AUSTIN, Texas, Feb. 27 /PRNewswire-FirstCall/ -- Electric Transmission Texas LLC (ETT), a proposed joint venture between subsidiaries of American Electric Power (NYSE:AEP) and MidAmerican Energy Holdings Company, today filed a transmission proposal with the Public Utility Commission of Texas (PUCT) for the construction of approximately 1,000 miles of transmission lines to support development of the Competitive Renewable Energy Zones (CREZ) in Texas.
At the same time, ETT proposed for consideration by the PUCT and the Electric Reliability Council of Texas (ERCOT) an additional approximately 900- mile, high-voltage, high-capacity backbone transmission system to support long range reliability and customer growth needs facing the state. ETT made the recommendations through the CREZ docket, which will identify specific zones that are targeted for development of generation and transmission infrastructure in Texas.
In November, AEP and MidAmerican announced plans to establish ETT as a joint venture to invest in transmission projects within ERCOT. ETT is currently a wholly owned subsidiary of AEP but will become a joint venture with MidAmerican upon receipt of required regulatory approvals. ETT will operate as a transmission utility subject to the rules and regulations governing ERCOT member utilities. An AEP subsidiary initially will act as project manager for the planning, construction and operation of the transmission lines and facilities for ETT.
"There is a critical need to expand the Texas electric transmission grid," said Calvin Crowder, ETT executive director. "Our proposal includes phased development of a high-voltage, high-capacity transmission backbone for ERCOT that will allow Texas to capture the long-term value of wind energy resources that are located in remote areas of the state and quickly interconnect those renewable resources to the load centers in the south, central and north- central parts of the state. Our proposal takes the process to the next level by also outlining a 21st century vision for the growth of the Texas transmission grid."
The first two stages of the proposal focus on ensuring sufficient transmission capability to meet anticipated renewable energy needs. Stage One would reinforce the ERCOT transmission grid, providing access for up to eight gigawatts of existing and planned renewable energy projects in north and central West Texas. Stage Two would support an additional two gigawatts of renewable energy projects. The combined cost of these two stages is estimated to be approximately $3 billion, with completion of Stage One anticipated by 2012 and Stage Two by 2015, based upon AEP's experience with past transmission projects in Texas.
"The third stage of the proposal, a visionary plan to establish an extra high-voltage bulk power delivery system, is much longer-term in scope and conceptual in nature. Planning must begin now, however, to ensure the future viability of the ERCOT grid," Crowder emphasized.
ETT anticipates filing more details of its plan with the PUCT in April in accordance with the commission's timetable in the CREZ proceeding. According
to the CREZ docket procedural schedule, the PUCT is expected to release decisions about the CREZ zones, including outlining necessary transmission investment, in July 2007.
The long-range stage of ETT's proposal, estimated to cost approximately $4 billion, is conceptual and could change significantly as part of the PUCT and ERCOT evaluation process. Definitive paths for the proposed projects have not been determined, and will not be determined without ample opportunity for public input.
"The proposal is not exclusive; other transmission developers will be welcome to participate," Crowder said. "We want active participation and an exchange of ideas with other entities in working to refine this plan over the next several months. The key for Texas is to develop a comprehensive plan with collaboration to avoid transmission constraints and costly overlap in transmission system development.
"Now that the renewable energy developers have indicated the areas of Texas that they believe offer the most potential for renewable energy development, ETT's proposal will reliably link those areas with load centers in the state. ETT can bring needed transmission online quickly by employing the expertise and capital of two transmission leaders," Crowder added.
As owner and operator of the nation's largest transmission system, AEP brings more than 100 years of expertise in planning, siting, building and operating high-voltage transmission to this venture. MidAmerican Energy Holdings Company, with access to the substantial capital resources of its corporate parent, Berkshire Hathaway Inc., is committed to being a long-term investor in the utility sector. MidAmerican Energy Holdings Company is currently the fifth largest electric transmission owner in the United States.
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation's largest generators of electricity, owning nearly 36,000 megawatts of generating capacity in the U.S. AEP also owns the nation's largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP's utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). The company is based in Columbus, Ohio.
MidAmerican Energy Holdings Company, based in Des Moines, Iowa, is a global provider of energy services. Through its energy-related business platforms -- PacifiCorp, MidAmerican Energy Company, CE Electric UK, Kern River Gas Transmission Company, Northern Natural Gas Company and CalEnergy -- MidAmerican provides electric and natural gas service to more than 6.9 million customers worldwide. MidAmerican Energy Holdings Company subsidiaries PacifiCorp and MidAmerican Energy Company own and operate more than 18,000 miles of electric transmission lines. Information about MidAmerican is available on the Internet at www.midamerican.com.
Additional information about the ETT transmission proposal is available at http://www.aep.com/go/crez.
This report made by AEP and certain of its subsidiaries contains forward- looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its registrant subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: electric load and customer growth; weather conditions, including storms; available sources and costs of, and transportation for, fuels and the creditworthiness of fuel suppliers and transporters; availability of generating capacity and the performance of AEP's
generating plants; the ability to recover regulatory assets and stranded costs in connection with deregulation; the ability to build or acquire generating capacity when needed at acceptable prices and terms and to recover those costs through applicable rate cases or competitive rates; the ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery for new investments, transmission service and environmental compliance); resolution of litigation (including pending Clean Air Act enforcement actions and disputes arising from the bankruptcy of Enron Corp. and related matters); AEP's ability to constrain its operation and maintenance costs; the economic climate and growth in AEP's service territory and changes in market demand and demographic patterns; inflationary and interest rate trends; AEP's ability to develop and execute a strategy based on a view regarding prices of electricity, natural gas, and other energy-related commodities; changes in the creditworthiness of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading market; changes in the financial markets, particularly those affecting the availability of capital and AEP's ability to refinance existing debt at attractive rates; actions of rating agencies, including changes in the ratings of debt; volatility and changes in markets for electricity, natural gas, and other energy-related commodities; changes in utility regulation, including implementation of EPACT and membership in and integration into regional transmission organizations; accounting pronouncements periodically issued by accounting standard-setting bodies; the performance of AEP's pension and other postretirement benefit plans; prices for power that AEP generates and sells at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation, and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.
MEDIA CONTACTS: ANALYSTS CONTACT: Melissa McHenry Julie Sloat Manager, Corporate Media Relations Vice President, Investor Relations American Electric Power American Electric Power 614/716-1120 614/716-2885
Source: American Electric Power
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