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AEP and Allegheny formalize joint venture to build transmission line


COLUMBUS, Ohio.– American Electric Power (NYSE: AEP) has finalized its transmission joint venture with Allegheny Energy (NYSE: AYE). The companies announced plans April 18 to create the joint venture to build a 290-mile, high-voltage transmission line from West Virginia into Maryland.

The Potomac-Appalachian Transmission Highline (PATH) project includes approximately 244 miles of 765-kV extra-high voltage transmission from AEP’s Amos substation near St. Albans, W.Va., to Bedington substation, northeast of Martinsburg, W.Va. Another 46 miles of transmission, consisting of twin-circuit 500-kV transmission, will be constructed from Bedington to a new substation to be built at Kemptown, southeast of Frederick, Md.

The total project is estimated to cost approximately $1.8 billion. AEP’s share of the estimated costs will be approximately $600 million. PJM Interconnection (PJM) identified June 2012 as the system need date for the project.

The joint venture holding company, named Potomac-Appalachian Transmission Highline LLC, plans to file with the Federal Energy Regulatory Commission (FERC) in early fall 2007 on behalf of its operating companies to establish a rate of return and appropriate rates to recover the costs of the project. Work also will begin on a routing study and environmental assessment for the project, which will require about one year to complete. The joint venture’s operating companies will seek regulatory approvals for the project from the utility commissions in both West Virginia and Maryland following the completion of the routing study.

The operating companies of the joint venture will operate as transmission utilities and be subject to the rules and regulations of FERC, PJM and state regulatory authorities in West Virginia and Maryland. AEP will have lead responsibility for engineering, designing and managing construction of the 765-kV elements of the project through a service agreement with the joint venture operating companies. Allegheny will have similar responsibilities for 500-kV elements. Each company will provide services to the joint venture operating companies for siting, acquiring rights-of-way, securing regulatory approvals from the states the line crosses and maintenance of the project.

The joint venture does not include any provisions for the remaining portion of AEP’s I-765 TM Interstate Project proposal, which remains under study by PJM. Participation in the joint venture also does not preclude either company from pursuing other transmission opportunities in PJM or elsewhere.


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