AEP transmission venture cleared for construction incentives
A joint venture between American Electric Power Company Inc. and a Pennsylvania power company has received regulatory approval for incentives on a transmission line stretching from West Virginia to Maryland.
The Columbus-based utility said the Federal Energy Regulatory Commission approved four transmission incentives for the project, dubbed Potomac-Appalachian Transmission Highline LLC. AEP is working with Greensburg, Pa.-based Allegheny Energy Inc. (NYSE:AYE) to build a 290-mile transmission line that will run from AEP's Amos substation near St. Albans, W.Va., to a new substation to be built at Kemptown, Md.
Incentives approved include recovery of front-end costs before recovery rates take effect, a return on equity for new transmission of 14.3 percent and authorization to recover front-end costs if the project is abandoned.
AEP will engineer, design and manage construction of the first 244-mile leg of the line, while Allegheny will manage the final 46 miles http://easy-quick-payday-loans.com. The total estimated project cost is $1.8 billion, $600 million of which will be shouldered by AEP.
The joint venture plans to file for approval from West Virginia and Maryland in the fourth quarter after the completion of routing studies and environmental assessments. PJM Interconnection, the regional transmission organization that manages wholesale electricity in 13 states including Ohio, approved construction of the project in June and set June 2012 as the date by which it needs to be operational.
AEP (NYSE:AEP) delivers electricity to 5 million customers in 11 states. The utility recorded a profit of $1.09 billion on revenue of $13.4 billion last year.
Allegheny Energy owns and operates facilities that serve more than 1.5 million customers in Pennsylvania, West Virginia, Maryland and Virginia. The company earned $412.2 million on $3.3 billion in revenue for 2007.
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