Duke Energy and AEP Form Joint Venture to Build Transmission Aug. 11, 2008
CHARLOTTE, N.C. -
Duke Energy and American Electric Power (AEP) have formed a 50-50 wholly-owned joint venture to build and operate 240 miles of extra-high-voltage 765-kilovolt (kV) transmission lines and related facilities in Indiana.
The project, called Pioneer Transmission LLC, would link Duke Energy’s Greentown Station (near Kokomo, Ind.) with AEP’s Rockport Station (east of Evansville, Ind.).
The project will expand extra-high-voltage transmission to
• Improve the reliability of the nation’s transmission grid
• Enhance the efficiency and reliability of the region’s transmission operators – Midwestern Independent System Operator (MISO) and PJM Interconnection (PJM)
• More efficiently link the region’s power plants and provide improved interconnections for new power plants in central Indiana, including the more than 3,000 megawatts of wind energy planned for the region.
Pioneer Transmission will be regulated by the Federal Energy Regulatory Commission (FERC). Its estimated costs are approximately $1 billion.
Since this project benefits both MISO and PJM, it is anticipated that the cost would be allocated to MISO customers in 15 states and the Canadian Province Manitoba and PJM customers in 13 states and the District of Columbia. Final costs depend on the line route, equipment and commodity costs.
“This is Duke Energy’s first 765-kV power line project and we are pleased to work with an experienced partner such as AEP,” said James L. Turner, president and chief operating officer, Duke Energy U.S. Franchised Electric and Gas. “Pioneer Transmission has significant economic and reliability benefits for the MISO and PJM region, which includes our 1.6 million retail electric customers in Indiana, Ohio and Kentucky. It can also play a key role in bringing Indiana’s wind energy potential to markets across the region.”
AEP and Duke Energy will submit the Pioneer Transmission proposal to PJM and MISO for consideration in their electric transmission expansion plans later this year. The joint venture will operate in Indiana as a transmission utility and seek rate approval for the project from the FERC in third quarter 2008.
An extensive public outreach effort will be conducted in 2009 and 2010 before the final path for the transmission line is selected.
The in-service date for the project will be determined by the MISO and PJM planning processes, with the earliest possible completion in 2014 or 2015 timeframe.
Building more extra-high voltage 765-kV transmission lines in Indiana provides significant economic and environmental benefits. A 765-kV transmission line requires less land to carry more power than lower voltage lines.
A 765-kV transmission line also operates more efficiently than lower-voltage lines, reducing the amount of electricity that needs to be generated by reducing line loss – electricity lost during transport. The new 765-kV designs that would be used for this project have line losses of less than 1 percent, compared with losses as high as 10 percent for some lower voltage alternatives.
The AEP-Duke Energy joint venture will operate as a transmission utility and be subject to the rules and regulations of FERC, PJM, MISO and the State of Indiana. Equity ownership of the new company will be equally split between AEP and Duke Energy.
Duke Energy, one of the largest electric power companies in the United States, supplies and delivers electricity to approximately 4 million U.S. customers in its regulated jurisdictions. The company has approximately 35,000 megawatts of electric generating capacity in the Midwest and the Carolinas, and natural gas distribution services in Ohio and Kentucky. In addition, Duke Energy has more than 4,000 megawatts of electric generation in Latin America, and is a joint-venture partner in a U.S. real estate company.
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