AEP transmission venture with Allegheny files to establish FERC
rate for PATH transmission project
COLUMBUS, Ohio, Dec. 28, 2007 – American Electric Power (NYSE: AEP) today announced
that Potomac-Appalachian Transmission Highline LLC, AEP’s transmission joint venture with
Allegheny Energy (NYSE: AYE), has filed with the Federal Energy Regulatory Commission (FERC)
to establish a transmission rate to recover costs for the approximately 290-mile, extra-high
voltage transmission line that the companies propose to build from West Virginia into Maryland.
The companies are seeking a transmission cost-of-service formula rate, effective March 1, 2008,
that will provide for annual updates to the amounts that PJM Interconnection (PJM), an
independent regional transmission operator, will charge utilities to recover the costs of the
project. The proposed rate includes recovery of a return on construction work in progress (CWIP)
for the project and a return on equity of 14.3 percent, which includes an incentive award,
consistent with federal policy to encourage significant transmission infrastructure and technology
improvements. AEP and Allegheny each separately received FERC approval for incentive rate
treatments for individually proposed transmission projects that ultimately became the joint
Potomac-Appalachian Transmission Highline (PATH) project.
The PATH project includes approximately 244 miles of 765-kilovolt (kV) extra-high voltage
transmission from AEP’s Amos substation near St. Albans, W.Va., to Allegheny’s Bedington
substation, northeast of Martinsburg, W.Va. Another 46 miles of twin-circuit 500-kV
transmission will be constructed from Bedington to a new substation to be built near
Kemptown, southeast of Frederick, Md. The total project is estimated to cost approximately
$1.8 billion. PJM identified June 2012 as the date by which the PATH project needs to be operational.
“The PATH project addresses significant reliability concerns in the region, including overloads that
will occur on more than thirteen existing transmission lines in Maryland, West Virginia, Virginia and
Pennsylvania, as soon as 2012 if PATH is not built,” said Michael G. Morris, AEP chairman, president
and chief executive officer. “Establishing FERC rates for the project will provide the timely cost
recovery necessary to obtain financing and allow us to move forward and bring the project on
line in time to help prevent overloads on these lines.”
Once approved by FERC, the costs of the PATH project will be allocated to all electric utilities
who serve retail customers in the PJM region.
AEP and Allegheny plan to begin work on the routing study and environmental assessment for the PATH
project in January 2008. The companies anticipate seeking regulatory approvals for the project from the
utility commissions in both West Virginia and Maryland in the fourth quarter of 2008, following the
completion of the routing study. AEP and Allegheny are committed to working with landowners,
neighboring residents, business owners, affected communities and regulators to minimize the
environmental and land use impacts of the project.
http://www.aep.com/newsroom/newsreleases/default.asp?dbcommand=displayrelease&ID=1426