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AEP, Duke Transmission Joint Venture in Indiana would Link 3,000 MW of Wind

August 19, 2008

Duke Energy and American Electric Power (AEP) formed a 50-50 wholly-owned joint venture to build and operate 240 miles of extra-high-voltage, 765-kV Indiana transmission lines and related facilities that would connect more than 3,000 MW of wind energy planned for the region.

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.). As is often the case with new transmission that benefits wind, the project will also strengthen the overall system, improving reliability and efficiency of both the Midwest Independent System Operator (MISO) and PJM Interconnection, LLC, the region’s two transmission operators. High-voltage lines are viewed as both a key to smart wind power development as well as modernizing the nation’s fragmented and outdated transmission grid, which is generally considered inefficient by today’s standar ds.

Building more extra-high voltage 765-kV transmission lines in Indiana provides significant economic and environmental benefits, as they require less land to carry more power than lower-voltage lines, the companies noted. A 765-kV transmission line also operates more efficiently than lower-voltage lines, reducing the amount of electricity that nee ds to be generated by cutting “line loss,” or electricity lost during transport.

Pioneer Transmission will be regulated by the Federal Energy Regulatory Commission (FERC). Since the project, which has an estimated $1 billion price tag, benefits both MISO and PJM, it is anticipated that the cost would be allocated to MISO customers in 15 states and the Canadian province of Manitoba, along with PJM customers in 13 states and the District of Columbia.

“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 COO of 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 FERC in the third quarter of this year.

The in-service date for the project will be determined by the MISO and PJM planning processes, with the earliest possible completion in the 2014 or 2015 timeframe. An extensive public outreach effort will be conducted in 2009 and 2010 before the final path for the transmission line is selected, the companies said.

Source: Wind Energy Weekly 1302 (15 August 2008), http://www.awea.org/windenergyweekly/WEW1302.pdf