Texas PUC approves ETT application to build Laredo-to-Rio Grande Valley transmission line
Austin, TX, May 16, 2013 - The Public Utility Commission of Texas (PUCT) unanimously approved May 9 an application by Electric Transmission Texas, LLC (ETT) for a Certificate of Convenience and Necessity (CCN) to build a 345-kV transmission line from the Laredo area into the Rio Grande Valley.
The transmission project includes construction of approximately 156 miles of 345-kV transmission lines that will connect ETT's Lobo Substation near Laredo with substations north of Edinburg and will add two new substations along the line route. The cost of the project is estimated at approximately $318 million.
In approving the CCN application, the PUCT also approved a unanimous settlement with nearly 100 landowners along the route, the PUCT staff and the Texas Parks and Wildlife Department. The new transmission line from the Laredo to the Edinburg area will cross portions of Webb, Zapata, Jim Hogg, Brooks, Starr and Hidalgo counties. ETT plans to construct the transmission line on steel single-pole structures, an approach overwhelmingly supported by landowners.
The Electric Reliability Council of Texas (ERCOT) determined Oct. 11, 2011, that the project is critical for the reliability of the ERCOT system and, specifically, the Lower Rio Grande Valley. Currently, there are only two 345-kV transmission lines serving the Valley. Both of the existing lines import power from the Corpus Christi area and run parallel to the Gulf Coast, which means both are vulnerable to hurricanes and other severe weather. Work to upgrade those two lines already is underway and should be complete this summer.
"I am very pleased that so many groups were able to reach the unanimous settlement regarding the route," said ETT President Calvin Crowder. "Approval of the CCN is a significant step to ensuring continued transmission reliability in the Rio Grande Valley and Laredo areas. We now will begin right-of-way acquisition and detailed engineering for the project, with actual construction anticipated to begin in 2014. Area residents will begin enjoying the benefits of the project in 2016."
ETT is a joint venture between subsidiaries of American Electric Power (NYSE: AEP) and MidAmerican Energy Holdings Company. The joint venture acquires, constructs, owns and operates transmission facilities within ERCOT, primarily in and around the AEP Texas Central Company and AEP Texas North Company service territories.
AEP, headquartered in Columbus, Ohio, is one of the largest electric utilities in the United States, delivering electricity to more than 5.3 million customers in 11 states. AEP (www.aep.com) has extensive experience building extra-high-voltage 765-kV transmission lines and owns the nation's largest electricity transmission system, a nearly 40,000-mile network that includes 2,100 miles of 765-kV transmission lines, more than all other U.S. transmission systems combined. AEP's transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas.
MidAmerican Energy Holdings Company provides electric and natural gas service to more than 7 million customers worldwide, operates an extensive 18,000-mile electric transmission system, a natural gas local distribution system, and interstate natural gas pipeline systems totaling nearly 17,000 miles. Learn more at www.midamerican.com.
This report made by American Electric Power and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: the economic climate, growth or contraction within and changes in market demand and demographic patterns in AEP's service territory; inflationary or deflationary interest rate trends; volatility in the financial markets, particularly developments affecting the availability of capital on reasonable terms and developments impairing AEP's ability to finance new capital projects and refinance existing debt at attractive rates; the availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag between incurring costs and recovery is long and the costs are material; electric load, customer growth and the impact of retail competition, particularly in Ohio; weather conditions, including storms and drought conditions, and AEP's ability to recover significant storm restoration costs through applicable rate mechanisms; available sources and costs of, and transportation for, fuels and the creditworthiness and performance of fuel suppliers and transporters; availability of necessary generating capacity and the performance of AEP's generating plants; AEP's ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; AEP's ability to build or acquire generating capacity and transmission lines and facilities (including the ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs (including the costs of projects that are cancelled) through applicable rate cases or competitive rates; new legislation, litigation and government regulation, including oversight of nuclear generation, energy commodity trading and new or heightened requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances, or additional regulation of fly ash and similar combustion products that could impact the continued operation and cost recovery of AEP's plants and related assets; evolving public perception of the risks associated with fuels used before, during and after the generation of electricity, including nuclear fuel; a reduction in the federal statutory tax rate that could result in an accelerated return of deferred federal income taxes to customers; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions, including rate or other recovery of new investments in generation, distribution and transmission service and environmental compliance; resolution of litigation; AEP's ability to constrain operation and maintenance costs; AEP's ability to develop and execute a strategy based on a view regarding prices of electricity, coal, natural gas and other energy-related commodities; prices and demand for power that AEP generates and sells at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation; AEP's ability to recover through rates or market prices any remaining unrecovered investment in generating units that may be retired before the end of their previously projected useful lives; volatility and changes in markets for electricity, coal, natural gas and other energy-related commodities; changes in utility regulation, including the implementation of Electric Security Plans and the transition to market and expected legal separation for generation in Ohio and the allocation of costs within regional transmission organizations, including PJM and SPP; AEP's ability to successfully manage negotiations with stakeholders and obtain regulatory approval to terminate the Interconnection Agreement; changes in the creditworthiness of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading market; actions of rating agencies, including changes in the ratings of AEP debt; the impact of volatility in the capital markets on the value of the investments held by AEP's pension, other postretirement benefit plans, captive insurance entity and nuclear decommissioning trust and the impact on future funding requirements; accounting pronouncements periodically issued by accounting standard-setting bodies; and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes, cyber security threats and other catastrophic events.
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