COLUMBUS, Ohio, Sept. 18, 2007
– American Electric Power (NYSE: AEP) has formed a joint venture company with a MidAmerican Energy Holdings Company (MidAmerican) subsidiary to build and own electric transmission assets. The joint venture, Electric Transmission America LLC (ETA), will be a 50-50 partnership to identify and invest in high-voltage transmission projects (345-kilovolt or higher) located in North America outside of the Electric Reliability Council of Texas (ERCOT). The two companies have an existing joint venture agreement to build transmission in ERCOT.
Through ETA, the companies intend to invest in transmission projects with a cost of at least $100 million or more. Individual projects and the scope of the future investment will be determined by the ETA board which will include two representatives from AEP and two from MidAmerican. ETA will consider project partners during its evaluation of opportunities.
The companies hope to identify and initiate the approval process for the first ETA project during the first half of 2008. Initially, the parties plan to have AEP act as project manager to develop and build the transmission lines and facilities for ETA.
“This new venture builds on the very positive relationship that we have developed with MidAmerican over the last 10 months. Our companies share many of the same philosophies, including the belief that investment in transmission in the United States has lagged growth in demand and market development over the last few decades. Our country critically needs new transmission investment to enhance reliability, maximize the use of existing electricity and support development of new generation, including renewables,” said Michael G. Morris, AEP chairman, president and chief executive officer.
“AEP owns and operates the nation’s largest transmission system, and we are the experts in building and operating extra-high voltage transmission. We want to use that expertise to build a significant interstate transmission business and have already identified more than $9 billion in potential transmission opportunities in the regions that we serve. Partnering with MidAmerican, a company with a commitment to transmission investment, extensive transmission assets and a strong capital base, will enable us to grow our transmission business at the same time that we are investing substantial capital in generation and distribution to better serve our 5.1 million customers in our 11-state footprint,” Morris said.
AEP and MidAmerican previously agreed to collaborate on transmission expansion in ERCOT through a joint venture agreement announced in November 2006 to form Electric Transmission Texas (ETT). That joint venture is expected to be formalized this fall after ETT receives approval to operate as a utility by the Public Utility Commission of Texas (PUCT). ETT will remain an independent venture focused on Texas transmission investment.
MidAmerican Energy Holdings Company, based in Des Moines, Iowa, is a global provider of energy services. Through its energy-related business platforms – PacifiCorp, MidAmerican Energy Co., CE Electric UK, Kern River Gas Transmission Company, Northern Natural Gas Company, and CalEnergy – MidAmerican provides electric and natural gas service to more than 6.9 million customers worldwide. MidAmerican Energy Holdings Company subsidiaries PacifiCorp and MidAmerican Energy Company own and operate more than 18,000 miles of electric transmission lines. Information about MidAmerican is available on the Internet at www.midamerican.com.
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning more than 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines 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. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio.---
This report made by AEP 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: electric load and customer growth; weather conditions, including storms; available sources and costs of, and transportation for, fuels and the creditworthi-ness of fuel suppliers and transporters; availability of generating capacity and the performance of AEP’s generating plants; AEP’s ability to recover regulatory assets and stranded costs in connection with deregulation; 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 when needed at acceptable prices and terms and to recover those costs through applicable rate cases or competitive rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery for new investments, transmission service and environmental compliance); resolution of litigation (including pending Clean Air Act enforcement actions and disputes arising from the bankruptcy of Enron Corp. and related matters); AEP’s ability to constrain operation and maintenance costs; the economic climate and growth in AEP’s service territory and changes in market demand and demographic patterns; inflationary and interest rate trends; AEP’s ability to develop and execute a strategy based on a view regarding prices of electricity, natural gas and other energy-related commodities; 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 debt; volatility and changes in markets for electricity, natural gas and other energy-related commodities; changes in utility regulation, including the potential for new legislation in Ohio and membership in and integration into regional transmission organizations; accounting pronouncements periodically issued by accounting standard-setting bodies; the performance of AEP’s pension and other postretirement benefit plans; prices for power that AEP generates and sells at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation; other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.