- Evaluating Transmission Costs and Wind Benefits in Texas
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AUSTIN, Texas, April 25, 2007 – Every dollar spent for construction of new transmission lines to support the development of wind resources in Texas will result in a $5 to $7 reduction in energy costs, according to testimony filed Tuesday with the Public Utility Commission of Texas (PUCT) by Electric Transmission Texas LLC (ETT), a proposed joint venture between subsidiaries of American Electric Power (NYSE: AEP) and MidAmerican Energy Holdings Co.
The testimony, which was submitted as a part of the PUCT’s Competitive Renewable Energy Zones (CREZ) Docket, supports a study by the Electric Reliability Council of Texas (ERCOT) through ETT’s own analysis while at the same time providing an additional analysis sponsored jointly by ETT and The Wind Coalition, a group of large wind developers, equipment suppliers and public interest organizations promoting wind development in the south central United States. The jointly-sponsored study focused on the benefits of new transmission to support wind resources throughout the state and did not specifically address the ETT proposal filed in the CREZ Docket.
“The jointly-sponsored analysis validates the conclusions of the earlier ERCOT study, which indicated that consumers would save between $221 million to $1.278 billion per year with the addition of 1,000 to 5,250 megawatts of wind generation,” said Calvin Crowder, ETT executive director. “In fact, the study jointly sponsored with The Wind Coalition, as well as our own separate analysis, concludes that the savings initially projected by ERCOT are conservative.
“Clearly, there is a strong economic case for moving forward to build new transmission lines to ensure the development of wind resources throughout the state,” Crowder continued. “At the same time, we advocate seizing upon what we see as a unique opportunity to address the long-term transmission needs within ERCOT.”
ETT has proposed the construction of approximately 1,000 miles of transmission lines to support development of Competitive Renewable Energy Zones in Texas. At the same time, ETT proposes consideration by the PUCT and ERCOT of a high-voltage, high-capacity backbone transmission system to support long-range reliability and customer growth needs facing the state.
The first two stages of the ETT Transmission Plan will deliver up to 10,000 megawatts of existing and planned renewable energy from Competitive Renewable Energy Zones in north and central West Texas to major load centers along the I-35 corridor from north Dallas-Fort Worth area to the Austin-San Antonio area. The combined cost of these two phases is estimated to be approximately $3 billion with completion of Stage One anticipated by 2012 and Stage Two by 2015, based upon AEP’s experience with past transmission projects in Texas.
Stage Three of the ETT Transmission Plan will establish a transmission backbone within ERCOT through the construction of an extra high-voltage bulk power delivery system. Stage Three of the ETT Transmission plan, estimated to cost approximately $4 billion, is conceptual and long-term in its approach and could change significantly as part of the PUCT and ERCOT evaluation process.
Definitive paths for the proposed projects have not been determined, and will not be determined, without ample opportunity for public input. The proposal is not exclusive; other transmission developers will be welcome to participate.
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 nearly 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.
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 Company, 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. Additional Information:
- Evaluating Transmission Costs and Wind Benefits in Texas
(PDF: 144 KB : get viewer
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 creditworthiness 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 or regulation 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 sell 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.