AEP's ETA Transmission Venture Joins With Westar Energy To Build 765-kV Transmission in Kansas

COLUMBUS, Ohio, May 19 /PRNewswire-FirstCall/ -- Electric Transmission America (ETA), a joint venture of subsidiaries of American Electric Power and MidAmerican Energy Holdings Co., has formed a joint venture company with Westar Energy Inc. to build and own new electric transmission assets in Kansas.

The ETA and Westar joint venture, named Prairie Wind Transmission LLC, is proposing to build approximately 230 miles of extra-high voltage 765-kilovolt (kV) transmission facilities extending from Wichita, Kan., west to a substation northeast of Dodge City, Kan., and then south to the Kansas border from Medicine Lodge, Kan. The project will provide enhanced electricity transport in Kansas and support expansion of renewable electricity generation in the region.

Southwest Power Pool's (SPP) estimated costs for the project are approximately $600 million; however, final costs will be dependent on the routing of the line, equipment and commodity costs. Anticipated completion would be in 2013. AEP's ownership share of the joint venture will be 25 percent.

"This project will provide a critical pathway for expansion of renewable generation in Kansas and within the Southwest Power Pool. More than 30,000 megawatts of wind generation has been proposed for transmission interconnection in this region, but there is insufficient transmission capacity available to transport it to where it could be accessed by customers," said Michael G. Morris, AEP chairman, president and chief executive officer. "Our collaboration with Westar and MidAmerican would build the first segment of a larger extra-high voltage transmission highway that has been proposed by the Southwest Power Pool to enhance reliability and support development of the sizable renewable generation resources in the region. Without additional transmission construction, these renewable resources will remain untapped.

"Westar has significant transmission assets and success in gaining approval for transmission projects in Kansas. MidAmerican is the fifth largest transmission owner in the United States, and AEP has more than 100 years of transmission expertise, including owning the nation's largest, and arguably most reliable, electricity transmission system. Our companies share a vision for transmission expansion based on the recognition that the United States needs significant transmission investment to ensure reliability, meet growing electricity demand, better use existing generation and support new generation, including renewables," Morris said.

The Kansas project encompasses the first phase of the Extra-High-Voltage Overlay Study plan released March 3 by SPP. Westar and ETA anticipate filing in the near future seeking authority from the Kansas Corporation Commission to construct, own and operate transmission in Kansas. The companies also will seek rate approval from the Federal Energy Regulatory Commission (FERC) in the coming months.

AEP and MidAmerican operate another transmission joint venture, Electric Transmission Texas, LLC, a transmission-only utility providing transmission services and pursuing opportunities for additional transmission investment within the Electric Reliability Council of Texas.

Westar Energy is the largest electric utility in Kansas, providing electric service to more than 674,000 customers in the state. Headquartered in Topeka, Kan., Westar Energy has about 6,200 megawatts of electric generation capacity and operates and coordinates more than 33,000 miles of electric distribution and transmission lines.

MidAmerican Energy Holdings Co., 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.

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.

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 the registrants 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 and performance 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 (including the company's ability to obtain any necessary regulatory approvals and permits) 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 of new investments in generation, distribution and transmission service and environmental compliance); resolution of litigation (including 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; volatility in the financial markets, particularly developments affecting the availability of capital on reasonable terms and developments impairing AEP's ability to refinance existing debt at attractive rates; 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, coal, nuclear fuel and other energy-related commodities; changes in utility regulation, including the potential for new legislation in Ohio and the allocation of costs within regional transmission organizations; accounting pronouncements periodically issued by accounting standard-setting bodies; the impact of volatility in the capital markets on the value of the investments held by AEP's pension, other postretirement benefit plans and nuclear decommissioning trust; 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.