American Electric Power recently announced it will form a joint venture company to fund and own new electric transmission assets in Texas. The joint venture company would include AEP and one outside company. Discussions are ongoing with potential partners. AEP anticipates the transmission joint venture will be active in 2007.
‘Texas faces a significant – and growing – need for transmission investment to address existing areas of congestion and to support the competitive generation market in the state,’ says Michael G. Morris, AEP's chairman, president and chief executive officer. ‘Gov. Rick Perry recognized that last week when he said the state will ensure that sufficient transmission capacity is added to support development of new wind farms.’
Creating a joint venture company to pursue Texas transmission opportunities allows the participants to share the capital investment necessary to complete these infrastructure projects. The joint venture could invest up to $1 billion in new transmission projects in Texas and would own the assets. The company would be created as a utility and would be subject to the rules and regulations governing utilities within the Electric Reliability Council of Texas (ERCOT). AEP would be responsible for developing, building and operating the assets for the joint venture company.