Through the 50-50 partnership, AEP and Duke are proposing to build 240 miles of extra-high voltage 765-kilovolt (kV) transmission lines and related facilities in Indiana. The project would link Greentown Station (near Kokomo, Ind.) with Rockport Station (east of Evansville, Ind.).

Estimated costs for the project are approximately $1 billion, but final costs will depend on the routing of the line, equipment and commodity costs. AEP and Duke will be working with the PJM Interconnection (PJM) and Midwest ISO (MISO) to determine the optimal configuration for the final project. The project will be wholly owned by the joint venture. AEP's share of the costs will be 50 percent of the total.

The project is part of AEP's vision of expanded extra-high voltage transmission to improve the reliability of the nation's transmission grid, allow more efficient use of existing electricity production and delivery infrastructure, protect national security and expand opportunities for new generation, including renewables.

"The ability of electric utilities to continue providing reliable, reasonably priced electricity to fuel our nation's economic growth is increasingly challenged by aging, insufficient infrastructure; continued growth in electrical load; rising construction costs and a desire to reduce greenhouse gas emissions. These issues can be managed more successfully through strategic expansion of our nation's transmission grid, including significant investment in extra-high voltage transmission," said Michael G. Morris, AEP chairman, president and chief executive officer.

"Indiana is home to nearly 27,000 megawatts of generation, and the state's transmission system delivers electricity across the Midwest and beyond. To continue reliable delivery of this energy and add the output of new generation that has been proposed in the state, Indiana needs additional extra-high voltage transmission capacity. A reliable supply of electricity is fundamental to our quality of life and economic growth, and Indiana's transmission system, which was largely completed more than 25 years ago, needs to grow as well to continue to meet the needs we have today and in the future," Morris said.

AEP and Duke will submit the Greentown-Rockport proposal to PJM and MISO for consideration in their transmission expansion plans. The joint venture will file in Indiana to operate as a transmission utility and will file seeking rate approval for the project from the Federal Energy Regulatory Commission (FERC) in third-quarter 2008.

The in-service date for Greentown- Rockport will be determined by the MISO and PJM planning processes, with the earliest possible completion in 2014 or 2015.

"Like most parts of the country, Indiana will see significant benefits from extra-high voltage transmission expansion. The need to build additional transmission provides the opportunity to invest in a long-term transmission solution that will facilitate development of additional generation, including renewables, and support the reliable transport of electricity to fuel future economic growth. For example, more than 3,000 megawatts of wind power has been proposed in central Indiana, but additional transmission is necessary to bring it online," said Susan Tomasky, president, AEP Transmission.

"Building more extra-high voltage 765-kV transmission lines in Indiana can provide significant economic and environmental benefits. A 765-kV transmission line requires less land to carry more power than lower voltage lines, and the 765-kV line would cost less than half as much to build. A 765-kV transmission line also operates more efficiently than lower-voltage lines, reducing the amount of electricity that needs to be generated by reducing line loss - electricity lost during transport. The new 765-kV designs that would be used for this project have line losses of less than one percent, compared with losses as high as 10 percent for a lower-voltage alternative," Tomasky said.

The joint venture will operate as a transmission utility and be subject to the rules and regulations of FERC, the State of Indiana, PJM and MISO. Equity ownership of the new company will be equally split between AEP and Duke.

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