AEP, Duke Energy Transmission Project in Indiana Moving Forward

Pioneer Transmission, a joint venture formed by American Electric Power and Duke Energy in 2008, will begin engineering, permitting and siting activities in 2012 on a 66-mile, 765-kilovolt electric transmission line in Indiana between the existing Greentown substation (approximately 15 miles east of Kokomo) and a new substation called New Reynolds (about 20 miles north of Lafayette).

Pioneer Transmission's Greentown-New Reynolds project was designated today as one of 17 Multi-Value Projects (MVPs) included in the Midwest ISO (MISO) Transmission Expansion Plan. These projects will collectively enhance regional power system reliability, improve market efficiency, enable public policy mandates and facilitate the integration of new generation resources, including renewable energy.

"This project is the first phase of a broader regional effort to develop a new high-capacity, extra-high-voltage transmission system to meet evolving demand for energy and modernize the electric transmission infrastructure," said Pioneer Transmission President Bob Bradish.

The estimated cost of the 66-mile Greentown-New Reynolds line is $245 million. MISO estimates that the 17 MVPs announced today will provide economic benefits ranging from 1.8 to three times the cost of the projects.

The actual route of the Greentown-New Reynolds line is still to be determined. Pioneer Transmission will construct and own the 765-kilovolt (kV) New Reynolds substation to handle the interconnection of multiple power line voltages at this location.

"We're committed to working closely with key stakeholders and communities as we design the project, including transmission line routing," said Bradish. "We'll also collaborate with MISO and PJM Interconnection as we plan transmission investments in Indiana that will boost electric reliability throughout the region."

Greentown-New Reynolds is part of a larger, 240-mile transmission project in Indiana originally proposed by Pioneer Transmission in 2008 that would extend from Duke Energy's Greentown substation and terminate at AEP's Rockport substation near Evansville. The total cost of the broader project is estimated at $950 million, subject to variables including transmission line routing and equipment costs.

Through an order issued in early 2009, the Federal Energy Regulatory Commission granted Pioneer Transmission's 765-kV Greentown-Rockport project a formula rate and project incentives.

To facilitate project development, Pioneer Transmission will file a petition for public utility status with the Indiana Utility Regulatory Commission later this month. The second and third phases of the 240-mile Pioneer transmission line will be evaluated by PJM and MISO during their next planning cycle beginning in 2012.

Pioneer Transmission is also working with Tennessee Valley Authority (TVA) on a 765-kV line connecting AEP's Rockport Station (east of Evansville, Ind.) with TVA's Paradise Station in Drakesboro, Ky.

AEP and Duke Energy continue to pursue commercial transmission projects both jointly and independently, per the terms of their 50-50 joint venture agreement. Duke Energy's interest in Pioneer is owned by the company's Commercial Businesses, which operate independently from its regulated Franchised Electric and Gas unit.