Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  American Electric Power Company Inc    AEP

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets 

AEP-Great Plains JV To Build $466 Million In Transmission Projects

share with twitter share with LinkedIn share with facebook
share via e-mail
0
04/04/2012 | 11:09pm CET

--AEP forms joint venture with Great Plains Energy to build new competitive transmission projects

--The JV will build two initial projects for $466 million, then compete for new projects

--New federal rules that aim to boost competition are expected to create new opportunities for transmission projects

(Adds comments from AEP executive in third, fourth and 11th paragraphs, transmission market estimate in the eighth paragraph and other details throughout.)

 
  By Cassandra Sweet 
  Of  
 

American Electric Power Co. (>> American Electric Power Company, Inc.) said Wednesday it is forming a joint venture with Great Plains Energy Inc. (>> Great Plains Energy Incorporated) to build $466 million of electric transmission projects, followed by other projects.

AEP will own 86.5% of the new company, called Transource Energy LLC, while Great Plains Energy will own 13.5%. The firm will take over development and construction of two transmission projects Great Plains has proposed to ship power between southeast Nebraska and western Missouri, and between two cities in western Missouri.

The joint venture will focus on winning projects in a new competitive market that will result from new federal rules aimed at boosting transmission development, said Lisa Barton, executive vice president for transmission at AEP.

"We want to make sure that we're well positioned to get as many of these projects that are in our backyard as well as look at it from a growth opportunity standpoint," Barton said in an interview.

As U.S. utilities look for ways to boost revenue and earnings amid rising costs and increasing competition, building new transmission lines needed to ship electricity from one part of the country to another is an increasingly attractive business. Federal regulators introduced new rules last year that make it easier for companies to recover their costs for such projects and require regional grid operators to identify new projects that are needed.

New transmission lines are needed in most parts of the country to ensure that the grid has enough electricity at all times to meet demand, to provide access to more power resources, and to ship wind, solar and other renewable power to the grid from remote areas.

New transmission projects also will likely be necessary to deliver power supplies needed to replace dozens of aging coal-fired power plants that will be shut down over the next several years because of stricter federal pollution limits and low prices for natural gas, a rival fuel that makes coal look more expensive by comparison.

U.S. utilities are planning to invest between $240 billion and $320 billion in transmission projects through 2030, according to a report issued last year by The Brattle Group. The projects include building new transmission lines, beefing up existing lines, building new substations and other facilities.

AEP, which owns several utilities, is also the largest U.S. transmission operator and one of the largest transmission developers. The company plans to spend more than $2.2 billion on new transmission projects through 2015.

Among those is a $1.6 billion, 420-mile transmission line that AEP plans to build with Exelon Corp. (EXC) and a joint venture that AEP owns with MidAmerican Energy, a unit of Berkshire Hathaway Inc. (BRKA, BRKB); a $1 billion, 260-mile transmission line through Indiana that AEP is developing with Duke Energy Corp. (>> Duke Energy Corporation); and a group of projects in Texas that AEP is building with Mid-American Energy.

AEP will continue developing and building its existing projects at "full force," while looking to develop new projects through the Transource joint venture, Barton said.

Under the new transmission rules set by the Federal Energy Regulatory Commission, regional grid operators must identify new transmission facilities their region will need to meet growing energy demand, relieve congestion on the grid, bring new renewable resources to market and ensure the region has access to power supplies amid power plant closures or other changes. The first wave of those plans is due at the FERC this fall.

In the past, individual companies could block new development by rivals if the project crossed a part of the grid that they controlled. The new rules remove that ability.

AEP operates utilities in 11 states and serves about 5 million customers. Great Plains Energy is the parent company of Kansas City Power & Light.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com

(Kristin Jones contributed to this article.)

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on AMERICAN ELECTRIC POWER CO
05:05p AMERICAN ELECTRIC POWER : Fort Smith to host public comment meeting to address i..
12:46p AMERICAN ELECTRIC POWER : AEP Joins Army PaYS Program To Provide Private Sector ..
01/11 AMERICAN ELECTRIC POWER : Nick Akins Receives EEI's 'Distinguished Leadership Aw..
01/10 AMERICAN ELECTRIC POWER : AEP to Participate in Evercore ISI Utility CEO Confere..
01/07 FIRSTENERGY : American Electric Power to approach renewable energy differently
01/05 AMERICAN ELECTRIC POWER : AEP Ohio Schedules Open House to Discuss Electric Tran..
01/02 AMERICAN ELECTRIC POWER : Renewable energy project proposals sought
2016 AMERICAN ELECTRIC POWER : Thousands without power in Lawrence Co., Ohio
2016 AMERICAN ELECTRIC POWER : AEP issues Ohio wind call
2016 AMERICAN ELECTRIC POWER : Transource Transmission Project Energized in Missouri
More news
Sector news : Electric Utilities - NEC
01/16DJPower Assets to Decide Whether to Pay Special Dividend on January 26
01/15DJDuet Agrees to $5.48 Billion Offer from Cheung Kong Infrastructure
01/10DJENTERGY : Plant Closure to Cost Jobs, Tax Revenue -- WSJ
01/10DJENTERGY : Agrees to Close Controversial Indian Point Nuclear Plant -- Update
01/10DJENTERGY : Westchester County Bracing for Closure of Indian Point Nuclear Plant
More sector news : Electric Utilities - NEC
News from SeekingAlpha
01/12 VALUATION DASHBOARD : Utilities - Update
01/12 Berkshire Hathaway B Shares Are Undervalued - Cramer's Lightning Round (1/11/..
01/10 Bert's December Dividend Income Summary
01/06 AMERICAN ELECTRIC POWER : The Market's Most Electrifying Utility?
01/03 UTILITY STOCKS FOR DIVIDEND GROWTH : The Correct Metric Is Important
Advertisement
Financials ($)
Sales 2016 16 524 M
EBIT 2016 3 518 M
Net income 2016 1 640 M
Debt 2016 17 841 M
Yield 2016 3,58%
P/E ratio 2016 19,03
P/E ratio 2017 17,35
EV / Sales 2016 2,97x
EV / Sales 2017 3,10x
Capitalization 31 204 M
More Financials
Chart AMERICAN ELECTRIC POWER CO
Duration : Period :
American Electric Power Co Technical Analysis Chart | AEP | US0255371017 | 4-Traders
Full-screen chart
Technical analysis trends AMERICAN ELECTRIC...
Short TermMid-TermLong Term
TrendsBullishBearishBearish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 21
Average target price 67,1 $
Spread / Average Target 5,7%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Nicholas K. Akins Chairman, President & Chief Executive Officer
Brian X. Tierney Chief Financial Officer & Executive Vice President
Alberto G. Ruocco Chief Information Officer & Vice President
Lionel L. Nowell Independent Director
Linda A. Goodspeed Independent Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
AMERICAN ELECTRIC POWE..0.79%31 204
DUKE ENERGY CORP-0.15%53 393
SOUTHERN CO0.87%48 628
DOMINION RESOURCES, IN..-0.55%47 740
IBERDROLA SA-3.27%41 482
EXELON CORPORATION0.62%32 970
More Results