NEW TRANSMISSION FOR NEW ENERGY APPROVED IN TEXAS

This deal confirms what the Big Money already knows: New Energy is coming and it is going to need new transmission.

Texas is the last place in the US where transmission isn’t regulated by the feds.

Regulators clear AEP joint venture in Texas
December 24, 2007 (Business First/BizJournals via Yahoo Finance)
and
AEP, Texas Transmission Joint Venture Begins Operation
December 21, 2007 (PR Newswire via Fox Business)

WHO
Public Utility Commission of Texas (PUCT), Electric Reliability Council of Texas (ERCOT), Electric Transmission Texas LLC (ETT), American Electric Power Company Inc. (AEP), Texas Central Co., MidAmerican Energy Holdings Co.

ERCOT in Texas -- a power unto itself. (click to enlarge)

WHAT
PUCT/ERCOT has approved ETT, an AEP/MidAmerican joint venture, to build new transmission. MidAmerican is owned by billionaire Warren Buffet’s Berkshire Hathaway Inc. Both AEP and MidAmerican have extensive energy and transmission holdings.

WHEN
- ETT is expected to announce the first of an additional $1 billion in transmission projects in the Texas grid in second quarter 2008.
- AEP formed a 2nd joint venture with MidAmerican, Electric Transmission America LLC, in September 2007.

A lot of competition in Texas transmission. click)

WHERE
- ETT will run transmission to the Texas grid and create the capacity to transfer power to Mexico’s grid.
- AEP is based in Columbus, Ohio.
- MidAmerican Energy Holdings Co. is based in Des Moines, Iowa.

WHY
- The Texas grid is the only one in the US independent of federal transmission standards. It is regulated and overseen by ERCOT.
- ETT will install a 100-megawatt frequency transformer in order to be able to transfer power from the Texas to the Mexico grid.
- AEP transferred $70 million from Texas Central Co. to Electric Transmission Texas to begin transmission projects, including the 100-megawatt frequency transformer.
- Electric Transmission America LLC has targeted $100 million of high-voltage transmission projects outside of Texas.

A lot of new generation, a lot of new transmission needed. (click to enlarge)

QUOTES
Michael G. Morris, chairman/president/ceo, AEP: “We've determined that there is significant value in moving forward with capital transmission investments in ERCOT, given the regulatory mechanisms in place that support timely recovery of that investment…The ERCOT transmission grid has critical expansion needs to ensure reliability, meet growing electricity demand, reduce congestion and support renewable generation. ETT, backed by the expertise of AEP and MidAmerican, both leading utilities in the transmission realm, will help ensure that the much-needed additional transmission infrastructure in ERCOT is brought on line expeditiously."