UTILITY, POWER COMPANY TO BUILD NEW TRANSMISSION

Expect lots of stories like this one for the rest of this year and into next year. Duke Energy and AEP are partnering to build Pioneer Transmission, a 240-mile new transmission line. Pre-existing power plants need the new transmission infrastructure, of course. But there's something else. Duke and other power producers and utilities are developing more than 3,000 megawatts of new wind along the route.

The biggest single problem in undertaking the building of new transmission is finding a route. The Not-In-My-BackYard (NIMBY) spirit frequently overwhelms the can-do spirit in the planning and building of new wires. But new wires are urgently needed to ease the present burden on existing wires. They are even more necessary if New Energy capacity now being developed in rural areas all over the nation, where wind and sun are strong but wires are nowhere around, is to be delivered to distant population centers where there is rising demand for electricity.

Note that though Pioneer Transmission’s approval process should be completed by the end of 2008, 2 subsequent YEARS are allotted for public outreach and route planning.

The good news: New extra-high-voltage 765-kilovolt (kV) lines carry more power, require less land and lose only 1% of the power they carry during transmission (older lines lost as much as 10%). The utilities call 765-kV “the next interstate.” (See AEP’s I-765 Proposal and the Future of America’s Transmission Grid)

The bad news: As Keith Johnson, the Wall Street Journal’s online energy maven, pointed out, here’s the summary on Pioneer Transmission: $1 billion dollars and 6 years for 240 miles.

Considering how much New Energy the U.S. will need in the next 3 to 5 decades (about as much as it has in total right now), planning and surcharging utility bills and taxing should start yesterday for the new transmission necessary to deliver it.

Or is Boone Pickens right? Will the private sector take care of all that? Well, one thing Mr. Pickens is right about: It certainly makes sense to put the right policies in place and see what the much-heralded American entrepreneurial spirit has got left after all these bursting bubbles. Don't bet against it.

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Duke Energy and AEP Form Joint Venture to Build Transmission
August 11, 2008 (PR Newswire via COMTEX/MarketWatch)
and
High Voltage: Clean Energy and the Transmission Hurdle
Keith Johnson, August 11, 2008 (Wall Street Journal)

WHO
Duke Energy U.S. Franchised Electric and Gas (DUK) (James L. Turner, president/chief operating officer); American Electric Power (AEP); Midwestern Independent System Operator (MISO) and PJM Interconnection (PJM); Federal Energy Regulatory Commission (FERC)

WHAT
Duke and AEP formed a 50-50 joint venture (JV) to build Pioneer Transmission LLC, new extra-high-voltage transmission, in Indiana.

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WHEN
- The JV partners will submit plans to MISO and PJM later in 2008.
- They will seek FERC approval in 3rd quarter 2008.
- There will be extensive public outreach in 2009 and 2010 before the final route is selected.
- Earliest possible completion is 2014 or 2015.

WHERE
- Pioneer Transmission will link Duke Energy's Greentown Station, near Kokomo, Ind., with AEP's Rockport Station, east of Evansville, Ind.
- Costs will be allocated to MISO customers in 15 states and the Canadian Province Manitoba and PJM customers in 13 states and the District of Columbia.

WHY
- Extra-high-voltage transmission is 765-kilovolt (kV) lines, a way to carry more power while using less land.
- Pioneer Transmission will run 240 miles.
- Estimated cost: ~$1 billion.
- System operators MISO and PJM and the national grid will benefit from improved reliability and efficiency.
- FERC will regulate.
- Duke Energy has 35,000+ megawatts of generating capacity in the Midwest and the Carolinas.

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QUOTES
James L. Turner, president/chief operating officer, Duke: "This is Duke Energy's first 765-kV power line project and we are pleased to work with an experienced partner such as AEP…Pioneer Transmission has significant economic and reliability benefits for the MISO and PJM region...It can also play a key role in bringing Indiana's wind energy potential to markets across the region."