AEP to withdraw from PATH project

COLUMBUS, OHIO - American Electric Power AEP announced it will file, along with FirstEnergy Corp., to withdraw the applications for state regulatory approval of the Potomac-Appalachian Transmission Highline PATH project following an announcement by regional grid operator PJM Interconnection that the project has been suspended.

PATH is a joint venture between AEP and the former Greensburg, Pa-based Allegheny Energy to build a 765-kilovolt, 275-mile transmission project from Putnam County, W.Va., to Frederick County, Md. Allegheny merged with Akron-based FirstEnergy February 25.

Today's filings in Virginia, Maryland and West Virginia are in response to a directive by regional grid operator PJM Interconnection to suspend further development of the PATH project while PJM conducts a more rigorous analysis of the potential need for PATH as part of its continuing Regional Transmission Expansion Plan. PJM directed the construction of PATH in 2007 to resolve violations of national and local standards for reliable operation of the region's transmission system. Since then, annual studies reaffirmed the need for PATH as the recommended solution for resolving these issues. However, PJM's latest analyses indicate that the need for the project has moved well into the future.

"While we are certainly disappointed by the suspension of PATH and the uncertainties created by the PJM planning process, we do support a thorough and detailed analysis of the need for the project. We remain convinced that the project will be needed and plan to move forward with it when PJM completes its review," said Michael G. Morris, AEP chairman and chief executive officer.

PJM has indicated that it will undertake an evaluation of its planning methods through a stakeholder process. This process will evaluate the criteria used to determine the need for transmission projects under its Regional Transmission Expansion Plan, and determine whether the need for PATH should be re-evaluated in light of any approved revisions to its planning process. Once this process is complete, PJM will reassess the need for transmission expansion in the region. Until then, the PATH companies will immediately suspend most activities on the project except for those that may be necessary to return the project to active status at the conclusion of PJM's planning process review.

"We are pleased that PJM is evaluating its overall planning process, and we hope that evaluation allows a longer-term view for transmission expansion. In the meantime, we'll move forward with our other transmission investments including the ETT projects in Texas, our Transco projects within our service territory, and the Prairie Wind project in Kansas that recently received the go ahead from the Southwest Power Pool," Morris said.