AEP, Duke Energy to develop transmission project with TVA

Indianapolis, June 2, 2011 — Pioneer Transmission LLC, a joint venture between American Electric Power and Duke Energy, will develop a 55-mile, extra-high-voltage transmission project with Tennessee Valley Authority in Indiana and Kentucky.

Under the terms of a memorandum of understanding with TVA, the parties propose to build a 765-kV transmission line connecting AEP's Rockport Station (east of Evansville, Ind.) with TVA's Paradise Station in Drakesboro, Ky.

The cost of the project, which would also include construction of a new 765-kV substation at Paradise, is estimated at $275 million, subject to approved routing.

Pioneer and TVA will submit the Rockport-Paradise proposal to the PJM Interconnection for consideration in its regional planning process. In addition, the project will require siting approval from the Kentucky Public Service Commission.

Ownership shares of the final project will be determined by TVA and the PJM approval process.

The Rockport-Paradise project complements the 240-mile Greentown–Rockport transmission line that AEP and Duke proposed in August 2008, when the companies formed Pioneer.

Through a final order issued on Jan. 21, 2009, the Federal Energy Regulatory Commission granted the 765-kV Greentown-Rockport project a formula rate and project incentives.

Pioneer is working with PJM and MISO to move the project through their respective approval processes. Pioneer expects to file for utility status in Indiana later this year.

AEP and Duke Energy continue to pursue commercial transmission projects both jointly and independently, per the terms of their 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.

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