Power line plan

December 29, 2007|By Allison Connolly

American Electric Power and Allegheny Energy said yesterday that they have filed a request with the Federal Energy Regulatory Commission to approve a rate formula to recover the cost of building a $1.8 billion, 290-mile-long, extra-high-voltage transmission line from West Virginia to Frederick.

If the formula is approved, the PJM Interconnection, which operates the regional power grid, would use it to charge utilities in 13 states for the use of energy from that system. Maryland is part of that grid.

The rate formula would be updated annually. Allegheny spokesman Todd Meyers said the companies are seeking a 14.3 percent return on equity. While Meyers acknowledged the return is on the high end for such projects, he said the power line's size makes it riskier. It's too early to say how much it would cost consumers, he said.

"It's the very first step in a long road, but it's an important step," said Melissa McHenry, a spokeswoman for AEP.

Regulators have 60 days to accept the proposal or submit it for a hearing. The power line still needs approval from state governments for the route. The companies hope the line will be built by 2012. Some predict Mid-Atlantic states could face an energy shortfall within five years if new capacity is not built.

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