First projects to include 200 miles of 345-kV transmission in Missouri
KANSAS CITY, Mo.--(BUSINESS WIRE)--Apr. 4, 2012--
Great Plains Energy (NYSE: GXP) and American Electric Power (NYSE: AEP)
today announced they have formed a company to build and invest in
transmission infrastructure. The new company, Transource EnergySM
LLC (Transource), will pursue competitive transmission projects
initially in the Southwest Power Pool (SPP), Midwest Independent
Transmission System Operator (MISO) and PJM Interconnection (PJM)
regions, with the potential for expanding to other regions in the
future. Great Plains Energy owns 13.5 percent of Transource. AEP owns
86.5 percent.
In 2011, the Federal Energy Regulatory Commission (FERC) issued a new
rule (Order 1000) that facilitates competition in the transmission
sector of the utility industry. By partnering with AEP, a recognized
leader in the transmission business, Great Plains Energy will be well
positioned to compete in the emerging competitive transmission market.
“Our nation’s bulk electric system requires significant investment in
transmission infrastructure to improve reliability, reduce congestion,
increase access to renewable energy resources and allow for a smarter
and more efficient grid,” stated Mike Chesser, Chairman and CEO of Great
Plains Energy. “FERC’s recent order fundamentally changes the way in
which transmission will be developed, owned and operated in the United
States. As a result, future transmission infrastructure will be built by
companies that can successfully compete and provide the most
cost-effective solutions for the benefit of the company, our customers,
our shareholders and the region.”
Regional transmission infrastructure projects are typically large scale
projects requiring significant capital resources to fund and build.
Through Great Plains Energy’s partnership with AEP, Transource will be
well positioned to build and own large scale projects in the competitive
environment by leveraging the combined companies’ scale, scope and
expertise. This partnership allows Great Plains Energy the financial
flexibility to free up capital to focus on other infrastructure
investments which will enhance reliability for KCP&L and GMO’s customers.
Both of Great Plains Energy’s regulated electric utility subsidiaries,
Kansas City Power & Light Company (KCP&L) and KCP&L Greater Missouri
Operations Company (GMO), will continue to own and maintain their
existing transmission infrastructure, which includes more than 3,600
miles of high-voltage transmission lines they own and operate in Kansas
and Missouri. The utilities will continue to invest in new transmission
projects that are identified to serve customers in their franchised
service territories.
The first two projects Transource intends to build are within the
Southwest Power Pool (SPP) region. KCP&L and GMO will seek regulatory
approval to transfer their two SPP-approved regional transmission
projects, located in Missouri, to Transource. The Sibley-Nebraska City
line is a 175-mile, 345-kilovolt line linking the Nebraska City
substation (owned by Omaha Public Power District) near Nebraska City,
Nebraska, with the Sibley substation near Sibley, Missouri. Transource
would construct and own approximately 170 miles of the project. Omaha
Public Power District would construct the remainder of the transmission
line. The project, estimated to cost approximately $380 million, has an
anticipated in-service date of 2017.
The other project, the Iatan-Nashua line, is a 30-mile, 345-kilovolt
line from the Iatan substation near Weston, Missouri to the Nashua
substation near Smithville, Missouri. The Iatan – Nashua project,
estimated to cost approximately $54 million, has an anticipated
in-service date of 2015.
Both transmission projects are required by the SPP and are necessary to
improve reliability, reduce congestion on the grid and provide future
access to affordable power for KCP&L customers, GMO customers and other
electric utility customers throughout the region. The lines will expand
the regional high-voltage transmission grid and support the development
of renewable energy. Because both projects provide regional benefits,
the cost will be recovered among the regional utilities.
This summer, KCP&L and GMO will file for regulatory approvals with the
Missouri Public Service Commission (MPSC) to complete the transfer of
the two SPP projects to Transource. Transource will file an application
with the MPSC for line certificates which will grant Transource the
authority to construct, own and operate the two SPP regional projects.
It also intends to apply for a FERC formula rate for the two Missouri
projects later this year.
“The partnership with AEP positions Great Plains Energy well for the
future and will allow us to pursue larger-scale regional transmission
grid expansion around the country,” said Terry Bassham, President and
Chief Operating Officer of Great Plains Energy. “We are excited about
the growth potential that exists for our company and believe this
partnership will result in cost-effective grid expansion for the benefit
of customers in regions where projects are built.”
Great Plains Energy is a holding company headquartered in Kansas City,
Mo. Great Plains Energy owns the Kansas City Power & Light Company and
KCP&L Greater Missouri Operations Company. Great Plains Energy’s
electric utilities serve more than 800,000 customers in 47 counties in
Missouri and Kansas with a combined diverse generation platform of
approximately 6,600 megawatts.
American Electric Power is one of the largest electric utilities in the
United States, delivering electricity to more than 5 million customers
in 11 states. AEP ranks among the nation’s largest generators of
electricity, owning nearly 39,000 megawatts of generating capacity in
the U.S. AEP also owns the nation’s largest electricity transmission
system, a nearly 39,000-mile network that includes more 765-kilovolt
extra-high voltage transmission lines than all other U.S. transmission
systems combined. AEP’s headquarters are in Columbus, Ohio.
About Great Plains Energy:
Headquartered
in Kansas City, Mo., Great Plains Energy Incorporated (NYSE: GXP) is the
holding company of Kansas City Power & Light Company and KCP&L Greater
Missouri Operations Company, two of the leading regulated providers of
electricity in the Midwest. Kansas City Power & Light Company and KCP&L
Greater Missouri Operations Company use KCP&L as a brand name. More
information about the companies is available on the Internet at: www.greatplainsenergy.com
or www.kcpl.com.
Forward-Looking Statements:
Statements
made in this release that are not based on historical facts are
forward-looking, may involve risks and uncertainties, and are intended
to be as of the date when made. Forward-looking statements include, but
are not limited to, the outcome of regulatory proceedings, cost
estimates of capital projects and other matters affecting future
operations. In connection with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, Great Plains Energy and KCP&L
are providing a number of important factors that could cause actual
results to differ materially from the provided forward-looking
information. These important factors include: future economic conditions
in regional, national and international markets and their effects on
sales, prices and costs, including but not limited to possible further
deterioration in economic conditions and the timing and extent of
economic recovery, prices and availability, of electricity in regional
and national wholesale markets; market perception of the energy
industry, Great Plains Energy and KCP&L changes in business strategy,
operations or development plans; effects of current or proposed state
and federal legislative and regulatory actions or developments,
including, but not limited to, deregulation, re-regulation and
restructuring of the electric utility industry; decisions of regulators
regarding rates the Companies can charge for electricity; adverse
changes in applicable laws, regulations, rules, principles or practices
governing tax, accounting and environmental matters including, but not
limited to, air and water quality; financial market conditions and
performance including, but not limited to, changes in interest rates and
credit spreads and in availability and cost of capital and the effects
on nuclear decommissioning trust and pension plan assets and costs;
impairments of long-lived assets or goodwill; credit ratings; inflation
rates; effectiveness of risk management policies and procedures and the
ability of counterparties to satisfy their contractual commitments;
impact of terrorist acts, including but not limited to cyber terrorism;
ability to carry out marketing and sales plans; weather conditions
including, but not limited to, weather-related damage and their effects
on sales, prices and costs; cost, availability, quality and
deliverability of fuel; the inherent uncertainties in estimating the
effects of weather, economic conditions and other factors on customer
consumption and financial results; ability to achieve generation goals
and the occurrence and duration of planned and unplanned generation
outages; delays in the anticipated in-service dates and cost increases
of generation, transmission, distribution or other projects; the
inherent risks associated with the ownership and operation of a nuclear
facility including, but not limited to, environmental, health, safety,
regulatory and financial risks; workforce risks, including, but not
limited to, increased costs of retirement, health care and other
benefits; and other risks and uncertainties.
This list of factors is not all-inclusive because it is not possible to
predict all factors. Other risk factors are detailed from time to time
in Great Plains Energy’s and KCP&L’s quarterly reports on Form 10-Q and
annual report on Form 10-K filed with the Securities and Exchange
Commission. Each forward-looking statement speaks only as of the date of
the particular statement. Great Plains Energy and KCP&L undertake no
obligation to publicly update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise.
Source: Great Plains Energy
Great Plains Energy
Investors:
Tony
Carreño, Director, Investor Relations
816-654-1763
anthony.carreno@kcpl.com
or
Media:
Katie
McDonald, Director, Corporate Communications
816-932-9455
katie.mcdonald@kcpl.com
