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OGE Energy Corp. and Electric Transmission America Announce Plan to Build 765 kV Lines in Western Oklahoma

2008-07-15 11:00:00

   Companies form Horizon Transmission LLC to aid wind power development

    OKLAHOMA CITY, July 15 /EMWNews-FirstCall/ -- OGE Energy Corp.

(NYSE: OGE) and Electric Transmission America (ETA), a joint venture of

subsidiaries of American Electric Power (NYSE: AEP) and MidAmerican Energy

Holdings Co., announced today that the companies have formed Horizon

Transmission LLC to construct high-capacity transmission line projects in

western Oklahoma.

    "Oklahoma again has an opportunity to grow its economy while delivering

a highly valued resource to our region," said Pete Delaney, chairman,

president and CEO of OGE Energy Corp. "This time, it's the clean and

renewable energy resource provided by the consistent winds present in

western Oklahoma."

    OGE will own 50 percent of the Horizon Transmission LLC joint venture.

    "OGE has joined with two strong and experienced partners to enable us

to continue to provide stewardship over the construction, operation and

maintenance of transmission critical to the development of Oklahoma's wind

resources," Delaney said. "These extra-high voltage lines will not only

help unlock the wind potential and opportunities for investment in

Oklahoma, but also will provide a valuable renewable source of electricity

to Oklahoma's utility customers."

    Separately, OGE's Oklahoma Gas & Electric (OG&E) subsidiary already is

proposing to build a 345 kilovolt (kV) transmission line between Woodward

and northwest Oklahoma City. That line is targeted for completion in 2010.

    The new partnership announced today will allow the companies to lead

development of renewable wind by sharing capital costs associated with the

planned transmission construction. Work on the Horizon projects is

scheduled to begin in the second half of 2009 and is targeted for

completion by the end of 2013.

    The Horizon projects are subject to creation by the Southwest Power

Pool (SPP) of a cost allocation method that would spread costs across the

SPP region. The project also requires approval from the Federal Energy

Regulatory Commission (FERC). OG&E may seek approval from the Oklahoma

Corporation Commission.

    The Horizon partnership's initial projects will include 765 kV lines

from Woodward 120 miles northwest to Guymon in the Oklahoma Panhandle and

from Woodward 50 miles north to the Kansas border. An SPP study estimates

cost for the two projects at about $500 million.

    All the projects underscore the role of Woodward as an important hub of

wind generation, forming the intersection of key transmission facilities

capable of collecting power generated by wind and transporting it to

markets both within and outside the region.

    "The Horizon Partnership, by combining the strength of both

organizations, is well positioned to build this complex transmission

infrastructure. OG&E will contribute its expertise in right of way,

operations and maintenance while AEP will provide engineering design and

construction oversight," Delaney said. "Through Horizon Transmission LLC,

we intend to expedite completion of these projects while avoiding the

burden of stand-alone capital costs associated with constructing 765 kV


    In May, ETA formed a similar joint venture with Westar Energy Inc.

(NYSE: WR) to build 765 kV lines between Spearville, Kan., and the Oklahoma

border north of Woodward. That project, named Prairie Wind Transmission

LLC, is proposing to build approximately 230 miles of transmission

facilities from Wichita, Kan., west to near Dodge City, Kan., and then

south to the Kansas/Oklahoma border near Medicine Lodge, Kan. The estimated

cost of that project is $600 million.

    The Horizon Transmission and Prairie Wind Transmission projects

encompass the first two segments of the Extra-High-Voltage Overlay Study

plan released in March by the SPP.

    OGE Energy is the parent company of Oklahoma Gas and Electric Company

(OG&E), which serves more than 765,000 customers in a service territory

spanning 30,000 square miles in Oklahoma and western Arkansas, and of

Enogex LLC, a midstream natural gas pipeline business with principal

operations in Oklahoma.

    MidAmerican Energy Holdings Co., based in Des Moines, Iowa, is a global

provider of energy services. Through its energy-related business platforms,

MidAmerican provides electric and natural gas service to more than 6.9

million customers worldwide. MidAmerican Energy Holdings Company

subsidiaries PacifiCorp and MidAmerican Energy Company own and operate more

than 18,000 miles of electric transmission lines.

    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 38,000 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

utility units include Public Service Company of Oklahoma. AEP's

headquarters are in Columbus, Ohio.

    Some of the matters discussed in this news release may contain

forward-looking statements that are subject to certain risks, uncertainties

and assumptions. Such forward-looking statements are intended to be

identified in this document by the words "anticipate," "believe,"

"estimate," "expect," "intend," "objective," "plan," "possible,"

"potential," "project" and similar expressions. Actual results may vary

materially. Factors that could cause actual results to differ materially

include, but are not limited to: general economic conditions, including the

availability of credit, actions of rating agencies and their impact on

capital expenditures; the Company's ability and the ability of its

subsidiaries to obtain financing on favorable terms; prices of electricity,

coal, natural gas and natural gas liquids, each on a stand-alone basis and

in relation to each other; business conditions in the energy and natural

gas midstream industries; competitive factors including the extent and

timing of the entry of additional competition in the markets served by the

Company; unusual weather; availability and prices of raw materials for

current and future construction projects; federal or state legislation and

regulatory decisions (including the approval of regulatory filings related

to the proposed acquisition of the Redbud power plant) and initiatives that

affect cost and investment recovery, have an impact on rate structures or

affect the speed and degree to which competition enters the Company's

markets; environmental laws and regulations that may impact the Company's

operations; changes in accounting standards, rules or guidelines; the

discontinuance of regulated accounting principles under SFAS No. 71;

creditworthiness of suppliers, customers and other contractual parties; the

higher degree of risk associated with the Company's nonregulated business

compared with the Company's regulated utility business; the impact of the

proposed initial public offering of limited partner interests of OGE Enogex

Partners L.P.; and other risk factors listed in the reports filed by the

Company with the Securities and Exchange Commission including Risk Factors

and Exhibit 99.01 to the Company's Form 10-K for the year ended Dec. 31,


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