BRIEF

Dan Gearino

Nov. 3, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- American Electric Power (NYSE:AEP) is creating a new company to handle the interstate transmission of power, a task previously handled at the state level.

This change could allow the Columbus-based utility to receive lower interest rates on its largest transmission projects, a spokesman said.

AEP is calling the new company Transco and is giving it an initial budget of $118 million for 2010.

"The Transco will be our vehicle for much of AEP's future on-system, wholly-owned transmission investment," said Michael Morris, AEP's chairman, president and CEO.

Although the company is expected to save money as a result of the new venture, it's not likely to be enough to be reflected in customers' bills, said spokesman Pat Hemlepp.

Morris discussed the plans yesterday at a utility industry conference in Florida. He said that the investment in Transco might increase over the years to $400 million, Hemlepp said.

AEP would not need approval from the Public Utilities Commission of Ohio to set up the new company, an agency spokeswoman said. The main regulator would be the Federal Energy Regulatory Commission, which oversees the interstate transmission of power.

dgearino@dispatch.com

Newstex ID: KRTB-0147-39406031