Electric Transmission Texas, LLC (“ETT”), jointly owned by American Electric Power Co., Inc. (AEP) and MidAmerican Energy Holdings Company, and Sharyland Utilities, L.P. (“Sharyland”), a Texas-based public electric utility, received approval from the Public Utility Commission of Texas (:PUCT) to construct a 345-kilovolt (kV) transmission line. The estimated total cost of the project is $309 million. The transmission line is expected to be operational in 2016.
Per the plan, ETT and Sharyland will build a new around 96-mile line, stretching from an existing substation of American Electric Power’s unit AEP Texas Central Company in the northwest of the city of Edinburg to the existing Brownsville Public Utilities Board Loma Alta substation located in the east of the city of Brownsville. The eastern half of the line will be developed and operated by Sharyland, while western half will be built, owned and managed by ETT. The midpoint of the line is located around one mile east of the Hidalgo and Cameron county line, TX.
ETT and Sharyland filed their first joint application for the 345-kilovolt (kV) transmission line project in July 2013. On May 16, 2013, ETT received a unanimous approval from the PUCT for a Certificate of Convenience and Necessity.
Post completion, the project will enable the companies to provide reliable electricity services to the Lower Rio Grande Valley and meet increased customer demand.
It is evident from past records that American Electric Power continues to expand and strengthen its existing operations. In Jan 2014, the company’s unit AEP Transmission Holding Co. partnered with AltaLink LP to take part in the Alberta Electric System Operator’s competitive process to construct and operate the Fort McMurray West 500-kV transmission project in Canada. American Electric Power invested around $3,632 million as capital expenditure in 2013.
American Electric Power had cash flow from operating activities of $4,107 million and cash balance was $118 million as of Dec 31, 2013. Efficient cash generation capacity through operating activities and a stable cash position enable American Electric Power to invest more on infrastructure projects and expand its scale of operations.
American Electric Power currently has a Zacks Rank #2 (Buy). Some other stocks looking equally good in the utilities industry include Black Hills Corporation (BKH), Otter Tail Corporation (OTTR) and Public Service Enterprise Group Inc. (PEG), each carrying a Zacks Rank #1 (Strong Buy).