Arlington, VA, Dec. 20, 2006 — AES Corp. announced that it is entering the electric transmission business as part of its growth strategy for North America.
Through a new wholly-owned subsidiary, AES said it has acquired the development pipeline and trade name from Trans-Elect LLC, a transmission developer. In addition, AES announced that the new subsidiary has entered into an agreement with Trans-Elect’s former management team to jointly develop projects across North America to extend and improve the nation’s electricity grid.
“We see significant potential for transmission development in North America with grid investment expected to nearly double by 2010. Increasing congestion costs in many high demand areas of the country, the growing development of renewable generation located far from load centers, and enhanced regulatory support at the state, regional, and federal levels are driving this growth,” said David Gee, president of AES North America.
Trans-Elect was formed in 1999 and since 2002 has acquired an interest in the AltaLink transmission system in Alberta, Canada, purchased Consumers Energy’s Michigan transmission system and secured financing to construct the expansion of the Path 15 transmission line in California. Before being sold to third-parties, these assets totaled 12,600 miles of transmission assets under management.
Transmission investment in the United States has increased since the late 1990’s from $2.5 billion in 1998 to $5.5 billion in 2005. According to the Edison Electric Institute, transmission investment could reach $8.0 billion per year by 2008 and $10.0 billion or more by 2010.
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