Dominion Energy, American Electric Power, FirstEnergy reach joint planning agreement to propose regional transmission projects across PJM footprint

Rhea-AI Summary

Dominion Energy Virginia, American Electric Power, and FirstEnergy Corp. have entered a joint planning agreement to propose new regional electric transmission projects across the PJM footprint. This collaboration aims to address the growing power demand in the region due to expanding energy-intensive industries, electrification, and manufacturing onshoring. The companies jointly proposed projects through PJM's Regional Transmission Expansion Plan Open Window process in September, including new 765-kV, 500-kV, and 345-kV transmission lines in Virginia, Ohio, and West Virginia.

The partnership leverages the expertise of these industry leaders to develop comprehensive, cost-effective solutions that promote regional grid reliability. If selected by PJM, the projects would undergo an extensive process of route selection, environmental studies, community engagement, and permitting before construction.

Positive

• Collaboration between three major energy companies to address growing power demand
• Proposed new high-voltage transmission lines across multiple states
• Potential to improve regional grid reliability and support economic growth
• Alignment with FERC's encouragement of efficient regional transmission development

Negative

• Projects are in early stages and subject to PJM approval
• Extensive multi-year process required before construction can begin
• Potential environmental and community impacts from new transmission lines

Insights

Energy Infrastructure Analyst

This joint planning agreement between Dominion Energy, American Electric Power and FirstEnergy is a significant development in the electric transmission sector. The collaboration aims to address the rapidly growing power demand across the PJM region, driven by data centers, electrification and manufacturing onshoring. This proactive approach to regional transmission development aligns with FERC's encouragement for efficient and cost-effective solutions.

The proposed projects, including new 765-kV, 500-kV and 345-kV transmission lines across Virginia, Ohio and West Virginia, represent a substantial infrastructure investment. While still in early stages, if approved by PJM, these projects could significantly enhance grid reliability and support economic growth in the region.

For investors, this collaboration signals potential long-term growth opportunities in the transmission sector. However, it's important to note that the extensive development process, including route selection, environmental studies and permitting, means any financial impact will be realized over an extended period. The joint approach may also lead to more competitive and cost-effective solutions, potentially benefiting ratepayers and improving regulatory outcomes.

Utility Sector Analyst

This joint venture represents a strategic move by three major utility companies to capitalize on the changing energy landscape. The collaboration allows them to pool resources and expertise, potentially leading to more efficient project development and cost management. This could translate to improved returns on investment and a stronger competitive position in the PJM market.

For Dominion Energy ($46.25B market cap), this agreement could enhance its growth prospects in the transmission segment. The company's involvement in large-scale regional projects may provide a stable, long-term revenue stream, which is particularly attractive in the utility sector.

Investors should watch for potential impacts on capital expenditure plans and how these projects might affect the companies' rate bases. While the initial investment may be substantial, successful implementation could lead to steady, regulated returns over time. Additionally, the focus on addressing growing power demand from data centers and electrification aligns with broader economic trends, potentially positioning these utilities for sustained growth.

• Companies jointly propose electric transmission projects to serve region's growing power demand through PJM's competitive planning process
• Collaboration leverages expertise of industry leaders to propose comprehensive, cost-effective solutions that promote regional grid reliability

RICHMOND, Va., Oct. 7, 2024 /PRNewswire/ -- Dominion Energy Virginia, American Electric Power and FirstEnergy Corp. have entered into an innovative joint planning agreement to propose several new regional electric transmission projects across multiple states within the PJM footprint. 

The innovative collaboration comes at a time when efficient and cost-effective regional transmission development is essential and encouraged by the Federal Energy Regulatory Commission (FERC), the independent federal agency that regulates the interstate transmission of electricity.

Power demand in the PJM region is growing at an unprecedented pace due to rapid expansion of energy-intensive industries such as data centers, the electrification of transportation and heating, and increased manufacturing onshoring. At the same time, the region's power generation mix is changing as legacy generation is retired and more renewables are added to the grid.

"This dynamic environment requires more regional collaboration to develop large-scale 'backbone' transmission infrastructure that spans across the areas served by our three companies," said Ed Baine, President of Dominion Energy Virginia. "By leveraging the expertise and resources of three industry leaders whose transmission zones border one another, we're better able to develop superior and more cost-effective solutions required to effectively resolve reliability issues across the PJM region. These projects are more comprehensive and will be more effective than what each of our companies would be able to develop individually."

"Energy-intensive industries, electrification and the energy transition all rely on a robust power grid," said Mark Mroczynski, President, FirstEnergy Transmission. "By drawing upon the combined experience of three leading transmission developers, we can take the proactive steps needed to build new infrastructure that will ensure our communities have the power they need for sustained health and economic growth in the future."

"AEP operates the largest transmission network in the nation and has more experience building 765 kV infrastructure than any other company in the U.S.," said Bob Bradish, senior vice president, Regulated Infrastructure Investment Planning for AEP. "The solutions we have proposed to address the rapidly evolving energy demand we are seeing across the region will enable us to continue providing reliable service and drive economic growth."

The companies jointly proposed the projects through PJM's Regional Transmission Expansion Plan (RTEP) Open Window process in September. PJM is the regional transmission organization that coordinates the transportation of wholesale electricity across the 13-state region that includes Virginia. The proposed projects include several new 765-kV, 500-kV and 345-kV transmission lines in Virginia, Ohio and West Virginia.

The projects remain in the early stages of development. If selected by PJM, the companies would then undertake an extensive, multi-year process to select routes, perform environmental studies, engage with communities, obtain state and local permitting and build the projects.

In addition to the joint proposals, each of the three companies have also submitted individual proposals for other transmission projects consistent with how each company has participated in past PJM open windows.

About Dominion Energy

Dominion Energy (NYSE: D), headquartered in Richmond, Va., provides regulated electricity service to 3.6 million homes and businesses in Virginia, North Carolina, and South Carolina, and regulated natural gas service to 400,000 customers in South Carolina. The company is one of the nation's leading developers and operators of regulated offshore wind and solar power and the largest producer of carbon-free electricity in New England. The company's mission is to provide the reliable, affordable, and increasingly clean energy that powers its customers every day. Please visit DominionEnergy.com to learn more.

About AEP

AEP, headquartered in Columbus, OH, owns and operates more than 40,000 miles of transmission lines, the nation's largest electric transmission system, and more than 225,000 miles of distribution lines to deliver power to 5.6 million customers in 11 states. AEP also is one of the nation's largest electricity producers with approximately 29,000 megawatts of diverse generating capacity. AEP is investing $43 billion over the next five years to make the electric grid cleaner and more reliable. AEP participates in the competitive transmission space through Transource, a jointly owned transmission company with Evergy, headquartered in Kansas City, Missouri.

About FirstEnergy

FirstEnergy Corp. (NYSE: FE), is dedicated to integrity, safety, reliability and operational excellence. Its electric distribution companies form one of the nation's largest investor-owned electric systems, serving more than six million customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. The company's transmission subsidiaries operate approximately 24,000 miles of transmission lines that connect the Midwest and Mid-Atlantic regions. Follow FirstEnergy online at firstenergycorp.com and on X @FirstEnergyCorp.

Forward-Looking Statements

This release contains certain forward-looking statements that are subject to a variety of factors that could cause actual events or results to differ from those included in these statements. These factors are identified in Dominion Energy's Forms 10-K and 10-Q filed with the U.S. Securities and Exchange Commission. Dominion Energy refers readers to those discusses for further information. Any forward-looking statement speaks only as of the date on which it is made, and Dominion Energy undertakes no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date on which it is made.

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SOURCE Dominion Energy

FAQ

What companies are involved in the joint planning agreement for PJM transmission projects?

Dominion Energy Virginia (D), American Electric Power, and FirstEnergy Corp. have entered into a joint planning agreement to propose regional electric transmission projects across the PJM footprint.

What types of transmission lines are proposed in the joint planning agreement?

The proposed projects include new 765-kV, 500-kV, and 345-kV transmission lines in Virginia, Ohio, and West Virginia.

Why is there a need for new transmission projects in the PJM region?

Power demand in the PJM region is growing rapidly due to expansion of energy-intensive industries like data centers, electrification of transportation and heating, and increased manufacturing onshoring. Additionally, the region's power generation mix is changing as legacy generation is retired and more renewables are added to the grid.

When did Dominion Energy (D) and partners submit their joint proposal to PJM?

The companies jointly proposed the projects through PJM's Regional Transmission Expansion Plan (RTEP) Open Window process in September 2024.