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LOS ANGELES, June 22 (Reuters) - PJM Interconnection on Friday approved two major transmission projects in four Mid-Atlantic states designed to alleviate congestion on big power lines in about five years.
Both projects must receive federal and state approval before construction can begin.
The two projects will cost almost $3 billion and would bring electricity produced at coal plants in West Virginia to Maryland and nuclear-fueled power from Pennsylvania to northern New Jersey, PJM said.
Allegheny Energy Inc. and American Electric Power Co. Inc. will build a $1.8 billion, 290-mile (467 km) project from St. Albans, West Virginia, to Frederick, Maryland. The transmission lines are scheduled to begin operation in June 2012, in time to meet that summer's demand, said Allen Staggers, Allegheny spokesman.
To be called the Potomac-Appalachian Transmission Highline (PATH), it will have a capacity of 765 kilovolts for 250 miles -- almost all in West Virginia -- and a 500-kilovolt line for 40 miles, mainly in Maryland.
The PJM board also on Friday approved a 500-KV, $930 million project to run 130 miles from the Susquehanna Substation in northeastern Pennsylvania to the Roseland Substation near Newark, New Jersey.
That project will be built by PPL Corp., FirstEnergy Corp. and Public Service Electric and Gas Co., a unit of Public Service Enterprise Group Inc. PPL will build the first 100 miles and then the other two companies the remaining 30 miles, a PJM spokeswoman said.
Earlier this month, Public Service said it will take five to eight years to build the lines. In an announcement on Friday, PJM said parts of the project could help congestion on 23 overloaded transmission lines in the two neighboring states Pennsylvania and New Jersey.
The Susquehanna Substation is near PPL's 2,245-megawatt Susquehanna nuclear power plant near Berwick, Pennsylvania. PPL on June 13 said it told the U.S. Nuclear Regulatory Commission that it may apply to build a third reactor at the site.
"While these two new lines are required to maintain the grid's reliability, they have the secondary benefit of resolving about $450 million in annual congestion costs," said Phillip Harris, PJM's president and chief executive.
PJM is the largest high-voltage power grid manager in the United States. Last fall, PJM said demand growth will average 1.6 percent yearly for the next decade in its 13-state region stretching from the Mid-Atlantic coast to Illinois, already serving more than 51 million people.
For the PATH in West Virginia and Maryland, Allegheny's portion of the cost is estimated at $1.2 billion, and AEP's share $600 million, the companies said.
Allegheny and AEP in April announced plans to form a joint venture to build PATH, and the two expect to formalize that JV in the coming weeks, Staggers said.
Once the JV is formed, it will file with the U.S. Federal Energy Regulatory Commission for incentive rate recovery. They will also need approval by public utility commissions in the two bordering Mid-Atlantic states.
PJM considers the PATH a "backbone upgrade" to the power grid.
A megawatt in the Mid-Atlantic area can generally serve about 800 homes.
(Additional reporting by Lisa Lee in New York)