Pennsylvania Utility to Spend Billions of Dollars Improving its Power Delivery System

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--PPL Electric Utilities Corporation (Allentown, Pennsylvania), a unit of PPL Corporation (NYSE:PPL) (Allentown), will spend billions of dollars over the next decade to strengthen and expand its regulated power delivery infrastructure in the state of Pennsylvania.

Pennsylvania utility regulators recently approved four transmission projects that represent a small down payment on PPL Electric Utilities' five-year, $3.4 billion capital investment program in its transmission and distribution infrastructure. After 2015, the utility is developing a second five-year plan that will be "very significant," according to spokesman Michael Wood.

In an interview with Industrial Info, Wood said he could not say if PPL Electric Utilities' 2016-20 project spending would be more than, less than, or the same as its $3.4 billion, 2011-15 plan. But he left little doubt that the serious capital project spending was just beginning. "We've had a fairly steady expansion of our capital investment in our delivery infrastructure in recent years, and we see that continuing to rise. On average, for years prior to 2009, we spent between $200 million and $250 million each year to strengthen and expand our transmission and distribution system. But our capital program rose to $290 million in 2009, $411 million in 2010 and $453 million this year. In 2012, we expect to invest about $620 million in its electric delivery infrastructure."

Wood emphasized that neither five-year capital program includes outlays to build new electric generation: "We've got dozens of transmission and distribution projects planned as well as transmission substations and distribution substations. Transmission projects have become much more complex and time-consuming--it takes a year just to place an order for the monopoles" that hold up the high-voltage transmission lines.

In October, the Pennsylvania Public Utilities Commission (Harrisburg, Pennsylvania) approved four transmission projects in eastern and central Pennsylvania valued at $54 million:

• Manor-Graceton: A $22.7 million project to rebuild a 230-kilovolt (kV) line in Manor Township in Lancaster and York counties. Construction is scheduled to start in August 2012.


• Otter Creek-Conastone: A $16.8 million project to replace the Otter Creek-Conastone 230-kV transmission line in York County. Construction is expected to begin in the summer of 2013 and be completed in spring 2014.


• Whitpain-Buxmont: A $11.2 million project to replace eight miles of 230-kV transmission line in Montgomery County. Construction is expected to begin in fall 2013, with the line in operation in spring 2014.


• South Akron-Dillerville: This project, valued at nearly $4 million, is part of a larger effort to upgrade transmission lines in central Lancaster County from 69-kV to 138-kV service to meet increasing electric demand in the Lancaster area.

"Moving forward on this work will benefit our customers in increased reliability," said David Bonenberger, general manager of Transmission Operations for PPL Electric Utilities. Three of the approved projects involve replacing lines dating to the 1920s and 1930s, he noted. "These lines, while they served our customers well for decades, are past their useful life and need to be replaced."

PPL Electric Utilities is building or wants to build a variety of other transmission and distribution capital projects, including:

• The Susquehanna-Roseland Project, a $1 billion, 500-kV transmission project that will stretch across 101 miles of Pennsylvania before continuing into New Jersey. PPL Electric Utilities will be responsible for about half the project's cost.


• The 60-mile Northeast-Pocono 230-kV transmission line, with a total investment value of $215 million. This project is scheduled to kick off in mid-2013 and finish in 2017.


• The Ledgedale Distribution Substation, TIV of $18 million, is scheduled to kick off in March 2012 and finish in April 2013.


• The Coopersburg-Quakertown transmission project is a 7-mile, 138-kV transmission line with a TIV of $15 million. The project, scheduled to begin in mid-2011, is slated for completion in early 2012.


• The Hawley 69-kV distribution substation, valued at $15 million, is scheduled to kick off during the fourth quarter of 2011 and be complete by the second quarter of 2012.

Speaking of the four projects approved last month by the Pennsylvania PUC, Wood said, "These are the first of several steps forward."

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