Washington (Platts)--13Apr2009

The US Federal Energy Regulatory Commission on Friday approved
transmission investment incentives for the multi-billion-dollar Green Power
Express transmission project proposed by ITC Holdings.

ITC on Monday said the ruling will enable it to pursue development of the
Green Power Express project, a collection of high-voltage power lines designed
to transport up to 12,000 MW of power from wind resources in the upper Midwest
to populous areas in Eastern and Midwestern states.

"This is an exciting step in the process of connecting clean, renewable
energy sources from wind-rich areas to urban locations where it is needed,"
Joseph Welch, chairman, president and CEO of ITC, said in a statement.

The Green Power Express project is designed to traverse portions of North
Dakota, South Dakota, Minnesota, Iowa, Wisconsin, Illinois and Indiana and
include approximately 3,000 miles of 765-kV transmission lines. The entire
project is estimated to cost about $10 billion to $12 billion, and the initial
phase of the project would be in service in 2020, FERC said in its order.

Although several parties protested ITC's plan for numerous reasons,
including that it is premature and excluded regional transmission planning
steps, FERC found many of ITC's transmission incentives requests were
warranted because the project would reduce transmission congestion, improve
reliability and facilitate delivery of wind power.

FERC found that the Green Power Express Project is "not routine by any
measure" and is eligible for transmission investment incentives because it
will provide benefits such as improved power transfer capability and access to
wind generation, ITC said. The order grants approval of an incentive return on
common equity of 12.38%; deferred recovery for start-up, development and
pre-construction costs through the creation of regulatory assets; inclusion of
all construction work in progress in rate base; abandoned plant treatment; and
use of a hypothetical capital structure with 60% equity and 40% debt until any
portion of the project is placed in service.

The FERC order conditionally accepted formula transmission rate sheets,
subject to refund, and set them for hearing and settlement judge procedures.

The approved transmission investment incentives and ROE were specifically
excluded from any hearing process, ITC said.

ITC now will seek Midwest Independent Transmission System Operator review
of the seven-state project and pursue a cost allocation mechanism that takes
into account its benefits, the transmission company said.

The Midwest ISO has more than 62,000 MW of renewable generation resources
in its active interconnection queue, with many of them planned in areas where
Green Power Express would be built, FERC said. In addition, "we note that
Midwest ISO estimates that it will need approximately 25,000 MW of renewable
generation in its footprint in the next 10 to 15 years to comply with current
renewable portfolio standards in the region," FERC said.