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Washington, D.C.-based utility Pepco Holdings Inc. (PHI) has announced that federal regulators unanimously approved requested transmission rate incentives for PHI's Mid-Atlantic Power Pathway (MAPP) transmission line. The regulators noted that the incentives are an important part of ensuring construction of the 230-mile project, improving reliability in the mid-Atlantic region and providing access to more than 1,300 MWh of wind generation.

The Federal Energy Regulatory Commission (FERC) voted 5-0 to approve all components of PHI's Aug. 18 request, stating that the MAPP project will improve import capability, reduce transmission congestion costs and improve reliability in the mid-Atlantic region. The commission also recognized that the incentives will promote those goals, given the importance of the new facilities and the risks inherent in bringing them to completion.

PHI requested full recovery of construction work in progress in the rate base, an incentive return on equity (ROE) increase of 1.5%, resulting in a 12.8% ROE for the project, as well as recovery of prudently incurred costs in the event that the project is not completed for reasons beyond the company's control. The incentive rate treatments will be implemented through the PHI companies' individual formula rates.

MAPP, initially estimated at a cost of about $1.05 billion, will serve as a major backbone to the regional electric grid, relieve expected overloads on the existing transmission system and deliver power to PHI's utilities - Atlantic City Electric, Delmarva Power and Pepco - rural electric co-ops and municipal-owned generators in Maryland, Delaware and southern New Jersey. If the option to convert to direct current for the Chesapeake Bay crossing is implemented, the estimated project cost will be about $1.4 billion.

SOURCE: Pepco Holdings Inc.

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