Shale Daily / NGI The Weekly Gas Market Report

Proposed Northeast Power Line Could Spur Gas-Fired Generation

PPL Corp.’s Pennsylvania utility, PPL Electric Utilities Corp., is proposing to build a major power line across four states, with the intention of opening the region to new power plants fired by natural gas from shale, presumably the Marcellus.

On Thursday, PPL said it had submitted the proposal to PJM Interconnection as part of the competitive process under Federal Energy Regulatory Commission Order 1000. The 500-kV, 725-mile transmission line would begin in western Pennsylvania and cross most of the northern tier of the state before turning south and crossing into Maryland. Spur lines would connect to New York and New Jersey. The proposed route traverses the heart of the Marcellus Shale.

During an earnings call to discuss 2Q2014 on Thursday, CEO William Spence said the project is in the preliminary planning stages.

"The new line would improve electric service reliability, enhance grid security and enable the development of new gas-fired power plants in the shale gas regions of northern Pennsylvania," Spence said. The power line could lower the bills of millions of electricity consumers by serving the region with lower-cost power and reducing grid congestion charges, he said.

"According to preliminary estimates, the cost of the project, which is not yet included in our [capital expenditures] projections, would be between $4 billion and $6 billion. Because of the magnitude of this proposal, there is a good chance we may enter into partnerships to develop and build the project."

Spence said the company expects the project would be completed between 2023 and 2025, assuming all of the necessary regulatory approvals are received and construction is allowed to begin in 2017.

Gregory Dudkin, president of PPL Electric Utilities, said there were several factors at play that made the project a compelling one.

"When you think about what's happened in the industry over the past year -- the polar vortex, substation security, coal retirements -- this project really pulls all those issues together and provides significant benefits to the consumers in the region," Dudkin said. "I think it's the compelling nature of the benefits of this project that will help the project move forward."

Recent Articles by Charlie Passut