Ohio-based, public utility holding company,
American Electric Power
(
AEP
) awarded a transmission contract to Houston-based,
Quanta Services, Inc.
(
PWR
) to reconstruct its 345,000 volt power line of 66 miles located in
the coastal city of Corpus Christi in Texas.
The Corpus Christi portion is the first of the five stages of
the energy transmission development program proposed by American
Electric. The construction process is expected to be initiated in
the fourth quarter 2012 and is projected to be completed by the end
of first quarter 2016.
This project is part of American Electric's recent drive to
modernize its transmission business which includes a 240 mile power
line stretching from Harlingen to Corpus Christi and finishing at
Edinburg in South Texas. Once the entire modernization program is
completed, it will contribute to transmission capacity increase of
at least 40%.
We believe this infrastructure upgrade will be a major revenue
driver for the company in the long run and will enable American
Electric to provide uninterrupted and reliable services to its
customers. This will aid in augmenting customer footprint across
the company's operational areas thereby contributing to
profitability.
American Electric is known to make periodic investments in its
transmission business. The company recently added another
high-quality investment prospect to its portfolio. It entered into
a joint venture with MidAmerican Energy Holdings Company and
Westar Energy Inc.
(
WR
) for the construction of a 345-kilovolt, 108 miles power line in
south-central Kansas. The project named Prairie Wind Transmission
is worth $180 million and is expected to be completed by late
2014.
Aside from developing its transmission services, American
Electric is also working to improve the generation portfolio by
gradually converting its coal fired units into natural gas fired
ones to meet the environmental standards. American Electric has
planned long term capital investment in the range of $6 billion to
$7 billion to continue with its green power development
initiatives.
The Zacks Consensus Estimates for the third quarter and full
year 2012 currently stand at $1.04 per share and $3.05 per share,
respectively. The company's closest competitor is North
Carolina-based,
Duke Energy Corporation
(
DUK
).
The company presently has a Zacks #2 Rank implying a short-term
Buy rating. American Electric engages in the generation,
transmission and distribution of electric power to retail
customers. It generates electricity using coal and lignite, natural
gas, nuclear energy and hydroelectric energy. With market
capitalization of $21.06 billion, the company has as of now 18,000
employees.
AMER ELEC PWR (AEP): Free Stock Analysis Report
DUKE ENERGY CP (DUK): Free Stock Analysis
Report
QUANTA SERVICES (PWR): Free Stock Analysis
Report
WESTAR ENERGY (WR): Free Stock Analysis Report
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