Trans-Elect and the Dine Power Authority announced they have signed an agreement to pursue the completion of the development and permitting of the Navajo Transmission Project (NTP).

The project is a 462-mile, 500kV high voltage transmission line originating in the Four Corners area of New Mexico, running across the Navajo Nation and terminating in Nevada, near Las Vegas. Trans Elect's NTD and Dinè have begun been contacting and working with generators, utilities and regulators and regional ISO's to define the customer and revenue sources for the line.

The project, the largest transmission infrastructure project currently underway in the United States, is key to meeting increasing electric demand in the fast-growing southwest power markets, according to Bob Mitchell, Executive Vice President of Trans-Elect.

"We are delighted to be working with Dinè Power and the Navajo Nation to see if we can finish the development of NTP and move the project to construction," Mitchell said. "The project is very important to the continuing growth the southwest markets as it increases system reliability and provides access to low-cost coal generation to the fast growing Arizona, Nevada and Southern California markets. This in turn offers the region and power suppliers a needed hedge against the huge growth in natural gas-fired generation in the southwest."

Mitchell added that despite that most companies are hesitant to make investments in transmission assets out of concern for the current health of the US power markets, this is the time to push forward with key infrastructure projects such as NTP that have a long development lead time.

"Trans-Elect believes the robust growth in the southwest markets and southern California will continue, and that the time is now for strengthening the transmission system to meet that growth," he added. Mitchell also said Trans-Elect's potential investment in NTP underscored its belief that the Federal Energy Regulatory Commission (FERC) is on track with its plan to create a competitive transmission market in the U.S., capable of attracting the kind of investment dollars needed for NTP and other capital intensive infrastructure projects.

"This project fits with Trans-Elect's mission to be the first truly national transmission company," Mitchell said. "It validates FERC's view that with a sound transmission market structure in place, investment dollars will flow to this critically important transmission sector."

"We have completed the preliminary engineering on the line, nearly all of the state and federal permitting and the Right-of-Way work on NTP at this point," said Steven C. Begay, General Manager of Dinè Power Authority. "We are very pleased that Trans-Elect has the vision to see how NTP fits into the market. Trans-Elect is an excellent partner to finish the work required and move the project into construction."

"This is a critical project for Navajo Nation infrastructure development," Begay added. "NTP, connecting Four Corners generation to the Phoenix, Las Vegas and Southern California markets, will open up new opportunities for Navajo coal in the Four Corners area. At a time when our country strives for energy independence and energy security, Navajo coal resources offer an important asset, providing critical price stability to the western power markets. And with the huge improvement in emission controls, the region can add to our coal generation in an environmentally responsible manner."

Under the agreement, Trans-Elect and DPA will complete a thorough due diligence on all aspects of the project and begin the process of identifying new sources of power, primarily coal-fired, that would make use of the new capacity. It is anticipated that all permits and right-of-ways could be completed, and construction initiated, in twelve to sixteen months, once transmission line customers have made necessary and appropriate commitments.

DPA began development of the line back in 1992 and received the necessary Federal Environmental Impact Statement (EIS) for the line in 1997. For the most part, the approved route follows existing high voltage transmission routes to minimize visual and environmental effects. With nearly all of the permitting work complete, and the federal EIS issued, DPA sought a partner to help it finish the permitting, complete the right-of-way work and initiate engineering and pre-construction activities consistent with the schedules of the transmission line's customers.

Trans-Elect, Inc., based in Reston, VA is the first and only truly independent transmission company in North America. Trans-Elect now owns or serves as general partner for assets totaling nearly $1.1 billion, which represents 14,400 miles of transmission lines in the U.S. and Canada. Trans-Elect's NTD was launched in Fall of 2002. NTD's singular focus is to develop and construct new electric transmission lines.

Dinè Power Authority is an enterprise of the Navajo Nation empowered to initiate electric power infrastructure development on the Navajo Nation. It has been working on NTP since 1992 and is engaged in the development of coal-fired generation and natural gas-fired generation for the western area wholesale markets. It generally seeks to partner with power companies in the private sector who have the operating and financing skills needed to complete such large, capital-intensive projects.