Pepco gets approval for transmission incentives

LOS ANGELES Nov 3 (Reuters) - Pepco Holdings Inc (POM.N) on Monday got approval for a series of rate incentives and a higher rate of return for its proposed 230-mile Mid-Atlantic Power Pathway (MAPP) transmission project from the U.S. Federal Energy Regulatory Commission (FERC), government officials said.

"FERC authorized for the project a 1.5 percent return on equity (ROE) adder to the company's existing 11.3 percent ROE," FERC said in a press statement. "That will result in an overall ROE of 12.8 percent. FERC also authorized full recovery of construction work in progress and prudently incurred abandoned plant costs. The rates took effect Nov. 1, 2008."

The North American Reliability Corp has said that unless the Mid-Atlantic region builds more major transmission projects by 2012, brownouts and blackouts are likely in the Mid-Atlantic area including Baltimore and Washington, said Clay Anderson, Pepco spokesman.

A major power line, the 500-kilovolt MAPP will begin at the Possum Plant substation near Dumfries, Virginia and end at the Salem Nuclear Plant in southern New Jersey after passing through Maryland and Delaware.

Pepco said the transmission project will provide access for more than 1,300 megawatts of wind power.

The MAPP project is expected to cost up to $1.4 billion. The line is to be completed in segments from 2011 to 2014. (Reporting by Bernie Woodall; Editing by David Gregorio)