American Electric power to invest in new grid company

FORT LAUDERDALE Nov 2 (Reuters) - American Electric Power Inc (AEP.N) Chairman Michael Morris said Monday his company hopes to invest as much as $130 million in a new transmission company next year.

AEP will form a separate transmission company to pursue new transmission upgrades within its 11-state utility territory, according to a release.

Beyond 2010, Morris said investment in the company could quickly grow to $400 million for the next six to seven years.

Once approved by regulators, a separate company "will enable us to get a quicker regulatory return for our capital invested," Morris said on the sidelines of the Edison Electric Institute financial conference.

Morris envisions a spin-off of the new entity down the road.

"Ultimately, we intend to take some part of this into a partial IPO to put a true value on this portion of the larger AEP portfolio," Morris said. (Reporting by Eileen O'Grady; Editing by John Picinich)