AUSTIN - The Lower Colorado River Authority (LCRA) and American Electric Power (NYSE: AEP) have signed an agreement to begin work on the initial transmission projects in a joint effort that will improve capacity and reliability of electric power in South and West Texas.

The agreement is believed to be the largest such public/private undertaking into electric transmission in the nation, according to LCRA managers.

Under the agreement, LCRA and AEP plan to construct up to $500 million of transmission projects over the next five years at more than 30 sites in Texas. The Electric Reliability Council of Texas (ERCOT) determined the sites as crucial to supporting a competitive retail electric market in the state. The LCRA will finance and own the transmission system improvements. AEP will build and maintain them.

"We are looking forward to working closely with AEP, one of the premier utilities in the nation, to develop needed transmission projects for the benefit of the people of Texas," said LCRA General Manager Joe Beal.

"The LCRA has a long tradition of providing quality electric service in Texas," said Richard Verret, AEP's vice president for Transmission. "Our relationship will result in a winning combination of experience, expertise and customer service."

AEP is a global energy company based in Columbus, Ohio. AEP provides retail electricity to more than 7 million customers, and operates more than 38,000 miles of transmission lines in 11 states.

The LCRA is a nonprofit, self-funded conservation and reclamation district dedicated to providing public services to the people of Texas. Besides generating and transmitting electric power in Texas, the LCRA provides water supplies, manages floods, protects the water quality of the Texas Colorado River, operates parks, and promotes community and economic development.