ITC Holdings CFO updates projects’ status, noting ‘good progress’ on Thumb Loop project

Cameron Bready, ITC Holdings’ (NYSE:ITC) executive vice president and CFO, during the company’s 1Q12 earnings call April 25, provided an update to some of the company’s transmission projects, including the 140-mile, 345-kV Michigan Thumb Loop Project.

“We’ve made good progress with the Thumb Loop project with the selection of a contractor to build the first segment of the project,” he said. “We expect significant capital investment associated with the Thumb Loop to begin this year. This project provides the critical transmission infrastructure necessary to support the previously approved wind zone development in the state of Michigan.”

ITC said in March that it selected M.J. Electric, a Quanta Services company to build the project’s first segment. The first phase of the double-circuit line will extend about 62 miles from the site of the new Bauer substation in Tuscola Township, southwestern Tuscola County, to the new Rapson substation in Huron County, east of Bad Axe in Sigel Township in the state’s Thumb region, the company added.

ITC Chairman, President and CEO Joseph Welch said during the company’s 1Q12 earnings call that the selection of M.J. Electric “was based on competitive bidding process as well as [its] history of safety and successful project completion for ITC in this very specialized field.”

He also noted that the Thumb Loop project is the largest single project ITC has undertaken and is critical to supporting transmission upgrades in the region.

“It also serves as another example of how our strategic alliance relationships with vendors capable of undertaking these large projects ensures that ITC will remain well positioned to execute on its transmission investment incentives going forward.”

International Transmission Company (ITC Transmission) broke ground for the project on April 2.

According to TransmissionHub data, the project will be capable of supporting a maximum capacity of about 5,000 MW. Construction on the first segment is expected to complete in late 2013, with the remainder being targeted for completion by 2015. ITC Transmission, which will own and operate the project, received a siting certificate for the project from Michigan regulators in February 2011.

Bready also said the ITC Great Plains projects, which include the Hugo-to-Valiant and the KETA project “remain on schedule for completion.”

According to TransmissionHub data, the Hugo-to-Valiant project is an 18-mile, 345-kV transmission line estimated to cost $37m. The line is being implemented to reduce line congestion and expand interconnection capabilities to a broader range of generation.

Bready said, “Importantly, during the first quarter of 2012, ITC Great Plains received NERC certification as a transmission operator, which will allow us to operate these projects in SPP as they’re placed into service. Receiving this certification is another example of our focus on operational excellence, which serves to set ITC apart from many other transmission developers.”

The company anticipates that the Hugo-to-Valiant project will be placed into service in the next few weeks, Bready said.

According to TransmissionHub, the KETA project is a 225-mile, 345-kV line that originates at Spearville, Kan., and ends at Axtell, Neb. The line is estimated to cost $203m and is scheduled for completion in 2013. The project is being constructed in three phases. KETA stands for the sponsor group, the Kansas Electric Transmission Association.

Bready said, “The first phase of the KETA project is scheduled to be placed into service in June.”

Among other things, he said ITC is also in the process of beginning its internal activities to further advance its portions of some Midwest ISO multi-value projects that the company is undertaking.

ITC said April 24 that its reported net income for the quarter ended March 31 was $46.1m, compared to $42m for the first quarter of 2011.

Operating earnings for the quarter were $48.6m, compared to operating earnings of $42m for the first quarter of 2011. Operating earnings are non-GAAP measures that exclude the impact of after-tax expenses of about $2.5m, associated with the Entergy (NYSE:ETR) transaction.

ITC also said that for the three months ended March 31, it invested $203m in capital projects at its operating companies, including $41.1m, $39.8m, $92.4m and $29.7m at ITC Transmission, METC, ITC Midwest and ITC Great Plains, respectively.

Operating earnings for the first quarter of 2012 increased $6.6m, compared to the same period in 2011.  This increase, ITC added, was largely attributable to higher income associated with increased rate base and AFUDC at all of its operating companies, partially offset, for instance, by lower revenues associated with the amortization of the ITC Transmission rate freeze revenue deferral which expired in May 2011.

The company also said that operation and maintenance expenses of $28.7m were $2.4m higher during the first quarter of 2012 compared to the same period in 2011. This increase was primarily due to increased vegetation management requirements and increased NERC compliance activities associated with surveying transmission overhead lines, ITC added. 

About Corina Rivera-Linares 3286 Articles
Corina Rivera-Linares was TransmissionHub’s chief editor until August 2021, as well as part of the team that established TransmissionHub in 2011. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial from 2005 to 2011. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines.