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AES News AES Enters Electric Transmission Business in North America

ARLINGTON, Va.--(BUSINESS WIRE)--The AES Corporation (NYSE:AES) today announced that it is entering the electric transmission business as part of its overall growth strategy for North America. Through a new wholly-owned subsidiary, AES said it has acquired the development pipeline and trade name from Trans-Elect, LLC, a leading transmission developer. In addition, AES announced that the new subsidiary has entered into an agreement with Trans-Elect’s former management team to jointly develop projects across North America to extend and improve the nation’s electricity grid.

“We see significant potential for transmission development in North America with grid investment expected to nearly double by 2010. Increasing congestion costs in many high demand areas of the country, the growing development of renewable generation located far from load centers, and enhanced regulatory support at the state, regional, and federal levels are driving this growth,” said David Gee, President of AES North America. “Independent electric transmission is a natural complement to our existing generation development business. We also see significant synergy and opportunity in working with Trans-Elect’s development team as they are proven and respected in the transmission business.”

Trans-Elect was formed in 1999 as the first independent transmission company in North America to pursue the development of independently-owned electric transmission with the goal of increasing the reliability of the system and lowering costs to consumers. Since 2002, Trans-Elect has acquired an interest in the AltaLink transmission system in Alberta, Canada, purchased Consumers Energy’s Michigan transmission system and secured financing to construct the expansion of the Path 15 transmission line in California. Before being sold to third-parties, these assets totaled 12,600 miles of transmission assets under management.

“Trans-Elect is proud to have pioneered independent electric transmission ownership and new transmission development in this country,” said Bob Mitchell, Chief Executive Officer of Trans-Elect Development, LLC, and a former executive at Trans-Elect. “We are excited about this new relationship with AES as they have been a creative force in developing independent generation in the US. Additionally, we believe that AES’s development skills, industry relationships, and financing capabilities will enhance our efforts to meet the nation’s electricity needs.”

Transmission investment in the United States has increased dramatically since the late 1990’s from $2.5 billion in 1998 to $5.5 billion in 2005. According to the Edison Electric Institute, transmission investment could reach $8.0 billion per year by 2008 and $10.0 billion or more by 2010.

About AES

AES is one of the world's largest global power companies, with 2005 revenues of $11 billion. With operations in 26 countries on five continents, AES's generation and distribution facilities have the capacity to serve 100 million people worldwide. Our 14 regulated utilities amassed 2005 annual sales of over 82,000 GWh and our 122 generation facilities have the capacity to generate approximately 44,000 megawatts. Our global workforce of 30,000 people is committed to operational excellence and meeting the world's growing power needs. To learn more about AES, please visit www.aes.com or contact AES media relations at media@aes.com.

Safe Harbor Disclosure

This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES's current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to, continued normal levels of operating performance and electricity demand at our distribution companies and operational performance at our contract generation businesses consistent with historical levels, as well as achievements of planned productivity improvements and incremental growth investments at normalized investment levels and rates of return consistent with prior experience. Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES's filings with the Securities and Exchange Commission, including, but not limited to, the risks discussed under Item 1A, "Risk Factors" in AES's 2005 Annual Report on Form 10-K. Readers are encouraged to read AES's filings to learn more about the risk factors associated with AES's business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.