Texas Eyes Renewable Energy Zone

A joint venture between American Electric Power Company (NYSE: AEP) and MidAmerican Energy has recently begun construction on a major renewable zone with in Texas. The partnership, called Electric Transmission Texas, plans to invest $1.4 billion in the Competitive Renewable Energy Zone (CREZ) project by 2013. These projects were awarded to ETT by the Public Utility Commission of Texas and this investment will help construct nearly 450 miles of transmission lines and substations across West Texas. The Texas panhandle is huge source of domestic on-shore wind and solar energy, but without proper transmission infrastructure much of this potential energy is wasted.

Electric Transmission Texas has already partnered with global engineering firm URS Corporation (NYSE: URS) to serve as overall program manager. However, the real money for investors lies within the small-caps doing the heavy lifting.

Smaller construction firms, Quanta Services (NYSE: PWR) and MYR Group (NASDAQ: MYRG) have been tapped to do the main construction. Robert Wood, URS vice president and program manager, emphasized that Quanta and MYR have solid reputations for these types of construction projects. "We are very pleased that they will be joining these projects and look forward to working with both companies," he said.

FBR Capital recently recommended buying MYR Group shares following the recent pullback and reiterates an Outperform rating on the stock.