Feb 27 (Reuters) - American Electric Power ( AEP ) and

its transmission affiliate Transource Energy LLC will invest

approximately $1.7 billion in transmission system upgrades to

improve reliability and deliver more power to meet growing

demand, AEP said on Thursday.

AEP said in a statement that it will invest across states

within the footprint of regional transmission organization PJM

Interconnection, including Indiana, Maryland, Ohio, Virginia,

and West Virginia.

Pennsylvania-based PJM coordinates the movement of wholesale

electricity in all or parts of 13 U.S. states and the District

of Columbia.

AEP and Transource's proposals were approved by the PJM

board "to address forecasted conditions that would create

reliability concerns," the statement added.

About $1.1 billion of the investment will go through

Transource Energy as part of a joint venture with Dominion

Energy ( D ) and FirstEnergy Transmission LLC, AEP said.

The remaining $600 million has been approved for AEP's

transmission companies and operating companies in Indiana, Ohio,

and Virginia. All projects are in the early stages of

development, AEP said.