NEW YORK (CNNMoney.com) - American Electric Power Co. plans to build an electricity-transmission line from West Virginia to New Jersey, according to a report published Tuesday.

The $3 billion project is the first to take advantage of a new federal law that encourages projects that bring relief to an overstressed power grid, The Wall Street Journal said.

The 550-mile line could remove bottlenecks that keep power from flowing between the Midwest and mid-Atlantic region, according to the report.

Consumers have paid $2 billion in the last two years to run expensive natural-gas and oil-fired power plants because there wasn't enough space on transmission lines to bring in less expensive power from elsewhere, it said.

Columbus, Ohio-based American Electric Power (Research) will disclose its plans in filings with regulators and grid operators Tuesday, the newspaper said.

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