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Utility operator seeks to join Carmel-based MISO

Associated Press
September 25, 2012
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Arkansas regulators have promised to decide quickly whether Entergy Corp. has met the state's conditions to join a regional transmission group, while the utility appears to have made progress toward satisfying regulators in Mississippi.

New Orleans-based Entergy, which owns utilities in Arkansas, Louisiana, Mississippi and Texas, wants to join the Midwest Independent Transmission System Operator, or MISO. The Carmel-based group directs movement of electricity in parts of 11 Midwestern states and the Canadian province of Manitoba.

MISO has projected Entergy and its customers would save $1.4 billion over 10 years by joining. That's because MISO will make sure Entergy customers use the power that can be produced most cheaply, even if it's far away from the company's southern territory, officials say. Joining a regional transmission group could also alleviate longstanding complaints that Entergy hasn't spent enough on its grid and has used those wires to favor its own power plants over independent generators.

The Arkansas commission pledged in a Thursday order to act "expeditiously." Arkansas' approval could be key to the deal — it's the only place where the Entergy grid touches the current MISO grid.

One key issue is Arkansas' demand that regulators in each of MISO's member-states get a majority vote on where transmission lines are built and who will pay for them. Arkansas also wants those state regulators to have the power to file their views alongside those of MISO in petitions to the Federal Energy Regulatory Commission.

MISO has agreed to the filing rights, said Aldie Warnock, the group's vice president of government and regulatory affairs. But it made an alternative proposal on giving regulators a majority vote. If regulators wanted to change the group's plans, two-thirds could impose a "yellow light" where MISO would reconsider.

"While these proposals differ in some respects from the conditions..., they provide an avenue for the level of regulatory involvement in the transmission planning and transmission cost allocation consistent with that contemplated by the commission," Clair Moeller, MISO's vice president of transmission, testified in the Arkansas case.

If Arkansas regulators don't agree with that plan, Moeller said MISO would take the position that Arkansas regulators are exceeding their authority. That could be grounds for Entergy to sue the Arkansas commission in federal court.

Arkansas' regulatory staff wrote that the conditions do not overstep the commission's power: "The orders do not 'require' MISO or any other entity to take any action, as MISO repeatedly alleges. The orders state under what conditions the transfer will be approved."

Mississippi regulatory staff and Entergy reached a Sept. 17 agreement that could pave the way for that state's Public Service Commission to approve the MISO transaction. Mississippi didn't demand more power for regulators, only stating that the group should work in "good faith" to make sure transmission costs are correctly parceled out and that regulators "have an important role" in MISO. Mississippi did demand any powers that any other state wins and said it should only go through if all six Entergy subsidiaries join MISO.

The Mississippi commission's line Democrat, Brandon Presley, has been the most active in regional transmission regulation. He declined to say Tuesday whether he was satisfied with the agreement, but noted that the three commissioners don't have to "rubber stamp" the staff's agreement

Joining MISO is also important to Entergy because it wants to spin off its long-distance transmission lines to Michigan-based ITC Holdings Corp. That deal is contingent on Entergy joining a regional transmission group. On Monday, ITC and Entergy filed with the Federal Energy Regulatory Commission seeking approval for the spin-off.

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