NEW ORLEANS — Federal regulators have extended a four-year-old arrangement with Entergy Corp. on how the company will manage its regional power transmission system.
The New Orleans Times-Picayune reports that the extension includes some changes aimed at giving officials in the four states where Entergy operates more input on potential new investment to the power grid, and ones that could ultimately save home and business owners money on their electricity bills.
Entergy has wrangled for years with independent power producers over the adequacy and accessibility of the company’s transmission system, The network of high-capacity power lines that carry electricity from plants to cities carries Entergy’s power as well as power generated by independent producers.
It was designed to primarily serve local areas, but that has changed in recent decades as electricity now travels over a greater distance.
As more independent power producers have arrived on the scene, much of the dispute has centered on who should pay for upgrades to the system, which some industry officials say could dramatically improve efficiency and reliability and result in long-term cost savings for ratepayers.
“You’re having to plan your transmission system to take into account a much broader set of sources of bulk power,” said Larry Daspit, an Entergy transmission spokesman.
Having enough capacity in the wires means that homes and businesses can get the power they need without paying to build new plants. The issue has also attracted attention with the focus turned to renewable sources of power like the wind, the sun, and geothermal energy, all of which will need transmission lines to move around the country.
Many utilities formed “regional transmission organizations,” or RTOs, to comply with Federal Energy Regulatory Commission orders to surrender control of their grids to independent groups.
Since 2006, Entergy has instead contracted with the Southwest Power Pool, a regional transmission organization in Arkansas, to serve as its independent coordinator of transmission, or “ICT.”
The arrangement was set to expire last week. Regulators decided Nov. 16 to extend it.
In the past, the ICT couldn’t force Entergy to build the transmission it recommended. Now, as part of the extended arrangement, the Entergy Regional State Committee, a body of regulatory commissioners in the four states where Entergy operates, can compel Entergy to add specific projects to its construction plan.
Daspit said the committee, which was formed last year, will “have a much more active role in transmission planning.”
Meanwhile, Entergy officials are still deciding how costs for recommended upgrades will be covered. Daspit said Entergy would need to be able to purchase the power at a savings for customers.
“We think if someone benefits from an investment, sure, they can pay their share,” he said, “but if they receive no benefit, then why should they pay, even if it’s just a few cents to the bill?”
The New Orleans City Council, which regulates Entergy New Orleans, had sought to hold a hearing to help evaluate the arrangement, a request that the FERC denied. William Booth, a Washington, D.C.-based utility lawyer for the council, said giving the regional committee more say in the process was a step in the right direction.
“I think we got some of what we wanted, but not all of what we wanted,” Booth said about the extension, adding that the city will continue “evaluating whether more independence, more oversight is warranted.”
Not everyone agrees that extending the transmission plan will have a tangible impact on the region’s transmission system.
“I think the ICT arrangement has been pretty ineffective,” said Terry Huval, director of the Lafayette Utilities System, one of the independent producers that relies on Entergy’s system.
“The transmission system with Entergy continues to have lots of problems and issues, even with the ICT in place,” he said.
Information from: The Times-Picayune, http://www.nola.com