NEW ORLEANS — There’s a new traffic cop directing electricity flows to 2.8 million power customers in Louisiana, Arkansas, Mississippi and Texas.
New Orleans-based Entergy Corp. handed over management of its grid late yesterday to the Midcontinent Independent Transmission System Operator.
MISO, based in Carmel, Ind., already directed electricity movement in parts of 11 Midwestern states and Canada’s Manitoba province.
The transfer was set for 11 p.m. CST yesterday. Earlier in the day, Entergy officials expressed confidence that things would go smoothly. John Hurstell, Entergy’s vice president of system and operations, said MISO conducted an auction Wednesday to cover most of Thursday’s power generation needs across its old and new territories.
Hurstell said that in the handoff, Entergy would tell its computer system to stop giving orders to turn power plants on and off, while MISO’s computer would take over that job.
“MISO has done this before,” Hurstell said. “They have added parties to the system without any problems.”
MISO is supposed to save Entergy customers $1.4 billion over 10 years. MISO says it will ensure Entergy customers get the cheapest possible electricity, even if it’s generated at a faraway plant instead of a nearby one owned by Entergy. The savings will come in part through those day-ahead auctions, which will allow the most efficient plants to offer to sell power at the cheapest prices.
One way the deal could save money is by allowing Midwestern utilities to ship power south during hot months when air conditioning demand is high, but allow Southern utilities to send power north in winter months when cold weather causes demand to spike there.
“This transfer will allow Mississippians to keep more of their money in their own pockets and insure the electric grid is operated in a manner that best serves the people of Mississippi,” said Mississippi Public Service Commissioner Brandon Presley.
Entergy has faced claims that it used control of its grid to favor its own power plants over newer independent generators, even when it cost much more to make electricity at old, inefficient Entergy plants. Independents were unable to sign profitable long-term contracts. Many generators ended up in financial distress and Entergy bought seven of their power plants.
Entergy denied wrongdoing and said it wasn’t responsible for others’ bad business decisions.
Entergy had hoped to spin off ownership of its transmission lines to ITC Holdings Corp., but scrapped that deal last week after it was rejected by Mississippi regulators.
The handover came at the same moment Entergy Arkansas Inc. exited the system agreement that bound the six Entergy subsidiaries. Arkansas regulators decreed the unit leave because Arkansas ratepayers had subsidized Louisiana in the past. The exit means Entergy is supposed to run the Arkansas utility as a stand-alone business, instead of pooling many operations with the five subsidiaries.
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