JACKSON — Entergy Corp. has won the final approvals needed to join a regional electrical transmission group.
The Mississippi Public Service Commission and New Orleans City Council both voted to allow the New Orleans-based utility to move ahead. Regulators in Arkansas, Louisiana and Texas had already approved the move.
Entergy says it will join MISO, the Midwest Independent Transmission System Operator, in December 2013. Indiana-based MISO directs electricity movement in parts of 11 Midwestern states and Canada’s Manitoba province.
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.
Customers in Mississippi are estimated to save $284 million, while those in New Orleans are supposed to save $40 million. Those savings will flow to customers through reductions in fuel charges and base rates, said Entergy spokesman Mike Burns.
“It’s clear that MISO is good for our customers and the communities we serve, and we’re appreciative of our commission’s decision that joining MISO is in the public interest,” said Haley Fisackerly, CEO of Entergy Mississippi, which serves 437,000 customers in 45 counties.
After joining MISO, Entergy wants to spin off its long-distance transmission lines to Michigan-based ITC Holdings Corp. Entergy has begun seeking regulatory approvals for that move, but has yet to receive any.
Joining MISO and completing the ITC spinoff became more important for Entergy this week after the Justice Department announced that it wouldn’t sue Entergy for anticompetitive behavior if it completed both transactions.
Entergy has long been dogged by claims that it has used control of its grid to favor its own power plants over independent generators, even when it cost much more to make electricity at old, inefficient Entergy plants rather than at new independent plants.
Entergy has also been accused of blocking independents’ ability to reliably move power to other customers. It meant independents were unable to sign profitable long-term contracts and instead had to sell power on an unprofitable daily basis or not at all. Many generators ended up in financial distress and Entergy bought five of their power plants.
Wednesday, the Justice Department cleared Entergy to buy two more plants, one in Jackson, Miss., and one in Malvern, Ark., from KGen Power Corp. of Houston for $523 million.
Entergy denies wrongdoing and says it’s not responsible for others’ bad business decisions.
With a regional transmission organization controlling the grid, many of those issues will go away, the Justice Department said.
“Entergy’s commitments to obtain membership in an RTO and divest its transmission system to a third party with the incentive to make efficient transmission investments are significant steps toward restoring competition in the Entergy service area,” antitrust prosecutors said in a Wednesday statement.
The company was also under pressure to act quickly because Arkansas regulators had ordered Entergy to pull its subsidiary in that state out of the system agreement by December 2013. The system agreement allows Entergy to order power for its six subsidiaries as one unit. MISO will take over that task.
A competing regional transmission group, the Southwest Power Pool, had argued that Entergy should join it instead. But regulators in all the jurisdictions deferred to Entergy’s desire to join MISO, even though there are more physical connections between Entergy and the pool, which is based in Little Rock, Ark. MISO will take over next month from Southwest Power Pool as Entergy’s independent coordinator of transmission, providing some of the services it will perform when Entergy becomes a full-fledged member.
MISO and Entergy said they would work together to smooth Entergy’s entrance into MISO.
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