Entergy (NYSE:ETR) and ITC Holdings (NYSE:ITC) are preparing to ensure a smooth transition to an independent transmission company structure, according to a filing made by ITC with with the Securities and Exchange Commission on April 19.
The transmission spin-off and merger implementation team are developing a plan in preparation of the start of the new transmission-only company, ITC said.
According to the filing, Entergy will spin off its transmission business into Mid South TransCo, which will subsequently merge into ITC.
On March 28, employees from both companies attended their first monthly status update meeting with Joe Domino, president and CEO of Entergy Texas, and Jon Jipping, executive vice president and COO of ITC Holdings, who are leading the project management office (PMO).
The PMO is focused on establishing the new transmission subsidiary, Mid South TransCo, as well as mapping out changes to Entergy’s operations once the transmission business is no longer part of the company, the filing added. The PMO is taking a phased approach to implementation, working through four phases: an analysis phase, to end in early May; a design phase to end in September; implementation planning; and finally, implementation.
“Our job is to make sure we’ve identified everything that has to happen for a successful transfer of operations,” Domino said. “Our focus will also be on satisfying financial, legal and regulatory requirements to ensure a smooth, seamless transition.”
Domino said the transaction will eliminate Entergy’s growing need to access capital for transmission system upgrades and maintenance, and allow the company to focus on distribution and generation assets to keep pace with the region’s increasing energy demand. Furthermore, ITC will extend to the southeast its focus on building, operating and maintaining high-voltage transmission systems, the filing added.
The companies intend to complete the spin-off and merger in 2013.