Entergy Corp. (NYSE:ETR) has conducted storm response drills in April and May, which lay groundwork for Transco storm response preparations as the company prepares to spinoff and merge its transmission business into ITC Holdings (NYSE: ITC), according to a Form 425 filed June 4.
Entergy storm drills were well-timed opportunities to begin laying the groundwork for ITC to take ownership and control of the assets, the company said the filing.
In December 2011, Entergy agreed to spin off its transmission business into Mid South TransCo, which will subsequently merge into ITC. Subject to regulatory approvals, the transaction is expected to close in 2013.
“We are further along in our storm preparations than we’ve ever been,” said Greg Grillo, storm incident commander, director of transmission project management and construction for Entergy’s transmission and distribution systems and a member of the Transco implementation team for system outage response.
Entergy employees completed the system storm drill in April, which encompasses all of the utility operating companies that serve 2.8 million customers in New Orleans, Louisiana, Texas, Arkansas and Mississippi. State-specific storm drills for each operating company were held in early May, according to the filing.
“Our employees are engaged in the storm preparedness process with great participation from all operating companies. In the last several years, we’ve improved our processes significantly,” said John Mullins, vice president of utility operations, who will become Entergy’s incident command leader after the spin-off and merger of the transmission business into ITC.
“Even though we’ve successfully responded to some of the biggest storms in U.S. history, we know we need to continue to work on our storm planning and response. We must continue to learn from these drills, execute our plans safely, efficiently and reliably, and prove to our customers and regulators that we’re prepared for day one of operations after the spin-off and merger,” Mullins added.
Beth Howell, vice president of operations, ITC, observed the system storm drill, along with representatives of the Midwest Independent Transmission System Operator Inc.
“My participation was with an eye toward the future on how ITC will coordinate storm-response efforts with Entergy after the spin-off and merger,” Howell said. “It was very helpful in understanding the scope of issues we will need to address as we prepare for independent operations in 2013, primarily ensuring that coordination points and interfaces between ITC’s command structure and Entergy’s are in place.”
Before storm season next year, Entergy and ITC intend to conduct a two-day drill to test response plans and organizations. Entergy’s Power House facility in Jackson, Miss., will continue to function as Entergy’s storm command center.
After the spin-off and merger, ITC’s command center will be located in the transmission headquarters building next door.
“Next year’s drill will be a great opportunity to fully test communications and interfaces between Entergy and ITC to ensure that our coordinated response efforts remain effective for customers,” Grillo said. “We’ve already started developing design structures for new emergency response organizations and plans, and we are well positioned to have response teams staffed, trained and ready for action.”