CEO: Entergy Arkansas in compliance with PSC conditions to join MISO

Entergy Arkansas President and CEO Hugh McDonald on Aug. 24 submitted testimony to the Arkansas PSC (APSC) enumerating the company’s compliance with the commission’s conditions for transition to the Midwest ISO (MISO). 

The PSC’s 19 conditions were largely designed to separate Entergy Arkansas (EAI) consumers from costs assumed by parent company Entergy (NYSE:ETR) and its other operating subsidiaries. According to the APSC, the conditions provide “a clear path forward toward the full integration of EAI as a member of MISO.” 

One of these was separating generation and resource planning functions, including cost allocations, from other Entergy companies.

“EAI has mitigated the risk of future production cost reallocation by eliminating the contractual basis for such reallocation and eliminating the conduct used by [FERC] to justify the reallocation,” McDonald said. “However, EAI’s integrated resource planning and operations staff will conduct the generation resource planning for EAI’s customers’ requirements separately from the generation resource planning conducted on behalf of the other operating companies, including the consideration of potential economic transmission projects to reduce production costs for EAI’s customers,” McDonald said.

Entergy Arkansas in 2005 terminated its participation in the system agreement effective Dec. 19, 2013, and put in place a generation resource planning process that is focused on meeting the needs of its customers, not the joint needs of the other Entergy subsidiaries. To that end, the company has established a resource planning and operations committee (RPOC).

Though the company will separate generation operations, McDonald said its transmission planning activities will be coordinated with Entergy, as it will be required to do under MISO’s open access transmission tariff.

Given the pending spinoff of Entergy’s transmission assets to ITC Holdings (NYSE:ITC), however, coordination with the other Entergy companies may not be necessary for much longer, he said. After the transaction closes, Entergy Arkansas would no longer own transmission assets and would not be required to conduct joint transmission planning with the other Entergy companies, he said.

Entergy Arkansas will participate in the bottom-up MISO transmission planning process that it conducts on an annual basis, including proposing the economic transmission projects identified by EAI’s resource planning and operations staff.

Conditions and compliance

Among its other compliance measures, Entergy Arkansas will do the following, separate from the other Entergy operating companies: sign its own MISO transmission owners’ agreement (TOA); vote separately from the other Entergy companies; propose to FERC and/or MISO that it be assigned to a transmission pricing zone, load zone, auction revenue rights zone, and local resource zone.

Entergy Arkansas has also agreed to staff the RPOC with Entergy Arkansas employees, not those of other Entergy companies; file an application with the APSC seeking approval for a change of control of its transmission assets, should it desire to exit MISO; allow the APSC to direct it to exit MISO if its RTO membership results in a material adverse impact on retail ratepayers; remain under the APSC’s jurisdiction, to the extent not otherwise preempted by FERC, with respect to retail electric rates and all related electric facility operations, facility siting, financing, and reliability; and file detailed reports every two years of quantified and projected net benefits of MISO membership, costs to exit MISO and FERC policy changes.

The company has negotiated new contracts for any technical service support it may receive from Entergy.

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.