The Public Utility Commission of Texas (PUCT) approved on Oct. 25 a proposed settlement that will allow Entergy’s (NYSE:ETR) Entergy Texas to join the Midwest ISO.
The PUCT issued a draft order for the application before its open meeting in support of an Oct. 1 proposal for decision, finding the transition to MISO to be in the public interest under the conditions of a non-unanimous amended stipulation and settlement agreement. The Southwest Power Pool (SPP) is the only party to the proceedings that opposed the amended agreement.
“Over the coming weeks, Entergy Texas intends to work diligently within MISO’s stakeholder process to develop tariff changes to provide reasonable congestion hedges to Entergy Texas customers,” the company said in a statement.
Entergy is seeking approval of its move to MISO from several retail regulators in a process that parallels its proposed merger and spin-off transaction with ITC Holdings (NYSE:ITC).
“With regard to the proposal to spin-off and merge the Entergy Texas transmission business with ITC, we currently expect to make a filing with the PUCT in the fourth quarter 2012, requesting commission approval of the proposal,” Entergy Texas said.
On Oct. 19, the PUCT held a special session to discuss Entergy’s application to join MISO.
“During this meeting, the commissioners indicated they could approve the proposed settlement if Entergy were to agree to certain additional conditions,” ITC President and CEO Joseph Welch said during the 3Q12 earnings conference call on Oct. 24. “Entergy filed a response to the commission that addresses the commission’s concerns related to the settlement and satisfies the additional conditions raised during the open meeting.”
ITC expects all of MISO’s applications will progress in time for the companies to close their transaction in 2013.
The Louisiana Public Service Commission has conditionally approved Entergy Louisiana’s move to MISO, but the City Council of New Orleans has yet to act on Entergy’s application.
A settlement with the Mississippi Public Service Commission that would allow Entergy Mississippi to join MISO awaits final approval.
“In Arkansas, the public service commission issued an order essentially identifying 19 conditions that both MISO and Entergy must satisfy in order to gain commission approval,” Welch said. “Both Entergy and MISO filed responses to the 19 conditions; however, the commission has not yet ruled as to whether or not the filed responses satisfied such conditions.”
ITC representatives are cautious about new conditions to the transaction, but remain positive about MISO’s application process.
“Whether it’s Entergy’s proposal to join MISO or our transaction, to the extent that conditions are put on the transaction that impact how we think about the opportunity or impact how we’re regulated as an independent transmission business and the value proposition associated with the transaction, that would naturally cause us and our board to have to consider whether or not advancing is appropriate,” ITC CFO Cameron Bready said during the earnings call. “We’d have to wait and see through our process in Arkansas what conditions the commission might want to put on our transaction separate and distinct from Entergy’s opportunity to join MISO – which is really their proceeding – and determine whether or not we’d have to consider what those mean relative to our willingness and ability to continue to push forward with the transaction.”