Entergy (NYSE:ETR) Chairman and CEO Leo Denault said on Oct. 25 during the company’s 3Q16 earnings call that at the end of June, the company completed Phase 2 of its Pine Bluff Voltage Support Project in Arkansas, building a new 230-kV substation and transmission line.
According to the company’s website, projects under the approximately $69m “White Bluff Area Improvements” initiative in the Pine Bluff area of central Arkansas included the reconfiguration of the White Bluff 500-kV substation, the addition of a new 500-230-kV autotransformer, and the construction of a new 23-mile, 230-kV transmission line from Entergy Arkansas’ White Bluff generating facility to Woodward substation.
Denault said during the call that in July, the company finished the installation of a 230-kV line, a 500-230-kV autotransformer and a 230-kV substation to better serve its customers in Texas.
According to the company’s website, the “Orange County Project” is located north of the Beaumont/Port Arthur area in Texas, and included the construction of the new 230-kV switching substation, referred to as Chisholm Road; construction of the new 230-kV line from Hartburg to Chisholm Road; and cutting-in of the existing McLewis to Helbig and Georgetown to Sabine 230-kV lines. The approximately $55m project also included the installation of the second 500-230-kV autotransformer at Hartburg, according to the website.
“Some of our transmission investment decisions are made through the annual MISO Transmission Expansion Planning Process, also known as MTEP,” Denault said during the call. “We are nearing the end of the MTEP planning process for 2016. Currently, we have 48 projects totaling roughly $480m under consideration. The [Midcontinent ISO, or] MISO board will make its selections and give final approval to projects in December.”
In September, he said, the company “submitted about $700m of proposed projects for MTEP17, and we will work with MISO on the selection process for those proposals over the course of the next year.”
According to the “MTEP Active Project List,” Entergy’s projects include:
- Entergy Arkansas’ approximately $149.3m, Hot Springs EHV-Happy Valley 500-kV project, which involves building an approximately 35-mile, 500-kV line, for instance, to address extensive thermal overloads seen around the White Bluff and Hot Springs area
- Entergy Louisiana’s approximately $78.9m West Monroe Area 230-kV Reliability Improvement Plan project, which involves building double-circuit 230-kV line, for instance. A separate 230-kV injection source would help eliminate cascading constraints associated with a failure of the Sterlington substation
- Entergy Louisiana’s approximately $41m Montgomery-Cane River 230-kV project, which involves building a new 230-kV line from Montgomery to Cane River and installing a new 230/115-kV autotransformer at Cane River. Loss of the Fisher 230/115-kV autotransformer results in thermal overloads on the Winnfield-Winn Prison-Cane River 115-kV line sections
- Entergy Texas’ approximately $11.2m Willow Marsh 230-kV project, which involves building a 230-kV substation that cuts into the China to Amelia 230-kV line 599 in order to serve a new block load addition. This is a customer-driven project to build the new substation to serve new industrial load
Also in September, Entergy Arkansas made a regulatory filing seeking approval from the Arkansas Public Service Commission (APSC) for advanced metering implementation. Entergy New Orleans made a similar filing on Oct. 18 with the New Orleans City Council, Denault added.
“In each filing, we’ve requested that our regulators find the deployment of advanced metering infrastructure to be in the public interest,” he said. “Entergy Arkansas expects to recover its investment through its forward looking [formula rate plan, or] FRP. Entergy New Orleans has requested approval to implement a phased-in customer charge.”
Contingent on approval by the APSC and the New Orleans City Council, meter deployment would begin in 2019, he said.
Among other things, Denault also noted that this quarter, Entergy Arkansas reached a settlement in its first FRP filing with a forward test year.
“We have requested any potential rate adjustments to be in effect on Dec. 30,” he said.
Entergy Mississippi completed its FRP filing with a stipulated settlement for a $19.4m rate increase, Denault said, adding that new rates were effective in July.
Entergy Texas in September filed for a $19m annual increase to its transmission cost recovery factor rider, reflecting $210m in incremental transmission investment since its last base rate filing, he said.
Entergy Texas also presented its view on alternative ratemaking mechanisms to the Public Utility Commission (PUC) of Texas through a filing made in August, he said, adding that the filing was in response to the Texas Legislature’s request for the commission to conduct a study and make recommendations regarding appropriate reforms to the ratemaking process. In its comments, Denault added, Entergy Texas asserted that a formula rate plan with a forward test year is an effective mechanism to reduce regulatory lag.
“This mechanism would provide utilities with an opportunity to earn their authorized returns and it’s also beneficial to a utility’s credit ratings, providing access to capital at lower costs to customers and facilitating the infrastructure investment to support economic development and the creation of jobs in Texas,” he said. “The commission will consider the filing along with the recommendations from others, and provide its final ratemaking report to the Legislature in January.”
Denault also noted that Entergy’s FERC-regulated system agreement came to an end on Sept. 1, adding that the agreement’s elimination allows the company to focus more specifically on the priorities and policies of local regulators.
Entergy on Oct. 25 reported 3Q16 earnings per share of $2.16 on an as-reported basis, and $2.31 on an operational basis. As-reported earnings for 3Q16 were $388.2m, compared to $723m for 3Q15, the company said.