Mississippi regulators approve transaction between EMI, CE involving transmission assets

The Mississippi Public Service Commission, in an order dated Dec. 6, approved a purchase and sale transaction between Entergy’s (NYSE:ETR) Entergy Mississippi Inc. (EMI) and Cooperative Energy (CE), formerly known as South Mississippi Electric Power Association, involving certain electric transmission assets.

The companies in September filed a joint application for approval of exchange, transfer, sale, and change of control, and a joint petition for certificate of public convenience and necessity (CCN) (referred to as the joint application and petition) seeking approval for the corresponding sale, transfer and change in control, and seeking authorization from the commission for EMI and CE to acquire from each other, and thereafter own, operate, and maintain certain transmission assets.

The order also noted that no interventions were filed in the docket, and after the deadline for filing interventions had passed, the commission considered the matter at its regularly scheduled public meeting on Dec. 6, without requiring a hearing.

As stated in the joint application and petition, as well as in direct testimony, EMI and CE negotiated mutually agreeable terms for the proposed purchase, sale, and transfer of certain transmission lines, switching stations, tap lines, and associated transmission assets with the mutual intent of aligning ownership, operation, and maintenance of those transmission facilities with the applicants’ respective service areas and customers or members, the commission said in the order.

The applicants requested that the commission grant EMI and CE a CCN for the purchase and acquisition – at original cost less depreciation, where applicable – of transmission assets listed and defined as the “EMI-purchased assets” and the “CE-purchased assets” (collectively, referred to as the transmission facilities), and approve the sale, transfer and/or change in control of any and all portions of certificates associated with the transmission facilities, all as part of the transaction.

The commission added that as part of the transaction, EMI will purchase from CE, and CE will sell to EMI, two 115-kV lines that EMI currently leases from CE – the approximate 12.56-mile Centreville-Woodville Line in Wilkinson County, Miss., and the approximate 11.94-mile Franklin-Smithdale Line in Franklin County, Miss. – as well as all associated real property, including the right of way (ROW), and other associated rights.

EMI operates and maintains those lines, but does not own them, and leases them from CE, and with the purchase, the responsibility for maintaining the lines will be aligned with the lines’ owner, according to the joint application and petition, as well as to the direct testimony of Aaron Hill, manager, Transmission Planning, at EMI. According to Hill, EMI’s ownership of the lines will benefit customers by allowing the cost of improvements to be capitalized by EMI, in addition to eliminating the cost of the lease payments to CE, the commission added.

EMI will also purchase from CE, and CE will sell to EMI, one approximate 0.32-mile, 115-kV loop line in and out of the CE-owned Friendship switching station in Pike County, Miss., and all associated real property rights and other associated rights, the commission said, adding that EMI is currently the operator of the line but does not maintain it.

According to the joint application and petition, as well as to Hill’s testimony, the Friendship loop line is an integral part of an important segment of Entergy Mississippi’s transmission grid in the area, the McComb-Tylertown 115-kV Line, and acquisition of that line by EMI will align ownership with the responsibility to operate and maintain the line. EMI’s ownership of the line will also benefit its customers by allowing EMI to capitalize the cost of any improvements to the assets, the order noted.

The commission further stated that the transaction also includes the purchase by CE from EMI – at net book value – various EMI-owned switching stations and tap lines that primarily service CE members (collectively, referred to as the CE-purchased assets). The CE-purchased assets include: the Acona 115-kV Switching Station and Tap Line to the Acona DEPA Substation in Holmes County, Miss.; the Carrollton 115-kV Switching Station and Tap Line to Carrollton DEPA Substation in Carroll County, Miss.; the Greenville TCEPA 115-kV Switching Station and Tap Line to Greenville Swiftwater TCEPA Substation in Washington County, Miss.; the Greenwood DEPA 115-kV Switching Station and Tap Line to Shell DEPA Substation in Leflore County, Miss; the Jayess 115-kV Switching Station and Tap Line to Jayess MEPA Substation, in Walthall County, Miss.; the Lorman 115-kV Switching Station and Tap Line to Lorman SWMEPA Substation in Jefferson County, Miss.; the 115-kV Tap Line from Minter City Switching Station to Minter City DEPA Substation in Leflore County; the Natchez Southeast 115-kV Switching Station and Tap Line to Kingston SWMEPA Substation in Adams County, Miss.; the Redwood 115-kV switching station in Warren County, Miss.; certain assets located at the Midway 115-kV switching station in Yazoo County, Miss.; and the Shaw 115-kV Switching Station and Tap Line to Shaw DEPA Substation in Sunflower County, Miss.

As part of the transaction, EMI will also terminate its current lease of the CE-owned Silver Creek substation in Lawrence County, Miss., and CE will assume operation and maintenance of the facility.

Gary Hutson, vice president of Power Supply for CE, said in direct testimony that the termination of the Silver Creek lease, the sale of the three CE electric transmission lines, and CE acquiring the switching stations and tap lines from EMI will align the ownership, operation, and maintenance responsibility for the assets with the company that is primarily responsible for providing reliable electric service to its customers and/or members from the facilities.

The commission also said that for EMI, the total purchase price for the EMI-purchased assets will be $119,194.16, and for CE, the total purchase price for the CE-purchased assets will be about $3m.

Among other things, the commission said that it finds that the applicants are ready, willing, and able to acquire, operate, and maintain the transmission assets, as well as to sell and transfer those assets through execution of the transaction. Moreover, the corresponding sale and transfer between the applicants of any and all associated certificates of public convenience and necessity is consistent with the public interest, the commission said.

About Corina Rivera-Linares 3054 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.