As the Arkansas Public Service Commission (APSC) considers options after Entergy Arkansas exits the Entergy System Agreement in 2013, Southwest Power Pool Inc. (SPP) explains why it is the best choice for Entergy and Arkansas ratepayers.
SPP agrees with Entergy that membership in a regional transmission organization brings benefits to utilities and their customers — such as centralized electric grid operations, access to wholesale energy markets and collaborative planning for the grid's future needs — but disagrees that the Carmel, Indiana, U.S.-based Midwest Independent Transmission System Operator (MISO) is a better option for Arkansas.
SPP President and CEO Nick Brown said, “If Entergy joins SPP as a full member, two large adjacent power grids will be consolidated, Entergy will have a voice in SPP's decision-making process, it will continue contributing to our regional energy reserves, and the APSC will have real and meaningful influence through SPP's Regional State Committee.”
The APSC ordered a cost-benefit study of Entergy joining both SPP and MISO. The SPP study was funded and administered by the Federal Energy Regulatory Commission and conducted by Charles River Associates (CRA); it found that Entergy joining SPP would bring net benefits of $1.3 billion from 2013-2022 for all ratepayers in the SPP/Entergy region. According to a subsequent CRA cost-benefit study of Entergy joining MISO, benefits to the Entergy region are about $130 million higher if Entergy joins SPP.
The filing states that if Entergy joins SPP, the APSC will have a better opportunity to act on behalf of Arkansas ratepayers through SPP's Regional State Committee. Regulators who serve on the committee have substantive authority to direct policy changes on behalf of ratepayers and influence regulatory issues. In contrast, MISO's Organization of MISO State has only an advisory role in MISO's governance process.
SPP places great importance on building consensus with its members and other stakeholders. In SPP's 2010 stakeholder survey, 71% of respondents expressed overall satisfaction with SPP. In MISO's 2010 customer opinion report, only 29% of stakeholders expressed overall satisfaction with MISO. SPP provides members a 10:1 benefit/cost ratio, compared to MISO's 7:1 benefit/cost ratio.
“SPP has been successful in working with our members to build new transmission, which we need to improve our ability to deliver lower-cost power to customers and to make optimal use of our region's diverse generating resources,” said Brown. “SPP currently serves as Entergy's Independent Coordinator of Transmission. We have extensive experience with and knowledge of Entergy's electric grid, and we work together to determine its transmission needs. If Entergy joins SPP as a full member, it will partner with other utilities across the region to help build the transmission grid of the future that will benefit all ratepayers.”