Entergy Louisiana, LLC and Entergy Gulf States Louisiana, L.L.C. have filed a joint application with the Louisiana Public Service Commission seeking to join the Midwest Independent Transmission System Operator, Inc.
The companies' joint application seeks to transfer functional control of their transmission facilities to MISO by December 2013. The joint application is the next step in pursuit of Entergy Louisiana's and Entergy Gulf States Louisiana's proposal to join MISO as transmission-owning members, which was initially announced by the companies in April.
Commenting on the significance of the filings, Bill Mohl, president and chief executive officer of Entergy Louisiana and Entergy Gulf States Louisiana, said, "A number of potential transmission operating arrangements have been under review by the Entergy operating companies, and following careful analysis, we are confident that our proposal to join MISO is a key step in our efforts to best meet the energy needs of our customers. This decision is an important component of our commitment to meet those needs as we look forward into the future."
After extensive review and analysis, it was determined that joining MISO would provide the greatest benefits to Entergy Louisiana and Entergy Gulf States Louisiana customers. The companies' analysis shows that joining MISO is expected to result in net benefits to the customers of Entergy Louisiana and Entergy Gulf States Louisiana, collectively, of $430 - 575 million net present value basis based on a study period of 2013 to 2022.
These savings are largely attributable to MISO's organized power markets, which allow for a more efficient commitment and dispatch of generation resources, and to economies of scale offered by an RTO of MISO's size. MISO operates across 12 states and one Canadian province and, with the addition of the Entergy operating companies to its membership, will stretch from Canada to the Gulf of Mexico.
"Some of the most significant benefits are achievable because MISO has an established, transparent and highly efficient Day Two Market, which is an innovative system that effectively and economically matches supply and demand for electricity," said Mohl. "MISO's ability to provide a platform for transactions among power sellers and purchasers across its footprint through the Day Two Market was a critical factor in our determination that MISO is the right RTO choice for our customers."
Another important factor in the selection of MISO is that under the provisions of MISO's tariff and its transition proposal to the Entergy operating companies, customers will be allocated costs for region-wide transmission projects only in proportion to the benefits they are expected to receive from those projects. In addition, with the move to MISO, Louisiana's transmission grid is expected to operate even more reliably as a result of MISO's sophisticated, state-of-the-art monitoring tools, congestion management processes and backup capabilities.
The LPSC's regulatory jurisdiction to establish the terms and conditions, including rates, for service to the companies' customers is unaffected by the proposed move to MISO. Additionally, MISO membership brings the opportunity for the LPSC to participate in MISO's larger-scale regional planning process and its Organization of MISO States, which provides input to MISO's management team and board of directors.
While Entergy Louisiana and Entergy Gulf States Louisiana are the first to file for change of control with their regulators, other Entergy operating companies are expected to follow in the coming weeks and months.
Entergy's Louisiana utility companies serve more than one million customers through the operating companies Entergy Louisiana, LLC and Entergy Gulf States Louisiana, L.L.C. With operations in southern, central and northeastern Louisiana, the companies are part of Entergy Corp's electric system serving 2.7 million customers in Louisiana, Arkansas, Mississippi and Texas.