Louisiana electricity customers are one step closer to saving a projected half a billion dollars or more following the Louisiana Public Service Commission's decision supporting Entergy Louisiana, LLC's and Entergy Gulf States Louisiana, L.L.C.'s proposal to join a large regional transmission organization.
The LPSC unanimously approved the joint application of the two companies to join the Midwest Independent Transmission System Operator, Inc. or MISO. Louisiana is the first state in which approval has been given to Entergy operating companies to transfer functional control of their transmission facilities to the RTO. Subject to carefully considered conditions, the proposed integration into MISO is expected to occur in December 2013.
The RTO facilitates the buying and selling of electricity, while continually balancing supply and demand, managing network congestion and creating a robust, competitive market for industry participants. MISO, which oversees transmission planning for its members, is the nation's first regional transmission organization and one of its largest.
Each of the six utility operating company subsidiaries of Entergy Corp., which do business in Arkansas, Louisiana, Mississippi, New Orleans and Texas, has filed for similar approval with its respective regulator to join MISO.
"The LPSC's determination today confirms over two years of study and analysis on the part of our companies and many others," said Bill Mohl, president and chief executive officer of Entergy Louisiana, LLC and Entergy Gulf States Louisiana, L.L.C. "Working with our commission through this matter has been an important and critical step in seeing that our companies meet the future energy needs of our customers in a reliable and affordable manner."
A May 2011 analysis showed that joining MISO is expected to result in net benefits to customers of the two companies, collectively, of $430 million to $575 million on a net present value basis based on a study period of 2013 to 2022. The projected savings are largely attributable to MISO's organized power markets, which allow MISO to optimize the dispatch of all generating units within its area, whether owned by the Entergy operating companies or other MISO members. MISO currently operates across 11 states and one Canadian province. With the addition of the Entergy operating companies to its membership, MISO will stretch from Canada to the Gulf of Mexico.
"Joining MISO is expected to reduce costs and improve reliability for our customers," Mohl said. "Let's credit the LPSC for its leadership and forethought and its willingness to get out front and become the first of the Entergy region's retail regulators to approve this change of control."
Mohl said the companies will now continue to pursue the planning and implementation that will allow them to capture the benefits projected for their customers.
Entergy Louisiana, LLC and Entergy Gulf States Louisiana, L.L.C. serve more than one million customers. With operations in southern, central and northeastern Louisiana, the companies are part of the Entergy electric system serving 2.8 million customers in Louisiana, Arkansas, Mississippi, and Texas.