McDonald: Entergy Chooses MISO Over Southwest Power Pool

by Arkansas Business Staff  on Monday, Apr. 25, 2011 11:53 am  

Entergy Arkansas customers will immediately stop subsidizing electricity rates in Louisiana when it leaves Entergy Corp.'s system agreement at the end of 2013, Entergy Arkansas President Hugh McDonald said Monday.

Arkansas ratepayers will then share in additional savings from Entergy Corp.'s decision to join the Midwest Independent System Operator at about the same time, he said.

"That line item on the bill, the FERC-mandated agreement, will go away," McDonald said, referring to the Federal Energy Regulatory Commission's 2005 order that brought electric rates in Louisiana closer to the lower rates in Arkansas. "At a minimum that will happen. And then additional benefits of [MISO's] Day 2 market will occur on an ongoing basis."

Entergy Corp. announced Monday that its operating units — Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans and Entergy Texas — would join MISO, with a target joining date of December 2013. Entergy Arkansas will submit a filing to the Arkansas Public Service Commission by May 12 seeking approval of the MISO plan.

MISO, according to Entergy's new release, is "an independent, nonprofit, Regional Transmission Organization that supports the reliable delivery of electricity in 13 U.S. states."

The addition of the Entergy units will expand the footprint of the organization from the Canadian Border to the Gulf of Mexico, and MISO's "established 'Day 2' market" for buying and selling wholesale electricity is expected to save Entergy customers some $1 billion over 10 years.

In deciding to join MISO, headquartered in Carmel, Ind., Entergy rejected the option of joining Little Rock-based Southwest Power Pool, McDonald said. The Day 2 market was a big part of the decision. MISO is about 50 percent larger than SPP, he said, and while SPP is working on a similarly advanced wholesale market system, it is not expected to start running until 2014.

The agreement with MISO is a 30-year contract, according to Entergy Arkansas spokesman Dan Daugherty, although Entergy could withdraw during that period by giving five years notice.



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