Entergy's Eternal Power Struggle: MISO Move Decades in the Making

by Luke Jones  on Monday, Nov. 26, 2012 12:00 am  

Years of controversy and litigation have led to Entergy Corp. joining a regional transmission operator, which manages Entergy’s power lines, and selling the lines themselves to a third party, ITC Holdings Corp. 

In 2007, Entergy Arkansas customers began receiving bills that included a charge for "FERC-imposed payments."

"For the first couple of years, we were paying $250 million per year," McDonald said. "We did not see a point in time in the future where customers were not making subsidy payments."

Outside of the system agreement, Entergy Arkansas' options were to stand alone, choose an RTO or create some other pooling agreement. It chose the RTO option, which set a hard deadline of December 2013 — the end of McDonald's eight-year notice — for the entire Entergy Corp. family to finally join an RTO.

"And that place to go is what we've been, essentially, arguing over and litigating for the past three years," McDonald said.

MISO vs. SPP

The choice boiled down to two options. The first, Southwest Power Pool of Little Rock, was already temporary transmission operator for Entergy Corp., having been placed in this position in 2006 after Entergy Corp. failed to create its own RTO.

The second was MISO, the Midwest Independent Transmission System Operator of Carmel, Ind., a much larger company that operates in much of the Midwestern U.S. and Canada.

“MISO got involved in early 2011 when some studies were being done to determine the viability of the Entergy companies joining an RTO,” said Todd Hillman, MISO’s executive director of Entergy region integration.

By the end of 2011, MISO was selected over SPP as RTO of all Entergy companies. Entergy stated this was due mainly to MISO’s larger size and resources, as well as its access to a day-two market.

“They have a day ahead in real-time energy market,” McDonald said. “They will make sure that all the customers that are part of the utilities in MISO will receive the lowest-priced energy within that footprint while at the same time making sure the transmission system remains reliable.”

Southwest Power Pool, naturally, bristled at the decision.

“We’re disappointed,” said Carl Monroe, EVP and COO of SPP. “We think Entergy would be better off joining SPP, and we think their consumers and our consumers would be better off, too.”

 

 

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