Commission accepts companies’ compliance with conditions for membership

LITTLE ROCK, Ark. – The Arkansas Public Service Commission today paved the way to more than a quarter-billion-dollars in projected savings over the next decade for Entergy Arkansas customers when it conditionally approved Entergy Arkansas, Inc.’s proposal to join the Midwest Independent Transmission System Operator, Inc. or MISO.

The decision gives conditional approval to Entergy Arkansas’ request to transfer functional control of its transmission facilities to MISO, a move expected to occur in December 2013.  The order clears the way for Entergy Arkansas to proceed with the necessary next steps toward implementing its move to MISO.

“This is a big win for electricity consumers in Arkansas,” said Hugh McDonald, president and chief executive officer of Entergy Arkansas, Inc. “The commission’s thorough review assures everyone this move is good for customers, good for communities, and good for Arkansas.”

“We can now execute the MISO Transmission Owners Agreement and focus our full attention toward continued compliance with the commission’s conditions and ensuring a smooth transition into MISO on December 19 next year.”

Membership in MISO is part of the company’s plan to operate in a post-System Agreement environment. The System Agreement governs the planning and operation of the Entergy generation and transmission system and other matters between the Entergy operating companies; Entergy Arkansas announced its intention to exit the arrangement in 2005.

Entergy Arkansas filed a report detailing the expected benefits of joining MISO in May 2011 and, last fall, filed its request to transfer functional control of its transmission system to MISO. The extensive analysis supporting the filing projected the move would save Entergy Arkansas electric customers $263 million on a net present value basis based on a study period of 2013 to 2022, as well as improve reliability and provide for more competitive and diverse generation resources.

On August 3, the APSC issued a decision setting forth 19 conditions under which it would grant approval for Entergy Arkansas to join MISO; subsequently Entergy Arkansas and MISO filed detailed information on how they have already met or plan to meet each of the conditions. The commission’s decision accepts Entergy Arkansas’ and MISO’s respective filings as satisfactory compliance with the commission’s conditions and further directed MISO to expeditiously file with the commission proof that the proposed changes to its governance have been approved by the appropriate MISO entities.  Yesterday, the Public Utility Commission of Texas approved Entergy Texas, Inc.’s proposal to join MISO. Two other jurisdictions have also conditionally approved the proposed transfer of control to MISO.  In May, the Louisiana Public Service Commission conditionally approved the move to MISO for the Entergy utilities operating under its jurisdiction.

MISO operates a market for electricity and manages congestion across the vast transmission grid under its control. MISO facilitates the buying and selling of electricity, while continually balancing supply and demand, managing congestion on the transmission grid and creating an open, competitive market for industry participants. MISO is the nation’s first regional transmission organization, and one of its largest.

“MISO’s large territory, its preferred transmission cost allocation methodology and its proven experience in operating day-ahead and real-time regional energy markets are keys to delivering the greatest benefits to our customers,” McDonald said. “As we prepare our power generation and delivery systems to meet the demands of a new century and maximize its value for our customers, it is essential that we take advantage of the proven benefits of an established, sophisticated Day 2 Market, which MISO offers.”

The savings projected with MISO are largely attributable to its organized power markets, which allow for a more efficient commitment and dispatch of all the generating plants within MISO, regardless of who owns or controls them. Other core advantages include the economies of scale offered by an RTO of MISO’s size, and its transmission cost allocation methodology that more equitably allocates the costs of transmission projects to those receiving the benefits from those projects. 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.

Each of Entergy’s utility operating company subsidiaries which do business in Arkansas, Louisiana, Mississippi, and Texas, has filed similar transfer of control requests with its respective regulator to join MISO.

Entergy Arkansas provides electricity to 700,000 customers in 63 counties. Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including more than 10,000 megawatts of nuclear power, making it one of the nation’s leading nuclear generators. Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of more than $11 billion and approximately 15,000 employees.