Entergy Arkansas Makes Official Request to Move to MISO

After months of public discussion and regulatory hearings, Entergy Arkansas officially filed a “change of control” request to join Midwest Independent Transmission Operator (MISO), an Indiana-based transmission coordination group.

“Our proposal for Entergy Arkansas to join MISO is monumental for our customers,” said Hugh McDonald, president and CEO of Entergy Arkansas, Inc. “It provides the answer to a commitment we made to customers in 2005 to terminate Entergy Arkansas’ participation in a contract that simply created too much uncertainty and litigation risk for our customers and company.”

Entergy Arkansas has been exploring options for years for an exit from its current transmission agreement with its parent company, Entergy Corp., and sister state operation groups. Entergy served notice of the change after a federal regulatory ruling in 2005 required Arkansas customers to pay out-of-state costs as part of an equalization agreement with other Entergy organizations.

The current request, which must be signed off by the Arkansas Public Service Commisssion (PSC), would allow Entergy Arkansas to work with MISO to coordinate regional electricity transmission orders after December 2013.

Entergy announced in April that it would seek a formal move to MISO. Little Rock-based Southwest Power Pool has argued strenuously that Entergy Arkansas should fold its transmission coordination into its footprint.

MISO’s “Day 2” market for coordinating electricity transmission was cited by Entergy officials as a major advantage for the company versus Southwest Power Pool’s market coordination.

This summer, the PSC held a series of lengthy public hearings to understand the impact of an Entergy move to MISO and to hear testimony on other options.

In October, the PSC issued a 112-page order that dictated the next series of steps for Entergy Arkansas to move to MISO. The PSC order included:

– Not stating an opinion on whether Entergy Arkansas should join MISO or Little Rock-based Southwest Power Pool (SPP) for its transmission coordination. The PSC order simply says a regional transmission organization makes sense.
– Recognizing that some other electric companies in Arkansas, such as SWEPCO and the Electric Cooperatives, must be given consideration because Entergy’s move to MISO could affect “the public interest.” Based on PSC testimony, this determination could impact the financial model for the Entergy Arkansas merge with MISO.
– An emphasis that Entergy Arkansas maintain independence from its parent company and sister operating organizations. This has been a real sore spot for PSC commissioners and one that led to contentious grilling in a recent hearing.