Arkansas PSC Gives ‘Limited’ Green Light To Entergy’s MISO Move

Nearly one year after making a formal request, Entergy Arkansas is just a minor step away from receiving permission from the Arkansas Public Service Commission to exit its system agreement from its parent company.

The Arkansas Public Service Commission issued a 33-page order on Friday (Oct. 26) giving its tacit approval to a deal that will allow Entergy Arkansas to join the Midwest Independent Operating System (MISO).

“… The Commission finds that EAI [Entergy Arkansas] and MISO have either complied or substantially complied with the Order No. 68 conditions with the exception of Condition No. 13 with which MISO has sufficiently complied for the EAI/MISO integration process to move forward on a limited basis at this time,” the commission stated in its order.

The exception it refers to asks for clarity on a vote involving how transmission planning and cost allocation will be determined. The PSC cited two conflicting proposals for the condition and asked for assurances about the details of the issue.

In August, the PSC raised more than a dozen concerns regarding Entergy’s move to MISO, which is aiming for closure before December 2013.

MISO, headquartered in Carmel, Ind., coordinates electricity movement across an 11-state grid and is expected to provide Entergy with an advanced system for electricity trading that could benefit its transmission operations.  Little Rock-based Southwest Power Pool, which operates across a 9-state grid, had hoped and was pushing for Entergy to join its transmission coordination outfit.

The bottom line is that Entergy Arkansas has a close to a green light as it can get to continue down its road as a stand-alone organization, separate from its parent company in respect to cost-sharing and transmission planning.

“Today is a major step forward for electric customers throughout Arkansas and all of the Entergy service area,” said MISO CEO John Bear. “The APSC laid out a series of conditions for MISO to address, and through collaborative discussions with stakeholders in the MISO and Entergy region, we were able to meet those conditions.”

Entergy has estimated it could save as much as $263 million over a ten-year period as part of the MISO system.

You can access the full order here.

UPDATE: Southwest Power Pool CEO Nick Brown issued the following statement in response to the PSC ruling.

While we are still reviewing the Order, SPP is surprised and disappointed that the Arkansas PSC conditionally approved Entergy’s request to join MISO. This is particularly disappointing since it appears to set a lesser standard than that placed upon other Arkansas utilities when they joined SPP, specifically the required governance that ensures ratepayers are protected through express authority delegated to state commissioners.  Adding to the surprise is that the APSC was a leader in 2004 in ensuring Arkansas ratepayers were protected when SPP developed its RTO governance structure, which has been proven to be highly successful.

In addition, this approval will create a seam that will be difficult to manage and ripe for litigation as has been the case with MISO’s eastern seams.  Unfortunately this litigation is similar to the litigation the APSC has worked so diligently to end with Entergy’s System Agreement.

Finally, SPP still believes it is the better choice for Arkansas ratepayers and has a governance structure that allows the APSC to protect its ratepayers.  Regardless of our disappointment with this decision we will now turn our attention to ensuring a successful transition to MISO of our Entergy-related responsibilities, and will continue our work in building a robust transmission system and an efficient market for the stakeholders in the SPP region.