Entergy looks at options on grid

Midwest coordinates the electricity grid in 13 Midwestern states.

The chief executive officer of Entergy Arkansas says the utility is continuing to determine its next steps after the Arkansas Public Service Commission last week set conditions that must be met before it will approve the company’s membership in a regional electricity grid organization.

The commission said Friday that it’s not in the public’s best interest for Entergy Arkansas to join Carmel, Ind.-based Midwest Independent Transmission System Operator until the utility meets at least 16 conditions.

Midwest coordinates the electricity grid in 13 Midwestern states.

“Most of these conditions Entergy Arkansas and [Midwest] have already agreed to as reasonable and appropriate,” Entergy Arkansas CEO Hugh McDonald said in a statement released Monday evening. “However, [ the commission] introduced some conditions that are of concern to the company.”

McDonald did not elaborate on which conditions

concern Entergy Arkansas. But Julie Munsell, a spokesman for Entergy Arkansas, said Tuesday that the conditions McDonald referenced are those that involve steps to be taken by Midwest.

“Those are of concern because we’re still unsure just how that will get worked out, although we believe it will be,” Munsell said.

The utility, which has about 700,000 customers in Arkansas, told its parent company, New Orleans-based Entergy Corp., in December 2005 that in December 2013 it would withdraw from Entergy Corp.’s system agreement. The agreement intermingles operations of the corporation’s six utility subsidiaries.

That agreement has cost Entergy Arkansas’ customers more than $4.5 billion since 1985 because of orders handed down by federal regulators.

Entergy Arkansas continues to be committed to joining Midwest by December 2013, despite Friday’s ruling by the state commission, McDonald said.

“And we’re committed to working with the commission to attempt to address their concerns,” McDonald said in his statement. “There’s certainly more work to be done.”

Entergy Arkansas’ research shows that its customers would save up to $260 million over 10 years after the utility joins Midwest. But research by the commission’s general staff disagrees with that level of savings.

Todd Hillman, executive director of Midwest’s market development, said Midwest had expected to get some direction from the Arkansas commission in the order issued Friday.

“Right now, we’re trying to process it,” Hillman said. “Still, we are fully moving forward with the intention of a December 2013 integration of all the Entergy operating companies” into the Midwest grid organization.

David Cruthirds, a Houston regulatory lawyer and publisher of energy newsletter “The Cruthirds Report,” said in his newsletter Monday that Entergy Arkansas and Midwest “cannot claim surprise” about what the commission expected.

“They were on notice [from a commission order in October] and apparently underestimated the commission’s commitment and the seriousness of the commission’s expectations,” Cruthirds wrote. “Entergy left the commission with little choice but to take a firm position” in its order Friday.