OMICRON OPENS NEW, ALL-INDOOR TRAINING CENTER

Omicron has opened a hands-on training facility-indoors and fully air conditioned-minutes away from downtown Houston and area airports.

Interior of the hands-on training area at the Omicron Academy in Houston.
Interior of the hands-on training area at the Omicron Academy in Houston.

Omicron Academy will help the company improve the quality of its service and training to customers in North and Latin America.

The facility’s versatility and design that accommodates different training scenarios all indoors is a benefit to Omicron and its customers, according to the company.

omicron

“We can train on circuit breaker testing and transformer testing, 24/7, rain or shine,” said Will Knapek, Omicron Academy training manager. “No need to cancel class due to weather.”

The facility offers several key features, including a 10-MVA power transformer to perform all typical electrical power transformer tests and advanced diagnostics, 69-kV SF6 circuit breaker and a 15-kV vacuum breaker for circuit breaker testing, partial discharge (PD) testing area, hands-on protective relay lab for up to 16 people, and a training area for distribution automation that includes apparatus from various manufacturers.

Built around real testing situations, courses are tailored for technicians and engineers from electrical utilities, industrial plants, equipment manufacturers and service companies. Attendees include technicians and engineers in design and commissioning, substation maintenance, asset management, protection and metering.

Students can immerse themselves in a real-world learning environment that emphasizes theory and hands-on training while earning continuing education units and professional development hours. For a list of courses and registration, visit www.omicronusa.com/training.


SURVEY: UTILITIES USING INCIDENT COMMAND SYSTEM

One year after Hurricane Sandy, a recently released survey finds utilities are increasingly adopting the Incident Command System (ICS).

Macrosoft, a company that provides software solutions to electric utilities and other industries, surveyed 85 large and small utilities from all U.S. regions to identify ICS trends, best practices and challenges.

Much progress has been made, but significant obstacles remain, according to Macrosoft. For example, many companies plan to implement ICS, but most failed to budget for it.

Some of the most significant survey findings include:

  • 95 percent of respondents see ICS as “important” or “very important” for effective emergency response.
  • 50 percent of respondents train on ICS annually; about 10 percent train quarterly.
  • 56 percent of respondents indicated their companies have no software application that supports their ICS process.

The survey found major shortcomings: the lack of uniformity, standardization and automation in ICS adoption, training, execution and tools. Macrosoft said ICS adoption and implementation will encounter obstacles, but these specific shortcomings could be overcome if the industry takes some concrete steps to do so.


MISO MARKS DECADE OF PLANNING FOR RELIABLE, LOW-COST ENERGY

The Midcontinent Independent System Operator Inc.’s (MISO’s) board of directors celebrated a milestone in mid-December when it unanimously approved MISO’s Transmission Expansion Plan 2013 (MTEP13).

This plan is MISO’s 10th comprehensive long-term regional electric grid plan and is designed to bring billions of dollars in annual benefits for decades for energy consumers throughout MISO’s footprint, according to the system operator. Similar to the nine plans before it, MTEP13 was developed through a rigorous 18-month process that included dozens of meetings with stakeholders.

Since 2003, the MISO transmission expansion planning process has approved $17.9 billion of investment to promote system reliability, improve market efficiency, enable public policy mandates and allow the reliable integration of new generation resources. With more than $6.2 billion in projects already in service, MISO has made great progress in achieving these goals.

“We give a special thanks to MISO’s transmission owners, state regulators and policymakers, and all of our stakeholders for their participation in and support of our value-based planning process over the past 10 cycles,” said John Bear, MISO president and CEO. “The projects created by MTEP provide accessible, low-cost electricity for the customers our members serve and create thousands of jobs in the process.”

The current MTEP13 provides 317 new projects, representing an incremental $1.48 billion in transmission infrastructure investments in the following three categories:

  • 79 baseline reliability projects totaling $372 million are required for the grid to continue to meet North American Electric Reliability Corp. (NERC) reliability standards.
  • Three generator interconnection projects totaling $15 million allow for reliable connections of new generation to the transmission grid.
  • 235 other projects totaling $1.1 billion address a wide range of needs, such as support for lower-voltage transmission systems and providing local economic benefits that are not considered market efficiency projects.

Highlights from past MTEPs include:

  • MTEP11 included the first multivalue project portfolio, which will create $15.5 billion to $49.2 billion in net present value economic benefits over 20 to 40 years.
  • MTEP06 included the first projects subject to regional transmission cost allocation protocols.
  • MTEP03, the first MTEP, provided an estimated $1.84 billion in new transmission investment over the five-year period through 2007.

“This has been an incredibly successful program with billions of dollars invested to build and maintain a vital part of our nation’s infrastructure,” Bear said. “We look forward to another 10 years of ensuring energy reliability, creating increased market efficiencies and facilitating public policy objectives to address additional issues and goals identified through our stakeholder processes.”

MISO ensures reliable operation of and equal access to high-voltage power lines in 11 states and the Canadian province of Manitoba. MISO manages one of the world’s largest energy markets with $18.4 billion in gross annual market charges. MISO was approved as the nation’s first regional transmission organization in 2001. The nonprofit 501(C)(4) organization is governed by an independent board of directors and is headquartered in Carmel, Ind., with operations centers in Carmel and Eagan, Minn. Membership is voluntary.


MOODY’S: US REGULATED UTILITIES’ CAPITAL SPENDING TO FALL IN 2015

chart

Moody’s Investors Service recently published a special comment about its report released in late October that predicts planned capital expenditures of U.S. regulated utilities will peak this year and in 2014, then fall in 2015.

Moody’s special comments on “US Regulated Utilities: Planned Capital Expenditures Set to Fall in 2015, And Modestly Decline Thereafter” include the following key points:

Industrywide capital spending will peak then decline, but falling cash flows will counterbalance positive credit impact. Moody’s examined some 34 utility holding companies and observed that planned capital expenditures will peak at some $70 billion annually this year and next before declining to $65 billion in 2015 as many utilities wrap up large projects-many generation and environmental.

The fall in spending otherwise will improve free cash flow, which results in a credit positive because of the reduced requirements for debt financing.

The rate recovery associated with the completion of large projects also is credit positive. These positive credit impacts are counterbalanced, however, by expected declining cash flows, the result of expiring tax benefits associated with bonus depreciation.

Completion of generation and environmental projects drives capital investing lower. Companies that show the greatest decline in capital expenditures from 2012 to 2015 include NextEra Energy, Cleco Corp., Puget Energy and Westar. NextEra’s and Puget’s declines are related to the completion of large generation projects, whereas Cleco and Westar are completing environmental upgrades to comply with Mercury Air Toxic Standards.

All of these companies will show improvement in free cash flow, and Puget and Cleco have the potential to generate positive free cash flow.

As utilities wind down large capital spending programs, business risk will decline for many, but not all. For some companies, including Southern Co., SCANA and Dominion Resources, high execution risk remains for large construction projects not expected to be completed until between 2017 and 2019.

New environmental standards, among other factors, could cause capital spending to rise again. Moody’s outlook for capital expenditures does not include potential spending related to compliance with carbon emissions or other new environmental standards at existing power plants.

For carbon, however, it looks like companies would not need to begin spending until after the standards are set in 2016 at the earliest.

Additional renewable and gas generation projects could be associated with implementation of new environmental standards at existing plants, as well as a wave of increases in renewable portfolio standards that could go into effect during the next several years.

In addition to spending on generation and environmental projects, the report said, some utilities have plans to spend on transmission projects because there is a tremendous need for improved electric transmission to replace aging infrastructure and to fully use new generation.

Several companies with planned capital expenditures rising through 2015 are involved in large transmission projects, including Ameren Corp., American Electric Power, Northeast Utilities and ITC Holdings.

EYE ON THE WORLD

Schneider Electric invites African students to global business case challenge

giraffe

Schneider Electric, a global specialist in energy management, is inviting African students to take part in Go Green in the City, a global business case challenge focusing on innovative energy solutions for Paris. The challenge is open to students across the globe.

By early December, 217 African students representing 21 countries had signed up for the 2014 Go Green in the City. Most of the students come from Nigeria (83 applications), Algeria (29 applications), Morocco (23 applications), Ghana (18 applications), South Africa (17 applications) and Egypt (12 applications). In addition, more than 1,744 applications from more than 81 nations had been received.

Students from engineering and business schools, master’s and MBA programs in Africa and across the globe have until Feb. 15 to sign up for the challenge in teams of two with at least one female member at www.gogreeninthecity2014.com.

“The young generation in Africa is increasingly aware of the mounting electricity and energy needs, which go hand in hand with social progress and environmental protection,” said Mohammed Saad, president of Schneider Electric in Africa. “This growing interest by African students is key for Schneider Electric. The challenge lies not only in producing more electricity, but also in generating smart energy so as to enable intelligent growth in Africa.”

On Feb. 28, the 100 best teams will be short-listed and have one month to work with a Schneider Electric mentor to present a synopsis and video that outlines their business cases. The top 12 teams then will be invited to Paris in June to take part in the final. The winning team will travel to Schneider Electric sites across the world to meet with staff and management. They also will be offered permanent positions within the company.


Georgia now exporting green energy to Turkey

The Georgia-Black Sea Transmission Network Project completed Dec. 12 during a ceremony with the ministers of Georgia and Turkey at the new substation in Akhaltsikhe, Georgia.

The project began in 2010 with support from the European Investment Bank, the European Bank for Reconstruction and Development, the German KfW Group, and the Development Bank of Austria.

Siemens Energy completed two back-to-back high-voltage direct current (HVDC) links at the Akhaltsikhe substation in southern Georgia close to the Turkish border for Energotrans Ltd. The new back-to-back HVDC links feed a 400-kV overhead transmission line that connects to the Turkish 400-kV grid at the border. Each link transmits 350 MW of eco-friendly electric power, which is crucial for Turkey’s growing power demand.

The three-phase alternating current of the one network is converted in the new converter substation into direct current and transmitted directly via a DC link to the inverter station. There, the direct current is converted back into three-phase current with simultaneous adjustment to the parameters of the network into which it is to be fed. This enables seamless interconnection of the two networks.

The Georgian network is based on a 500-kV system. The Georgia HVDC station converts power from 500- to 400-kV and back. The station operates on two back-to-back links, each line of which is able to transmit 350 MW of power. The line to Turkey is 151 kilometers long and ends at Borchkha substation in Turkey.

The HVDC back-to-back links provide protection against cascading grid disturbances, acting like an automatic firewall that can control stops and restarts of the transport of electric power.

Georgia is working to establish membership in the European Network of Transmission System operators for Electricity (ENTSO-E) with the expectation of exporting electricity to other EU countries, made possible by this new transmission solution.

Power Transmission and the associated service are part of Siemens’ Environmental Portfolio. Some 43 percent of its total revenue stems from green products and solutions.

Black Sea Transmission Network Project

HVDC links
Georgia is the first country in the Caucasus region using HVDC links, improving the reliability of its power supply and efficiently exporting eco-friendly electric power to a neighboring country.

Eskom sponsors DistribuTECH launch in Africa

DistribuTECH Africa has confirmed Eskom’s full support as Utility and Networking Sponsor for the upcoming conference and exhibition March 17-19 at the Cape Town International Convention Centre in Cape Town, South Africa.

The inaugural DistribuTECH Africa will focus on all aspects of transmission and distribution within this area of the globe. The event will be co-located with POWER-GEN Africa to provide comprehensive coverage of the power needs, resources and issues facing the electricity generation industries across sub-Saharan Africa.

DistribuTECH Africa

DistribuTECH Africa targets those in the utility and private power sectors and engineering and commercial personnel from the equipment manufacturing and consulting fields. The event will address professionals from energy-intensive industries with responsibility for ensuring power supply and officials and ministers from national and regional political spheres who are tasked with energy policy.

The 2014 conferences will attract African dignitaries and international energy experts from sub-Saharan Africa, the U.S., U.K., Germany, Italy, Russia and elsewhere. The program spans five tracks across the co-located events.

DistribuTECH Africa

Speakers will include South African Energy Minister Ben Martins; Eskom Group Executive Steve Lennon; and Nampower Namibia Managing Director Paulinus Shilamba.

Senior executives from key local players such as SASOL, Shell and Alstom will deliver talks or participate in in-depth panel discussions alongside high-ranking executives from top energy organizations from across the continent and the globe, including the Nigerian Presidential Task Force on Power, EDM Mozambique, the Ethiopian Power Corp., Electricite de France, the Lesotho Highlands Water Commission and the African Development Bank, as well as respected academics and industry leaders.

DistribuTECH Africa

In addition to the conference program, DistribuTECH Africa and POWER-GEN Africa offer a world-class exhibition floor with suppliers and service providers from home and abroad.

Global event organizer PennWell Corp. reports that more than 2,100 attendees from 63 countries and six continents attended the inaugural POWER-GEN Africa 2012. The combined DistribtuTECH Africa and POWER-GEN Africa 2014 event is expected to attract more high-level decision-makers.

DistribuTECH Africa

The events will include two technical tours: Eskom’s new Centre for Substation Automation and Energy Management Systems (CSAEMS), Cape Town Peninsula University of Technology; and Eskom’s Ankerlig Power Station-previously known as the Atlantis OCGT power station-one of five gas turbine power plants in South Africa.

Those attending DistribuTECH Africa and POWER-GEN Africa will be able to take part in free training workshops provided by leading suppliers, plus the new addition of a WADE Africa Decentralized Energy Workshop.

DistribuTECH Africa

Discounted Early Bird rates are available for conference delegates who register before Feb. 18. Registering for one event provides access to both, including all conference sessions and entrance to the exhibition floor, plus all networking receptions.

For hotel and registration information, the full preliminary conference program and to download the Pre Show Guide with details on the conference, exhibitor list, floor plan, technical tour and workshop details, visit www.powergenafrica.com or www.distributechafrica.com.

DistribuTECH Africa has confirmed Eskom’s full support as Utility and Networking Sponsor for the upcoming conference and exhibition March 17-19 at the Cape Town International Convention Centre in Cape Town, South Africa.

DistribuTECH Africa

The inaugural DistribuTECH Africa will focus on all aspects of transmission and distribution within this area of the globe. The event will be co-located with POWER-GEN Africa to provide comprehensive coverage of the power needs, resources and issues facing the electricity generation industries across sub-Saharan Africa.

DistribuTECH Africa targets those in the utility and private power sectors and engineering and commercial personnel from the equipment manufacturing and consulting fields. The event will address professionals from energy-intensive industries with responsibility for ensuring power supply and officials and ministers from national and regional political spheres who are tasked with energy policy.

The 2014 conferences will attract African dignitaries and international energy experts from sub-Saharan Africa, the U.S., U.K., Germany, Italy, Russia and elsewhere. The program spans five tracks across the co-located events.

Speakers will include South African Energy Minister Ben Martins; Eskom Group Executive Steve Lennon; and Nampower Namibia Managing Director Paulinus Shilamba.

Senior executives from key local players such as SASOL, Shell and Alstom will deliver talks or participate in in-depth panel discussions alongside high-ranking executives from top energy organizations from across the continent and the globe, including the Nigerian Presidential Task Force on Power, EDM Mozambique, the Ethiopian Power Corp., Electricite de France, the Lesotho Highlands Water Commission and the African Development Bank, as well as respected academics and industry leaders.

In addition to the conference program, DistribuTECH Africa and POWER-GEN Africa offer a world-class exhibition floor with suppliers and service providers from home and abroad.

Global event organizer PennWell Corp. reports that more than 2,100 attendees from 63 countries and six continents attended the inaugural POWER-GEN Africa 2012. The combined DistribtuTECH Africa and POWER-GEN Africa 2014 event is expected to attract more high-level decision-makers.

The events will include two technical tours: Eskom’s new Centre for Substation Automation and Energy Management Systems (CSAEMS), Cape Town Peninsula University of Technology; and Eskom’s Ankerlig Power Station-previously known as the Atlantis OCGT power station-one of five gas turbine power plants in South Africa.


Mexico sees historic energy reform

mexico

by Juan Manuel Trujillo, Thomas Mellor and Bruce Wolfson, Bingham McCutchen LLP

Mexico on Dec. 20 amended Articles 25, 27 and 28 of the Mexican Constitution to transform and modernize the country’s energy sector.

Mexico’s energy reform is comprehensive with potentially far-reaching effects in the oil and gas and electric power industries. The energy reform is expected to contribute to Mexico’s long-term development by opening the energy and hydrocarbon sectors to both foreign and local private investors.

The impact of energy sector reform should be immediate and significant. It offers foreign investors the opportunity to participate in exploration and production in various indirect ways and to engage directly in midstream and downstream operations. This will make Mexico the second-largest market open to foreign investment in the energy sector, behind Brazil.

The midstream market alone-which includes transportation, storage, wholesale marketing and distribution of crude and refined petroleum products-has been estimated at more than $52 billion annually. It also brings competition to the state-owned oil company Petràƒ³leos Mexicanos (PEMEX) and electricity provider Comisiàƒ³n Federal de Electricidad (CFE). The entire energy sector, with very limited exceptions, has been closed to foreign participation or domestic competition since 1938.

Among the most notable features of the energy reform are:

  • Oil and hydrocarbon resources in the subsoil will remain property of the nation;
  • Private companies still will be precluded from owning oil and gas reserves but will be able to participate in exploration and production activities through licenses, production-sharing contracts, profit-sharing and service agreements, among others. Private ownership will be permitted in the midstream and downstream sectors;
  • PEMEX will be transformed into a “productive state enterprise” within the next two years. It no longer will be required to have labor union representation on its board and will be afforded an initial priority to select the fields in which it wishes to conduct or continue its exploration and production activities (known as “round zero”);
  • The Mexican federal government will remain in charge of administering hydrocarbons and electric power;
  • Significantly expanded authority is granted to the Ministry of Energy and the National Commission of Hydrocarbons for conducting the bidding processes and overseeing exploration and production contracts with private parties. Similarly, the Regulatory Energy Commission will have enhanced authority to manage and regulate the granting of permits for the exploitation of hydrocarbon resources;
  • A new National Center for the Control of Natural Gas is created to administer the pipeline and storage network in the country;
  • The Central Bank of Mexico will act as trustee of a Mexican Oil Fund aimed at administering and distributing nontax revenues derived from oil contracts;
  • The National Industrial Safety and Environmental Protection Agency is created to regulate occupational and industrial safety and environmental matters in the energy sector;
  • Private companies will be able to participate in power generation for public use in a future national electricity wholesale market to be independently administered by the National Energy Control Center; and
  • The Federal Electricity Commission, Mexico’s national power company, also will be transformed into a “productive state enterprise” and will remain with exclusive authority for the transmission and distribution of power, as well as for the planning and control of the national electricity system.

The reach of this ambitious energy reform will be defined by the implementing legislation, which should be enacted within 120 days of the adoption of the constitutional amendment. The new operational framework is expected to come into being by 2015.

The implementing legislation is expected to include:

  • Rules governing the exploration and production activities of public sector companies;
  • Rules governing contracts, licenses and other rights of private sector participants with respect to oil and gas reserves, including exploration and production and the bidding processes;
  • Rules governing coexisting exploration, production and mining activities by more than one participant;
  • Rules governing the reporting of reserves associated with oil and gas contracts with private participants;
  • Rules governing any national content requirements under oil and gas contracts with private participants;
  • Rules governing midstream and downstream activities by private participants;
  • Rules governing productive state companies, including financing, budgeting, governance and transparency concerns, and the transformation of PEMEX and the Federal Electricity Commission into productive state companies;
  • Rules regarding the authority and independence of the various government agencies participating in the energy sector;
  • Rules governing the power generation by private participants, the national electricity wholesale market, and access to it;
  • Rules governing arrangements with private companies in the power sector, including contractual arrangements related to the transmission and distribution of power;
  • New environmental and safety standards specific to the energy sector;
  • Rules concerning the climate change and the advancement of clean energy; and
  • Rules governing the management, transparency and purposes of the Mexican Oil Fund.

SURVEY: MOST UTILITIES WANT TO OFFER MOBILE BILL PAY BUT DON’T

phone

A late 2013 survey of utility professionals revealed that 75 percent of their utilities do not offer a mobile bill payment experience, but 51 percent said they want a mobile bill payment solution so they can reach customers more effectively on their preferred mobile devices.

The survey was conducted by Check, a mobile payments company that offers a free mobile app used by nearly 10 million customers to pay bills and track personal finances.

The survey, which was conducted to reveal current trends about utilities and their mobile bill payment strategy, found that across the nation, small, local utilities to midsize, regional ones are noticing a shift: consumers’ paying bills on the fly from their mobile devices vs. reviewing paper bills and paying with checks.

Despite challenges such as vagueness about their mobile strategies or a lack of information technology (IT) resources, the utilities surveyed use creative strategies to provide customers with a mobile bill payment experience and solution.

To address challenges, they are adopting strategies such as:

  • Examining the cost savings and flexibility of partnering with mobile bill payment companies vs. building or buying solutions;
  • Leveraging new opportunities for customer engagement on mobile channels; and
  • Decreasing billing costs by going paperless.

Patricia Oygar, board president of Southern California Water Co.’s Desert Water Agency, put navigating challenges and prioritizing customer convenience at the top of the agency’s list.

“We are very pleased to offer more convenience to our valued customers,” Oygar said. “Mobile apps are an increasingly popular method to complete tasks, and we are always looking for new ways to innovate and benefit from improved technology.”

Significant survey results include:

  • 75 percent of respondents’ companies do not offer a mobile bill payment experience;
  • 51 percent of utility professionals wanted a mobile bill payment solution to reach customers more effectively on their preferred mobile channels to:
  • – Decrease billing costs, including the cost of paper bills (24 percent);
    – Increase customer engagement (18 percent); and
    – Collect money faster and optimize cash flow (7 percent).
  • 47 percent of respondents said vagueness and uncertainty about their mobile strategy posed a challenge to adopting a mobile bill payment solution. Challenges are:
  • – Lack of IT resources and low IT priority (29 percent);
    – Budget (17 percent); and
    – Security and compliance concerns (7 percent).

Data was provided by 57 utility professionals who work in customer service, billing, IT or marketing groups.

They represent a range of utilities serving up to 2 million customers.

The survey found that across the nation, small to midsize utility consumers are paying bills from their mobile devices.


MISSISSIPPI PSC AGAINST CEDING CONTROL OF ENTERGY ASSETS TO FEDS

Mississippi flag

By Rosy Lum, TransmissionHub chief analyst

The Mississippi Public Service Commission (PSC) made no attempt to veil that its Dec. 10 decision to reject ITC Holdings’ acquisition of Entergy’s transmission assets pivoted around the ever-present friction between state and federal control.

The PSC’s decision is rife with references to not wanting to hand over jurisdiction of the assets to the Federal Energy Regulatory Commission (FERC).

“If approved, the transaction would strip this commission of effective regulation of the transmission assets in Mississippi currently owned by (Entergy Mississippi) and transfer this authority to the federal government,” the PSC said in the decision.

The thrust of the commission’s argument was that to cede control would necessarily result in higher rates to retail customers, which would contravene the state law that requires such a transaction assure customers be served on the same basis after the transaction as before.

“(The) transaction offers with certainty only significant cost to ratepayers and complete loss of this commission’s rate jurisdiction over the transmission assets at issue,” the PSC said.

That Mississippi would be uncomfortable with such an outcome comes as no surprise to industry insiders who for months, if not since the announcement of the transaction in 2011, have been skeptical about its success.

“Because Mississippi is a bundled state, the state has jurisdiction over the transmission costs and if they sell the system to ITC, FERC will get jurisdiction and the state will have to pass through the rates FERC approves,” an industry lawyer told TransmissionHub on Dec. 11, adding that southern states “have never been comfortable” with the prospect of FERC jurisdiction.

In its approval of the transaction in June, FERC acknowledged the transaction could result in rate increases for some but that its benefits outweighed those costs.

“The states don’t want to relinquish their control of those assets,” an industry investment banker told TransmissionHub on Dec. 11. “Going into that (transaction), it had a high degree of difficulty, trying to basically rip FERC-regulated assets out of the local utilities’ (hands) and needing all those approvals to do it.”

ITC and Entergy have pledged $453 million in rate-mitigation funds to lower Entergy customer rates across its four-state territory of Arkansas, Louisiana, Mississippi and Texas, including $77.5 million in rate mitigation for Mississippi customers.

According to the decision, however, Mississippi customers could pay $348 million over 30 years as a result of ITC’s ownership. Including increases in rate base and assuming 5 percent annually over 30 years, customers could pay an additional $813 million, the PSC said.

Mississippi regulators directed Entergy Mississippi to “move beyond this transaction;” to wit, to work with commission staff to develop a plan for transmission investment that it should file within 90 days after integration into the Midcontinent Independent System Operator (MISO).

Entergy has been a target of criticism for its lack of investment in its transmission system, but that lack of investment has been to protect retail customers, as new transmission “is to benefit the generators and wholesale prices,” the lawyer said. “So, they’re getting beat up for looking after the retail customer.”

The PSC mentions in the decision that the Department of Justice has expressed the desire for Entergy to divest its transmission assets to an independent transmission company, which ITC is, and join an RTO to address anticompetitive concerns.

The independent model, however, is a mere “experiment” that is “barely 10 years old,” Mississippi regulators said, and it is unclear that it ensures benefits to consumers.

The lawyer noted that Entergy has been trying to spin off its transmission system for years, but the commission makes clear in the decision that doing so is not in the best interests of ratepayers, as “Entergy shareholders would reap a windfall through higher rates made possible by the FERC rate construct at the expense of captive customers, who have borne the cost of transmission assets that may have been neglected or misused.”

The industry lawyer said, “All these people making allegations about misusing the transmission system is pretty unfair. There are regulators talking out of both sides of their mouths.”

In its decision, the PSC knocks Entergy for joining an RTO, stating, “Rate increases are certain, but benefits are not, particularly the realization of benefits incremental to those arising from (Entergy Mississippi’s) participation in MISO.”

In the next breath, however, the commission states that its decision to approve the move to MISO hinged on expert testimony that identified significant potential benefits of moving to an RTO.

“Moreover, the commission retained authority over retail transmission rates under MISO’s bundled load exemption yet still imposed additional conditions to ensure sufficient regulatory control and ratepayer protections,” the PSC said.

The PSC has approved a base return on equity (ROE) of 10.76 percent. The MISO-approved base ROE is 12.38 percent.

It remains to be seen whether the predictions that ITC’s acquisition of Entergy’s transmission assets wouldn’t clear the hurdle of the state regulatory process are coming true. Though industry bankers have been pessimistic that this deal would get done, the industry lawyer cautioned that behind closed doors, Mississippi regulators could be negotiating with Entergy and ITC for a better rate-mitigation deal, other concessions or both.

“You can’t assume things based on what’s public,” he said.

Rosy Lum, chief analyst for TransmissionHub, has been covering the U.S. utility industry more than six years. She began her career as an energy journalist at SNL Financial, for which she established a New York news desk. Reach her at rosyl@pennwell.com. TransmissionHub is a sister publication of POWERGRID International magazine. Both are owned by PennWell Corp.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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