Mississippi Regulators reject merger of Entergy, ITC Holdings

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The Mississippi Public Service Commission (MPSC) announced a unanimous decision Tuesday to deny a joint application request to transfer ownership and control of Entergy’s high voltage transmission system to a subsidiary of ITC Holding Corp. MPSC had concerns about what was best for the public, saying the deal could possibly result in a $300 million rate increase for Mississippi customers over 30 years, according to the Associated Press.

Central District Commissioner and Chairman Lynn Posey said the commission “was not persuaded the transfer of ownership would be in the best interest of Entergy Mississippi’s customers.” Posey said the commission’s decision was based on three negative aspects of the proposal: an increase in customer rates, a loss of commission losing jurisdiction over transmission cost of service, and no clear benefits to customers because Entergy has yet to integrate and operate within the Midcontinent Independent System Operator Inc. grid.

The Federal Energy Regulatory Commission had approved the application for Entergy to spin off its electric transmission business last June, but the deal still required approval from the company’s state and local jurisdictions.

"We are disappointed that the Mississippi commission took action today and found that the transaction is not in the public interest.  We will evaluate the Mississippi commission's 99-page order and work with ITC to determine next steps," Entergy stated in a press release.

"We strongly disagree with the commission's decision and its stated rationale for denying our application.  ITC and Entergy have demonstrated that the transaction is in the public interest based on the significant benefits that would result from ITC's ownership of the transmission system, which is clearly in need of investment to improve reliability and facilitate the competitive electricity market.  While we recognize the commission's perspectives on jurisdiction and rate issues, ITC and Entergy made commitments to hold customers harmless from possible negative impacts and we do not believe that jurisdictional concerns should stand in the way of customers realizing the benefits of this transaction.  The commission's action today would deny Mississippi customers the near-term and longer-term economic and reliability benefits resulting from ITC's independent ownership with a singular focus on transmission,” ITC stated in a separate release.

ITC is expected to file a post-effective amendment that will include information about TransCo and the proposed transactions. Statements and other documents related to the proposed transactions, when available, can be obtained for  free SEC's website.

Entergy  has about 30,000MW of generated capacity that it owns and operates, including more than 10,000 MW of nuclear power.

The transaction is subject to certain conditions precedent, including regulatory approvals and the availability of financing. ITC cannot provide any assurance that the proposed transactions related thereto will be completed, nor can it give assurances as to the terms on which such transactions will be consummated.

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