The Mississippi Public Service Commission (PSC) is continuing to evaluate Entergy’s membership in one of the nation’s largest regional transmission organizations (RTO).
The commission is trying to decide which is best for ratepayers: Entergy remaining in the Midcontinent Independent System Operator (MISO), leaving MISO for a competing marketplace or returning dispatch of Entergy’s grid back to the company.
The three-member elected commission commenced the review of the utility’s membership in MISO in April after the February 2021 ice storm and cold snap that crippled the power grid of Texas and caused widespread outages. MISO South customers, including Entergy Mississippi customers, were asked to conserve electricity on February 16 and 17 to avoid larger outages.
MISO is a non-profit RTO that centrally controls the delivery of electricity for its member utilities via a multi-state grid to 15 states and the Canadian province of Manitoba.
RTOs as they exist today began after the Federal Energy Regulatory Commission began issuing orders from 1996 to 1999 that defined their characteristics and functions, culminating with release of Order 2000 in December 1999.
In these situations, the PSC orders an online docket be prepared and the company and other intervenors (parties approved to participate by the PSC with a stake in the proceedings) can add testimony and voice their opinions over Entergy’s membership in MISO.
Entergy Senior Lead Communications Specialist Mara Hartmann told the Northside Sun that the utility voluntarily joined MISO and any decision to possibly leave it would be made in consultation with the commission.
The PSC issued an order on December 7 that instructs MISO to provide answers to its data requests, since the information it provided in response to an October 27 order “contained certain deficiencies.”
Entergy joined MISO in 2013 after it reached an agreement with the U.S. Securities and Exchange Commission to divest its transmission network after the federal agency commenced an investigation over Entergy’s alleged anticompetitive practices in the acquisition of two natural gas-fueled power plants owned by KGen, an independent power producer.
One of those plants is in Hinds County and it replaced the nearby Rex Brown plant, which was retired in 2019. The SEC investigation remains open despite the agreement.
In 2012, the commission approved Entergy’s membership in MISO and the PSC required the company to submit annual reports about the benefits and drawbacks of membership in the RTO.
The PSC said there are cost savings for rate payers — $1.3 billion for Entergy as a whole and $246 million for Entergy's Mississippi subsidiary through 2020. It also says it is less clear to the commission and other regulatory bodies nationwide whether the benefits of RTO membership outweigh the potential costs.
Entergy also said in its filing that it would cost about $89 million to leave MISO and re-establish dispatch control over its entire grid, a cost that would likely have to be passed on to Energy’s ratepayers.
Entergy is unlikely to join the Southeast Energy Exchange Market, a power trading platform formed by the Southern Company (parent of Mississippi Power), Duke Energy (North and South Carolina), Dominion Energy (South Carolina), the Tennessee Valley Authority and eight other utilities. SEEM would allow the participating utilities to voluntarily buy and sell power in 15-minute increments, but the grids of the member utilities wouldn’t be centrally managed like in a traditional RTO.
Entergy says in its filing from June 28 that it believes that the benefits of MISO membership will continue into the foreseeable future. It also says MISO has approved a new transmission expansion for the RTO’s South Region that will strengthen the grid and improve reliability.
The company also says MISO has a plan that will localize the cost for repairs like the $90 million for all MISO members to pay for repairs for Hurricane Laura, which struck western Louisiana in 2020. Under the new proposal, just the MISO South region would’ve been responsible for those costs.
The company said in its filing it is unlikely to leave MISO for SEEM since it won’t replace the day-ahead or real-time energy markets and wouldn’t provide the savings or benefits enjoyed by MISO membership.
Hartmann confirmed that the company is still of that opinion and that joining SEEM wouldn’t have the same benefits currently available to Entergy customers.
The Clean Grid Alliance, in its filing from June 28, estimated that Entergy leaving MISO for SEEM would result in rate increases for customers. Duke Energy (Ohio) recorded a cost of $97 million to withdraw from MISO in 2011, while the Louisville Gas and Electric and Kentucky Utilities companies paid $40 million in exit fees in 2006.
MISO said in its filing that a 2020 study didn’t result in any interregional transmission projects. The RTO also said that the limitation between the North and South regions of MISO was largely contractual.
The Clean Grid Alliance said that MISO should expand its grid, especially between its North and South regions which are tenuously connected in the “boot heel” area of eastern Missouri. This would allow the grid to move renewable energy (such as wind and solar) more easily through the grid where it is needed.
It says in the filing that Entergy has no direct grid connections with MISO’s North Region.
Another advocacy group, 305 New Orleans, said in its filing that a physical planning solution (building more transmission lines and other infrastructure) rather than a contractual obligation is needed to allow generators to sell more affordable electricity between markets and ensure customers have access to a more stable power supply between regions.
The group said that MISO South's lack of access to a competitive market compared to the rest of the MISO footprint is an impediment to affordable and competitive electricity options.
The Clean Grid Alliance also said expansion of Entergy’s renewable generation portfolio would be more expensive to do outside an RTO. Entergy Mississippi announced on November 10 the EDGE (Economic Development with Green Energy) plan that would increase the company’s renewable generation portfolio by 1,000 megawatts by 2025 while replacing aging fossil fuel plants such as Vicksburg’s Baxter Wilson plant by the end of May 2022.
