Entergy Texas utility seeks to join Midwest grid

HOUSTON, April 30 (Reuters) - Entergy Corp's Texas utility filed an application with state regulators on Monday seeking to transfer control of high-voltage transmission assets in the state to the Midwest Independent Transmission System Operator (MISO) by December 2013.

Entergy's application with the Public Utility Commission of Texas is the last filing by its utilities in Arkansas, Louisiana and Mississippi to seek permission to join MISO, an 11-state independent regional grid operator based in Indiana.

No state regulator has yet approved the change.

Entergy Texas President Joe Domino said joining the larger grid organization should save Entergy's 400,000 Texas customers up to $225 million over a decade.

"We spent more than two years carefully reviewing and analyzing all of our options, culminating in our determination that MISO membership would provide the greatest benefits to our customers," Domino said in a statement.

If approved, MISO would assume control of transmission planning, dispatch of generation offered to MISO's markets and manage grid congestion on Entergy's system.

Entergy's action to seek membership the MISO regional transmission operator (RTO) emerged in the last two years after several aborted efforts and with the growing insistence of state and federal regulators.

The move also follows the October 2010 disclosure that Entergy was cooperating with a U.S. Department of Justice civil investigation of its competitive practices, including its transmission system practices.

Entergy said MISO membership will lead to savings of up to $1.4 billion over a decade.

Last week, Entergy Chairman J. Wayne Leonard said joining MISO "is critical" to Entergy's next step, spinning off its transmission operation to ITC Holdings Corp.

"Joining MISO is an incremental step in improving our business model, but the ITC transaction is transformational, offering customers and other stakeholders the opportunity to benefit from complete independence, the advantages of scale and at the same time, greater focus," Leonard told analysts on a call.

Leonard said he hopes to have regulatory approval in all four states early in the fourth quarter. The Texas PUC has 180 days to consider Entergy Texas' request.

Entergy needs approval from each state regulator to join an RTO to advance the ITC deal, according to ITC officials.

Earlier this month, federal regulators approved a cost-allocation plan that allows Entergy's customers to pay only for transmission upgrades that benefit them.