HOUSTON Aug 9 Texas utility regulators approved
a motion on Friday to allow Entergy Corp and ITC
Holdings to withdraw a plan to transfer Entergy's
electric transmission assets in Texas to ITC.
Facing likely rejection by the Texas Public Utility
Commission, or PUC, the companies asked that the $1.78 billion
proposal be withdrawn so they can resubmit the plan with
additional information on how they will offset higher costs for
The transaction, a spin-off and merger of Entergy's
15,400-mile transmission network serving parts of Arkansas,
Louisiana, Mississippi and Texas, requires action by a number of
other state and local regulators.
The Texas commission was the first state regulator to vote
on the proposal and faced a deadline later this month to act.
The deal, which has been approved by federal regulators and
ITC shareholders, faces opposition in other states.
Last month, a panel of administrative judges urged the Texas
PUC to reject the plan, saying that it would raise transmission
costs for Entergy customers without providing sufficient
With similar criticism raised in other states, Entergy and
ITC have offered a total of $453 million in rate mitigation over
five years to Entergy customers to offset ITC's request for a
higher rate of return.
Under the plan, Entergy Texas customers would receive $90.1
million in rate reduction over the five-year period.
That plan was disclosed after regulatory hearings in Texas
were closed and could not be considered by the two-member
commission on Friday.
"This process doesn't allow last-minute evidence," said
Commissioner Ken Anderson, who also criticized the companies for
seeking approval in Texas before action had been taken in other
Anderson then outlined 26 "make or break" conditions he said
might allow the deal to advance, but Entergy and ITC would not
agree to the conditions.
As a result, PUC Chairman Donna Nelson said that unless the
companies withdrew their plan, she would have no choice but to
reject the proposal due to the many unanswered questions.
"We appreciate the commission's decision to allow us to
withdraw our application, with an opportunity to refile so that
all of the commitments that we have already indicated we are
prepared to make can be included in the record for the
commission to consider," said ITC spokeswoman Louise Beller in a
"We continue to believe that this transaction would deliver
the near-term and longer-term benefits to customers that result
from a high-performing, reliable transmission system," she said.
Entergy and ITC are under pressure to obtain regulatory
approval of the deal before the end of the year.
As a prerequisite to the ITC deal, Entergy has joined the
Midcontinent Independent System Operator, or MISO, an
independent regional transmission organization, or RTO, where
RTO membership and divestiture of Entergy's grid network are
necessary to resolve a civil investigation opened by the
Department of Justice in 2010, scrutinizing its competitive
practices, according to the agency.