Oct 29 (Reuters) - U.S. power company Entergy Corp said Tuesday it will not complete the spinoff and merger of its transmission business with U.S. transmission company ITC Holdings Corp before the end of the year as previously expected.
If the deal is not completed by December 31, either party can cancel the $1.78 billion transaction, Entergy’s CEO Leo Denault said on a conference call following the release of the company’s earnings.
“We continue to believe (the ITC deal) will result in optimal value for all stakeholders,” Denault said.
“ITC’s independence, broader regional planning and sole focus (on transmission) will ... reduce congestion, attract new generating resources ... and ultimately lead to lower energy costs,” he said.
But state regulators have been slow to approve the deal, fearing it could increase transmission costs for consumers in Entergy’s Arkansas, Louisiana, Mississippi and Texas service areas.
In September, Entergy and ITC re-filed their proposal in Texas with a new plan that better protects consumers from higher transmission rates after state regulators threatened to reject the transaction.
Denault said hearings are scheduled for November in Louisiana, while the companies are working with regulators in Arkansas to schedule another round of hearings.
He said hearings in Mississippi concluded in September.
Denault could not say when the states would decide on the ITC deal, noting it will take the companies “at least 60 to 90 days after all regulatory approvals are received to close the transaction.”
Entergy shares lost $1.91, or about 2.8 percent, to $66.20 in Tuesday afternoon trade. ITC, meanwhile, was up 0.8 percent to $100.85 per share.