HOUSTON, Jan 10 (Reuters) - Texas regulators said Thursday a plan by Entergy Corp to end certain power contracts may undermine economic benefits for Texas customers that regulators relied on to approve the firm's move to the Midwest Independent Transmission System Operator (MISO).
Depending on Entergy's action later this month, the Texas Public Utility Commission may seek to revoke its October vote to approve Entergy's integration into MISO, which is set to be completed by the end of this year, said Texas Commissioner Ken Anderson.
Transferring control of its 15,000-mile, high-voltage grid network to MISO is a prerequisite to Entergy's plan to spin off its transmission business to ITC Holdings Corp in a $1.78 billion transaction and to help resolve an investigation by the U.S. Department of Justice.
The controversy over Entergy's transition to MISO was sparked by a Texas filing which raised commission concern over what information Entergy may have had, but not disclosed, when it negotiated the settlement with other companies that the PUC eventually approved.
Anderson said a new economic analysis by Entergy indicates that $133 million in savings to Texas customers could be wiped out if Entergy moves forward with a filing at the Federal Energy Regulatory Commission seeking to end certain purchased power agreements.
In a raised voice, Anderson called Entergy's behavior in the case "unacceptable for a regulated utility" in Texas and described it as part of Entergy's "long history of hiding the ball."
Commission Chairman Donna Nelson said if Entergy seeks to change the power contracts at FERC, "it will be contrary to the facts we relied on" to approve the MISO transition.
The Texas commission wants Entergy to delay any FERC filing to allow time for an independent analysis to determine how termination of certain purchased power contracts will impact MISO's allocation of transmission revenue rights to Entergy Texas.
John F. Williams, an attorney representing Entergy, told the commission that the FERC filing needs to be made by the end of January, but that the company hopes to find another resolution to the matter.
Entergy cites several reports that show its membership in MISO will lead to savings of up to $1.4 billion over a decade for Entergy's 2.8 million customers in Louisiana, Arkansas, Mississippi and Texas.