Entergy Proposes Independent Entity Oversee –           Not Control-- Transmission Grid

Platts T&D - 01/22/2004

Entergy CEO Wayne Leonard, in a letter to the members of the Federal Energy Regulatory Commission, proposed using an "independent entity," which would "oversee," but not functionally control, the transmission system in the Entergy service area as an alternative to a regional transmission organization.

Leonard said that creating an RTO that had full control of grid operations probably was not feasible at this time in the Southeast because of concerns by state regulators about interference with retail rates.

He said that Entergy supported the goals of FERC Order 2000, which set minimum standards for RTOs, but believed that a "pragmatic, incremental" approach was needed in the region. Under the voluntary plan, the proposed independent entity would have "broad oversight authority" over key aspects of grid operation, including granting service and planning new lines.

Entergy would get an outside contractor to run the entity, and the contractor would have the right to make complaints directly to FERC if it believed Entergy was operating the grid in a discriminatory manner. Given this oversight, Entergy said it would "have every incentive to be above reproach" in operating the grid.

To meet FERC transmission pricing goals, the new entity would make case-by-case decisions about whether participant funding should be used to pay for new transmission projects. Entergy would have no right to veto these decisions, which would then go to FERC for final approval. Entergy promised to make a specific proposal to FERC by March 31 on the participant-funding issue.

Entergy said its proposal could achieve the same benefits as a normal RTO plan and could serve as a model for resolving differences over RTO policy between various regions. Entergy had previously been involved in setting up the SeTrans RTO with Southern Company that would have covered much of the Southeast, but the plan was abandoned late last year because of state regulatory complaints.