By Tom Kleckner
FERC on Monday approved an Entergy request to transfer ownership interests in two transmission control centers from Entergy Services to the company’s operating companies (EC19-18).
The commission found that the transaction would not adversely affect horizontal or vertical competition, noting that the control centers — in Jackson, Miss., and Little Rock, Ark. — have been and will continue to be operated under MISO’s control. FERC also determined that the transaction would not have an adverse effect on rates, as transferring the control center’s ownership will increase administrative efficiency and rate transparency.
The ownership interests will be allocated to Entergy’s operating companies in Arkansas, Louisiana, Mississippi, New Orleans and Texas based on each company’s 2017 coincident peak load. FERC established the peak-load allocation factors in a separate docket (ER19-211).
The commission also granted in part a complaint under Federal Power Act Section 206 by the Louisiana Public Service Commission, one of five regulatory bodies to intervene in the proceeding. The PSC alleged that the Entergy operating companies’ current accounting and rate treatment of the control centers’ costs characterize them as transmission facilities, and that all of their costs should be included in the companies’ MISO formula rates (EL18-201).
FERC denied Entergy’s request to dismiss the PSC’s complaint, saying the Uniform System of Accounts for public utilities requires that “transactions with associated companies … be recorded in the appropriate accounts for transactions of the same nature.”
“Affiliate transactions that are in the nature of transmission expenses must be recorded by the public utility in transmission expense accounts,” the commission wrote. Based upon the requirement, it disagreed with Entergy’s contention that its operating companies “comply with the commission’s accounting rules.”
The commission ordered the operating companies to make a compliance filing within 30 days showing that they have made the required accounting changes and formula rate recalculations. They also must explain how the recalculations will be reflected in the annual formula rate true-up.
The control centers went into service in 2016 and 2017. They replaced five transmission operations centers and a single system operations center previously owned by the operating companies and operated by Entergy Services.
