By Amanda Durish Cook

FERC last week denied requests by Texas and Louisiana regulators for rehearing of its December 2013 order approving the Entergy operating companies’ incorporation into MISO and Entergy Arkansas’ exit from the companies’ system agreement.

The Public Utilities Commission of Texas contended FERC was wrong because in filing “limited” amendments to the agreement, Entergy didn’t subject its entire system agreement to scrutiny.

The Louisiana Public Service Commission contended that FERC’s order failed to determine what entity is responsible for costs left when an operating company withdraws. It said ratepayers of the last remaining company in the operating company system could unjustly bear the brunt of the costs needed to plan and operate the resources of multiple companies. Louisiana regulators also questioned whether Entergy’s proposed congestion cost would correspond with MISO practices and suggested that Entergy Arkansas’ exit would leave a regulatory gap in state authority over Entergy.

FERC’s Nov. 9 order denied the commissions’ complaints on all fronts, saying that the system agreement doesn’t require withdrawing companies to pay an exit fee or otherwise compensate remaining companies (ER13-432-001).

“[Entergy Arkansas’] integration into MISO does not require a broader review of the system agreement. Nothing about Entergy’s intent to operate as a power pool within MISO is inherently inconsistent with behavior in an organized market,” FERC wrote. “Furthermore, nothing in the system agreement or commission precedent would bar Entergy from integrating the operating companies into MISO as a power pool.”

FERC last week also accepted Entergy’s compliance filings required by the 2013 order (ER14-1263, et al). The commission had ordered the companies to amend their costs and credits allocator to use energy usage instead of peak demand as the basis for calculations.

The Louisiana commission protested that Entergy’s revised allocator “departs dramatically from the criteria articulated by the commission” by using monthly energy usage data instead of hourly energy usage data, as MISO’s Tariff states. They asked FERC to reject Entergy’s method on the basis that it violated cost-causation principles.

FERC instead accepted Entergy’s compliance filing, noting that using hourly energy usage data “would be problematic because it would be inconsistent with the monthly allocation of ancillary services and uplift charges and credits related to generating units.”

“We find that Entergy has provided sufficient detail in its compliance filing to explain how it will calculate the energy-based allocator and has justified why its proposal is just and reasonable,” the commission wrote.

FERC Commissioner Colette Honorable, a former Arkansas regulator, did not participate in either ruling.