By Rich Heidorn Jr.

CARMEL, IND. — MISO transmission developers cried foul last week over Entergy’s proposed $187 million transmission upgrade near Lake Charles, La., saying the company’s request for expedited approval is denying them a chance to compete for the project.

Entergy Gulf States Louisiana filed the request with MISO on Dec. 15, saying it was in response to a system need identified on Dec. 1.

The company asked that the request be treated as an out-of-cycle project and not as part of the normal MISO Transmission Expansion Planning (MTEP) process. “Due to major industrial expansion projects ongoing in the Lake Charles area and the aggressive timeline to complete the project by summer of 2018, this project needs to be started in the first half of 2015,” it said.

The project, which the company described in a Jan. 8 press release as “one of the largest single transmission projects in Entergy’s history,” includes two new substations, expansion of a third and 25 miles of 500-kV and 230-kV transmission.

“It’s not the largest [out-of-cycle project] we’ve ever received, but it’s substantial,” said Jeff Webb, MISO director of planning, in presenting the project to the Planning Advisory Committee on Wednesday.

Under the Transmission Planning Business Practice Manual, out-of-cycle projects are limited to reliability projects that address a need identified after the project submittal cutoff date of the prior annual MTEP cycle, with a required need date within three years of the request date and expected in-service date within four years.

Webb said the cost of the project would be allocated to the Entergy pricing zone and built by Entergy — not opened to the competitive selection process ordered by the Federal Energy Regulatory Commission in Order 1000.

“If you wait long enough, everything becomes a reliability project,” said George Dawe, vice president of Duke American Transmission. “In my mind it doesn’t meet at least one, and maybe two, of those criteria. … They’re saying that sometime after September this load materialized.”

“We think it meets the requirements,” responded Webb, noting the requested June 2018 in-service date. “It seems rational. We have no knowledge of when Entergy may or may not have known.”

Webb’s defense did not end the debate. Dawe was joined by others also expressing skepticism. Discussion of the project — scheduled for 10 minutes on the agenda — stretched on for about 45 minutes.

Sharon Segner of LS Power requested MISO evaluate the project to see “whether there are benefits to this line outside of Entergy’s footprint and whether it goes to the competitive bid process.” Those are the questions, she said, that would be the subject of a potential challenge before FERC.

Webb said such an evaluation would take too much time to meet Entergy’s schedule.

Entergy’s press release indicated the project would have benefits beyond reliability: “In addition to enhancing reliability, operational flexibility and helping meet the increased demand in the region, the project will also improve access to lower cost generation in the [MISO] market, potentially reducing costs for all customers in the area.”

Kipp Fox of AEP Transource questioned how the load “mysteriously appeared between Module E submissions” — interim resource adequacy plans each load-serving entity is required to provide MISO annually.

“You should have some governance rules,” he added.

Webb insisted Entergy’s claim was “believable.”

“It’s kind of like generator interconnections. Lots of people talk about generator interconnections. [Utilities] don’t start planning and building until you have a commitment.”

Tia Elliott, director of regulatory affairs at NRG Energy, noted that Entergy had won approval of an out-of-cycle project in Lake Charles a year ago. “Here we are a year later and we see another request for load growth in the Lake Charles area,” she said, noting that the total cost of the two projects exceeds $200 million.

Entergy submitted the earlier request Dec. 19, 2013, saying it was needed to respond to a signed contract it received about two weeks earlier for new block load additions in the Lake Charles area. The request proposed construction of a substation and a transformer upgrade. The company said the facilities, estimated to cost $37.7 million, were needed by summer 2015.

Webb said there is a tension between emergent reliability needs and the competitive developer selection process under Order 1000, which can take 12 months or longer.

Subjected to the competitive process “this project wouldn’t have a developer for a year and a half from now and it has to be in service in June 2018,” he said. “There’s not enough time.”

Webb also said MISO is “sensitive … to the possibility of gaming that [our-of-cycle] process.” He invited stakeholders to provide “specific suggestions on how we can meet those two competing issues” through rule changes.

No one from Entergy spoke during the discussion. In a statement today, Entergy said the project meets all four of MISO’s criteria for out-of-cycle projects. The filing “is the appropriate process for this project given the unprecedented growth occurring and the limited time to install the facilities needed,” it said.

“We look forward to participating in the stakeholder process and we fully expect MISO to approve the [project] as a baseline reliability project needed to support the unprecedented economic development occurring in this region.”

Tom Mielnik, manager of electric system planning at MidAmerican Energy, said the out-of-cycle process is necessary.

“Customers like to make the decision at the last minute and then they want the utility to act expeditiously,” he said. “This is a real issue and a need for out-of-cycle projects.” He added that customers “typically” insist that utilities keep their potential interest confidential as they weigh several different sites for potential expansions.

The project will be discussed in detail at a Feb. 11 meeting of the South Technical Study Task Force in New Orleans. The project will also be considered by the System Planning Committee of the Board of Directors, which Webb said could recommend it to the full board as soon as April.