Transmission Matters

Entergy System Agreement Termination

The five Entergy Operating Companies (EOCs) have cooperated with each other for over fifty years under the Entergy System Agreement (ESA), which acts as an interconnection and pooling agreement, provides for the joint planning, construction and operation of EOC generation and transmission facilities, and maintains a coordinated power pool among the EOCs. Each EOC, except for Entergy New Orleans, Inc. (ENO), has given notice of its intent withdraw from the ESA, leaving ENO alone in the ESA and therefore effectively terminating the ESA by 2022. The EOCs withdrawing from the ESA are seeking an earlier termination of the agreement by 2019. Members of the Firm are presently providing support as advisors to the Council of the City of New Orleans in matters related to:
    • The effect on ratepayers of shortening the notice period required to withdraw from the ESA
    • Cost sharing and allocation post ESA
    • The effect of differently sized Transmission Pricing Zones (TPZ) on ratepayers
    • The effect of the EOC's Midcontinent Independent System Operator, Inc. (MISO) integration on ENO transmission and power costs post ESA termination
    • Matters before FERC related to the ESA, MISO, and TPZ design
Members of the Firm are applying their experience and expertise in the areas of utility planning, network operation, and regulatory ratemaking to provide insight into the effect of changes to the ESA on ENO ratepayers.

Midcontinent Independent Transmission System Operator Membership Proceeding

On November 14, 2011, Entergy New Orleans, Inc. (ENO) and Entergy Louisiana, LLC (ELL) filed with the Council of the City of New Orleans in Docket No. UD11-01 a Joint Application for Transfer of Functional Control of Certain Transmission Assets to the Mid-Continent Independent Transmission System Operator (MISO) to facilitate ENO and ELL’s membership in MISO. The Joint Application estimated net benefits of between $1.1 - $1.4 billion (10 yr. NPV). Members of the Firm sponsored expert testimony in the Council’s proceed on numerous aspects of the proposed transaction including transmission planning, and operations, storm preparedness planning and restoration, claimed net benefits, MISO governance structure issues, regulatory jurisdiction issues, revenue requirements and resulting rate structure issues, deferral of transition costs, and a public interest determination. Members of the Firm participated in settlement negotiations with ENO and ELL which resulted in the Council’s conditional approval of the Joint Application.

Minimizing Bulk Power Costs Study

A member of ERG, serving as the Council of the City of New Orleans’ representative on the Entergy Regional State Committee Working Group provided regulatory oversight and direction to ABB, Inc. who was retained by the Entergy Regional State Committee (ERSC) for the performance of a comprehensive study to investigate the feasibility of possible transmission upgrades to either eliminate or minimize the need to operate reliability must run (RMR) generating units located in Entergy’s transmission load pockets existing in its four state service territory. The study determined the costs and production cost savings resulting from proposed transmission solutions, taking into account potential transmission upgrades located both inside and outside of the load pockets under study necessary to achieve the reduction or elimination of the need to operate Entergy’s RMR generating units.

Industrial Power Quality Issues

ERG was retained by North American Stainless, Inc., a specialty steel producer, to investigate the existence and impact, if any, of significant power quality issues being alleged by the electric utility serving the mill. These issues resulted from the catastrophic failure of the mill’s static var system (SVC). ERG analyzed the extent to which the mill was producing harmonic voltages and currents with reduced SVC operation, in comparison to allowable limits under applicable U.S. and international standards. In addition, ERG analyzed the potential for problems which could occur at the utility’s nearby generating station, as a result of harmonic distortion reflected into the transmission system. ERG sponsored expert testimony in a complaint proceeding before the Kentucky Public Utilities Commission regarding a proposed special tariff which was filed by the utility for service to the mill.

Transmission Operation and Maintenance Practices Litigation

ERG was retained by OCI, Inc. a large western U.S. mining concern, to provide litigation support and expert testimony in cases brought before the Wyoming Public Service Commission and the Federal District Court for Wyoming concerning issues related to the financial losses suffered by its Wyoming Trona mine resulting from the supplying investor-owned utility’s electric transmission operation and maintenance practices, which resulted in significant power quality and reliability issues for the mine.

Mandan Project Transmission Planning Studies

A member of ERG was responsible for the performance of extensive large area load flow, transient stability and inter-pool transfer studies concerning the MANDAN Project, a proposed 700 mile long, ±450 kV bipolar, three terminal, EHVDC transmission line between Manitoba, Canada and Hoskins, Nebraska. In addition, transient network analyzer studies were performed. This proposed $900 million project presented critical regional reliability issues as result of its planned design to nominally transfer 2000 MW on a seasonal diversity basis between the Manitoba Hydroelectric Board and Nebraska Public Power District. A member of ERG coordinated the study efforts with RTE-ASEA of Sweden, the planned manufacturer of the Project’s thyristor valves and invertor/convertor equipment.

115 KV Transmission Line Relocation

ERG provided consulting assistance to Intrawest Corporation, Vancouver, Canada regarding issues concerning the relocation of several miles of a 115 Kv transmission line in New Jersey owned and operated by Public Service Electric & Gas Co. Intrawest had requested that the line be relocated to minimize visual impacts associated with the development of the Pine Mountain Ski Resort. ERG analyzed the proposed costs of the planned relocation and identified approximately $3 million in savings for Intrawest. ERG provided assistance to Intrawest’s legal counsel in requesting a private letter ruling from the Internal Revenue Service concerning tax issues associated with proposed transaction.

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