Entergy/ITC Holdings Transmission Divestiture Transaction

On September 12, 2012, Entergy and ICT Holdings (ITC) filed a joint application with the Council of the City of New Orleans (Council) in Docket No. UD-12-01 for approval to transfer ownership of Entergy’s transmission facilities (15,500 circuit miles) in the four state region covering Arkansas, Louisiana, Mississippi, and Texas to ITC. Entergy proposed to divest its transmission assets to ITC through the use of a Reverse Morris Trust transaction. Members of the Firm reviewed the joint filing, conducted extensive discovery and filed expert testimony on behalf of the Council concerning the proposed transaction. Major issues upon which Member’s of the Firm testified included:

  • the Council’s loss of regulatory control over Entergy New Orleans, Inc.’s and Entergy Louisiana, LLC’s transmission businesses relative to storm planning
  • storm recovery
  • operations and rate setting
  • the prospect of significant retail rate increases resulting from expected Return on Equity impacts
  • MISO Transmission Pricing Zone cost risk
  • no sharing of gain with ratepayers
  • overall costs and benefits of the proposed transaction

In testimony, Member’s of the Firm asserted that the proposed transaction was not beneficial to retail ratepayers and recommended that the Council find the proposed transaction to not be in the public interest. On December 13, 2013, Entergy and ITC formally withdrew their applications from the Council, the Arkansas Public Service Commission, the Louisiana Public Service Commission, Mississippi Public Service Commission, and Public Utility Commission of Texas thereby cancelling the proposed transaction.

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