Entergy 2011 Annual Report Download - page 20

Growing Value
It can take less than a second for a frog to roll out its
long, sticky tongue, catch a passing insect and roll its
tongue back into its mouth. Identifying an opportunity
and acting quickly are key survival skills.
In 2011, after comprehensive review and
analysis, we determined that joining MISO is
expected to save customers up to $1.4 billion
in power production and related costs in the 2013
to 2022 time frame. The savings to customers are
generated by the efficiencies of buying and selling
electricity in a large wholesale market facilitated
by a centralized market-driven dispatch process.
Formal requests to join MISO have been filed, or
are being prepared for filing, with our retail
regulators. Decisions on these change of control
filings to join MISO are expected by fall 2012. The
target implementation date is by December 2013
for transferring functional control of the
transmission assets to MISO.
Enhancing the Transmission Business
In December 2011, we announced our plan to
spin off and merge our transmission business
into ITC Holdings Corp., an independent electric
transmission company. Entergy’s transmission
business consists of approximately 15,700 miles
of interconnected transmission lines at voltages of
69 kilovolt and above and associated substations
across the mid-South. Following the completion of
the merger, ITC will be one of the largest electric
transmission companies in the U.S., with more
than 30,000 miles of transmission lines spanning
from the Great Lakes to the Gulf Coast.
We believe ITC’s independent transmission
company structure is the best model to drive
economic efficiency, achieve an open and robust
market, and provide access for low-cost generation
and efficient transmission use and expansion in
the country. Entergy gains financial flexibility that
benefits its customers and communities. Within
the U.S., projected capital investment in the
electric utility industry is estimated to be in the
$2 trillion range over the next 20 years. Merging
the transmission business with ITC increases
our flexibility to make ongoing investments in
the remaining parts of our business, improves
access to capital and protects the credit quality of
Entergy and its subsidiaries.
One prerequisite to closing the transaction
is that Entergy secures all necessary approvals
from state and local regulators to join a Regional
Transmission Organization, which is consistent
with efforts already under way to join MISO.
We believe that the change of control filings
to join MISO should be considered separately
from the ITC transaction. Completion of the
transaction is expected in 2013 subject to
the satisfaction of certain closing conditions,
including the necessary approvals of Entergy’s
retail regulators, the Federal Energy Regulatory
Commission and ITC shareholders.
Ensuring Reliable, Affordable Service
Our utility operating companies pursue build,
buy and contract options to address current
capacity needs and meet long-term load growth.
In 2011, we continued to pursue generation
supply alternatives with the following actions:
n Entergy Arkansas announced its plan to
purchase the Hot Spring Energy Facility, a
620-megawatt combined-cycle gas-turbine unit
near Malvern, Ark., with a targeted closing
date of mid-2012.
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