On April 8, 2011, the Midwest Independent System Operator, Inc. (“MISO”) filed a petition for Declaratory Order (“Petition”) from the Federal Energy Regulatory Commission (“FERC” or the “Commission”) that the terms of the Joint Operating Agreement (“JOA”) currently in effect between MISO and the Southwest Power Pool (“SPP”) concerning sharing of transmission capacity on a common path will remain applicable to Entergy Arkansas, Inc. (“Entergy”) if Entergy becomes a transmission-owning member of MISO. In its Petition, MISO argued that “divergent interpretations” of this section of the JOA, section 5.2, are limiting Entergy from making an informed choice as to which Regional Transmission Organization (“RTO”) to join.
SPP and MISO both have contract paths to Entergy. Section 5.2 of the JOA between MISO and SPP states that where MISO and SPP “have contract paths to the same entity, the combined contract path capacity will be made available for use by both parties.” In its Petition, MISO argued that section 5.2 should permit the transmission-owning members of an RTO to share adjoining RTO’s capacity on a “reciprocal basis.” MISO argued that an RTO member with existing paths to its host RTO and another RTO can use capacity from either one of the RTOs in the energy markets and maintain interconnection during outages. According to a whitepaper that SPP released on this topic, they believe that section 5.2 applies “only when MISO and SPP have contract paths to the same third-party system.”
MISO and SPP’s dispute over section 5.2 of the JOA has become part of the ongoing process by the Arkansas Public Service Commission (“APSC”) to oversee the selection of a “successor arrangement” to the Entergy System Agreement (which economically dispatches all Entergy resources to Entergy load across the system, and provides planning) for Entergy. On April 11, 2011, SPP publicly released its “Entergy Membership Proposal,” which details the integration process, transmission revenue sharing, regional cost allocation and withdrawal provisions, among other topics. Notably, Entergy would be responsible for a $6,000 annual membership fee and the projected administrative fee of 20.4 cents per megawatt hour (based on Entergy and CLECO putting their transmission facilities under SPP’s Tariff on January 1, 2013).
In their Petition, MISO asked the Commission for expedited treatment, with comments due 21 days after the filing (April 29, 2011) and a decision by June 7, 2011.