Smitherman: PUCT Must Consider "Non-Quantifiable" Metrics in Entergy Decision

May 13, 2011
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The PUCT needs to consider "non-quantifiable" metrics as it studies the future of Entergy Texas, PUCT Chairman Barry Smitherman said during yesterday's open meeting.

In particular, Smitherman cited challenges that the PUCT may face in following the stakeholder process in the Midwest ISO, given its distance as well as the RTO's scale.

Commissioner Kenneth Anderson also cited the forward capacity market being undertaken in MISO as another area which must be considered.

Furthermore, Anderson said that it will be critical to understand how the Entergy operating companies, particularly those remaining in the system agreement (including Entergy Texas) will operate within MISO, since Entergy has confirmed that intends to continue various intra-company cost exchanges under the agreement.

Anderson also said that state regulators have more control at the SPP, with the ability to direct FERC filings regarding cost allocation.

Finally, Smitherman noted that a large number of MISO states are also members of the Midwestern Greenhouse Gas Reduction Accord, which may eventually impose a carbon tax on generators similar to the Regional Greenhouse Gas Initiative. Smitherman said that the impacts on Texas, should Entergy join MISO, from any such tax are unclear.

However, should generators in some MISO states be required to account for the tax in their offers, it would presumably raise energy prices across the RTO.

None of the Commissioners cited the largest non-quantifiable benefit potentially available to Entergy Texas customers under one RTO scenario: removal from FERC jurisdiction, which would leave Texas policymakers to address resource adequacy, transmission cost allocation, and other issues as would most benefit Texas customers, rather than being subject to FERC discretion. Such removal of FERC jurisdiction could be possible if Entergy Texas alone joined ERCOT, removing all potential costs from MISO capacity markets, and MISO and SPP regional transmission cost sharing.

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