FERC Rules in Favor of MISO in MISO-SPP JOA Dispute Crucial to Entergy Integration

July 4, 2011
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FERC has ruled in favor of the Midwest ISO in an interpretation of the MISO-Southwest Power Pool Joint Operating Agreement (JOA) which is critical in the proposed integration of Entergy into MISO as a transmission owner (EL11-34).

The disputed portion of the JOA relates to the sharing of transmission capacity on a common path (see 4/11). As MISO and Entergy would share only one, limited physical connection (1,000 MW), transmission sharing through ties among Entergy and SPP (which total 14,000 MW) under the JOA would be essential in workably integrating Entergy into MISO.

The disputed language to the MISO-SPP JOA states:

"Sharing Contract Path Capacity. If the Parties have contract paths to the same entity, the combined contract path capacity will be made available for use by both Parties."

SPP had argued that under the terms of the JOA, once Entergy cedes its independence and joins MISO, it would no longer be an "entity" to which MISO has a contract path, but would rather be wholly part of the MISO. As such, SPP would not be required to share the capacity as it is currently required to do under the JOA.

MISO argued that Entergy's status with respect to shared transmission capacity would not change as a result of joining MISO.

FERC agreed with MISO, finding that, "section 5.2 of the SPP JOA would allow for the sharing of available transmission capacity between MISO and Entergy Arkansas and SPP and Entergy Arkansas in the event that Entergy Arkansas becomes a transmission-owning member of MISO."

FERC continued:

"More specifically, we find that the term 'entity' is sufficiently broad to encompass Entergy Arkansas, regardless of whether it is a member of MISO, SPP, or neither. Although the term 'entity' is not defined in the SPP JOA, certain defined terms in the SPP JOA use the word 'entity' to refer to companies which fall within membership of SPP or MISO. For example, 'Operating Entity" is defined as 'an entity that operates and controls a portion of the bulk transmission system with the goal of ensuring reliable energy interchange between generators, loads, and other operating entities.' Thus, the defined term 'Operating Entity' is a subset of the undefined term 'entity' (i.e. Operating Entity is only one type of 'entity'). Because this definition of 'Operating Entity' could apply to any transmission-owning member of MISO or SPP, the undefined term 'entity' must then also apply to any transmission-owning member of MISO or SPP, as argued by MISO. Therefore, we find that SPP's and other protesters' interpretation that the term 'entity' in section 5.2 applies only to entities that are not members of MISO or SPP (i.e., third-party entities) is unsupported by the terms of the SPP JOA."

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