Texas Commissioner Anderson Calls Entergy Explanations "Unbelievable" Regarding PPAs Now Threatening Move to MISO

Entergy's explanations regarding power purchase agreements Entergy intends to modify at FERC, to allow the PPAs to terminate upon MISO membership, are, "almost to the point of being unbelievable," Texas Public Utility Commissioner Kenneth Anderson said during yesterday's open meeting.

The PPAs are between Entergy Texas, Inc. (ETI) and Entergy Gulf States Louisiana, LLC (EGSL), and relate to generation formerly owned by Entergy Gulf States, Inc., which in 2007 was split into ETI and EGSL to facilitate the introduction of customer choice to ETI, to be accomplished by ETI joining ERCOT (a plan since abandoned).

As reported by Matters last month, Entergy is seeking to modify termination language in the PPAs, at the behest of the Louisiana PSC, to allow the PPAs to be terminated upon MISO membership. Currently, the PPAs may only be terminated by mutual agreement, or due to the introduction of retail access at ETI.

Anderson noted that if the PPAs are terminated, the net benefits to Entergy Texas customers of joining MISO would be negative $133 million, according to an initial filing by Entergy. A subsequent filing by Entergy showed no appreciable impact from the PPAs' termination, but Anderson questioned the validity of this analysis given the radical swing versus the original impact study.

If the original study is correct, and the PPAs are terminated, it would undermine the Commission's original finding that Entergy Texas' membership in MISO is in the public interest, and would compel the Commission to revisit its prior conditional decision allowing such membership, Anderson said.

Anderson said that he was "deeply troubled" with Entergy Texas' behavior in the proceeding, given that this PPA issue was only brought before the Texas Commission after the Commission conditionally approved ETI's membership in MISO.

Entergy Texas' explanations regarding these issues, "have been confused, at best ... [and] almost to the point of being unbelievable," Anderson said.

The Commission will be intervening in any FERC proceeding to modify the PPAs, and will also conduct an independent analysis of the impact that the PPAs' termination would have on Texas ratepayers.