The Federal Energy Regulatory Commission (FERC) approved the merger of Entergy Corp’s transmission system with ITC Holdings Corp. and its move into the Midcontinent Independent System Operator (MISO).
Entergy’s transmission assets in Louisiana, Mississippi, Arkansas and Texas will be transferred to ITC Holdings, which operates transmission in Michigan, Iowa, Illinois, Minnesota, Kansas and Oklahoma. FERC’s approval came in four orders issued June 20. In addition to ruling the merger is consistent with the public interest (EC12-145), the commission approved formula rates for the new ITC operating companies (ER12-2681) and agreements governing the move to MISO (ER-12-2682, ER12-2693).
The deal will give Entergy’s shareholders ownership of about 50.1% of ITC’s common stock. Entergy will continue ownership of its generation and distribution assets.
Commissioners Cheryl LaFleur and John Norris dissented in part, saying they opposed allowing ITC to use a 60% equity/40% debt capital structure for five years, which they said will cause a rate increase for Entergy customers. The commission should have required ITC to use the Entergy Operating Companies’ capital structure, which has a lower level of equity, they said.
The merger awaits approvals by state regulators in the Entergy operating region.