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Questions on Capacity Costs High on Entergy Texas Stakeholders' Minds

July 22, 2011
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In preparation for a July 28 PUCT workshop on issues related to the proposed integration of Entergy Texas (ETI) into the Midwest ISO, and issues related to several of the operating companies' exit from the Entergy system agreement, stakeholders submitted questions to Entergy to be addressed at the workshop, many of which deal with capacity costs (38708).

Additionally, a coalition of cities in the Entergy Texas service area raised issues related to the required Competitive Generation Service tariff, which is to be developed to allow certain large loads leave Entergy Texas for competitive commodity supply (see 12/1)

Questions from the Texas Industrial Energy Consumers included:

- What risks do ETI's customers face if Entergy Operating Companies (EOCs) that are long on power opt to sell into the new MISO capacity market rather than to capacity short operating companies?

- What mechanisms are currently in place to mitigate capacity costs for Entergy's capacity short operating companies?

- Would those mechanisms change if a capacity short operating company was not a part of the Entergy System Agreement (ESA)?

- How would Entergy hold its customers harmless from increased costs related to a capacity market? Would ETI be willing to hold its customers harmless from market-based versus cost-based capacity charges?

The Office of Public Utility Counsel asked how proposed changes regarding capacity obligations in MISO would affect the net benefit analysis Entergy has prepared regarding MISO integration.

TIEC also sought specific projected savings in retail rates, on a percent basis and in $/kW or $/kWh, from ETI joining either MISO or the Southwest Power Pool.

A coalition of cities in the ETI service area asked whether ETI's proposal in its most recent base rate case to limit wholesale suppliers of Competitive Generation Service to Qualifying Facilities within Entergy Texas' service territory would be viable under either a) the MISO option, b) the SPP option, and c) under a status quo/Independent Coordinator of Transmission option with Entergy Arkansas and Entergy Mississippi withdrawn from the system agreement.

OPUC also asked how Entergy's termination or renegotiation of existing QF contracts would affect the Competitive Generation Service tariff.

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