New Orleans utility Entergy Corporation’s (ETR - Analyst Report) bid to join the Midwest Independent Transmission Operator (“MISO”) has been sanctioned by both the Mississippi Public Service Commission and the New Orleans City Council. The tentative joining is set for the month of December 2012.
The company has previously received approval from the regulatory bodies of Arkansas, Louisiana and Texas for the proposed move. MISO is one of the largest independent transmission organizations which is involved in the purchase and sale of electricity in the organized markets and provides direct access to power to 11 Midwestern states and Canada’s Manitoba region.
The transition to MISO will enable Entergy to gain reliable and cost-effective transmission services which will boost the company’s margins. Besides, this membership is expected to lead to savings of $1.4 billion over a period of 10 years for Entergy's consumers.
Entergy’s strategic move to MISO comes at a time when the company recently acquired two natural gas-fired plants in the Arkansas and Mississippi from KGen Power Corporation. These planned moves will offer ample opportunities for future growth at Entergy. Moreover, the potential savings could lure new customers thereby expanding Entergy’s customer base.
Entergy has also been seeking regulatory support for its divestiture of the long-distance electric transmission business to Michigan-based ITC Holdings Corporation (ITC - Snapshot Report) and is awaiting decisions.
Entergy faces stiff competition from CenterPoint Energy Inc. (CNP - Analyst Report). The latter is also focusing hard on the development of its pipeline assets. Entergy has a short-term Zacks #3 Rank (Hold rating) in view of the continued weak economic environment in the U.S. which will weigh on the company’s power sales.
Entergy Corporation and its subsidiaries are engaged in the electric production and retail distribution operations. The company operates in two segments, Utility and Entergy Wholesale Commodities. With market capitalization of $11.20 billion, the company has 14,682 employees.