News Release: June 20, 2013
Docket Nos. EC12-145-000, ER12-2681-000, ER12-2682-000, ER12-2693-000
Item Nos. E-3, E-4, E-5 & E-13
FERC Approves Entergy-ITC Holdings Asset Transfer
The Federal Energy Regulatory Commission (FERC) today approved the merger of Entergy Corporation’s interstate transmission system with that owned by ITC Holdings Corp., saying the transaction is consistent with the public interest and meets the tests of the Commission’s merger policy.
Today’s orders give FERC’s approval to a complex, multi-step transaction that proposes to transfer Entergy’s transmission assets in Louisiana, Mississippi, Arkansas and Texas to a new set of companies owned by ITC Holdings, which is based in Michigan and operate transmission in Michigan, Iowa, Illinois, Minnesota, Kansas and Oklahoma. FERC’s actions today also facilitate the integration of the new companies’ transmission assets into the Midcontinent Independent System Operator (MISO). The transaction still must be approved by state regulators in the Entergy operating region.
All this was done in a package of four FERC orders involving the combination of the transmission businesses of the two companies. In addition to approving the transaction under section 203 of the Federal Power Act and determining that the deal is consistent with section 305(a) of the Federal Power Act (EC12-145-000), FERC approved the formula rates to be charged by the new ITC operating companies (ER12-1681-000) and certain jurisdictional agreements as part of the application, as well as other necessary service filings that will govern the operation of the new ITC operating companies within MISO (ER-12-2682-000, ER12-2693-000).
Under the transaction, Entergy’s existing operating companies will separate their transmission assets into companies that will be owned by an intermediate holding company called Entergy Mid South. The common units of Entergy Mid South will then be distributed to Entergy’s shareholders in a spinoff or a split-off, and Entergy Mid South will merge with ITC’s intermediate holding company, ITC Midsouth.
Entergy’s shareholders will own a majority of the common stock of ITC Holdings at closing. The former Entergy transmission businesses held by Entergy Mid South will be held by ITC Holdings through ITC Midsouth. Meanwhile, the Entergy operating companies will continue their ownership of the generation and distribution assets of the companies.