NEW ORLEANS and NOVI, Mich., Sept. 5, 2012 /PRNewswire/ -- Entergy Corporation (NYSE: ETR) and ITC Holdings Corp. (NYSE: ITC) have initiated a multi-state and federal regulatory process per an agreement announced on Dec. 5, 2011, that calls for Entergy's utility operating companies to spin off and merge their electric transmission businesses with a subsidiary of ITC. Taking the first step in the extensive process are Entergy Louisiana, LLC and Entergy Gulf States Louisiana, L.L.C., which, in conjunction with ITC and ITC Midsouth LLC, filed a joint application today with the Louisiana Public Service Commission seeking approval of the transaction.
Entergy is seeking approval to transfer approximately 15,800 miles of interconnected transmission lines at voltages of 69kV and above and the associated substations to ITC. ITC will then be one of the largest electric transmission companies in the U.S., with more than 30,000 miles of transmission lines spanning from the Great Lakes to the Gulf Coast. Meanwhile, Entergy's utility companies will continue to own and operate their respective distribution and generation businesses and will provide customer service, billing, outage reporting and restoration services to homes and businesses in the region.
"This transaction is expected to bring significant benefits to our customers as we seek to meet the challenges associated with transforming the U.S. electric grid for the 21 st century and beyond," said Bill Mohl, president and chief executive officer of Entergy Louisiana and Entergy Gulf States Louisiana. "ITC's sole business is transmission, and the company possesses a demonstrated capability to own, build, and operate transmission systems at industry-leading levels. The transaction will facilitate and build on the customer benefits of joining the MISO RTO Day 2 wholesale market."
The LPSC conditionally approved Entergy Louisiana's and Entergy Gulf States Louisiana's application to join the MISO RTO in May 2012.Joseph L. Welch, ITC chairman, president and chief executive officer agreed with Mohl's assessment. "The electric industry is evolving, and ITC is well-positioned to make the infrastructure investment required to complete the modernization of the grid," he said. "We have a track record of operational excellence, and ITC will deliver the near-term and longer-term benefits to customers that result from a high-performing, reliable transmission system and a regional planning view that promotes the benefits of the competitive electric market, all of which is in the public interest. We look forward to serving the state and entire region to meet future energy demands." Infrastructure investment is among the many challenges that the U.S. electric industry is facing. The electric industry – and Entergy's operating companies – face growing demands to keep pace with the capital investment requirements necessary to maintain and upgrade infrastructure, meet environmental regulations and serve an energy-intensive economy. The transaction addresses these challenges head-on, providing separate, strong balance sheets that afford greater capability to finance infrastructure requirements, with ITC focused on transmission and Entergy's operating companies on generation and distribution.