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June 21, 2013 /PRNewswire/ -- ITC Holdings Corp. (NYSE: ITC) today announced that its proposed transaction with Entergy Corporation (NYSE: ETR) has received approval from the Federal Energy Regulatory Commission (FERC). FERC approved the companies' joint application for the transaction, under which Entergy will spin off its electric transmission business and merge it into an ITC subsidiary. In addition, FERC also approved new rate constructs for the transmission assets under ITC ownership. This approval follows the FERC approval received in May by ITC and Entergy authorizing utility operating company financings associated with the transaction.
FERC's order effectively accepted the companies' positions on the effects of the transaction on competition, rates and regulation, with the Commission noting the benefits that stem from the independent ownership of transmission assets, over and above benefits that will result from Entergy's integration into MISO. The Commission also largely approved the associated rate filings, including the requested allowed return on equity, authorized capital structures and the use of forward looking test years, while certain other elements were set for hearing.
"We are pleased with FERC's ruling yesterday approving the change of control of Entergy's transmission assets, acknowledging that this transaction is in the public interest," said
Joseph L. Welch, chairman, president and chief executive officer of ITC. "Although this is a positive step with respect to the transaction, we recognize that FERC's action is just one aspect of the process. We will continue to work through the regulatory process at the federal, state and local levels to underscore the benefits to customers of an independent transmission company—whose sole focus is the strengthening of the transmission grid," Welch said.
The transaction also requires approval from Entergy's state and local jurisdictions. Proceedings are underway before the Arkansas Public Service Commission, Louisiana Public Service Commission, New Orleans City Council, Mississippi Public Service Commission, Missouri Public Service Commission and the Public Utility Commission of
Texas. ITC and Entergy target a transaction closing this year pending receipt of all required regulatory approvals and satisfaction of other closing conditions.
Through several related orders, FERC would allow the transfer of approximately 15,400 circuit miles of interconnected transmission lines at voltages of 69kV and above and the associated substations in
Texas from Entergy to ITC. Meanwhile, Entergy's utility operating companies would continue to own and operate their respective distribution and generation businesses and provide customer service, billing, outage reporting and restoration services to homes and businesses throughout the region.
In addition to transmission facilities, approximately 750 Entergy employees, including key leadership personnel from Entergy's transmission business, would become employees of ITC as a result of the transaction. Upon closing of the transaction, ITC would establish and maintain a regional headquarters in
Jackson, Miss., where the headquarters of Entergy's transmission business currently is located. ITC also would have offices and warehouses throughout the existing Entergy service territory to ensure a local presence and timely response to stakeholder and system needs.
Details regarding the transaction are provided in the FERC filing. More information about the transaction can be viewed
here on ITC's website, and
here on Entergy's website.
About ITC Holdings Corp.
ITC Holdings Corp. (NYSE: ITC) is the nation's largest independent electric transmission company. Based in
Novi, Michigan, ITC invests in the electric transmission grid to improve reliability, expand access to markets, lower the overall cost of delivered energy and allow new generating resources to interconnect to its transmission systems. ITC's regulated operating subsidiaries include ITC
Transmission, Michigan Electric Transmission Company, ITC Midwest and ITC Great Plains. Through these subsidiaries, ITC owns and operates high-voltage transmission facilities in
Oklahoma, serving a combined peak load exceeding 26,000 megawatts along 15,000 circuit miles of transmission line. Through ITC Grid Development and its subsidiaries, the company also focuses on expansion in areas where significant transmission system improvements are needed. For more information, please visit ITC's website at
About Entergy Corporation
Entergy Corporation, which celebrates its 100
th birthday this year, is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including more than 10,000 megawatts of nuclear power, making it one of the nation's leading nuclear generators. Entergy delivers electricity to 2.8 million utility customers in
Texas. Entergy has annual revenues of more than
$10 billion and approximately 15,000 employees. For more information, please visit Entergy's website at
ITC Forward-Looking Information This document contains certain statements that describe ITC Holdings Corp. ("ITC") management's beliefs concerning future business conditions and prospects, growth opportunities and the outlook for ITC's business, including ITC's business and the electric transmission industry based upon information currently available. Such statements are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Wherever possible, ITC has identified these forward-looking statements by words such as "anticipates", "believes", "intends", "estimates", "expects", "projects" and similar phrases. These forward-looking statements are based upon assumptions ITC management believes are reasonable. Such forward-looking statements are subject to risks and uncertainties which could cause ITC's actual results, performance and achievements to differ materially from those expressed in, or implied by, these statements, including, among other things, (a) the risks and uncertainties disclosed in ITC's most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (the "SEC") from time to time and (b) the following transactional factors (in addition to others described elsewhere in this document, in the prospectus included in the registration statement on Form S-4 that was filed by ITC with the SEC in connection with the proposed transactions): (i) risks inherent in the contemplated transaction, including: (A) failure to obtain regulatory approvals necessary to consummate the transaction or to obtain regulatory approvals on favorable terms; (B) the ability to obtain the required financings; (C) delays in consummating the transaction or the failure to consummate the transactions; and (D) exceeding the expected costs of the transactions; (ii) legislative and regulatory actions, and (iii) conditions of the capital markets during the periods covered by the forward-looking statements.
Because ITC's forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond ITC's control or are subject to change, actual results could be materially different and any or all of ITC's forward-looking statements may turn out to be wrong. They speak only as of the date made and can be affected by assumptions ITC might make or by known or unknown risks and uncertainties. Many factors mentioned in this document and the exhibits hereto and in ITC's annual and quarterly reports will be important in determining future results. Consequently, ITC cannot assure you that ITC's expectations or forecasts expressed in such forward-looking statements will be achieved. Actual future results may vary materially. Except as required by law, ITC undertakes no obligation to publicly update any of ITC's forward-looking or other statements, whether as a result of new information, future events, or otherwise.