ITC Holdings Corp. and Entergy Corp. have filed a joint application with the Federal Energy Regulatory Commission (FERC) seeking approval for Entergy's utility operating companies to spin off and merge their electric transmission businesses into a subsidiary of ITC.
Upon closing of the transaction, ITC says it will become one of the largest electric transmission companies in the U.S., with more than 30,000 miles of transmission lines spanning 11 states from the Great Lakes to the Gulf Coast.
The FERC application seeks approval for Entergy to transfer more than 15,800 miles of interconnected transmission lines at voltages of 69 kV and above and the associated substations in Arkansas, Louisiana, Mississippi, Missouri and Texas to ITC.
These assets then will be placed under the functional control of the Midwest Independent Transmission System Operator, a party to the companies’ filing.
Meanwhile, Entergy's operating 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.
"The spin/merge transaction is designed to create benefits for our customers, our communities and our region," says Theo Bunting, Entergy's group president of utility operations. "With an independent transmission company owning the transmission business, we'll see greater capacity for investment, singular focus and excellence in operations."
Entergy and ITC initiated the multi-state and federal regulatory process with a joint application filing with the Louisiana Public Service Commission and the New Orleans City Council on Sept. 5 and Sept. 12, respectively.
The companies say the remaining regulatory filings for the transaction will be completed this year in Arkansas, Mississippi, Missouri and Texas. The companies target a transaction close in 2013 pending receipt of all required regulatory approvals and satisfaction of other closing conditions.
In addition to the miles of transmission lines and acres of substations involved in the transaction, approximately 750 Entergy employees, including key leadership personnel from Entergy's transmission business, will become employees of ITC.
ITC will establish and maintain a regional headquarters in Jackson, Miss., where the headquarters of Entergy's transmission business currently is located.
