Entergy Gulf States Louisiana, L.L.C., 021816 FERC, ER15-1922-000

Docket Nº:ER15-1922-000
Party Name:Entergy Gulf States Louisiana, L.L.C. Entergy Louisiana, LLC Entergy New Orleans, Inc.
Judge Panel:Before Commissioners: Norman C. Bay, Chairman; Cheryl A. LaFleur, and Tony Clark. Nathaniel J. Davis, Sr., Deputy Secretary.
Case Date:February 18, 2016
Court:Federal Energy Regulatory Commission
 
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154 FERC ¶ 61, 100

Entergy Gulf States Louisiana, L.L.C. Entergy Louisiana, LLC Entergy New Orleans, Inc.

No. ER15-1922-000

United States of America, Federal Energy Regulatory Commission

February 18, 2016

Before Commissioners: Norman C. Bay, Chairman; Cheryl A. LaFleur, and Tony Clark.

ORDER GRANTING WAIVER

1. On June 15, 2015, pursuant to Rule 207(a)(5) of the Commission's Rules of Practice and Procedure, 1 Entergy Services, Inc. (Entergy), on behalf of the Entergy Operating Companies, 2 submitted a request for limited waiver (Request for Waiver) of the Responsibility Ratio provision set forth in section 2.18 of the Entergy System Agreement to complete a Commission-approved transaction transferring Algiers assets from Entergy Louisiana to Entergy New Orleans.3 For the reasons discussed below, we grant Entergy's request for waiver, effective August 31, 2015, as requested.

I. Background

2. On December 10, 2014, as supplemented on February 11, 2015, in Docket No. EC15-48-000, Entergy filed with the Commission an application under section 203(a)(1) of the Federal Power Act4 for approval of a transfer of jurisdictional assets. In this transaction, Entergy Louisiana would transfer to Entergy New Orleans limited utility facilities in the Fifteenth Ward, known as Algiers, of the City of New Orleans, Louisiana (Algiers Asset Transfer). Entergy New Orleans provides retail electric service to retail customers throughout the City of New Orleans, subject to the retail jurisdiction of the Council of the City of New Orleans (Council) but, prior to the transaction, did not provide service to retail customers in Algiers. Instead, Entergy Louisiana provided service to retail customers in Algiers, subject to regulation by the Council, and provided (and still provides) service to retail electric customers in Louisiana outside of the City of New Orleans, subject to the jurisdiction of the Louisiana Public Service Commission (Louisiana Commission). As a result, Entergy Louisiana was subject to both the retail jurisdiction of the Council as well as the Louisiana Commission.5

3. In an order issued on April 3, 2015, the Commission approved the transfer of the jurisdictional components of the Algiers Asset Transfer as consistent with the public interest.6 These assets include approximately 8.3 miles of 115 kV and 230 kV transmission lines and two transmission substations.7 The Algiers Asset Transfer was consummated on September 1, 2015.8 Entergy Louisiana is now subject solely to the jurisdiction of the Louisiana Commission.

4. Entergy states that the System Agreement exists to allocate the costs and benefits of the coordinated operation of the Operating Companies' generation and transmission assets, completed via the Intra-System Bill. Entergy explains that Responsibility Ratios are used to allocate costs in the Intra-System Bill, such as for: (i) joint account purchases; (ii) MSS-1 and MSS-2 responsibilities; (iii) net balance on sales; and (iv) various Midcontinent Independent System Operator, Inc. charges. Entergy states that, pursuant to section 2.18 (Responsibility Ratios), Responsibility Ratios are calculated as a rolling average, for the 12 months ending with the current month, of each Operating Company's peak load coincident with the System's monthly peak load.9 Entergy states that these provisions allow for gradual changes to energy and cost allocation among the Operating Companies that vary in accordance with changes in overall System peak load.10

II. Entergy's Filing

5. In its initial filing, Entergy requests a limited waiver of section 2.18 (Responsibility Ratios) to provide for a one-time adjustment to the methodology used in the Intra-System Bill's calculation of Responsibility Ratios for Entergy New Orleans and Entergy Louisiana to reflect the Algiers Asset Transfer. Entergy contends that the load in Algiers already exists and is accounted for in the Responsibility Ratio calculation, and responsibility and cost for that load will immediately shift from Entergy Louisiana to Entergy New Orleans without phase-in upon closing. Entergy states that, through an agreement under Service Schedule MSS-4 of the System Agreement, Entergy New Orleans will be allocated 1.84 percent of the capacity and associated energy from Entergy Louisiana's existing generation portfolio to serve the load being transferred. Entergy New Orleans will receive a transfer of capacity to serve the Algiers load but, without waiver, the effect of the Algiers load on the Responsibility Ratio calculation would be phased-in over 12 months and create a mismatch in load and capacity in the Intra-System Bill.11

6. Entergy proposes to reset the Entergy New Orleans and Entergy Louisiana Responsibility Ratios with a one-time adjustment to include an estimate for the Algiers load in the historical Entergy New Orleans calculation and corresponding removal from the Entergy Louisiana calculation to avoid this mismatch. Entergy explains that the Algiers load is not metered separately, so an estimate is required until its separate metering project in Algiers is completed. Entergy states that it will use the same process to estimate Algiers peak load for the reset as it used to identify the 1.84 percent level of the capacity transfer according to Service Schedule MSS-4 described above. Entergy states that the Algiers load data will be trued-up when 12 months of load data are available and the Intra-System Bill rerun at that point.12

7. In his affidavit provided by Entergy, Patrick...

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