* FERC alleges years of ongoing violations
* Entergy "strongly disagrees" with FERC's findings
* FERC and DOJ investigating Entergy operations
By Eileen O'Grady
HOUSTON, Nov 27 A unit of Entergy Corp
violated more than a dozen standards in the operation of its
four-state electric transmission system, said a preliminary
report by the Federal Energy Regulatory Commission's enforcement
FERC staff cited 33 alleged violations of 16 standards in
which New Orleans-based Entergy failed "to adequately perform
critical functions required for reliable operation of its
transmission system," FERC said in a notice posted Tuesday on
FERC staff said many of the violations at Entergy Services
Inc have been ongoing for several years. They range from worker
training and certification issues to system modeling to failure
to maintain backup power at vital communication sites needed in
times of emergency.
"These findings highlight the problems within the Entergy
system and are not surprising given our investigation into
Entergy's business practices," said Jim Hood, Mississippi
attorney general whose suit against Entergy for anti-competitive
behavior has been pending in federal court for four years.
"The rate payers of Mississippi deserve better from their
electric provider, especially given the amount of money they pay
each month to keep the lights on," Hood said in an email.
FERC's notice comes as Entergy is working to join the
Midwest Independent System Operator and spin off its 15,000-mile
transmission system to ITC Holdings Corp in a $1.78
billion transaction next year.
An Entergy spokesman said the company "strongly disagrees"
with the staff's preliminary findings but is cooperating with
the investigation. Entergy spokesman Michael Burns also said the
FERC action "will have no impact" on the transaction with ITC
Industry sources said the violations, if proven, may result
in fines being levied against Entergy.
Entergy supplies power to 2.8 million customers in
Louisiana, Arkansas, Mississippi and Texas.
Entergy's effort to divest its transmission business emerged
after state and federal regulators joined forces to review a
decade of complaints filed by independent power producers in its
four-state service territory.
FERC is the second federal agency investigating Entergy. The
Department of Justice opened a broad civil investigation of
Entergy's competitive practices, the company disclosed in 2010.
The DOJ's antitrust division said earlier this month that
its investigation was looking into "whether Entergy has harmed
consumers by exercising its control over its transmission system
and dominant fleet of gas-fired power plants to exclude rival
operators of low-cost combined-cycle gas turbine power plants
from competing to sell long-term power."
ITC spokeswoman Louise Beller said the company is focused on
gaining needed state and federal approval of its acquisition of
Entergy's system, noting ITC is not involved in FERC's
"Moving the Entergy transmission businesses into ITC's
independent and singularly focused model supports FERC's vision
of an efficient, inter-regional and high-performance grid-one
that delivers reliable, diverse and competitively priced
supplies of electricity," Beller said.