The transaction was rejected by a 3-0 vote because it would have raised customer rates, resulted in a loss of state jurisdiction over transmission costs and offered no clear benefits to customers, Mississippi Public Service Commission Chairman Lynn Posey said in a statement posted today on the agency’s website.
Mississippi is the first state to reject the deal, announced in 2011. Texas regulators voiced similar concerns in August. ITC, the only publicly traded power-line operator, has said it will invest in the networks to reduce power failures. Opponents said the deal would place the lines under federal jurisdiction, which allows for higher returns on power lines.
“This spells doom for the deal,” Paul Patterson, a New York-based analyst for Glenrock Associates LLC, said in a telephone interview today.
Entergy also needs approvals in Arkansas, Louisiana and Texas for the deal, according to an Oct. 29 statement. It’s also seeking approval in New Orleans, a separate jurisdiction, and Missouri, where it has assets, according to a Nov. 7 filing.
“The commission was not persuaded the transfer of ownership would be in the best interest of Entergy Mississippi’s customers,” Posey said in the statement.
The companies withdrew their application in Texas after regulators objected to the deal during an Aug. 9 meeting in Austin. They later resubmitted their application.
Entergy fell 2.1 percent to $61.12 at 1:26 p.m. in New York. ITC rose 0.7 percent to $92.70.
Entergy said it’s disappointed in the decision and plans to review it, according to a statement.
Robert Doetsch, an ITC Holdings spokesman, didn’t immediately return a phone call and e-mail about the rejection.
ITC agreed to pay $1.78 billion for Entergy’s networks in Texas, Arkansas, Louisiana and Mississippi in December 2011. The Federal Energy Regulatory Commission had approved the transaction.
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