Two multistate electricity grid operators with facilities in Little Rock are trying to negotiate a compromise over payments for moving power over their transmission systems.
For more than a year, Midcontinent Independent System Operator and Southwest Power Pool have disagreed over Midcontinent's use of Southwest's transmission system.
Southwest believes Midcontinent should pay when it uses Southwest's system. Based on an agreement the two companies reached in 2004, Midcontinent believes it can use portions of the transmission system Southwest oversees if it is not already being used and that it is not necessary to pay to use it.
"It's less about not getting paid and more about how the system is utilized," John Bear, Midcontinent's chief executive officer, said Tuesday. "I think we're both making compromises. We're moving to where we're pretty close together. I'm very optimistic that we're going to have an agreement by the end of the summer.
"It's not going to be optimal, maybe, from their perspective and it may not be optimal from our perspective. But a good compromise is what we need. It will be reliable, first and foremost, and it will allow both sides to benefit."
Bear was in Little Rock on Tuesday for ribbon-cutting ceremonies at Midcontinent's $22 million, 50,000-square-foot operations center. Construction began on the building in March last year.
When the center begins operations in June, there will be more than 50 employees making average annual salaries of $85,000.
"[Southwest Power Pool] remains committed to the ongoing settlement discussions to resolve the issue of [Midcontinent's] use of our transmission system," Tom Kleckner, a Southwest spokesman, said in a telephone interview. "We believe that settlement discussions have been productive. We are optimistic that a settlement can be achieved over the next few months."
John Bethel, executive director of the Public Service Commission's general staff, said he wasn't certain of the details on discussions by Midcontinent and Southwest.
"But I know that it's ongoing," Bethel said.
Midcontinent oversees the electricity grid for parts of 15 states and one Canadian province. Midcontinent's Little Rock center is responsible for the supervision of Entergy Corp.'s transmission system in Arkansas, Louisiana, Mississippi and Texas.
Southwest Power Pool, which employs about 575 workers at its west Little Rock headquarters, operates the grid in eight U.S. states, including parts of Arkansas. Southwest's employees also are paid an average of $85,000 a year.
Bear also discussed the Environmental Protection Agency's Clean Air Act proposal, which would require that Arkansas reduce its carbon dioxide emissions by 44 percent by 2030, significantly higher than the country's average goal. Nationally, the agency is seeking to lower overall emissions by 30 percent by 2030. The proposal would necessitate closing coal plants or converting them to run on natural gas.
But about 80 percent of those reductions in carbon dioxide emissions would have to be in place by 2020.
Although Bear said Midcontinent will remain neutral on the proposal, meeting the reduced emissions levels by 2020 is not realistic, he said.
"We need more time," Bear said. "We can get [reductions by] 2030, but you can't take [coal] plants offline and put new plants online fast enough [to make 2020 goals]."
Business on 03/25/2015