Slide 1: Entergy-ITC Transaction Discussion
Filed by Entergy Corporation Pursuant to Rule 425 Under the Securities Act of 1933 Subject Company: Entergy Corporation Commission File No. 001-11299 Entergy-ITC Transaction Discussion August 27, 2012
Slide 2: Safe Harbor Language & Legal Disclosure
Safe Harbor Language & Legal Disclosure This presentation contains certain statements that describe ITC Holdings Corp. (“ITC”) management’s beliefs concerning future business conditions and prospects, growth opportunities and the outlook for ITC’s business, including ITC’s business and the electric
Slide 3: Safe Harbor Language & Legal Disclosure
Safe Harbor Language & Legal Disclosure In this communication, and from time to time, Entergy makes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Except to the extent required by the federal securities laws, Entergy undertakes no obl
Slide 4: Safe Harbor Language & Legal Disclosure
Safe Harbor Language & Legal Disclosure ITC and Mid South TransCo LLC (“TransCo”) will file registration statements with the SEC registering shares of ITC common stock and TransCo common units to be issued to Entergy Corporation (“Entergy”) shareholders in connection with the proposed transactions.
Slide 5: Agenda
Agenda 1. Entergy-ITC Transaction Overview • Approval requirements 2. Schedule • Stakeholder outreach • Anticipated timeline 3. MISO Transition Plan and Impacts • Review transition plan • Impacts of transition plan to Entergy Customers and stakeholders • Impacts of transition plan to current MISO st
Slide 6: Transaction Overview
Transaction Overview MIS“
Slide 7: Introduction
Introduction In December 2011, Entergy Corporation and ITC Holdings Corp. (ITC) announced an agreement under which Entergy will transfer ownership and operation of its electric transmission business to ITC. The transaction is targeted to close in 2013. Purpose of Today’s Discussion: • Brief stakehol
Slide 8: Entergy-ITC Overview
Entergy-ITC Overview Entergy Transmission Business System Peak 26,100 MW 28,000 MW Load Service Area Seven states Four states* Total 15,000 miles 15,800 miles Transmission Miles Service Area 89,850 114,669 Square Miles RTO MISO/SPP MISO market Membership integration by 12/2013 * Entergy also owns li
Slide 9: Entergy-ITC Transaction Overview
Entergy-ITC Transaction Overview Transaction • Reverse Morris Trust – Entergy’s transmission business merges into ITC Structure • Prior to merger, Entergy to pursue tax free spin-off of transmission business, and ITC to effectuate a $700 million recapitalization in the form of a share repurchase, sp
Slide 10: Transaction Approvals
Transaction Approvals The transaction is dependent upon the following approvals and other closing conditions: Authority Requirement Entergy Retail • Approval to join an acceptable RTO Regulators • Change of control of transmission assets (APSC, LPSC, MPSC, • Authorization to incur debt in some juris
Slide 11: Customer and Stakeholder Benefits
Customer and Stakeholder Benefits Transaction ultimately benefits all constituencies through independent model and overall best practices • Improved reliability, reduced congestion and greater access to competitive energy marketplace • Strong credit and ability to attract cost-effective capital for
Slide 12: Schedule
MIS“ Schedule 12
Slide 13: Stakeholder Outreach Process
Stakeholder Outreach Process • ITC, Entergy and MISO scheduled this meeting to: • Provide an overview of the plan to migrate Entergy's transmission assets to MISO at the time of the transaction, integration strategy and expected impacts to Entergy and current MISO transmission customers and stakehol
Slide 14: Anticipated Timeline
Anticipated Timeline • Transaction Change of Control filings in Entergy retail jurisdictions are planned to begin in the third quarter 2012 and will be sequenced over subsequent weeks • MISO and ITC FERC filings by end of September 2012 • Entergy ICT transition to MISO scheduled for December 1, 2012
Slide 15: Transition Plan
MIS“ Transition Plan 15
Slide 16: MISO Transition Plan
MISO Transition Plan • ITC, Entergy and MISO have developed a three-phase MISO integration strategy for the Entergy footprint • Proposed strategy would allow integration of the transmission assets into MISO up to six months before the Entergy OpCos join MISO as market participants, depending on the
Slide 17: Entergy MISO Integration/ITC Transaction
Entergy MISO Integration/ITC Transaction MISO replaces SPP as the ITC Midsouth OpCos Entergy OpCos become Independent Coordinator of become Transmission Market Participants in Transmission (ICT) Owners in MISO MISO (December 2012) (upon closing) (December 2013) Entergy's current ICT agreement ITC Mi
Slide 18: General Implementation Construct
General Implementation Construct • MISO grants transmission service over current MISO facilities (“MISO classic”) and the ITC Midsouth systems, with a coordinated approach for evaluation and approval of Transmission Service Requests, providing “one stop shopping” for customers • Removal of “pancaked
Slide 19: Overview of Proposed Module B-1
Overview of Proposed Module B-1 Module B-1 is needed to provide MISO transmission service following ITC’s acquisition of Entergy’s transmission assets, but prior to Entergy’s integration into the MISO energy and ancillary services markets • The PTP and NITS provisions of MISO’s Module B include link
Slide 20: Overview of Proposed Module B-1 (Continued)
Overview of Proposed Module B-1 (Continued) • Module B-1 will include several Attachments addressing certain Entergy footprint specific issues, including ATC/AFC calculation, payments to parties that funded upgrades on a direct assignment basis, weekly procurement process, studies and reports • MISO
Slide 21: Overview of TOA Appendix I
Overview of TOA Appendix I • Appendix I of the MISO Transmission Owner Agreement is a framework for membership and operation of independent transmission companies within MISO, under which independent transmission companies are delegated to perform certain functions • Transmission entity is fully ind
Slide 22: Overview of Weekly Procurement Process (WPP)
Overview of Weekly Procurement Process (WPP) • WPP is intended as an optimized procurement process. It is not a centralized market for energy • The intent of the WPP is to provide Entergy and its Network Customers production cost savings through optimization of short-term (daily and/or weekly) purch
Slide 23: Impacts of MISO Transition Plan to Entergy Customers and Other Stakeholders
Impacts of MISO Transition Plan to Entergy Customers and Other Stakeholders • MISO always develops a transition plan to integrate new transmission owners – these plans all include incremental steps • This is a phased approach to manage the transmission and market portions of the integration • Enterg
Slide 24: Impacts of MISO Transition Plan to Entergy Customers and Other Stakeholders (Continued)
Impacts of MISO Transition Plan to Entergy Customers and Other Stakeholders (Continued) • There will continue to be two balancing authority areas – MISO and Entergy • Certain existing Entergy processes will be retained through MISO Tariff Module B-1 for ITC Midsouth transmission for the transition p
Slide 25: Impact of MISO Transition Plan on Current MISO Stakeholders
Impact of MISO Transition Plan on Current MISO Stakeholders • Approach has been designed to mitigate impacts to existing MISO priorities • Existing transmission owners will share revenue from point-to-point service • Elimination of pancaked rates between MISO Classic and MISO South • The transmissio
Slide 26: Path Forward and Next Steps
Path Forward and Next Steps 26
Slide 27: Next Steps
Next Steps • Continue development of regulatory filings • MISO will file with FERC for approval of Module B-1 tariff sheets • ITC and MISO will file with FERC for approval of Attachment O templates and tariff sheets • Appendix I Agreement between ITC and MISO will be filed with FERC for approval • C
Slide 28: Questions
MIS“ Questions 28