UPDATE 12/16/20: The Mississippi Public Service Commission, after EPI’s publication, directed its staff and representatives to, “not engage in any dialogue, formal or informal, related to public policy or any other matter within the Commission’s jurisdiction, with any stakeholder or other participant who declines to publicly disclose who he or she represents.”
Entergy secretly placed a consultant to advance its interests in MISO stakeholder meetings under the guise of a “MISO South customer,” according to public records obtained by the Energy and Policy Institute. The consultant, Dave Harlan of Veriquest Consulting, spoke and acted on behalf of Entergy, the monopoly utility serving large parts of the Midcontinent Independent System Operator (MISO) territory, and representatives of the Mississippi Public Service Commission knew of his status as a proxy for the utility.
While the agenda that Entergy asked Harlan to advance is not described in the documents obtained by EPI, Entergy may have been worried about low-cost wind energy in MISO displacing the company’s expensive legacy coal and gas units, impairing its ability to justify construction of new power plants. Harlan worked for Entergy for 17 years and retired in 2008 before starting Veriquest Consulting, according to his LinkedIn profile.
MISO operates the transmission grid and coordinates the wholesale electricity market in 15 U.S. states in the center of the country, as well as the Canadian province of Manitoba, forming one of the world’s largest energy markets with more than $29 billion in annual gross market energy transactions, according to its website.
Entergy’s use of what amounts to a covert agent, and the complicity of some staff of the Mississippi PSC and of MISO, raises key questions about the integrity of MISO’s stakeholder process, and the influence that powerful incumbent utilities like Entergy have to game outcomes that are favorable to their interests but may harm consumers.
Entergy says Harlan speaks on its behalf
Jeremy Vanderloo, Vice President of Regulatory Affairs at Entergy, notified David Carr and Sam Mabry of the Mississippi Public Service Commission in May 2019 that Harlan would be raising concerns on an upcoming MISO call about a transmission dispute involving Entergy and another utility, according to emails obtained from the Mississippi Public Service Commission by EPI via the Mississippi Public Records Act.
The following day, Darron Case, the director of resource planning and market operations for Entergy Mississippi, emailed Carr and Mabry that Harlan, “made today on Entergy Mississippi’s behalf”. Harlan and two representatives from MISO, Chad Allen and Edin Habibovic, were copied on Case’s email.
In September of 2019, Harlan sent a lengthy email to Carr outlining how he avoided disclosure of his clients despite pressure from “the renewable lobby and probably a MISO North regulator and some transmission developers”. Harlan asked for Carr’s guidance on whether he needed to “re-frame” his comments at MISO to be more helpful to the Mississippi Commission or Entergy. Harlan continued, “I never represent that I work for EML [Entergy Mississippi] or MPSC [Mississippi Public Service Commission], but rather as a MISO South customer and an advisor to multiple MISO South stakeholders.”
Less than fifteen minutes later, Carr forwarded the email to two lawyers contracted by the Mississippi Public Service Commission, Nick Puga of Bates White and Valerie Green of Pierce Atwood, and asked them to talk to Harlan and find out more about Entergy’s concerns. Carr followed up with Harlan later the same afternoon and asked “should we invite Aaron Hill or anyone from EML [Entergy Mississippi] to this discussion.”
Harlan sometimes acted as an intermediary between utilities and regulators, according to the records obtained by EPI. He drafted comments in February 2020 for MISO’s active transmission planning process – known as MTEP21 – and shared them with Carr, adding that he was planning “to seek comments on this draft from my current or past clients and other MISO stakeholders that I may have relationships with.” Harlan hoped his comments would be used by regulators, such as the Mississippi Commission, as well as utilities like Entergy.
Neither Harlan, Entergy, nor the Mississippi Public Service Commission responded to requests for comment.
Some MISO stakeholders and members of the Planning Advisory Committee (PAC) wanted MISO to require stakeholders to disclose who they represent. Cynthia Crane, the chair of the PAC, agreed to follow up with the MISO Advisory Committee, which was discussing the issue, and to report back to the PAC at its upcoming January 2021 meeting, according to an account of the November 2020 PAC meeting shared with EPI.
MISO, in a comment provided to EPI, said it would not require stakeholders to disclose who they represent but would instead “leave it up to each committee to conduct meetings based on their individual norms.”
Entergy joins MISO, progress on transmission planning slows
Entergy’s motive to use undercover stakeholders may be explained by the ballooning of MISO staff time required to complete transmission planning. Transmission expansion and utilization has been a hot topic within industry circles as fundamental to the clean energy transition. Expedient transmission planning in MISO would allow for wind farms in the blustery Plains states in MISO’s northern region to send their electricity to southern states like Mississippi, Arkansas and Louisiana, which have less wind. Access to low-cost renewables on the market could displace Entergy’s expensive legacy coal and gas units in those states, and subvert Entergy’s ability to justify its need to build new power plants. Regulated utilities like Entergy largely earn profits from the construction of new power plants.
Entergy joined MISO in December 2013 as part of an agreement with the Department of Justice over its anti-competitive practices. Immediately subsequent to Entergy’s addition, MISO began experiencing what grew to a more than 5-fold increase in the amount of time required to complete its annual transmission planning, rising from 1,011 hours in 2014 to 5,844 hours in 2018, MISO’s staff has reported.
Entergy’s history with paid actors
Entergy’s secret MISO consultant harkens back to its use of paid actors in 2018 to feign public support in New Orleans City Council hearings for a proposed natural gas plant. The City Council later fined Entergy $5 million after an investigation determined that Entergy “knew or should have known” about the astroturfing, and because the utility “refused to produce the underlined items despite timely and repeated requests.”
To win approval for its New Orleans gas plant, Entergy also relied on public support from charitable organizations it financially supported. At least nine of the organizations which testified at the New Orleans City Council’s hearing on Entergy’s behalf had received charitable donations from the Entergy Charitable Foundation, according to the foundation’s tax returns and acknowledgements by the organizations themselves. Some of those organizations disclosed the donations by Entergy at the gas plant hearings, but others did not.