Oct 29 (Reuters) - U.S. power company Entergy Corp said Tuesday it will not complete the spinoff and merger of itstransmission business with U.S. transmission company ITCHoldings Corp before the end of the year as previouslyexpected.
If the deal is not completed by December 31, either partycan cancel the $1.78 billion transaction, Entergy's CEO LeoDenault said on a conference call following the release of thecompany's earnings.
"We continue to believe (the ITC deal) will result inoptimal value for all stakeholders," Denault said.
"ITC's independence, broader regional planning and solefocus (on transmission) will ... reduce congestion, attract newgenerating resources ... and ultimately lead to lower energycosts," he said.
But state regulators have been slow to approve the deal,fearing it could increase transmission costs for consumers inEntergy's Arkansas, Louisiana, Mississippi and Texas serviceareas.
In September, Entergy and ITC re-filed their proposal inTexas with a new plan that better protects consumers from highertransmission rates after state regulators threatened to rejectthe transaction.
Denault said hearings are scheduled for November inLouisiana, while the companies are working with regulators inArkansas to schedule another round of hearings.
He said hearings in Mississippi concluded in September.
Denault could not say when the states would decide on theITC deal, noting it will take the companies "at least 60 to 90days after all regulatory approvals are received to close thetransaction."
Entergy shares lost $1.91, or about 2.8 percent, to $66.20in Tuesday afternoon trade. ITC, meanwhile, was up 0.8 percentto $100.85 per share.
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