Oklahoma Attorney General Scott Pruitt’s attempt to tack on $500,000 to the $92.5 million rate hike proposed by Oklahoma Gas and Electric so he can hire experts in opposing the request is being recommended for denial by an administrative law judge at the State Corporation Commission. Some say the move would result in even higher consumer bills should the rate hike request be approved by the commission.
Judge Ben Jackson issued his recommendation Jan. 14 after holding a hearing on the motion by the Attorney General. The motion was for Assessment of Costs against OG and E for up to $500,000 for “costs associated with the acquisition of, and issue analysis by, expert consultants” to be “recoverable by OG and E” presumably through increased rates to be paid by ratepayers.
The attorney general indicated he needed the experts to properly represent the OG and E ratepayers as required by law.
“The AG admits that it does not have a constitutional or statute provision expressly granting expert witness fees in a general rate proceeding for an energy utility, but the AG submits that expert witness fees are necessary due to the complexities of the OG and E application, that the Commission has implicit power to award expert witness fees, and that the Commission granted such fees recently in a PSO general rate case,” wrote Judge Jackson. He noted that the Commission’s Public Utilities Division contended it was unaware of any constitutional provision or statue which allows the commission to award expert witness fees to the Attorney General at the start of a general rate case for an energy utility.
The OG and E Shareholders Association, represented by attorney Ronald E. Stakem, opposed the request, contending any such attempt to assess consujlting fees would “violate the fundamental principle of separation of powers arising from Oklahoma Constitution,Article 4, Section 1.” He argued it would bypass the legislature and eliminate “the check and balance of an Executive veto of undesirable revenue bills, in which event an override vote of at least two-thirds of the Legislature is required under Article 6, Section 12.”
“The Attorney General is mistaken to claim the general rate making power of the Commission under Oklahoma Constitution, Article 9,” wrote Stakem. “The expenses of the Attorney General are not expenses intended to be recovered in rates under the general rate making provisions of the law.”
After hearing and reading the arguments, Judge Jackson agreed, writing, “After review of the record, the ALJ recommends denial of the AG’s motion.”
The Attorney General’s office did not indicate whether it would appeal the ALJ’s recommendation.
The recommendation heads to the full Corporation Commission where it will be considered at a future date. The rate hike request as made by OGE would be effective no later than June. the utility wants to increase rates to produce sufficient additional revenue to achieve a 10.25 percent return. OGE, in making the request, called the rate hike a “minimum fair, just and reasonable rate.”
The hike would tack on another $7.22 a month onto an average residential customer bill. General Service customers would receive an average 12.6 percent rate increase. The industrial rate classes would see an average increase ranging from 5.4 percent for Power and Light customers to a decrease of 1.6 percent for Large Power and Light customers.
