Oklahoma Gas and Electric says it is asking the Oklahoma Corporation Commission to review the company request to receiver a nearly $390 million investment in the Mustang Energy Center.
In announcing the move, OGE said it initially planned to seek a rate hike of about $70 million a year to recover its investment in the first, new, natural-gas fired plant the company has built in more than 30 years. The new plant includes seven modern quick-start natural-gas turbines that replaced two of the oldest natural gas-fired units in the nation.
The company after the new federal tax reforms took effect, it delayed its filing from late December to adjust a proposed filing to ensure customers benefitted from the lower corporate tax rate.
As a result, OGE is seeking just under $2 million a year in a request that will see no monthly bill increase for residential customers.
“The president’s signing of tax reform in December was fortuitous for customers and the company,” said OG&E spokesman Brian Alford. “When it became evident in November that tax reform was a real possibility, we began having conversations at the Oklahoma Corporation Commission about incorporating the benefits of tax reform into our upcoming filing. Today’s filing reflects those benefits as well as our ongoing efforts to manage costs, which provide customers with a modern, highly efficient power plant at virtually no impact on monthly electric bills.”
“The Mustang Energy Center turbines are more efficient, sustainable and responsive, while continuing to honor its legacy of providing affordable, reliable power,” Alford said. “We’re also very fortunate to be in a position to repurpose the Mustang site with modern technology. The Mustang location has an existing, skilled workforce and infrastructure, including connection to nine transmission lines, which ensures that energy can be delivered where and when it is most critical. The location is essential to the reliability and resiliency of countless, critical private and government industries, and would play a critical role in restoring our system in times of crisis. Modernizing this facility also avoids the need for, and is far less expensive than, adding a new power plant to our existing fleet.”
Alford added that in addition to recovering the Mustang investment, the company’s filing also seeks to restore its return on equity, which is currently below the national average for vertically integrated utilities, as well as align its depreciation rates more closely to actual asset lifespans.