PSO has reached a settlement with the Oklahoma Corporation Commission on its original request for an $88 million rate hike. The agreement was reduced to $46 million in which the average residential customer will see an increase in a monthly bill of $2.38.
The original request would have amounted to a $7 a month increase.
“The agreement is proof that in Oklahoma, parties with different agendas can reason together in a spirit of cooperation and collaboration with the ultimate goal being a result that benefits all,” Corporation Commissioner Dana Murphy said. “The settlement means Oklahoma will continue to be able to offer industry and residents alike reliable service at the lowest average cost in our region.”
She called it a “win-win” for customers and for the utility. Murphy was joined by Commissioners Bob Anthony and Todd Hiett in approving the agreement.
PSO indicated the settlement will allow it to make necessary investments to maintain and improve the safety, security and reliability of the electric system while mitigating impact on customer bills.
“The settlement is the result of a collaboration of organizations with diverse interests who were able to reach a positive outcome for PSO and the customers and communities we serve,” said PSO President and Chief Operating Officer, Peggy Simmons. “The agreement approved today will create a path forward for us to continue providing safe, secure, reliable and affordable service.”
Filed with the OCC September 26, 2018, PSO’s original application included a request to increase rates to recover increased costs and system investments since 2017, a grid modernization plan to replace and upgrade aging infrastructure, and the adoption of performance-based rates (PBR) to more closely align the Company’s financial condition with its ability to meet customer needs.
Although the settlement doesn’t include PBR, it does provide for more timely recovery of PSO’s SPP-related transmission investments as well as investments to improve reliability and safety of the Company’s distribution system, which will address similar issues addressed by the PBR proposal. The settlement will increase bills for the typical PSO residential customer by approximately $2.38 per month.
PSO, a unit of American Electric Power (NYSE: AEP), is an electric utility company serving more than 550,000 customers accounts in eastern and southwestern Oklahoma. Based in Tulsa, PSO has approximately 3,800 megawatts of generating capacity, and is a major distributor of wind energy in the state.