Utilities wasted little time following the disastrous winter storm that hit the Midwest and South last week in asking for cost recovery help from the Oklahoma Corporation Commission. The gas supply costs of one company for February alone were estimated at $1.5 billion.
Even as Public Service Company of Oklahoma issued a press release on Thursday indicating it had filed such a request, an Administrative Law Judge on the commission held a hearing Thursday morning on a similar request by Oklahoma Natural Gas Co. Other utilities including OGE and Oklahoma Arkansas Natural Gas filed similar requests.
In its filing, ONG explained it initiated the proceeding for regulatory relief while the winter weather emergency was still in progress and did so “in anticipation of the economic harm that would arise as a result of extraordinary costs the company was incurring to maintain service to its customers.”
The company revealed its natural gas purchases in Oklahoma for the month of February were an estimated $1.5 billion compared to 2019 when Oklahoma Natural spent $306 million for the entire year.
“ONE Gas experienced unforeseeable and unprecedented market pricing for gas costs in our Kansas, Oklahoma and Texas jurisdictions,” stated the filing.
The company informed commissioners that unless alternative regulatory measures are immediately adopted, the extraordinary costs—will begin to passed through the Purchased Gas Adjustment clause to customers. Such a pass along would start in the company’s first billing cycle in April.
ONG estimated that even when averaged with the conventionally priced gas supply still flowing to customers, the extraordinary costs could result in a rate as high as $95 to $100 per dekatherm.
“At this time, customers may not have the ability to pay, resulting in possibly loss of service and bad debt,” wrote the company in its motion.
ONG asked the regulators for a deferral and explained it did not seek recovery of the deferred costs at this time. Such a recovery of the deferred costs through utility rates “will be addressed in this or another future proceeding.”
The company noted that the Kansas Corporation Commission and the Railroad Commission of Texas issued similar relief.
“Time is of the essence,” stated the filing.
During the Thursday morning meeting of the agency, Commissioner Brenda Murphy raised the filing by ONG and said she would support a protective order.