Customers of Oklahoma Natural Gas won’t be seeing any immediate increase in their monthly bills after the utility was hit with an estimated $1.5 billion in extraordinary gas costs during the February winter storm.
The Oklahoma Corporation Commission in a 3-0 vote on Tuesday approved a financial maneuver that allows ONG to “park” the costs for now. The vote was in support of an order allowing the utility to establish a regulatory asset and and waiver, a move that will delay any pass through of the extraordinary costs.
“We only have two choices,” said Commission Chairman Todd Hiett during the first of two Tuesday meetings by the regulatory body. “We either have to park the costs somewhere or send it to the ratepayers.”
A spokesman for Oklahoma Natural said the intent of the utility was to waive the extraordinary costs and “park” or “warehouse” them until they can be handled at a later date by the commissioners. Otherwise, the costs would have been put into the tariff system and customers would start seeing exorbitant bills sometime in early April.
“Absent regulatory intervention by this Commission, those extraordinary costs will soon flow through to customers in their monthly natural gas bills, as specified by existing tariff provisions and Commission rules,” stated the order signed by the three commissioners.
The order defers the costs and once ONG figures the real costs, it will have to file a compliance report with the regulators. Putting ONG’s costs into perspective, the company’s entire 2019 bill was closer to $300 million for natural gas.
The impact on a homeowner’s gas bill could have been astronomically high had the $1.5 billion cost been passed along to ONG’s customers.
Corporation Commissioners in a second meeting on Tuesday also voted 2-0, with Commissioner Dana Murphy absent, to extend their original emergency natural gas production rate of 100% for nearly two more weeks. The order will be in effect through March 31.
Commissioners also plan a meeting where they will consider a new rate to be in effect in April, one that staff wants to increase from the existing 50% long rate production rate to 75%.