While the Oklahoma Attorney General’s office, staff at the Public Utilities Division of the Oklahoma Corporation Commission, an Administrative Law Judge and an industrial consumers group took a stand Tuesday against a proposed PSO energy center at Fort Sill, the specter of BRAC was raised. Would the federal government retaliate if the center was not approved by state regulators and close the home to the Army’s Artillery and Air Defense Commands?
It’s what Corporation Commissioner Bob Anthony suggested as he spoke earnestly in support of the nearly $118 million center that would be built for energy security on the military post. Fort Sill would commit $10 million but the main cost would be shouldered by ratepayers of Public Service Company of Oklahoma.
“It is a security issue,” stated Anthony during the nearly3-hour long hearing he and commissioner Dana Murphy held to explore the controversial issue that has been discussed by PSO and the Army for nearly 7 years.
“What we do with this case has major implications,” he continued, suggesting there are ongoing discussions in the Biden administration to make cuts in U.S. military installations.
“If we tell Fort Sill to go fly a kite, Oklahoma would be making the biggest mistake.”
“I can’t make any BRAC-proof promises,” said John McNutt, an attorney with the Army who offered virtual testimony in support of the energy center.
“The Army is not looking for a handout from ratepayers. We are trying to harden our installations,” he explained, saying it is not economically feasible for the Army to build its own backup generators to power the entire military post.
“The Pentagon has not budgeted these projects—it’s a state-by-state basis. We don’t have anything else to contribute to the project—we don’t have any funds,” said McNutt.
PSO has a 30-year old lease with the Army post and as part of the agreement, Fort Sill would be guaranteed to have at least 14 days of emergency power in the event of a disaster or emergency. Otherwise, the energy center’s power would be shared by all PSO customers.
“We think the project is in the public interest,” said Joann Worthington, Senior Counsel of Regulatory Services at American Electric Power, parent company of PSO. “We’re trying to meet their needs.”
She also repeated PSO’s assertions made in legal filings that it found “troubling” some of the findings of the Administrative Law Judge, the Commission’s PUD and other opponents.
“We believe the findings have been unjust, unfair and unreasonable.”
Commissioner Dana Murphy questioned whether the project was created because Fort Sill wanted it and whether paying a premium was reasonable for ratepayers.
“Did PSO reach out to the military to pay for part of the cost?” she questioned during the hearing. “I continue to hear you say this would help all customers. But I’m struggling with that.”
While Murphy appreciated the military’s $10 million contribution for the center, she said, “They’re really paying for access and that’s a different ballgame.”
Opposition was mounted by Thomas Schroedter, executive director of the Oklahoma Industrial Energy Consumers.
“I appreciate Fort Sill and its importance but we’re looking at a huge subsidy on other ratepayers,” he told the commissioners. “It’s a bad signal to send and not good public policy.”
Schroedter claimed the project was “plugged in” by PSO to satisfy Fort Sill and “not the ratepayers” of the utility. He contended there are other customers that are also critical for the national defense.
“This is not a fair and reasonable cost for PSO,” he stated. “PSO created a special deal or contract and the costs are not reasonable.”
He repeated the claim that the project cost would be 2 to 5 times the amount of alternative projects.
Joining him in opposing the project was the Attorney General’s office. Chase Snodgrass, Deputy Chief Assistant Attorney General in the Utility Regulation Unit argued the state had presented what he called “compelling” evidence of substantive cost that should not be allocated to the ratepayers.
Snodgrass contended there are cheaper alternatives to the special energy center.
“At some point, there’s got to be a line,” he told the two commissioners.
When commissioner Anthony questioned him what might happen to ratepayers if the post were closed, he responded, ‘There’s no allegation Fort Sill is leaving Oklahoma.”
The Commission’s own Public Utilities Division is also against the project as Kyle Vasquez testified, saying it is “not fair, just or reasonable.”
He told commissioners he took “umbrage” to the characterization that the PUD was negative.
“We are big supporters of the military but we also have obligations to ask difficult questions.”
No decision was made by Commissioners Anthony and Murphy in the absence of chairman Todd Hiett. Instead, the two asked the involved parties to “get together” and “see if you can try to work something out.”
Snodgrass, representing the Attorney General’s office said his office would be willing to hold discussions “but they might not be fruitful.”