Oklahoma oil and gas group attacks OGE’s rate hike request

Petroleum Alliance


In opposing Oklahoma Gas and Electric company’s $163.5 million rate hike, the state’s largest and most influential oil and gas group said regulators should not approve such an increase until the utility fulfills its pledge to correct inadequate planning and preparation it had for the February 2021 winter storm Uri.

It also heavily criticized the utility for over-reliance on renewable energy sources which are not reliable during severe winter weather.

In a recent filing, the Petroleum alliance of Oklahoma offered stinging criticism of OG&E over what it did not do to prepare for the winter storm and what it has not done since then, even after getting a massive financing order last year from the Oklahoma Corporation Commission. The order eventually led to nearly $1 billion in ratepayer backed bonds approved by the State Supreme Court and handled by the Oklahoma Finance Development Authority.

In addressing OG&E’s rate hike request filed last fall, the Petroleum Alliance said the utility did not address any effort “to comply with its obligations set forth in Cause No. PUD 202100072 to ensure a stable and secure power supply and to mitigate costs to customers following and as a result of the winter weather event known as Winter Storm Uri.”

The order as well as the Joint Stipulation and Settlement Agreement approved by the commission required OG&E to engage stakeholders in a meeting to mitigate costs to customers of natural gas price volatility and future cold weather.

“Nearly six months have passed since the date of the Commission Order and OG&E has only held one stakeholder meeting to comply with its obligations.” The Alliance said it was not a discussion but a “take it or leave it proposition” and one that included no revision of the utility’s fuel supply portfolio and risk management plan to address natural gas storage practices.

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The Alliance contends the natural gas storage and procurement practices of OG&E “should not be put off.” It also pointed out that renewable energy was unavailable during the storm and said “Oklahoma must rethink policies that threaten a stable and secure power grid.”

It further said that increasing reliance on intermittent wind and solar power in the place of abundant and dependable natural gas makes it difficult “when the wind doesn’t blow and the sun doesn’t shine and only results in higher electricity bills landing in customers’ mailboxes, with even higher bills on the horizon if OG&E has its way.”

The Alliance was even more blunt in opposing the dependence on renewable energies, stating, “The same policies that promoted the wind industry’s growth created a power grid that is increasingly reliant on intermittent generation, lighting the fuse to a reliability time bomb when the wind doesn’t blow or solar panels are covered in snow and ice or the sun is blocked by days of cloud cover.”

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The Alliance said it “is concerned about what is being done to guarantee that reliable, dispatchable baseload power is available in the future.” It asked the commission not to approve the rate hike until a number of issues are address and questions answered.

The Alliance was one of a handful of groups that signed onto a second settlement agreement announced late last week, asking that OG&E not be given any rate hike approval by regulators.

An Administrative Law Judge at the commission will hold a hearing on June 27 to review the rate hike request and opposition to it and make a recommendation to the Corporation Commission.