Bill wins approval in Senate committee to change Oklahoma’s electric utility regulations


Oklahoma Senate leader Greg Treat’s bill to make sweeping changes to electric utility regulation in the state won approval Thursday in committee.

The Senate Energy and Telecommunications committee voted 10-2 in support of the bill which will be sent to the full Senate for consideration. The two “no” votes were made by Sen. Mary Boren of Norman and Sen. Jo Anna Dossett of Tulsa.

The approval of SB 1103, a bill that would authorize “performance-based rates” without approval from the Corporation Commission, won immediate support from Oklahoma Gas and Electric.

The utility, in a release late Thursday said the measure would help OG&E customers and “hardworking Oklahomans through greater accountability and transparency for electric companies’ rate review process and rate adjustments.”

OGE claims it would bring increased cost stability to Oklahoma’s electric rates, which according to the utility, are 17% below the national average as of December 2022, 8% below the regional average and 13% less than Texas.

“We appreciate Senate Pro Tem Greg Treat for authoring this electric power industry legislation and starting the conversation around rate stability and predictability, which our customers continue to tell us are important to them,” said Ken Miller, OG&E Vice President of Public and Regulatory Affairs.

The former State Treasurer who went to work for OG&E after serving two terms said the greater transparency would result from additional rate reviews every year. He also claimed the measure, if signed into law, would increase thee amount of scrutiny electric providers would receive from regulators.

In Oklahoma, the Performance Based Rate (PBR) model outlined in SB 1103 has already been implemented for regulating the state’s natural gas companies. Since 2004, where earnings above Oklahoma Corporation Commission (OCC) approved levels are shared with gas utility customers, the OCC’s staff has noted greater efficiency and reduced regulatory expenses, which in turn “reduce rates below what customers would otherwise pay,” according to the OG&E press release.

Similar regulatory models have been adopted in many jurisdictions across the country — Arkansas, Alabama, Louisiana, and Mississippi all have annual rate review mechanisms and boast electric prices far below the national average. Within OG&E’s Arkansas service area, where performance-based rates have been in place for seven years, the electric provider has significantly invested in system reliability and rates remain among the lowest in the nation.    

Other consumer protections that result from increased requirements on electric providers include:  

·         Any earnings to the electric company above OCC-approved levels are returned to customers in the form of bill credits and investments in the grid and electric infrastructure. 

·         Additional pricing options for customers through programs like average monthly billing and annual guaranteed flat billing which help customers better manage their bill. 

·         Companies must also offer terms for waiver of late payments, unpaid balances, extended payment plans, and weather-related moratoriums. 

·         Elimination of reasons for which an electric provider may disconnect a customer’s service and stabilize bills for customers by placing a “statute of limitations” on unsubstantiated service charges.  

·         Prevents one electric company from using an unpaid balance from another electric company as a reason to disconnect service. 

·         Pre-purchased natural gas supply to provide reliable power through extreme weather events such as Winter Storm Uri, which will protect customers from outages and dramatic price increases that could occur during extreme weather events.    

Source: OGE Press release