Electric utilities Performance Based Ratemaking bill dead in the legislature


The Petroleum Alliance of Oklahoma proclaimed victory in defeating the controversial Senate Bill 1103, the proposed performance based rate measure for utilities in the state.

In an announcement, the Alliance said the bill “is now dormant” for the 2023 legislative session “thanks to efforts by Alliance staff and its members.”

Senate Bill 1103 was not heard on the Senate floor Thursday, missing the deadline for bills to be approved and sent to the opposite chamber for further consideration. In a press conference that day, Oklahoma Senate President Pro Tempore Greg Treat said the “demise” of the bill was due to the inability of The Alliance and the electric utilities to reach an agreement.

Although the current bill can’t advance further, language from it could be inserted into proposed legislation still advancing through the state House and Senate. Alliance staff will remain diligent to ensure that electric utility legislation also meets the needs of the oil and gas industry, not just electricity providers. The Alliance is also committed to working with utilities to find a solution amicable to both parties that would allow the legislation to advance.

What is Performance-Based Rate Making? | RateAcuity™

Senate Bill 1103 would mandate Performance-Based Ratemaking (PBR) for regulated electric utilities, allowing those power providers to increase rates with less public scrutiny and transparency.

Similar programs have been instituted in Louisiana and Arkansas, with both allowing consistent, significant rate increases. In Louisiana, rates have increased by 146%. In Arkansas, rates have increased by 26% for residences and 30% for industrial customers. The Arkansas Public Service Commission has warned that the formula-based rate plan could result in a year-to-year rate increase that approaches or meets the state’s 4% cap. Senate Bill 1103 does not include a cap.

The bill will also impact Oklahoma’s oil and natural gas industry beyond monthly utility bills. PBR incentivizes electric utilities to move toward intermittent sources at the expense of reliability. The increased use and reliance on intermittent resources, while turning away from proven sources like natural gas, is a threat to service reliability, a threat to Oklahoma’s budget, and a threat to natural gas producers across Oklahoma.