Oklahoma Corporation Commissioners will meet Thursday to consider a settlement agreement reached over the $2.46 billion renewable energy project proposed by Public Service Company of Oklahoma.
The joint stipulation and settlement agreement was announced last week by Attorney General Gentner Drummond who finally signed onto the settlement for the need of the project.
“With a project of this magnitude, it was imperative to put in place customer protections to safeguard Oklahoma ratepayers,” Drummond said. “I am pleased that this settlement will result in more capacity in times of need, at cheaper rates for PSO customers.”
The project includes the utility’s acquisition of three solar farms and three more wind farms, all located in southern Kansas and the Texas Panhandle. PSO maintains the project will result in a net rate decrease of 64 cents for the average utility customer in 2026. By 2026, production tax credits and reductions in fuel usage will reduce the average customer’s bill by $2.58 a month.
Customer protection measures outlined in the settlement include:
- Requests for proposals – Future requests for proposals must include all types of energy sources to keep costs competitive and ensure customers receive the benefit of lowest cost resources regardless of their fuel source.
- Cost cap – PSO will cap the cost of the project at $2.47 billion, ensuring any cost overruns are not passed on to ratepayers. It also guarantees that any reduction in project costs are recognized to the benefit of customers.
- Production tax credits – PSO agreed to guarantee that the renewable resources in this project will qualify for tax credits, which offsets a large portion of the project cost.
- Net capacity factor – PSO will guarantee that the project will produce a certain level of power, which offsets the costs of other resources that use fuel commodities. This guarantees a large part of the underlying economics for the projects.
- Gas procurement and gas storage – PSO will conduct a collaborative process for its fuel supply plan and evaluate gas procurement and gas storage options to ensure reliability and lower customer costs. This measure is designed to prevent surging energy prices, such as those utilities encountered during winter storm Uri.
- Accountability provisions – The settlement includes language to ensure PSO upholds its obligations. Should the company fail to meet any of its guarantees, PSO will be required to make its customers whole.
Still, the project is adamantly opposed by many PSO customers who voiced their concerns and opposition in public comments to the Corporation Commission.
One PSO customer who is 70, complained of being tired of increasing utility bills.
“My bill has gone up by about 100.00 per month. We keep the thermostat on 66 in the winter and 78 in summer. I planned to retire last year, but as a result of this economy, politically and energy driven, I continue to work, as well as my 73-year-old sister.”
He also argued against more wind farms, contending in Western Oklahoma where he lives, he unable to see stars at night and birds are dying from the turbines.
Another PSO customer identified as Chris Cook wrote he did not support the additional wind and solar energy.
“Without government subsides they do not make economic sense. They are harmful to the environment on several levels including disposal, threat to endangered fowl, and being an eyesore blight on the landscape. I am not willing to pay a premium for these
misguided projects and want to be exempted from any additional charges.”
PSO customers pay more for constructing infrastructure that is substantially less reliable than existing infrastructure.”
Still another PSO customer, Jon Dante was against the project. arguing the 2021 storm in Texas “shone a light on the unreliability of these sources of electricity.”
He said both methods failed when subjected to freezing precipitation.
