Legislators prepare to hear pros and cons of ROFRs and alternative ratemaking

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Oklahoma legislators have decided that two issues to be considered in interim legislative studies have the potential to be so controversial, they will hold separate hearings on Monday at the State Capitol.

The Senate Senate Energy and Telecommunications committee, led by Sen. Lonnie Paxton, will hold a morning hearing into ROFRs, the Right of First Refusal by utilities to build major electrical transmission lines in the state. The hearing will begin at 9:30 a.m. in Room 535 of the Capitol and be livestreamed over the Internet at https://oksenate.gov/room-230.

Six witnesses are scheduled to testify. They include David Osburn, General Manager of the Oklahoma Municipal Power Authority; Matt Povlowski Vice President of NextEra Energy Transmission; Josiah Neely, Senior Fellow of Energy Policy at R-Street Institute; Emily Shuart, Director of Federal, Environmental and Regional Transmissoin Organization Affairs for OG&E; Chris Winland, Director of Strategic Planning at ITC Great Plains; and Matt Horeled, Vice President of Regulatory and Finance at PSO.

Based on public comments filed with the Oklahoma Corporation Commission, which has a Notice of Inquiry underway into both ROFR and Performance Base Ratemaking, we know who is for ROFR powers and who is against.

As OK Energy Today reported last week, the public comments revealed those supportive of ROFR are Oklahoma Gas and Electric, Public Service Company of Oklahoma and ITC Great Plains, LLC.

Other groups oppose giving more power to utilities to refuse competitive bidding for major transmisson line projects and they include: Oklahoma Municipal Power Authority, AARP, the Sierra Club, NextEra Energy Transmission and the Oklahoma Industrial Energy Consumers.

As proposed for consideration in Oklahoma, the Right of First Refusal would be implemented in transmission llines for 300 plus kV projects versus the existing Southwest Power Pool competitive bidding Order 1000 process. Utilities contend with the ROFR authority, they would have the abililty to deny competitive bidding and construct the project themselves. Some utilities contend the competitive bidding is time consuming and would also result in reliability benefits.

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But opponents, such as the Oklahoma Municipal Power Authority, argue any expanded ROFR would allow the utilities to bypass competitive bidding “in favor of non-competitively bid and more expensive projects” and pass those “excessive costs onto consumers through rate increases.” It also contends the expanded ROFR would allow transmission costs to continue to increase unchecked.

The Committee members are: Sens. Grant Green who is Vice Chairman of the committee, Mary B. Boren, David Bullard, Brent Howard, Chris Kidd, Joe Newhouse, David Rader, Shane Jett, Jo Anna Dossett, and Tom Woods.

Later in the day, The House Utilities Committee will explore the issue of Performance Based Ratemaking or PBR. The 1:30 p.m. hearing, also to be livestreamed, will be led by Rep. Trey Caldwell.

Again, based on public comments filed with the Oklahoma Corporation Commission, groups have come out in support and opposition to PBR.

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Those in support of the issue are Liberty-Empire District Electric,  OGE, The OG&E Shareholders Association,  PSO and the Sierra Club. Those opposed are the Federal Executive Agencies which includes Tinker Air Force Base, Vance AFB and the Army’s Fort Sill. Other opponents are the Petroleum Alliance of Oklahoma, AARP, OIEC and the Oklahoma Municipal Power Authority.

Performance Based Ratemaking has already been used for nearly 20 years by the Corporation Commission in its regualtion of Oklahoma Natural Gas. But opponents contend it is a “solution in search of a problem” and  “could lead to more frequent or larger rate increases than the current system.”

Supporters argue the current ratemaking system is “lengthy, costly and litigious” and “not conducive for collaboration or innovation.” They contend it results in lengthy hearings before the Corporation Copmmission and creates more scheduling inefficiency.

The House Committee members include: Reps. Mike Dobrinski, Steve Bashore, Meloyde Blancett, Jeff Boatman, Mickey Dollens, Ross Ford, Brian Hill, T.J. Marti, Terry O’Donnell, Kenton Patzkowsky and Clay Staires.