Lines were definitely drawn in the sand Monday as those opposed to giving the Right of First Refusal for large transmission-line projects by utilities in Oklahoma had their say and those who want ROFR went before a State Senate interim committee hearing.
“It’s an issue most of our members never heard of until last year,” said Sen. Lonnie Paxton, as he opened the hearing before the Senate Energy and Telecommunications Committee.
“It’s a complex issue that will affect every one of our constituents in the state.”
The hearing featured three groups opposed to Right of First Refusal for utilities and three who favor the ability to reject competitive bidding.
“No doubt about it,” declared David Osburn, General Manager of the Oklahoma Municipal Power Authority. “This is all about money.”
He told legislators, including House members who joined the hearing, that there will be more transmission buildouts coming from the Southwest Power Pool, the grid control group of which Oklahoma is a member. Osburn argued ROFRs will only mean higher costs for consumers and urged legislators not to listen to the “scare tactics” of those fighting the competitive bidding requirement.
But Emily Shuart with OGE said it’s about “hope” on the part of those opposed to ROFR laws, claiming there is no evidence of cost savings by requiring competitive bidding for major transmission line projects. She labeled the competitive bidding “a cumbersome and bureaucratic process” and called on legislators to finish what they started in 2013.
“The reasoning of cost savings has not been proven true,” she argued in her presentation to the legislative study hearing.
Shuart said forced competitive bidding is an encroachment on our state rights.
“You’re allowing the proverbial camel to get his nose under the tent—our tent.”
Another supportor over ROFR, Chris Winland, Director of Strategic Planning for ITC Great Plains, stated the competitive bidding requirement would bring “more harm than good.” He contended that the current order from the Southwest Power Pool, one requiring competitive bidding for smaller transmission project “is resulting in higher costs.”
Another proponent, Matt Horeled, Vice President of Regulatory & Finance with Public Service Company of Oklahoma charged that “anticipated benefits have not happened” as a result of required competitive bidding on transmission projects.
“Getting the projects done is more important than requiring competitive bidding,” he stated.
But Matt Pawlowsky with NextEra Energy Transmission maintained “ROFR will increase rates in Oklahoma.” He told the hearing “it’s critial that Oklahoma legislators put Oklahoma customers first.”
Still another ROFR opponent, Josiah Neely with R-Street Institutes called ROFR a “bad move for Oklahoma”, adding, “when you eliminate competition, you raise costs.”
He declared that competitive bidding would save 20% to 30% on project costs and the savings would be passed on to consumers.
Legislators had a variety of questions including how efficient the Oklahoma Corporation Commission’s handling of power issues is. Another questioned the possibililty of foreign countries from becoming owners of transmission projects in the state.
Shawnee Sen. Shane Jett wondered how many of the firms supporting ROFR have positions on ESG and climate change. He told the hearing ESG is not about economics and is “strictly political.” The Senator wanted to know from the companies how much of their stock is owned by BlackRock, VanGuard and foreign firms.
At the conclusion of the hearing, Senate Committee Chairman Lonnie Paxton admitted the testimony and atmosphere “went a little better than expected.”
“It could have gotten out of control but it was very informative.”
Next step? Likely a bill in the legislature to allow Right of First Refusal.