Corporation Commissioners agree to cap on PSO residential rate hike


Oklahoma Corporation Commissioners didn’t give Attorney General Gentner Drummond everything he wanted in asking them to reconsider a Public Service Company of Oklahoma rate hike that would raise residential rates by another $5.35 a month, but they agreed in part during a meeting on Tuesday.

The commission voted 3-0 in support of Drummond’s request to put a 2.5% cap on residential rates as part of the original PSO rate hike order.

The 2.5 percent cap will reduce the planned increase for the average residential customer from $5.35 a month to $3.57 a month. The $3.57 rate was part of a stipulated agreement originally signed by the Attorney General, the Public Utilities Division, PSO and the AARP. But Drummond was disappointed the agreement was not approved as reached when the Commission voted 2-1 to approve a rate hike.

When coupled with a planned decrease in fuel charges, it is estimated the average PSO residential customer will see an average decrease of $13.51 per month starting in January.

Drummond was critical of the Commission’s original order and told Commissisoners in a motion that PSO ratepayers deserve better.

“My office worked diligently to craft an agreement to protect ratepayers as much as possible, and I am extremely disappointed that it was cast aside in favor of higher bills for residential customers. With inflation through the roof, consumers are already paying too much for basic goods and services. The last thing they need is unnecessary rate increases,” he stated in the motion.

Commission Chairman Todd Hiett supported the original PSO order but agreed to the 2.5% cap on residential rates and did so with hesitation.

“When you go down the road of artificial caps, that does not mean, if you offer a cap for one time, that does not mean those rates are reduced and all others stay the same. Someone has to pay for that.”

He said tens of thousands of jobs in the state would pay for it.

“To arbitrarily shift a cost to that group of people, I do not think is in order.”

The Commission vote came after lengthy presentations by the nine different groups that took part in the original debate over the PSO request.

In particular, the Attorney General was heavily criticized by the Oklahoma Industrial Energy Consumers group and its attorney Thomas Schroedter. The OIEC contended the Attorney General’s request would add $24 million in costs to the PSO hike.

“You’re delivering a windfall to PSO and its investors,” argued Schroedter. “You’re harming schools, hospitals, retail stores, military bases, the entire oil and gas industry, colleges, agriculture and manufacturing.”

He charged the Attorney General wanted customers to pay more than their fair share and it would result in what he called a “double whammo.”

“The Attorney General wants to increase rates and make matters worse,” added Schroedter as he revealed that PSO is about to file another rate increase request in January. “The Attorney General’s motion conflicts with his responsibility to protect ratepayers. The Attorney General wants the commission to give a bigger piece of the pie to PSO.”

The Petroleum Alliance of Oklahoma also argued against the Attorney General. Spokesman David Jacobsen charged that nothing new had been presented by the AG and there was “no new evidence.”

“He’s just asking you to change your mind—a second bite of the apple if you will.”

A spokesman for the Department of Defense, representing the military bases and posts in Oklahoma told the Commissioners they got it right and the final order approved earlier in November “is fair.”

Prior to the meeting, the Attorney General issued a press statement and urged the Corporation Commissionto side with ratepayers over federal agencies. In the release, he claimed the Biden Administration had filed a brief in support of higher rates for residential customers.

“After presiding over the worst raft of inflation since the 1970s, the Biden Administration is now advocating for Oklahoma residents to pay higher utility bills,” the Attorney General said. “This fact alone should make it clear to Commissioners what is at stake. They can stand with me in support of lower utility bills for Oklahoma families, or they can stand with the Biden Administration and force our residents to pay more.”

Actually, the Defense Department and other Federal Executive Agencies were among those that filed a motion and Drummond, a Republican, interjected his use of “the Biden Administration.” Others objecting to Drummond’s motion were the Petroleum Alliance of Oklahoma and Walmart Inc.