With apologies to sausage makers, but that’s what it felt like watching Oklahoma Corporation Commissioners on Thursday discuss the details of what to do with the ratehike request sought by Public Service Company of Oklahoma.
Even then, the commissioners did not vote on the issue and instead, recessed the meeting until Friday afternoon so their proposals could be formalized and in writing.
Otherwise, it was a deep dive into the intricacies of the $155.2 million request as approved by PSO, the Attorney General and AARP in a stipulation agreement, one opposed by Oklahoma Industrial Energy Consumers, the Petroleum Alliance of Oklahoma, Walmart Inc., the U.S. Department of Defense and the Alliance for Electrical Restructuring.
Just as sausage makers get their hands dirty in the process, commissioners explored different economic and business aspects of the nearly year-old request that underwent a three-day hearing last spring before an Administrative Law Judge, a judge who eventually recommended approval of PSO’s request.
Discussion by the Commissioners on Thursday focused not so much on the impact of the rate hike on consumers, but of other legal matters including revenue requirements, guaranteed returns, credits, capital structure including how much debt to approve and equity of the company, Rate of Earnings and the matter of an IRS letter.
The IRS issue, as raised by Commission Chairman Todd Hiett, dealt with PSO’s original request which attempted to include the addition of the Rock Hill wind farm in northern Oklahoma. As brought out during the hearings in May, PSO’s request included the acquisition of the renewable energy project but it had not been finalized at the time of the filing with the Commission. PSO announced the finalized acquisition after the filing of the rate hike request.
At the time of the hearings before the ALJ, the utility explained it was waiting on a response from the Internal Revenue Service regarding a tax deferment issue. PSD had asked the IRS whether some of its expenses could be part of a regulatory asset effort.Just as it was a sticking point in May, it was also an issue during Thursday’s Corporation Commission meeting.
Commissioner Hiett expressed concerns about approving a rate hike request and creating a regulatory asset that had nothing in it. He didn’t want “retroactive ratemaking.”
Commissioner Bob Anthony discussed “staled data” from a case where testimony in the matter was several months old. He preferred returning the case to the ALJ for a “hearing on the merits” and allowing witnesses to present new data.
“That’s the biggest issue before us,” he declared.
Commissioner Kim David preferred working with Hiett on a draft order he had drawn up.
“I’m prepared to move forward.”
In the end, the decision was made to recess the meeting and take a vote Friday afternoon.