While some Oklahoma legislators are in private discussions about how to approach two controversial topics, Right of First Refusal and Performance Based Ratemaking, one similar measure called the Oklahoma Electric Choice and Competition Act is already in the works.
Known as SB 1332, the bill by Tulsa Republican Sen. Dana Prieto, appears to be very similar to Performance Based Ratemaking, a measure strongly pushed by utilities. Prieto’s bill would give industrial and commercial customers of investor-owned electric utlities that serve more than 100,000 customers the ability to obtain direct access to a competitive retail electric market for the purchase of electric generation service.
Prieto, who did not respond to questions posed by email from OK Energy Today, contends the transition to a competitive retail electric market “should not adversely affect industrial and commercial customers or result in a decline in the protections, policies and services that are currently in place for customers.”
A similar effort was made in the 2023 session of the legislature and strongly advocated by AERO, the Alliance for Electric Restructuring in Oklkahoma. AERO declared at the time that if successful, the effort would “end the monopoly status of Oklahoma Gas & Electric Company, Public Service Co. of Oklahoma and Liberty Utilities as brokers of electricity for commercial and industrial consumers.”
At the time, pointed to increased OG&E and PSO rates totaling $1.575 billion, despite $360 million in net income in 2021 for OG&E and more than $2 billion for PSO’s parent company, American Electric Power.
“Our monopoly vendors have an inherent conflict of interest,” said AERO Executive Director Mike Boyd in announcing the 2023 effort.
“They cannot serve the interests of their investors by seeking to maximize profits while also serving the interests of Oklahoma’s ratepayers, who need affordable and reliable power. We can fix this system by injecting choice and competition into the market and allowing ratepayers to choose who they purchase their power from.”
Senator Prieto’s 2024 bill appears to be anti-competition in one sense because it states that the costs and investments borne by utilities are not now allowed in a competitive market. “Electric utilities should be permitted to recover these stranded costs, as well as transition costs incurred to implement electric competition.”
Prieto proposes that beginning Jan. 1 of 2025, the Corporation Commission would permit commercial and industrial customers of electric utilities to choose a retail electric supplier.
SB 1332 was assigned Tuesday to the Senate Energy and Telecommunications Committee then to the Appropriatons Committee.
A fiscal analysis provided by the Corporation Commission indicated the Commission was “unable to determine a fiscal impact as SB1332 would spur development of significant rules to essentially create a new electric market.”
As for the Right of First Refusal and the Performance Based Ratemaking matters, they have yet to raise their heads publicly so far in the legislature, with the exception of the behind-closed-door-negotiations reported to be underway involving certain groups, legislators and utilities.
AERO would no doubt support a continued push for reforms to allow businesses to choose an electricity vendor, similar to how the state’s natural gas market is structure.