PSO’s fuel costs to get critical review by regulators

  • February 4, 2025

 

Part of Public Service Company’s requests with state regulators that sparked filings against Corporation Commissioner Todd Hiett’s particicpation goes again before the commission this week.

Just a few weeks after Hiett and Corporation Commissioner Kim David approved a $119.5 million rate hike that will mean another $12 a month more for ratepayers, they will decide this week on the utility’s request for approval of fuel expenditures in 2023. During the year, PSO served 578,000 Oklahoma customers and spent $186,061.991 in eligible fuel expenses but filings also point out that the utility billed customers $554,009,051.

It’s what Corporation Commissioners will vote on Thursday whether to approve the expenditures as part of PSO’s Fuel Adjustment Clause request.

Why pay attention to the utility’s fuel costs? Because the costs are part of expenses to be reviewed by corporation commissioners, much like the natural gas costs during the  2021 winter storm which led to long-term bond payments by ratepayers.

The Commission’s Public Utilities Division is recommending approval, stating, “After review, PUD believes that the practices, policies, and decisions of the Company were prudent, and the costs passed through the FAC to ratepayers were arithmetically accurate and applied correctly.”

The Attorney General’s office also supports the findings and said “PSO’s purchasing decisions during 2023 were prudent.”

But one organization, the Oklahoma Industrial Energy Consumers, headed by Tulsa attorney Thomas Schroedter raised some objections. In a filing, Schroedter called on commissioners to closely examine PSO’s procurement practices, policies and costs to ensure that they “result in lowest reasonable cost for customers.”

The OIEC said it has concerns with regard to the amount of congestion costs incurred in 2023 by PSO.

“OIEC believes the congestion cost issue should be thoroughly
addressed by PSO in PSO’s next base rate case filing. PSO’s congestion costs during 2023 totaled approximately $135.8 million, which is lower than the $217 million gross congestion costs incurred by PSO in 2022 but still remains very significant.”

Congestion costs are those that arise when there isn’t enough transmission capacity for the lowest-cost generation to ratepayers, meaning more costly power is delivered to consumers.

“PSO’s congestion costs during 2023 totaled approximately $135.8 million, which is lower than the $217 million gross congestion costs incurred by PSO in 2022 but still remains very
significant,” wrote Schroedter in his OIEC filing. “As in past cases, the majority of PSO’s congestion costs in 2023 were related to PSO’s wind energy facilities, which greatly diminishes the forecasted benefits of the wind energy projects.”
The Petroleum Alliance of Oklahoma voiced concerns about PSO’s costs.
“The Petroleum Alliance’s interest in the subject matter of this Cause is based on its concern about the rates and charges proposed for PSO’s services, the fair and equitable application of any increases in the rates and charges and the effect of same on PSO’s customers, including members of The Petroleum Alliance.”
The organization said of of particular importance are issues related to PSO’s fuel procurement and its use fuel forecasting process and modeling.
PSO’s fuel adjustment clause request also drew the attention of Rep. Tom Gann, one of the three legislators who filed suit with the Supreme Court to stop Commissionere Hiett from voting on OGE, PSO, and ONG rate cases. The legislators claimed the sexual abuse and drunkenness allegations against Hiett represented a conflict of interest because he allegedly had groped a man at a bar in Minnesota. The victim represented one of the utilities in cases before the Corporation Commission.
The same PSO case also drew critical filings from former Corporation Commissioner Bob Anthony before he was term limited last month. He filed dissenting opinions on some of the PSO requests, accused his fellow two commissioners of violating the Open Meeting Act and charged Hiett and Commissioner David of lights out on transparency at the agency in putting an end to his investigation of Hiett and the utilities.
“A prominent national newspaper adopted the slogan “Democracy dies in darkness.” Today, with the help of the Attorney General and the Oklahoma Legislature, Commissioners Todd Hiett and Kim David have turned off the lights at the Oklahoma Corporation Commission. Anyone who wants to know the truth about what is going on had better bring their own floodlight.”
Anthony also called publicly for Hiett to resign from office.
“I call on Commissioner Hiett to resign his office immediately. There can be no tolerance for his actions, especially when directed toward persons whose companies, industries and/or jobs
will otherwise continue to be directly affected by the regulatory decisions he makes. The situation is untenable. Neither getting sober nor sincerely apologizing can resolve it.”
The Corporation Commission will take up the PSO fuel adjustment clause case on Thursday at 10 a.m. in a special meeting.

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Jerry Bohnen