As Oklahoma Corporation Commissioners prepare to meet Monday to consider a request by Public Service Company of Oklahoma for preapproval of its $730 million acquisition of the Green Country Generating plant, the regulators are being urged by an Administrative Law Judge and consumer groups to deny approval.
Administrative Law Judge Carly M. Ortel issued her recommendation late last month, urging the Commission to “deny PSO’s request for preapproval of the purchase and cost recovery of the Green Country Generating Facility.” The 23-year old power plant, located in Jenks, consists of three natural gas-fired combined cycle generating units.
“PSO seeks to recover up to $753,042,291 in costs for the acquisition of Green Country through a Dispatchable Resource Rider (“DRR”) until such costs can be included in base rates in
PSO’s next general rate case,” stated the Judge in her decision, saying the DRR would be moot based on her recommendation.
Judge Ortel also concluded, “The Commission should deny PSO’s request for preapproval of the Green Country facility as it does not meet the standard set for preapproval in 17 O.S. § 286(C).”
She also informed commissioners “The costs associated with Green Country are unreasonable and largely unknown.” But the judge explained that any denial of the preapproval would not prevent PSO from acquiring the Green Country plant.
Judge Ortel also urged adoption of her recommended findings that “PSO’s selection process for the Green Country acquisition is not reasonable” and the utility did not include the acquisition in its competitive solicitation.
“THE COMMISSION FURTHER FINDS that the acquisition price of the Green Country facility is not reasonable. The purchase price of $730 million ($918/kW) is over five times the current net book value of the plant,” wrote the judge in her recommendation.
Approval could mean higher rates for PSO customers to the tune of about $7.24 more a month, but opposition has been raised by the AARP, the Petroleum Alliance of Oklahoma and the Oklahoma Industrial Energy Consumers. They point out that the cost of the plant was $730 million but PSO seeks recovery totaling $753 million.
“PSO failed to meet its burden to establish a need for the capacity to be provided by Green Country that would warrant preapproval
of Green Country. PSO also did not present evidence from which the Commission could consider other, reasonable alternatives,” they argued in filings with the Corporation Commission.
They also contend PSO failed to comply with competitive bidding rules in acquiring the Green Country power plant. PSO contends it needs the plant to meet future power needs. The consumer groups also claimed that even an Administrative Law Judge in deciding a recommendation concluded the age of the Green Country plant “produces an elevated risk of increased costs and/or early retirement” and that PSO did not analyze the risk of reduced operations at the plant due to environmental regulations.
The Corporation Commission plans a special meeting on Monday at 1:30 p.m. to consider the case.
PSO announced its agreement last fall to acquire the plant and said it hoped to assume ownership in June of 2025.
