A new state law that allows utilities to begin charging ratepayers for projects while they are under construction will get the public attention Thursday of Oklahoma Corporation Commissioners.
While commissioners at one time suggested SB998 infringed on their constitutional powers and they might challenge its constitutionality in the courts, they will discuss the bill during a Thursday afternoon public meeting. Some consumer groups also considered such a court challenge but so far, none have taken the step of filing a lawsuit.
Gov. Kevin Stitt allowed the bill to go into law without his signature and according to various sources, it was considered a major topic when the governor met with legislative leaders before reaching an agreement on a state budget. The bill did not receive legislative approval of an emergency clause and won’t take effect until mid-August, 2025, as defined in the Oklahoma Constitution, Article 5, section 58.
“No act shall take effect until ninety days after the adjournment
of the session at which it was passed, except enactments for carrying into effect provisions relating to the initiative and referendum, or a general appropriation bill, unless, in case of emergency, to be expressed in the act, the Legislature, by a vote of two-thirds of all members elected to each House, so directs.”
One major aspect of the bill is the “Construction While in Progress” or CWIP authority which allows a utility to seek approval of Corporation Commissioners to begin charging increased utility rates to customers while a utility project is under construction.
As explained in a legislative summary, the bill, or soon-to-be effective law, “requires the Corporation Commission to enter an order within 180 days on a utility’s application to expand or purchase a natural gas generation facility, instead of 240 days.”
It also requires any new natural gas generation facility to secure a firm contract for transporting natural gas to its facility through a competitive solicitaton process.
“The measure allows a utility to start recovering work-in-progress expenses prior to the commercial operation of a new, or newly expanded, natural gas facility. The Commission is required to permit a special rate for the recovery of such expenses. If the initiative to construct or expand a natural gas facility is terminated before completion, the utility must automatically
refund customers any money collected through the special rate plus interest. The utility has 90 days to refund the money after terminating the project.”
As OK Energy Today reported Wednesday, Oklahoma Gas and Electric is seeking such CWIP approval for a major project at its Horseshoe Lake Power plant in eastern Oklahoma County where two gas powered generators are being installed. OG&E included the CWIP in its application for preapproval of projects and contracts for expanded power generation.
Corporation Commissioners intend to discuss SB998 during the Thursday meeting where an agenda item indicated the focus was “whether pursuant to 75 O.S. § 253 an emergency rulemaking proceeding is necessary.” A vote might be held to direct the commission’s Public Utility Division Staff to prepare an emergency rulemaking.”
The referral to the Constitution is Oklahoma Statutes and Title 75, section 253, which states, “If an agency finds that a rule is necessary as an emergency measure, the rule may be promulgated pursuant to the provisions of this section, if the rule is first approved by the Governor.”