The move by Oklahoma Gas and Electric to use a controversial new law allowing ratepayers to be hit with higher charges to pay for energy projects under construction has some opponents.
The utility is using the Construction Work in Progress aspect of SB998 which became law without the signature of Oklahoma Gov. Kevin Stitt. Its request will be decided by Corporation Commissioners in a Wednesday morning meeting.
Opposing the utility’s request is the Oklahoma Industrial Energy Consumers, an organization that asks the Commissioners to determine that SB998 “does not apply retroactively to this case.” It pointed out in a Sept. 30 filing that OGE filed its original application on May 19, over three months before the bill became effective.
The Petroleum Alliance of Oklahoma signed the Stipulation Agreement, but also said in a filing on August 29 that it “does not support the portion of OG&E’s application which would utilize battery storage at the expense of the ratepayer.”
“The Petroleum Alliance is deeply concerned about electric utilities’ increased and continuing reliance on intermittent sources of electric general such as the wind and solar farms and these sources’ lack of reliability and ability to produce power at all hours of the day and night and in all weather situations,” it added.
The Alliance raised questions about “battery storage in an attempt to add viability to wind and solar farms that have proven their lack of reliability while imposing significant costs on the ratepayer.”
Otherwise, the Alliance said it supported OGE’s decision to use natural gas as the fuel source for its electric generation needs, calling it “an obvious, clean and reliable choice.” It also supported OGE’s decision to add gas-fired combustion turbines at the Horseshoe Lake facility, stating “future decisions like this by OG&E and other generators in Oklhaoma, will lead to greater economic development and viability for the State of Oklahoma.”
The Alliance also opposed OG&E’s proposal to add capacity by way of the Black Kettle CPA because if was a long term, 20-year commitment for a new yet-to-be-build Battery Energy Storage System project. It pointed to potential battery storage dangers, cell ignition, explosions and the release of highly flammable and toxic gases.
However, the Petroleum Alliance stated it supported OG&E’s proposed use of Construction Work in Progress for the recovery of the costs at the Horseshoe Lake operation.
However, a Stipulation Agreement filed Monday by OGE, the Commission’s Public Utilities Division, the state Attorney General and the Petroleum Alliance of Oklahoma made it clear the PUD isn’t a total supporter of the filing.
“However, regarding the individual issue of CWIP, PUD general opposes the use of CWIP and continues to believe that, as noted in its filed testimony in this case, cost savings for consumers under this mechanism will take time to materialize and result in inequity in the application of rates among present and future ratepayers,” stated the stipulation agreement filed on October 6.
“This has long been the law in Oklahoma,” stated the OIEC, adding, “it is a general proposition of law that statutes will not be given a retroactive effect or apply to pending cases, unless they relate to procedutre merely, or are expressed in the act.”
Attorney Thomas Schroedter, representing the OIEC, further wrote that “SB 998 cannot be applied retroactively to this case. Therefore, evidence that the amendments added by SB 998 imposes mandatory requirements on the Commission should be excluded.”
The parties in the stipulation agreement stated there is sufficient evidence to find that OG&E has a demonstrated need for proposed generating capacity additions of the Black Kettle Capacity Purchase Agreement, the Kiamichi CPA and the new natural gas generating units at the utility’s Horseshoe Lake generating facility But the Horseshoe Lake new natural gas units’ cost will be capped at $506.4 million. And OGE won’t be able to recover any capital costs in excess of the amount.
