Oklahoma and Missouri Ratepayers Could See Early Utility Hikes
If Oklahomans think they are the only ones facing possible rate hikes to pay for energy projects still under construction, they are not alone. Missouri ratepayers face the same situation because of a new law similar to one recently passed in Oklahoma. Both laws allow utilities to recover energy infrastructure costs before the projects are complete.
Oklahoma’s CWIP Law and Ongoing Utility Case
Oklahoma Corporation Commissioners are waiting for recommendations from an Administrative Law Judge on a large request from Oklahoma Gas and Electric Company.
When the bill was first introduced in the legislature, Oklahoma’s three corporation commissioners publicly opposed the measure. Despite their opposition, the bill became law at the end of August without Gov. Kevin Stitt’s signature.
The new law allows what is known as CWIP—Construction Work in Progress—rates. It also shortens the review time for regulators. The Oklahoma Corporation Commission must now decide any CWIP request within 180 days, rather than the 240 days previously used in utility rate cases.
The commissioners warned earlier that such a change could shift more risk to consumers while easing the financial burden on utility companies. They argued that ratepayers could end up paying for projects that are not yet providing power.
Missouri Follows with Its Own CWIP Law
Missouri adopted a similar approach earlier this year. The state’s Senate Bill 4, signed into law by Gov. Mike Kehoe in April, allows utilities to charge customers for electric infrastructure still under construction. The law requires approval from the Missouri Public Service Commission.
In addition, Missouri’s legislation lets utilities base natural gas and water rates on a future test year rather than on current or past costs. Supporters argue that this modernizes rate structures, while critics warn it leaves customers vulnerable to unnecessary increases.
Consumer Advocates Voice Concerns
The Missouri Independent quoted James Owen, executive director of Renew Missouri, who was not surprised by the likely impact on customers.
“Rates always get raised,” Owen said. “Utility companies are always going to be seeking rate increases from the state, and the state is going to usually be inclined to give it to them. I don’t think that should be how this works, but that’s what happens.”
His organization, a nonprofit advocating for energy efficiency and renewable energy, continues to warn that such laws make it easier for utilities to shift costs to consumers long before new power lines or plants deliver benefits.
SOURCE: Missouri Independent–Rewritten by Oklahoma Energy Today for clarity
