Not only did Oklahoma Corporation Commissioners get an earful of complaints from ratepayers about the prospect of paying for utility natural gas projects while they are under construction—so did Oklahoma Gas and Electric Company, the firm first in line to ask for such a rate hike.
Ten ratepayers, who took the time to travel to the state Capitol to testify in person before the commissioners present for the hearing regarding the OGE preapproval request, spoke against the measure. The utility wants permission, under a new state law, to begin charging for what would amount to a $100 million rate hike, while construction is underway on various energy projects, including the addition of two massive natural gas powered generators at the firm’s Horseshoe Lake Power Plant in eastern Oklahoma County.
One of the first given an opportunity to make a public comment was Stephanie Burdine of Yukon who called the request a “power grab” which she also blamed on the large AI firms that have reaped billions of dollars in their third quarter profits. She also cautioned the two commissioners present for the hearing, Todd Hiett and Brian Bingman, “You answer to us—we can fire you!”, adding that people cannot believe how much their electric bills are increasing.
One Oklahoma City OGE customer, Ted Merritt, who called himself a “blue collar worker” declared, “I’m here because I’m sick and tired of my bills going up.” He added, “I wish I got a pay raise every time OGE did—I’d be a millionaire.”
A Piedmont customer complained of OGE letters sent to her “every other month” explaining increased rates because of fuel adjustments or weather-related events. “This is wrong, customers are not shareholders and we should not be paying for new generators.”
Another customer, one from Edmond, said new customers and not existing ones “should pay for the reliability,” adding, “CWIP means more costs to current ratepayers.” Still another OGE customer complained, “There’s not end to this,” and said she “didn’t appreciate being pawns in this game.”
A machine shop operator said his firm “can’t stand another rate increase” after cutting costs and employee hours while “OGE wants another rate incease.” He told Commissioners Hiett and Bingman, “Oklahoma cannot take another hit!”
Some of those who testified urged commissioners to reject the rate hike request and for OGE to use more solar and wind power to generate electricity. “Don’t lock us into dirty expensive fossil fuels,” said one woman.
The hearing also saw some fiery comments from attorney Thomas Schroedter of the Oklahoma Industrial Energy Consumers who asked for the commission to reject any preapproval of OGE rates.
A filing this week of a stipulated settlement involving the Public Utilities Division of the Corporation Commission, the Attorney General, OGE and the Petroleum Alliance of Oklahoma also arose in the debate. The OIEC attorney, Schroedter, told commissioners, “They tried to settle the case out from under us.”
A Tuesday filing by OGE’s Kimber Shoop revealed a promise that if the stipulation were approved and the utility was allowed to recover CWIP for the two natural gas generators at Horseshoe Lake, it would agree to “not to pursue CWIP for its other new natural gas generating facilities under construction” and also “a delay of OG&E’s next general rate case until at least June 2026, but no later than January 1, 2027.”
Schroedter said it was clear the utility had filed its original request before the new law, based on legislative approval of Senate Bill 998 by Sen. Grant Green and Rep. Trey Caldwell, took effect. He argued the commission should not consider preapproval of Construction Work in Progress, which he stated would cost $100 million.
“It is a rate increase for customers,” declared Schroedter, whose opposition was also supported by the AARP. Both organizations maintained that OGE, in its filings, including a most recent one, made conflicting statements. “Customers don’t need another rate increase. I don’t know if the legislature fully understood the implications of the bill. It will involve tens of millions they’ll have to pay without any benefits.”
Following a lengthy argument by OGE attorney Deborah Thompson in which she argued “the corporation commission has authority to grant CWIP,” Schroedter told commissioners, “They admitted in their brief it can’t be retroactive.” But he was angered even more about OGE’s response to some of his filings opposing the request.
“OIEC, who represents a small number of undisclosed customers, argues that this Commission should reject the demonstrated customer savings associated with Construction Work in Progress (“CWIP”) based on a technicality around the timing of the Application in this case,” is the OGE phrase referred to by Schroedter.
“They bad mouthed my clients who produce 50,000 jobs—why did they have to do that? They played a little game and we called ’em on their bluff and they got caught. What kind of company would bad mouth their customers—this is unconscionable.”
When it came time for a decision on the OIEC’s request to determine the applicability of Senate Bill 998, Commissioner Hiett moved to adopt the OIEC motion stating, “The law in effect at the time is what applies.” But he couldn’t get the support of Commissioner Bingman.
“I prefer to take this under advisement. There’s a lot of information to review and it should be dealt with at a later time,” said Bingman.
Administrative Law Judge Kenneth Behrens, who presided over the hearing delayed any more action on the OGE request until Monday at 9 a.m. at which time there would be a pre-hearing and a hearing on the merits.
A few hours later, the utility released a statement from Ken Miller, Vice President, Public and Regulatory Affairs at OG&E.
Statement from Ken Miller, Vice President, Public and Regulatory Affairs at OG&E
Today, the Oklahoma Corporation Commission (OCC) held a public hearing regarding OG&E’s request to build two new natural gas combustion turbine power generation units at the Horseshoe Lake Power Plant in eastern Oklahoma County as well as the request to enter into two long-term agreements for additional power needs from third parties. Before today’s hearing, OG&E and three key stakeholders – the Oklahoma Attorney General, OCC Staff, and the Petroleum Alliance – reached an agreement on the terms of the new generation and long-term capacity contracts, which are a win for customers.
As part of the agreement, OG&E will file a new large load tariff to protect existing customers from increased costs of new large loads for current and future data centers. Combined, the new generating units and long-erm capacity contracts provide approximately 843 to 950 megawatts of energy and are an important step in meeting OG&E’s overall generation needs for the future.
All parties involved in the OCC proceedings agree that new power generation is necessary and that the proposed projects help meet future energy demand as outlined in OG&E’s 2024 Integrated Resource Plan. The opposition wants OG&E customers to pay an additional $176.5 million in interest that can be avoided by using Construction Work in Progress (CWIP) to reduce overall project costs.
The communities we serve are thriving thanks to strong population and business growth in our service area, and the Horseshoe Lake generation project will provide the reliable electric service customers need to live their lives and run their businesses at the lowest possible cost. The next step in this process is for the OCC to consider the case in a Hearing on the Merits on Monday, Oct. 13.
