OIEC and AARP Renew Opposition to OG&E Request
Two consumer groups fighting Oklahoma Gas and Electric (OG&E) over its plan to use a controversial new law to make ratepayers fund energy expansion projects while under construction have renewed their arguments that the request should be denied.
In a filing with the Oklahoma Corporation Commission (OCC), the Oklahoma Industrial Energy Consumers (OIEC) and AARP Oklahoma said the Construction Work in Progress (CWIP) request should be rejected. They contend OG&E “did not meet its burden of showing that CWIP cost recovery is reasonable” for more than $500 million in gas turbines planned at the Horseshoe Lake Power Plant. The groups also stated the proposal is not “in the best interest of OG&E ratepayers” and is “much more expensive for ratepayers.”
The filing included a 37-page proposed order for commissioners to consider.
Groups Cite 15–25 Year Payback and Higher Costs
Ratepayers Would Wait Decades to Break Even
OIEC and AARP wrote, “On a nominal dollar basis, it will take ratepayers 15 years to break even and to get back to where they would have been under AFUDC.”
They also explained that the estimate assumes the customer remains on the system 15 years later. AFUDC stands for Allowance for Funds Used During Construction—a method that delays recovery until projects are in service.
The filing continued: “On a present value basis, taking into account the time value of money, it takes 25 years for ratepayers to break even, and even after 30 years, the savings are not material.”
The groups estimate that customers would not start saving money until 2039, 2040, or 2041.
Questions About Plant Longevity and Customer Benefit
No Guarantee Horseshoe Lake Will Operate Beyond 2039
OIEC and AARP also argued that OG&E provided no guarantee the Horseshoe Lake plant would still be operating beyond 2039—or that customers who paid CWIP costs today would still be OG&E customers by then.
They added, “OG&E is financially strong with or without CWIP,” and “customers are opposed to recovery of CWIP in rates as they would rather invest their money now rather than wait 30 years to receive savings that would presumably result from CWIP payments.”
Supporters and Opponents Divide Over SB998
Attorney General and Petroleum Alliance Support OG&E
The Attorney General, the Petroleum Alliance of Oklahoma, and the Public Utility Division of the OCC agreed to support OG&E’s request.
However, the AARP and OIEC argued that the stipulation contains few protections for customers, saying the proposal shifts long-term financial risk to ratepayers.
Senate Bill 998’s Role and Retroactive Application
OG&E Filed Before the Law Took Effect
Both OIEC and AARP repeated their contention that the use of Senate Bill 998, which became law without Governor Kevin Stitt’s signature, should not apply to this case.
OG&E made its original rate request in May, before the bill won legislative approval, and refiled after it became law on August 28.
During October hearings, the consumer groups challenged the law’s applicability. They urged the commission to rule that amendments to Section 286(C) should not apply retroactively to this case.
Constitutional and Procedural Concerns Raised
Law Creates New Rights for Utilities and Limits Commission Authority
The filing states, “The amendments to §286(C) are not purely procedural or remedy, but create new rights for the utility and impose new requirements on the Corporation Commission. It modifies traditional and historical ratemaking authority of the Commission to determine rates after a facility is placed in service and is used and useful to the ratepayer.”
Thomas Schroedter, counsel and executive director of OIEC, told commissioners at an August meeting that he believes SB998 is unconstitutional, especially because it forces the commission to decide rate hikes within 180 days instead of the previous 240-day timeframe.
“It does strip you of your authority and we believe the legislation, 998, is unconstitutional because it usurps your authority,” Schroedter said. He also argued the law violates Article 9, Section 18 of the state constitution, calling it “legally deficient” and in conflict with other constitutional provisions.
Commission Chair Kim David agreed, saying she “questioned it as well.”
Possible Future Court Challenge
Denial Could Trigger Supreme Court Appeal
Despite these concerns, no constitutional challenge has yet been filed in court. However, if the OCC denies OG&E’s CWIP request, observers speculate a court challenge could follow—possibly leading OG&E to bring the case before the Oklahoma Supreme Court.