Hiett Explains His Opposition to CWIP Denial
Oklahoma Corporation Commissioner Todd Hiett says he voted against a plan to deny Construction Work in Progress for Oklahoma Gas and Electric not because he was against denial of CWIP but because there was no cost cap on one of the utility’s energy expansion projects.
Commissioners approved the order on a 2-1 vote with Commissioners Kim David and Brian Bingman supporting the denial. Hiett opposed the order which he said simply was a rewrite by OG&E of Commissioner Bingman’s original move to deny the ability of the utility to charge ratepayers while construction was underway on the projects.
“This is the most unusual arrangement I’ve seen in my 11 years on the Commission,” stated Hiett during the meeting. “OGE completely redrafts it after the record was closed. I am just shocked. It’s nothing but propaganda.”
Commissioner Bingman’s office said after the meeting the final order was not written by OGE. Hiett later issued a statement, explaining more about his opposition.
Concerns Over Cost Cap and Project Selection
“Of primary concern is the approval, without a cost cap, of OG&E’s construction of two new gas-fired generation units at its existing Horseshoe Lake facility numbered Horseshoe Lake 13 and 14 (“HSL 13 and 14”) which ranked 26th out of the top bids (on an overall basis with both cost and risk considered) based on OG&E’s own ranking,” said Hiett in his released statement.
“Such selection results in OG&E ratepayers paying 40 percent more for this selection than other available alternatives. Additionally, today’s order (Final Order No. 753440 (Final Order)) authorizes preapproval of contingency and owner’s costs of approximately $100 million that may or may not occur. My proposed order would have excluded these costs.”
He also released a list of his reasons to vote no.
Extension of the Generation Capacity Rider by six months;
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Removal of language that recognized an unfair and unbalanced, non-unanimous stipulation;
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Removal of references to prior OG&E witness testimony concerning CWIP that contradicted OG&E’s position asserted in this case;
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Removal of concerns with the constitutionality of SB 998;
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Supplementation of OG&E’s witness positions and removal of witnesses presenting positions that did not align with the company;
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Finding that OG&E should not be subject to a specific cap or other measure; and
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Removal of requirements for OG&E to provide explanations surrounding proposed depreciation rates for HSL 13 and 14 in its next rate case.
Commissioner David Defends Joint Stipulation Agreement
Commission Chair Kim David, who during the meeting stated she felt Hiett had accused the commission of being in bed with the utilities, also issued a statement explaining why she voted to deny OGE’s CWIP request but supported other aspects of the hundreds of millions of dollars in energy projects proposed by the utility.
“While I support many provisions and principles contained within the Final Order issued today, I respectfully express my disagreement with the rejection of the non-unanimous Joint Stipulation and Settlement Agreement (“Joint Stipulation”) that was negotiated by the Oklahoma Attorney General, acting as the State’s chief consumer advocate, the Public Utility Division, the Oklahoma Petroleum Alliance, representing Oklahoma’s largest industry, and Oklahoma Gas and Electric Company (“OG&E”).”
David said the agreement made last month had support from critical and diverse stakeholders.
“This agreement represented a balanced compromise among parties with differing interests and delivered substantial customer protections, some of which could not be implemented without the agreement.”
She further said the Joint Stipulation included consumer protections that would have mitigated the overall potential customer impact and cited a number of the protections.
Customer Protections Included in Rejected Agreement
“• Rate Case Delay: The agreement would have delayed OG&E’s next rate case, mitigating potential increases in 2026. Without this provision, if OG&E files by year-end and receives a result similar to its prior case, customers could face increases of approximately $9.39/month beginning July 2026, or about $7.04/month if the outcome were reduced by 25%. The Corporation Commission cannot impose such a rate-case stay-out absent a stipulation, making this a uniquely valuable protection.
• Prohibition on Construction Work in Progress (“CWIP”) for Horseshoe Lake Units 11 & 12: The Joint Stipulation would have barred OG&E from seeking CWIP recovery for these units, saving approximately $1.34/month in 2026. Again, such a restriction cannot be imposed outside a stipulation.
• Adjusted the Production Demand Allocator During Construction: This mechanism would have reduced customer impacts by reallocating costs as large new loads were added to the grid.
• Provided a Final True-Up at the In-Service Date: This process would have ensured that once large loads were fully operational, earlier construction-phase costs would be reconciled to current allocators, producing refunds and additional savings for customers.”
The commissioner also said the request by OGE of the new generation projects and two capacity purchase agreements represented an important step toward meeting future capacity needs in the state. She also said it will not be the last such case the Corporation Commission considers.
OG&E Responds to Hiett’s Accusations
OGE’s Vice President of Public and Regulatory Affairs, Ken Miller was even more pointed in his response to Hiett’s accusations made during the meeting. He called them “baseless accusations” and said Hiett’s attack was “beyond the pale.”
“I’ve known Todd for a long time and he has never responded well to not getting his own way,” he said in a statement. ““We take great offense to his characterization of OG&E’s advocacy for critical projects that meet Oklahoma’s growing demand for energy at low costs as highly inappropriate and unacceptable.”