CWIP will face its first major test
CWIP…will it stand its first legitimate test with Oklahoma Corporation Commissioners who proclaimed opposition months ago to the very bill in the legislature that allowed it to become law in Oklahoma?
Additionally, Oklahoma Energy policy watchers consider this the largest regulatory fight since securitization.
CWIP request heads to OCC for vote
The controversial request of Oklahoma Gas and Electric for preapproval of forcing ratepayers to pay for energy improvement projects while they are under construction (CWIP) goes before Oklahoma Corporation Commissioners on Wednesday.
Also, this case triggers structural precedent questions around early cost recovery.
Regulators are to take up OGE’s request (2025-000038) during a 1:30 p.m. meeting.
Therefore, Wednesday’s docket becomes a formal benchmark moment.
New law created pathway for CWIP
Using a new law based on the legislature’s approval of SB998, a bill allowed to become law without the signature of Gov. Kevin Stitt, the utility withdrew its original request filed May 19, 2025 and refiled after the measure won legislative support.
Additionally, all three corporation commissioners opposed SB998 and at one point, there was discussion of favoring a constitutional challenge to the new law.
Known as CWIP or Construction Work in Progress, the new law opened the way for OGE to seek millions of dollars in energy improvement projects while they are still under construction.
Finally, this foundational shift triggered two days of debate by OGE and those groups that raised challenges to the request.
Projects tied to CWIP request
OGE seeks approval for CWIP on generation capacity additions, including the Black Kettle Battery project near Enid, improvements to its Kiamichi plant, and the addition of two natural natural gas combustion turbines at the company’s Horseshoe Lake power plant east of Oklahoma City.
Also, capacity planning strategy shifts remain a core driver behind multi-year capital design.
The company, serving 907,000 customers covering 30,000 square miles in Oklahoma and western Arkansas says its 2024 Integrated Resource Plan (IRP) demonstrates a need for additional capacity in 2028 of 1,096 MWs and growing to 1,215 MWs in 2030. It contends that by 2034, there will be a need for 2,592 MWs.
Therefore, long-term forecast curves remain central to justification.
As a result, OG&E is seeking preapproval from Corporation Commissioners to cover a 5-year Capacity Purchase Agreement with Tenaska’s Kiamichi Energy Plant in Kiowa; a 20-year agreement for power from the Black Kettle Energy Storage in Oklahoma City; and the addition of two new gas-fired combustion turbines at a cost of $506.4 million at its Horseshoe Lake power plant in eastern Oklahoma County.
Additionally, multi-contract design reflects a diversified resource procurement balancing plan.
Cost impact and break-even debate
OGE officials testified the use of CWIP will save customers $176.5 million over the life of the two turbines at Horseshoe Lake and the cash flow will allow the utility to reinvest nearly $100 million back into the system “without having to seek additional capital from investors.”
However, consumer advocacy continues to push hard on breakeven math.
A Stipulation Agreement in support of OGE’s request was reached by the Attorney General, the commission’s Public Utility Division, OG&E and in part by the Petroleum Alliance of Oklahoma. Two groups, AARP and the Oklahoma Industrial Energy Consumers, opposed the settlement.
Also, internal stakeholder split signals a fractured policy posture.
“Allowing recovery of CWIP costs is much more expensive for ratepayers, looked at either on a nominal dollar basis or on a present value basis,” argued AARP and OIEC. They contended in a filing following arguments before an Administrative Law Judge that it will take ratepayers 15 years to break even and get back to where they would have been under.
Finally, cost recovery timeline remains one of the most combative elements in this fight.
“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 two organizations contended OGE did not show a need for CWIP and that the utility is “financially strong with or without CWIP.”
Therefore, challengers argue the legislative override of risk is unnecessary.
Monthly bill impact projections
OGE explained that if CWIP is approved, it would result in a monthly cost increase of 60 cents in 2026 for an average residential customer; $1.38 in 2027; $2.21 in 2028; $3.32 in 2029; $4.55 in 2030; and $4.81 in 2031; that the monthly cost increase to the average General Service customer is expected to be $0.79 in 2026; $1.86 in 2027; $2.91 in 2028; $4.34 in 2029; $5.76 in 2030; and $5.97 in 2031; that the monthly cost increase to the average Power & Light customer is expected to be $12.65 in 2026; $30.16 in 2027; $47.58 in 2028; $71.48 in 2029; $95.76 in 2030; and $100.20 in 2031; and that the monthly cost increase to the average Large Power & Light customer is expected to be $863.60 in 2026; $1,802.00 in 2027; $2,618.00 in 2028; $3,678.80 in 2029; $4,569.60 in 2030; and $4,651.20 in 2031.