Oklahoma Corporation Commissioners butted heads Thursday over the controversial Construction Work in Progress request of Oklahoma Gas and Electric Company before voting 2-1 to deny the request as part of hundreds of millions of dollars in improved energy project.
Corporation Commissioner Todd Hiett voted against an order proposed and amended by Commissioner Brian Bingman, contending it was drawn up actually by OG&E. He called the rewrite of Bingman’s original CWIP denial “nothing but propaganda” and “monopoly propaganda for deregulation of monopoly utilities.”
Hiett further charged the utilities had spent millions of dollars on the legislature and repeated his contention the order was “nothing but propaganda for CWIP” and a “complete dismantling” of the original order. The Commissioner said the commission should oppose the order.
“We should stand up against that—we’re the only thing ratepayers have.”
Commission chair Kim David said she was offended by Hiett’s accusations and charges.
“I’m highly offended by what you say. I took exception to your remarks. You’re accusing us of being in bed with the utilities. Please explain how we’re in bed.”
She further said she felt the stipulation or settlement agreement supported by the Commission’s Public Utility Division, the Attorney General and the Petroleum Alliance of Oklahoma was worthwhile and offered “really good customer protections.”
Hiett said he was not accusing the commission of being in bed with utilities but he opposed how OG&E came in after the Commission’s record of the case had been closed and rewrote the order.
Commissioner Bingman reacted and called Hiett’s statements “really strong comments” and he felt the proposed order and its suggestions “were all reasonable.”
An aide to Commissioner Bingman later told OK Energy Today, ”
“OG&E did not create this order. It was created by Commissioner Bingman’s office after consultation with multiple parties, as is standard in most cases. We disagree with the sentiment reflected, today, that this order was written by OG&E.”
“—there is nevertheless doubt as to whether SB 998 applies retroactively to OG&E’s already filed proceeding, and the Supreme Court teaches us that doubt must be resolved against retroactive application,” stated the order which said the timing of the application precluded any requirement under SB998 that the Commission approve CWIP recovery for two gas-powered generators at OGE’s Horseshoe Lake Power Plant.
“Based on the arguments set forth above, the Commission hereby grants OIEC’s motion and concludes that SB 998 does not apply to this Case.”
The order also rejected CWIP treatment for the gas generators at the power plant located in eastern Oklahoma County and stated the “Commission finds that time value of money must be considered in the context of evaluating whether customers should pay more up front or defer payments for later.”
In denying the CWIP request, the order concluded it would have resulted in an unknown number of customers who would pay financing costs during 2026 to 2030 during CWIP treatment and “would receive no benefits from the operation of HSL13 and 14 (gas generators at Horseshoe Lake) due to moving out of OG&E’s service territory or otherwise.”
However, despite denial of CWIP, the Commission’s approved order found that OG&E has a need for additional generation capacity. It also concluded the costs of the gas generators at Horseshoe Lake, $506.4 million, should instead be recovered through GCR or Gas Cost Recovery. Such GCR would expire 18 months after the units enter commercial service.
The order also stated OG&E would have to use its Fuel Cost Adjustment Rider for two remaining power projects, the Black Kettle battery project near Enid and the Kiamichi power plant in southeastern Oklahoma.
The three improvement projects include a 20-year capacity purchase agreement with the new Black Kettle battery energy storage system located in Woodward County; a 5-year capacity purchase agreement with the existing Kiamichi gas-fired plant in Pittsburg County; and the construction of the HSL 13 and 14 generating units at OG&E’s existing Horseshoe Lake plant in Oklahoma County.
Black Kettle won’t reach commercial operation until 2027 and will provide an accredited 95 MW of capacity and will last 20 years. The Kiamichi plant is an existing 1200-MW combined cycle natural gas plant and is owned by Tenaska, not an affiliate of OG&E. The contract will allocate 300 MW of capacity to OG&E in 2029 and 2030, and then it will increase to 450 MW of capacity through March 31, 2034.