OGE leverages new law for CWIP use at power plant

It applied for authority to use the controversial CWIP or Construction Work in Progress for the expansion of natural-gas powered generators at the plant after the Corporation Commission recently voted 2-1 for preapproval of millions of dollars in expansion costs.

In filing for the request, (Case 2025-000082) the utility pointed to a new law that originated from SB998, which went into law at the end of August and applied to energy projects that involve the use of natural gas for power.

“Under Oklahoma law, a new natural-gas-fired facility shall be permitted to recover Construction-Work-In-Progress (“CWIP”) as provided for in the following statutory language:
“The Commission shall permit an electric utility to begin to recover return on and return of Construction-Work-In-Progress expenses prior to commercial operation of a newly constructed electric generation facility subject to the provisions of this subsection, provided the newly constructed electric generation facility utilizes natural gas as its primary fuel source. The Commission shall permit a separate rate adjustment mechanism, adjusted periodically, to recover the costs described in this section for new capacity in natural-gas-fired electric generation facilities.” 17 O.S. § 286(C)(6),” stated OG&E in the filing with the Corporation Commission.

In filing for preapproval of the expanded energy projects, OG&E originally asked for CWIP approval but did not receive it for its battery power project at Enid, one called Black Kettle. Now, the utility is making a request for CWIP for its use of natural gas to power additional electricity production at the Horseshoe Lake Power Plant. It explained that using natural gas will be the primary fuel source for the combustion turbines.

OG&E pointed out that Horseshoe Lake Units 13 & 14 “meet all the statutory requirement for CWIP recovery and the Corporation Commission had already granted “preapproval” of the two units at the power plant. The units are not yet operational but as OG&E’s filing noted, “Horseshoe Lake Units 13 & 14 will provide electric generating capacity using natural gas as the primary fuel source.” The use of natural gas was a key provision of the SB998 which became law without the signature of Gov. Kevin Stitt.

What will CWIP mean for OG&E customers if it is granted? The utility is asking for a CWIP Adjust Mechanism or CAM tariff to implement CWIP recovery at horseshoe Lake. If granted by the regulators, it would become effective on March 1, 2026, as explained by the filing.

Testimony was filed reflecting an explanation by OG&E’s Gwin Cash, Senior Manager of Pricing, Rate Administration and Load. She said the tariff would become effective the first billing cycle of the month following commission approval. The HL 13 & 14 projects recovery would start with the effective date of the tariff and continue until the month the project reaches in-service status at which time cost recovery will transition to the Generation Capacity Recovery tariff.

“Costs will be allocated to customers using the production demand allocator. This allocator will initially be determined using the cost-of-service study from the Company’s most recent general rate case filing. OG&E will conduct a revised cost of service study for the purpose of adjusting the production demand allocator annually to reallocate the CAM costs according to the latest load data,” she stated. “Costs will be recovered from customers via a per kilowatt-hour charge with the exception of the Power and Light and Large Power and Light classes which will be recovered via a per kilowatt charge.”

She recommended residential customer rates of $0.59 for 2026; $1.17 for 2027; $1.88 for 2028; and $2.10 for 2029.

OG&E also filed a recommended timeline for the corporation commission to hear its case, including a request to be heard en banc or by the full commission.