Oklahoma Natural Gas Seeks Rate Increase, Citing Lower-Than-Allowed Returns
Oklahoma Natural Gas (ONG) says the rates allowed under an Oklahoma Corporation Commission ruling aren’t enough and it needs an increase in rates for its 930,000 residential, commercial and industrial customers.
The Oklahoma City-based utility filed a request with the commission last week for an increase in rates, that if approved, would mean a residential customer would pay another $2.73 a month, but with the use of the Excess Deferred Income Tax (“EDIT”) it would amount to an increase of $1.53 and $0.42 for a residential low income customer.
Company Says Earned Return Fell Below Allowed Return
ONG stated that what it earned in 2025 was below what the Corporation Commission allowed as a result of a 2021 decision.
“The ER (Earned Return on Equity) for the twelve months ending December 31, 2025 was below the AROE (Allowed Return on Equity) of 9.4%,” stated the filing. It further said the company’s operations were $28,730,412 below the allowed return on equity.
“Consequently, pursuant to the PBRC Tariff, the company proposes to increase base rates by $28,730,412,” per the filing. The PBRC is the Performance Base Rate Change mechanism for the collection of Oklahoma Natural’s base rates.
Cory Slaughter, Director of Rates and Regulatory for ONG testified that as a percent of the total bill, it would amount to an impact of 2.42% higher of the average residential customer and 0.89% higher for an average low-income customer compared to 2025. He explained that since the 2025 PBR approval, ONG has invested $299 million in capital additions and 78% were related to installing, replacing and rebuilding vintage/aging pipeline infrastructure, system reinforcements as well as relocations of infrastructure for government projects, new meter, service, line installations for new customers and CNG fueling infrastructure.
“Approximately 29% or $86 million of the capital additions in 2025 directly relate to the installation of lines and services necessary to connect new customers requesting service,” stated Slaughter. He went on to explained there were 9,980 new meter sets in 2025 but the net increase in customers as of the end of 2025 was 6,296, an attrition he blamed “likely” on a shrinking rural base.
According to Slaughter, nearly 29% or $87.7 million of the capital additions made last year “directly relate to the rebuilding and replacement of lines due to corrosion, deterioration or other pipeline issues.”
Supreme Court Challenges Could Affect Filing
But the filing made by ONG could be directly affected if and when the state Supreme Court makes a ruling on challenges of previous rate cases approved for ONG by the Corporation Commission. The challenges are those made by Rep. Tom Gann, Rep. Rick West and Rep. Kevin West.
In their challenge of Performance Based Rate request filed a year ago by ONG, the legislators noted that Slaughter also testified in that rate case, as noted in Gann’s challenge. Gann raised questions about a Joint Stipulation agreement reached prior to his challenge.
“Mr. Slaughter testified the Joint Stipulation contains a revenue increase of $41,078,183 compared to the $41,504,750 requested by the Company, a decrease of $426,567 from the Company’s filed position. The decrease in the revenue requirement is related to an adjustment to correct an error within the payroll annualization adjustment as recommended by Attorney General Witness Brice Betchan and supported by PUD Witness Andrew Scribner. Id. 4:4-11.”
The three Republican legislators contend the Corporation Commission did not comply with the Oklahoma Accountancy Act by not providing any “lawful audit of ONG’s 2021 Winter Storm bonds as required by law.” Their Supreme Court challenge also claims the Corporation Commission “erred by admitting and relying upon inadmissible OCC Public Utility Division testimony.”
They also claim Commissioner Todd Hiett “erred by unlawfully participating in a matter from which he should rightly have disqualified himself”—–after “he allegedly committed criminal acts (a) against a ONE Gas, Inc. employee and/or (b) at/after a June 21, 2023 event hosted by two of ONG’s attorneys of record in this matter and (c) about both of which ONG’s attorneys refused to answer when asked on the record if they had direct knowledge;3 and consequently, whether the Oklahoma Corporation Commission violated the constitutionally protected due process rights of ONG’s captive customers by issuing orders as to which Commissioner Hiett should not have participated, including Hiett’s vote on the appealed final order.”