Oklahoma regulators spent nearly three and one-half hours this week listening to Public Service Company’s request for nearly $1.2 billion in added electric power generating operations and to those opposing the projects.
Corporation Commissioners started consideration of PSO’s rate application formally known as Case No. PUD2025-000064, a proposed $1.255 billion addition of new power resources. serving 562,000 customers in eastern and southwestern Oklahoma, the Tulsa-based utility stated in filing the request in January its proposal “ensures PSO can meet Oklahoma’s growing energy needs through grid upgrades, advanced technologies, and smart tools that reduce outages, speed restoration, and provide accurate billing and real-time alerts.”
The Tulsa-based utility contended that without acquiring additional Southwest Power Pool accredited capacity resources, PSO’s summer capacity position will be deficient 10 MW in 2027, 470 MW in 2028 and 1,766 MW in 2029.
In its filing last year, Matthew Horeled with PSO testified, ” PSO has signed a Letter of Agreement with a new customer that will eventually result in a load of over 1,000 MW. For most of PSO’s history, the largest single customer was 130 MW. PSO currently has 11 customers under Letters of Agreement (LOAs) or contracts that are 50 MW or larger. There are several industrial parks in PSO’s service territory in late-stage negotiations with large load projects that are expected to sign LOAs this year. These projects represent thousands of new jobs for Oklahoma’s economy.”
But opponents and those critical of how PSO wants to finance and fund the projects raised issues and many were based on legal positions of the laws and rules the corporation commissioners must use in determining the outcome of the request.
PSO is facing potentially large load customers in the form of a $4 billion proposed aluminum smelter in Inola as well as data centers wanting to develop in northeast Oklahoma. But, as the phrase goes, “the elephant in the room” is the very topic used by opponents to the controversial data centers proposed in Oklahoma and around the country—who will pay for the needed electrical power growth to run those centers and other large industrial projects?
Attorney Thomas Schroedter with the Oklahoma Industrial Energy Consumers told Commissioners, “Wouldn’t it be nice if the Googles of the world would have that ability to enter into a transaction with a third party to bring their own power and then have PSO or OG&E transport that power to their facility? That really is the one answer to addressing this issue of processing at the speed of light.”
Adam Singer with the Oklahoma AARP reminded regulators, “We know that the load growth is not from the residential rate payers, or primarily not from the residential rate payers.”
He charged that the several projects proposed by PSO would result in the residential rate class being “disproportionately increased” compared to other rate classes.
“The residential rate class, with the use of an energy allocator, will receive a 9.59% increase, while the rest of the rate based on average will receive an 8.54% increase,” said Singer who agreed many of the large load projects to be powered by PSO would bring in new employers and new jobs to the state of Oklahoma.
“ I think that is important, but I think it’s also important to ensure that we have individuals that live here, that can afford to live here to work at those jobs, said Singer, while pointing to a recent Energy and Policy Institute study, published this week by OK Energy Today, showing Oklahoma is number one in the percentage of electricity disconnections.
“The numbers are pretty surprising. This is only electricity disconnections. It doesn’t include gas disconnections, 572,000. I believe that’s in 2024. We had more disconnections than the state of California, even, and only had fewer than Florida and Texas, and if you think about the number of residents that we have here, that’s staggering how our numbers can be that high.”
One of the several projects proposed by PSO involves what is called the Northeast 5&6 Project at its Oologah power plant. It is opposed by the Corporation Commission’s Public Utilities Division whose own witness, Frank Mossberg stated in prior testimony, “To include the significant load from LOAs (Letters of agreement) in the load forecast creates a risk for ratepayers to pay for generation that is not needed.”
However, commissioners were advised by the OIEC’s Schroedter, “Number one, condition number one is, as you know from the testimony, PSO can’t build these plants, right? I mean, they don’t have zoning approval to build the plants. So you need to be very careful in your order, and I suggest that in your order, if you approve these units, you say subject to PSO providing proof, evidence, by a certain date, that it has secured zoning approval from the District Court of Rogers County.”
One of PSO’s three proposed BESS projects involves the stalled Oologah project.
Schroedter also cautioned commissioners on approval of CWIP, the measure that allows utilities to put the cost of construction projects on the backs of ratepayers while the projects are being built. CWIP, as approved last year by the state legislature applies to power generation projects involving the use of natural gas.
“It basically relates to a natural gas plant, but as I understand this, PSO is really not building this plant. It is being built byan affiliated company, so the question is whether or not CWIP applies when an electric utility isn’t building the plant. Now, PSO will come up here and say, oh, this is a new argument, you know, we’ve not heard this, but I’m just suggesting to you or I’m just telling you what statute says, and as I understand it, PSO is not building this gas plant. It is being built by an affiliate, AEP Service Corporation.”
Before commissioners ended their marathon session, attorney Jack Fite on behalf of PSO derided the claim of a PUD representative who called some of the projects “dangerous” to consumers.
“Where is there any evidence that was, these are just words that people are spouting off. There was not any testimony whatsoever that what PSO was engaged in was dangerous activity. The only, and I keep repeating it, the only evidence was that those turbines were 40 percent below mark. That doesn’t sound dangerous to me. It’s this perception in people’s minds. There’s no evidence. It’s just what they think, and quite frankly, it’s just lawyer talk.”
In brief assessments at the conclusion of the hearing, Commissioner Todd Hiett referred to the challenges by the state to the proposed battery storage systems, challenges based on whether the BESS failed to fall under the category of “generating” electricity.
“And so I would say that, uh, this probably will be decided in the court, no matter which way we end up going, it’ll probably, probably go to court. So, if I end up ruling to, uh, allow the batteries to be an option in a 286 case, I sure hope the Supreme Court rules that way, or I’ll never hear the end of it.”
Commissioner Kim David offered agreement.
“And, you know, and, and I, I, I agree in that, but it’s not, or it may not be generation. It is, capacity. And I, I, I’m still looking at, I mean, right no, my, my belief is, is that our rules allow for capacity,” adding she would continue looking at the issue.
Commissioners adjourned and the long list of lawyers and others plan to return next week.