The Oklahoma Corporation Commission (OCC) Monday preapproved Public Service Company of Oklahoma’s (PSO) request for additional electric generation resources totaling more than $1.2 billion in costs. The approval came on a split vote with Commissioners Kim David and Todd Hiett in support of PSO’s requests while Commissioner Brian Bingman voted against them and issued a dissenting statement.
The commission, in a statement about its preapproval vote said the added generation abilities by PSO were intended to strengthen grid reliability and to address rapidly growing energy demand across the state, while at the same time adding significant customer protections.
The Commission provided the below summary of its decision:
1. PSO demonstrated a need for additional generation capacity and generally considered reasonable alternatives in the selection of each project, except that it excluded third party contracts for Battery Energy Storage System (“BESS”) facilities.
2. The Wind Energy Purchase Power Agreements (“PPAs”) are hereby preapproved, with costs to be recovered through the Fuel Adjustment Clause (“FAC”) utilizing a production demand allocator.
3. The Five-Year 150 MW Kiamichi Capacity Purchase Agreement (“CPA”) is hereby preapproved, with costs to be recovered through the FAC utilizing a demand allocator. However, the Commission encourages PSO to choose longer-term, lower-cost contract options in future competitive bidding processes.
4. The three (3) Purchase and Sale Agreement (“PSAs”) Battery Energy Storage System (“BESS”) Projects (50 MW BESS Rock Falls Project, 74 MW Dover Project, and 100 MW Northeastern 1&2 (“NE 1&2″) Project) are preapproved, subject to PSO gaining
zoning approval and other conditions, with costs to be recovered through the Energy Security Rider (“ESR”), provided PSO guarantees the value of Investment Tax Credits (“ITCs”) as set forth herein.
5. The Northeastern Units 5 & 6 (“NE 5&6”) Projects are hereby conditionally preapproved, subject to PSO gaining zoning approval and other conditions, with Construction Work in Progress (“CWIP”) costs to be recovered through the ESR.
6. As mandated by the Oklahoma Legislature’s enactment of Senate Bill (“SB”) 998 (2025), codified at 17 O.S. § 286(C)(6), PSO is entitled to recover CWIP in relation to the NE 5&6 project (Oologah) although the Commission does not endorse CWIP cost recovery as a policy matter. The approved portfolio is designed to help PSO meet projected future capacity needs as Oklahoma continues experiencing significant economic development and increased electricity demand. The Commission found PSO demonstrated a need for additional generation capacity under Oklahoma law.
The Commission’s action involved approval of CWIP or Construction Work in Progress for some of the PSO projects, which will result in ratepayers being charged while construction is underway. PSO had asked for approval of eight resources to add a total of 1,299 MW of nameplate capacity to the company’s system. The total cost is $1.255 billion and the projects consisted of: Three wind PPAs – Caddo, Weatherford and King Plains;
A five-year 150 MW CPA – Kiamichi; Three BESS PSAS – NE 1&2, Rock Falls, and Dover (collectively, “BESS Projects”); and
A self-build natural gas combustion generation facility – NE 5&6.
CPA is a Contract Purchase Agreement and PPA is Purchase Power Agreement.
Commissioners did not agree with some of the recommendations of the Administrative Law Judge who heard PSO’s original request.
Part of the commission’s decision involved the Oologah power plant where PSO is involved in a legal dispute with Rogers County Commissioners and officials after they denied the utility’s rezoning request last fall. It led to a lawsuit filed by PSO in December 2025 and another suit in January 2026.
Commissioners took note of the issue as they approved CWIP for Battery Energy Storage Systems at the power plant.
“Although PSO asserts that any CWIP collected prior to NE 5&6 being placed in service would be refunded if the project is not completed, the Commission finds that this assurance is insufficient to fully protect customers from unnecessary risk. Because the projects cannot proceed to construction absent a favorable zoning determination, PSO shall not recover any CWIP associated with NE 5&6 until a final, non-appealable order is issued by the District Court granting the necessary zoning approval,” they stated in their final order.
Certain costs were also ordered to be firm including $539,800,000 for construction of NE 5 & 6 gas turbine projects at Oologah.
“Any request to recover costs in excess of this amount must be
supported by a showing of prudence in PSO’s next Chapter 70 general rate case following the facility’s entry into service,” declared the order.
As part of the order, the Commission imposed multiple customer protection measures, including:
1) Cost caps and reporting requirements for each project;
2) Establishing a mechanism to true-up and adjust rates as new demand is added to the grid,
3) Disclosure of the legislatively mandated CWIP as a line-item on each customer’s bill,
4) Requiring PSO to meet specific conditions before recovering certain project costs,
5) Holding customers harmless for costs tied to projects that fail to receive necessary zoning approvals, and
6) Requiring accountability measures tied to federal tax credits and project expenditures.
Commissioner Brian Bingman couldn’t agree with the final order and issued a dissenting statement that focused on the cost of the battery energy storage system projects included in the approved portfolio. While Commissioner Bingman supported portions of the overall proposal, he expressed concerns about the cost and risk associated with the approximately $715 million investment tied to the three battery storage projects. He also raised concerns regarding PSO’s exclusion of third-party battery storage contract options from consideration.
“While I agree with my fellow Commissioners that PSO has a need for additional generation and that many of the generation choices included in PSO’s proposed portfolio are reasonable, I am voting no to register my objection to the significant expenditure PSO will make toward three Battery Energy Storage System (“BESS”) Projects. Of the $1.255 billion PSO will invest and recover from customers, approximately $715 million-well over half the total investment-relates to just three BESS projects. Nevertheless,
these three projects would provide only 217 MW of accredited summer capacity, around a quarter of the summer capacity provided by all projects proposed by PSO,” he stated.
“PSO has not operated BESS facilities before, and I am concerned about customers bearing the risk of this new technology at
such a high price during this time of rising costs. Thankfully, several parties including the Attorney General, Oklahoma Industrial Energy Consumers, and the Petroleum Alliance of Oklahoma raised serious concerns about the economics of the BESS Projects in this case.”