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Oklahoma's Attorney General seeks a reduction in utility's rate hike request

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Oklahoma Attorney General Mike Hunter speaks to the media at the the attorney general's office in Oklahoma City, Thursday, June 14, 2018. [Sarah Phipps/The Oklahoman archives]
Oklahoma Attorney General Mike Hunter speaks to the media at the the attorney general's office in Oklahoma City, Thursday, June 14, 2018. [Sarah Phipps/The Oklahoman archives]

Oklahoma’s attorney general isn’t on board with Oklahoma Gas and Electric Co.’s request to increase customer rates by $77.6 million per year, officials announced Tuesday.

Instead, Attorney General Mike Hunter's office asked an administrative law judge to recommend elected members of the Oklahoma Corporation Commission order the utility to lower its rates by $32 million.

“While we appreciate OG&E’s corporate citizenship and dedication to providing reliable service to customers, we believe the numbers submitted by the company are not supported by the data we reviewed,” Hunter stated as part of the prepared release.

The utility’s proposal, if granted, would mean about a $7.60 increase per month for its average Oklahoma residential customer.

In addition to boosting its return on equity, or profit, the utility also seeks through the request to recover expenses involving upgrades at two of its power generating stations.

A $75 million project converted two of three coal-fired powertrains at OG&E's Muskogee Plant to natural gas. The other $534 million project installed emissions-reducing scrubbers on the Sooner Plant’s two coal-fired trains.

Environmentalists opposed the latter project, arguing that OG&E would have better served customers tapping renewable energy sources. OG&E, however, has maintained keeping its power generating portfolio diverse is the better plan.

In 2015, commissioners voted 2 to 1 to reject the utility’s request to cover expenses for that work, with Commissioners Todd Hiett and Bob Anthony on one side and Commissioner Dana Murphy on the other.

In 2016, OG&E brought a second request to the commission seeking approval of its Sooner upgrade, providing that actual cost recovery would be considered later.

Anthony and Hiett approved that request, while Murphy, who didn’t sign the order, stated she supported the utility's position it needed to keep a diverse energy portfolio.

That order subsequently was invalidated by Oklahoma's Supreme Court through an appeal brought by the Sierra Club and Oklahoma Energy Results LLC.

The utility has completed $1.1 billion in work to both improve its efficiencies and to comply with federal environmental restrictions.

A third project, which OG&E recovered $400 million in costs for in a rate case settled in June, replaced an older natural-gas fired plant in western Oklahoma City with more responsive and efficient natural gas fired generators.

In that case, commissioners ordered the utility to reduce its rates by $64 million to compensate customers for tax savings generated by the Tax Cuts and Jobs Recovery Act.

When the latest rate increase request was filed in December, utility spokesman Brian Alford said work at both the Sooner and Muskogee plants had been accomplished under budget.

Alford noted Tuesday the projects generated industry-leading emissions reductions while keeping customer rates significantly below the national average.

"We are not going to litigate this matter in the press,” Alford stated, adding that OG&E’s average residential electric bill had decreased by nearly $18 per month in 2018 and that bills would remain lower than that, even if the utility’s pending request is approved.

“Each party has its own view — some are motivated by politics, others by special interest,” Alford said.

“There are exceptions. Among them is the staff of the Oklahoma Corporation Commission, which is charged with taking a fair and objective look at the company's filing and providing a fair and balanced review and response. These filings are simply a part of a process that will ultimately be decided by commissioners."

A review of case filings Tuesday showed the Sierra Club continues opposing OG&E’s request to recover expenses related to the Sooner plant scrubbers.

Meanwhile, the attorney general’s testimony hadn’t yet been posted.

However, the office encouraged consumers to provide utility regulators with written comments on OG&E’s request by emailing pudsubmissions@occemail.com and using PUD 201800140 in the subject line.

A hearing before an administrative law judge on the case is scheduled for 1:30 p.m. on May 28 in Courtroom 301 at the Jim Thorpe Building in Oklahoma City, the attorney general’s office said.

Jack Money

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›

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