By Mike W. Ray
Southwest Ledger
& Jerry Bohnen
OK Energy Today
OKLAHOMA CITY – The state Corporation Commission approved Attorney General Gentner Drummond’s request to limit Public Service Co.’s recent rate hike to 2.5% for the electric utility’s residential customers.
The cap will lower the rate increase for the average residential customer from $5.35 a month to $3.57 per month. When coupled with a planned savings of $17.08 on fuel charges, it is estimated the average PSO residential customer will see an average decrease of $13.51 per month starting in January.
The fuel portion of the bill will be revisited for adjustment again in May, according to Wayne Greene, PSO’s region communications director.
The average residential customer uses 1,100 kilowatt-hours of electricity in a month, PSO officials report.
Commission Chairman Todd Hiett supported the original PSO order approved Nov. 3, but during a Nov. 21 commission meeting he agreed to Drummond’s motion to the lower cap on residential rates. However, he did so reluctantly.
“When you go down the road of artificial caps, that does not mean those rates are reduced and all others stay the same,” Hiett said. “Someone has to pay for that.”
Thomas Schroedter, attorney for Oklahoma Industrial Energy Consumers, argued that acceptance of Drummond’s request will add millions of dollars in costs to the PSO rate increase and will result in higher electric rates for Oklahoma schools, hospitals, colleges and universities, military installations, tribal-owned facilities, manufacturers, retail stores, the agriculture industry, commercial property owners, “the entire oil and gas industry,” and other commercial and industrial ratepayers.
The final order the Corporation Commission approved earlier this month authorized a base rate revenue increase of $131,208,000, which was less than half of the “revenue deficiency” of $293.9 million that PSO applied for, Schroedter noted.
Drummond’s request increased the base rate revenue deficiency by $24 million to $155.2 million, which will “deliver a windfall to PSO and its stockholders,” Schroedter charged.
The Attorney General’s motion “seeks to promote the interests of a single class of customers – residential ratepayers – to the detriment of PSO’s other customers,” the OIEC contended.
The 2.5% residential rate cap that Drummond urged the commission to impose was not supported by any evidence and was “arbitrary,” the OIEC wrote in its objection to the Drummond’s motion.
PSO has another rate case on the commission calendar for early next year, and perhaps the cap can be reexamined then, Commissioner Kim David said.
Nine parties weighed
in on PSO rate case
The Corporation Commission vote came after lengthy presentations by nine organizations, companies, state and federal agencies that took part in the original debate about PSO’s request.
The Petroleum Alliance of Oklahoma joined the OIEC in arguing against Drummond’s motion. Alliance attorney David Jacobsensaid the 2.5% cap for residential customers will have a disproportionate effect on industrial and commercial customers. “Ultimately, this will result in higher operating costs, which will be passed on to residential consumers in higher prices,” he said.
The Attorney General filed two motions on Nov. 13, asking the OCC to modify its final order on the PSO rate request.
The Department of Defense and other Federal Executive Agencies filed a motion in support of the commission’s original ruling. Others opposing Drummond’s motion were the Petroleum Alliance of Oklahoma, and Walmart Inc.
The American Association of Retired Persons, the Alliance for Electrical Restructuring in Oklahoma, the commission’s Public Utility Division, and PSO supported the Attorney General’s motion to impose the 2.5% residential rate cap.
PSO is a Tulsa-based retail electricity provider serving nearly 573,000 customer accounts in eastern and southwestern Oklahoma. PSO supplies electricity to 232 cities and towns, including Lawton, Altus, Duncan, Cache, Elgin, Fletcher, Porter Hill, Sterling, Apache, Cement, Cyril and Frederick.