OKLAHOMA CITY – Utility rate hikes in Oklahoma are becoming a “hot button” political issue more often of late.
There’s the matter of whether legislators are reluctant about advancing such issues as Right of First Refusal (ROFR) for utility companies in construction of major transmission lines. Or exempting corporation commissioners from most of the state’s Open Meetings Act. Or paying corporation commissioners mileage and per diem.
We know this much: utility rates will likely draw more attention. A lot more.
Sean Voskuhl, state director of AARP in Oklahoma, pointed to OG&E’s recent stumble when word was released that the utility’s confidential major donation led to naming rights for the new State Fair Arena.
Interviewed on “ Scott Mitchell Talks Energy With Jerry Bohnen,” Voskuhl said it’s certainly the number one issue with AARP members who send him “heartbreaking” cards and letters about rate hikes.
The Oklahoma Development Finance Authority sold $761.65 million in ratepayer-backed bonds in 2022 to cover $748.9 million in extraordinary fuel costs that OG&E incurred over a two-week period during Winter Storm Uri in February 2021. As a result, OG&E customers will pay an average of $1.14 to $2.12 per month to retire that “securitized” debt over a 28-year period.
The Corporation Commission on Nov. 21, 2023, unanimously approved a compromise agreement that authorized OG&E to bill its customers $275 million for replacement of two aged steam power-generating units with two quick-start gas-fired combustion turbines at the Horseshoe Lake power plant near Harrah.
Oklahoma City-based OG&E provides electricity to nearly 900,000 customers. They include “a few customers on the far eastern side of Stephens County, near Ratliff City, and in Jefferson County we serve the towns of Ringling and Cornish,” Carson Cunningham, OG&E senior communications specialist, told Southwest Ledger. “And we have some transmission operations in other southwest Oklahoma counties but do not serve any customers there.”
Public Service Co. of Oklahoma claimed $696.9 million in fuel and purchased power costs incurred during the February 2021 storm, plus associated financing expenses.
“Securitization” bonds that the ODFA sold in 2022 to retire PSO’s debt will be paid off over a 20-year period. During that time the “average” residential customer, who uses 1,100 kilowatt-hours a month, will pay a monthly surcharge of approximately $4.72, the utility reported.
An order the Corporation Commission approved in November 2023 authorized a Public Service Co. base rate revenue increase of $131.2 million, less than half of the “revenue deficiency” of $293.9 million that PSO applied for.
The Corporation Commission approved Attorney General Gentner Drummond’s request to limit PSO’s rate hike to 2.5% for the electric utility’s residential customers.
The cap lowered the rate increase for the average residential customer from $5.35 a month to $3.57 a month. When coupled with a planned savings of $17.08 on fuel charges, it is estimated the average PSO residential customer has realized an average decrease of $13.51 per month that started in January. The fuel portion of the bill will be revisited for adjustment again in May.
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, more than three dozen of which are in southwest Oklahoma, including Lawton, Altus, Duncan, Cache, Elgin, Fletcher, Porter Hill, Sterling, Hobart, Apache, Rush Springs, Carnegie, Cement, Chickasha, Cyril, Davidson, Duke, Elmer, Fort Cobb, Frederick, Gotebo, Gould, Grandfield, Granite, Headrick, Hollis, Lone Wolf, Manitou, Martha, Mountain Park, Mountain View, Roosevelt, Snyder, Temple, Terral, Tipton and Waurika. Utility rate hikes are annual events “Look at the landscape. Since Winter Storm Uri we’ve had rate increase on rate increase every year,” Voskuhl said. “Currently OG&E is asking for one of the largest increases in a very long time: a $332.5 million rate hike that would increase a residential customer’s bill by nearly $20 a month.”
A Corporation Commission hearing on the merits of that case is scheduled for June 17; an administrative law judge’s proposed “findings of fact and conclusions of law” is due 10 calendar days after that hearing concludes; and the ALJ’s report is due 30 days later for the commission and other interested parties in the case to consider.
AARP members have written Voskuhl to complain of their struggles to pay utility bills while they are on fixed incomes.
Voskuhl said the issue of utility rates has “resonated” with customers and Oklahoma Gas & Electric has become the poster boy of the issue. “People are struggling and it seems like OG&E doesn’t care.”
One OG&E customer wrote to say, “If they have enough money for naming rights, why can’t they lower our bills?”
OG&E has drawn fire over its State Fair contribution and even attracted the wrath of Corporation Commissioner Kim David, who vowed that whatever money was given to the Fair Board cannot be recovered from ratepayers.
The OGE Foundation said the purchase of naming rights to the new Coliseum at the Oklahoma City Fairgrounds will not affect any OG&E customer’s bill.
The foundation issued a statement explaining further that there is a difference between OG&E and the OGE Energy Corporation Foundation. The OGE Foundation said it has existed for decades and is funded through private shareholders and investors.
Adding to the issue of steadily increasing utility bills is OG&E’s support of what began as a “right of first refusal” bill in the Legislature, a measure opposed by Voskuhl and the AARP.
“We know it’s a power grab by the utility companies that really want to control those dollars for transmission buildouts,” he said. “We like competition in Oklahoma and we think people ought to encourage bids.”
Voskuhl, a former state Representative, disagrees with House Bill 4097, contending it would take away any incentive for lower construction costs. He also believes it is yet another example of why utility rates are becoming a campaign issue.
“It just seems like there’s a lack of awareness and maybe arrogance by OG&E of not understanding of what residential ratepayers are going through with rate increases.”
Voskuhl would like to think that some candidates for public office would find ways to lower the utility costs of Oklahomans. “The number one thing we’re hearing about is higher utility costs, and of this election, I think pocketbook issues are front and foremost.”
He said it’s time for a balance between grassroots supporters and “corporate money and greed … of many of these utilities.” The AARP leader reminded legislative leaders and utilities that the way that balance can be accomplished is at election polling booths.
As for OG&E, Sean Trauschke, chairman, president and CEO, recently wrote to shareholders and thanked them for investing in the company as the annual meeting approaches in May.
“Our noble purpose is to energize life for our customers each and every day. That’s not just something we say, it’s how we live our obligation to serve all customers – from the large industrial corporation to our residential customers living in the most rural part of our service area. They each rely on us to de liver the energy they need to power their homes, businesses, and lives,” Trauschke wrote.