OKLAHOMA CITY – The state Corporation Commission approved Fort Cobb Fuel Authority’s rate hike on a 2-1 vote. Chairman Todd Hiett voted ‘no’ because the final order omitted a proposed sixyear phase-in for customers who are served from “domestic taps.”
During a March 13 commission meeting, Hiett said there were 379 domestic tap customers in Fort Cobb and nearly 400 in all. Those customers constitute approximately 10% of FCFA’s customers, Hiett said.
When Southern Star was installing a pipeline, he said, they provided some property owners with a domestic tap (also referred to as a field tap) for residential service. These taps were not part of a distribution line. In exchange for granting right-of-way allowing the pipeline to be buried on their property, these residents were provided with a tap “and the opportunity to purchase gas at either no cost, or wholesale cost, or some minimal cost of the gas,” Hiett said.
After Southern Star discontinued service to those customers, “They would not have had any service at all except for the fact that the Fort Cobb Fuel Authority bought the right to serve those customers,” Hiett said. FCFA is “trying to move them from the old field tap to a more normal charge for customers currently on the distribution system.”
Most of the costs that FCFA incurs in its gas operations are attributed to “its plant and pipeline infrastructure, capital costs and financing related to this infrastructure, and costs associated with maintaining that infrastructure,” wrote Ron and Cheryl Gallegos of Guthrie.
“None of these costs are attributable to FCFA’s domestic tap customers,” because they have a direct connection to Southern Star’s pipeline. “The only infrastructure used by FCFA to deliver gas to us and other domestic tap customers is its gas meter,” the Gallegoses said.
“Southern Star installed a new meter on our property, which we believe it sold for a minimal amount as part of the transition to FCFA.” Southern Star “provides the tap, the few feet of pipe that runs from its pipeline to the ground surface. This pipeline is connected to FCFA’s meter.”
That pipeline extends to the Gallegoses’ house. “Our understanding, based on our past dealings with other utilities, is that the ‘house pipeline’ is owned by us and is our responsibility.” Regardless of whether it is or is not owned by them, “There has been no work needed on the ‘house pipeline’ since we have lived in our home.”
Insofar as maintenance costs, “We are only aware of the monthly meter read and check,” the Gallegoses wrote. “A service worker occasionally adds methyl mercaptan, a natural-gas odorant, to the cannister attached to the meter.”
Nevertheless, “Like all FCFA customers, we pay a monthly service charge whether we use any gas or not,” they pointed out.
“I felt like there was a need to phase-in those customers, give them time to decide whether they wanted to pay Fort Cobb’s new rates or transition to propane or electricity or some other source,” Hiett said during the commission’s May 14 meeting. He previously told the other commissioners that he was concerned about “the abrupt change from a minimal cost per month” to $500 or $700 “for the same usage.”
“I’m familiar with the term ‘rate shock,’” Commissioner Bob Anthony said. However, the domestic tap customers “have had a really good deal for a long time,” he said, and announced his support of the final order.
“They have not been getting this gas for free,” Hiett responded. “They gave up rightof- way across their property in exchange for that tap.”
The commission’s Public Utility Division “attempted to address” the concerns expressed by Hiett and FCFA’s domestic tap customers, but the options “would only delay” the inevitable, a spokesman said. “The real culprit in this issue is the cost of gas, not the rates.”
“I sympathize with the customers over this dilemma,” Commissioner Kim David said. “It’s going to be tough for these customers, but I feel like the final order before us is the best we could put together for them.”
Under the settlement agreement approved last week, starting on New Year’s Day 2025 domestic tap customers will pay a $24.50 base service charge, $3.44 per hundred cubic feet for the first 5 ccf, then 64.9 cents for each hundred cubic feet over 5 ccf.
Comingdeer told the Corporation Commission that Fort Cobb Fuel Authority has agreed to prepare a full cost-of-service study that will include analysis of the domestic tap, for inclusion in the next rate case. He said the company agreed to a minimal phase-in that would affect at least some of the domestic tap customers added to the gas distribution system.