City to pay more to keep the lights on

Higher electricity costs are going to knock a hole in Oklahoma City’s recently adopted 2017-18 budget.

Oklahoma Gas and Electric Co. said this month that rates were going up to account for higher natural gas prices and costs related to managing the regional electric grid.

The additional charges will amount to an estimated 29 percent increase in the city’s annual electric bill, or about $4.7 million, according to budget and energy managers.

That’s more than the city is expected to spend annually in operating expenses for the MAPS 3 downtown park and more than the expected annual operating subsidy for the MAPS 3 streetcar.

Already contending with diminished revenue, the city will have to find savings in other areas or tap reserves to keep the lights on, said Budget Director Doug Dowler.

Oklahoma City spent $16.2 million on electricity in fiscal 2017, the budget year that ended June 30. The figure is expected to approach $21 million this year.

Estimated increases for fiscal 2018 will vary from 24 percent to 31 percent across budget units:

•Airports: an increase of $300,000 or 24 percent, to $1.5 million.

•Utilities: an increase of $3.2 million, or 31 percent, to $13.3 million.

•The general fund, the account for day-to-day expenses: an increase of $1.1 million, or 26 percent, to $5.2 million.

•Other funds: an increase of $200,000, or 26 percent, to $1 million.

Utilities is the biggest consumer of electricity, which is for pumping and treating water.

Dowler said it was the city’s understanding that OG&E had been undercharging “so this increase includes not only higher fuel costs but some amount to make up for the amount undercharged last year.”

OG&E said the typical residential customer’s bill would be going up about $9.60 starting this month.

Bills vary with the seasons and by household usage, but the U.S. Energy Information Administration says the average residential bill is about $110 per month in Oklahoma.

Costs reviewed

In Oklahoma, regulated utilities and regulators track “passthrough” costs for fuel, such as natural gas, and the charges are adjusted periodically.

Due to higher fuel and related costs, OG&E said it had under collected amounts due by $86 million as of May. Fuel costs will be reviewed again in the fall.

The latest market report from the Southwest Power Pool showed average natural gas prices were $2.70 per thousand cubic feet in the first part of this year, compared to $1.68 per thousand cubic feet in spring 2016.

OG&E attributed increased grid congestion charges to wind generation. While wind generates an increasing share of power in the regional market, distribution bottlenecks occur.