Commission task force doing important work

WHEN a task force looking at the workings of the Oklahoma Corporation Commission met for the first time two months ago, Commissioner Todd Hiett admitted to some trepidation but acknowledged the potential upside of a review by outsiders.

“We have staff that is very dedicated, very diligent, hardworking, but they are strapped,” Hiett said. “At the same time, I do think we can work through and come out with, hopefully, a good product.”

We hope so, too, because the commission’s impact on the state cannot be overstated. Its decisions, whether regarding oil and gas development, telecom or utilities, reverberate with companies large and small, and with investors.

Consider two cases that will soon go before the commission, brought by Public Service Co. of Oklahoma and Oklahoma Gas and Electric Co. PSO is seeking preapproval of a $4.5 billion wind generation project that involves 800 turbines in the Panhandle and a transmission line to move electricity to a north Tulsa substation where it’ll be distributed to customers served by PSO and a sister utility.

Rejection of the preapproval request could doom the project, as PSO would have to think awfully hard about going forward with construction and then hoping the commission, after the project’s completion, grants the utility a rate increase to pay for it.

OG&E will soon be presenting a rate case involving its newly dedicated Mustang Energy Center, a $390 million, 462-megawatt natural gas generator built on the site of a former combined-cycle natural gas plant that the utility opened in 1940. OG&E is hoping for better luck than it had earlier this year with the commission.

In March, in a case that took 16 months to resolve, the commission approved a rate increase of $8.8 million. OG&E had requested $92.5 million. In June, Moody’s Investor Service put OG&E and OGE Energy on a negative outlook, due in part to the state’s regulatory environment.

That same week, Fitch Ratings kept its outlook at “stable” for OGE Energy but cited concerns about the commission’s 21-month review of the utility’s case for installing scrubbers on two coal units in northern Oklahoma. The commission’s regulation “is overall supportive but showing signs of deterioration,” Fitch said.

Sean Trauschke, chairman and CEO of OGE Energy Corp., said recently that the utility has lost $700 million to the market since the commission’s March order. That’s a dramatic indication of the commission’s considerable sway.

Gov. Mary Fallin created the task force this spring. It’s led by Michael Teague, the state’s secretary of energy and environment, and includes Hiett, two legislators and a deputy attorney general. The group will focus on the commission’s mission, workload levels, staffing, funding and structure. Its final report and recommendations are due a year from now.

Teague has said the task force’s goal isn’t to backseat drive, but instead is to “set the commission up for success in the future.” That’s a worthwhile pursuit. A nimble and effective Corporation Commission is vital if Oklahoma industry— and thus the state— is to prosper in the years ahead.