Judge recommends approval of OG&E rate cut

An administrative law judge on Friday recommended Oklahoma Corporation Commissioners approve a proposed $64 million rate cut settlement agreement for Oklahoma Gas and Electric Co.

Commissioners scheduled a vote for Tuesday morning.

If approved, the deal would provide OG&E residential customers an average savings of $18.17 on their July bills and a monthly, ongoing reduction of about $4.44. The settlement deal was announced Wednesday.

“It is my position that I recommend this stipulated agreement,” Administrative Law Judge Michael Norris said near the end of Friday’s hearing.

Commissioner Todd Hiett praised the agreement, but said he needs more time to review it.

“I want to commend the company and all intervening parties in putting together this settlement and bringing it forward,” Hiett said. “I have a very favorable opinion of it, but I still have review to do. Time is of the essence. We certainly want it to be implemented as quickly as possible.”

Commissioner Dana Murphy agreed with the recommendation and scheduled the vote for Tuesday morning.

“The parties have had weeks on this. I don’t think it’s asking a lot for the commissioners to have more time since many of us at the commission just got it yesterday,” Murphy said Friday.

The settlement agreement was reached between OG&E, the Corporation Commission’s Public Utility Division staff, the attorney general’s office and consumer groups including the AARP, Oklahoma Industrial Energy Consumers and Walmart.

“This is a global settlement where all the parties had the opportunity to participate,” said Jason Bailey, director of revenue requirements at OG&E. “We believe it was a fair and open process. We believe it is a full resolution to the matters of this case. It results in real savings to our customers, and we believe it ultimately is fair and reasonable.”

The settlement plan allows for OG&E to recover the $400 million it spent upgrading its Mustang Energy Center and its solar power generating facility near Covington and includes savings associated with last year’s federal tax reform, which OG&E in November estimated at about $70 million.

The deal agreement does not include the costs of installing environmental scrubbers at OG&E’s coal plants at the Sooner power plant or in Muskogee. OG&E spokesman Brian Alford said the utility likely will file a rate review later this year to address those costs.