PSO reaches proposed settlement on rate increase request

The Oklahoma Corporation Commission announced Wednesday evening its Public Utility Division and Public Service Co. of Oklahoma have reached a proposed settlement on the utility's pending rate case. Commission officials said the proposed agreement initially would authorize the utility to raise its rates by $46 million, or about $2.38 more per month for an average residential customer. Officials said the proposed settlement was achieved through negotiations that included the Public Utility Division, PSO, the Oklahoma Attorney General's office, AARP and the Oklahoma Industrial Energy Consumers group. The proposed settlement agreement still must be approved by the three-member Oklahoma Corporation Commission. Earlier this week, the panel scheduled a hearing to take public comments on the case Thursday morning. But officials said Wednesday evening it hadn't yet been determined when the proposed deal will be considered by commissioners for approval. PSO made its rate increase request in September, initially seeking $88 million more. And while the amount it was seeking wasn't unusual, the type of ratemaking it requested was. PSO proposed to be allowed to change from a traditional regulatory format to one that's performance based, where the rate it charges for power is tied to various performance metrics, including customer satisfaction rates and outage percentages that also are reviewed annually. Under that type of regulation, justifiable subsequent rate changes only are authorized when those reviews find the regulated entity met its prescribed performance standards. What regulators and utilities have learned is that performance-based reviews benefit both the companies and their customers because they encourage improvements in overall operations while lessening rate-change impacts on both, officials have said. Until now, performance based ratemaking has been used by the commission only to regulate natural gas service providers within Oklahoma. Officials said Wednesday evening the proposed settlement does not include the performance-based regulatory regime. Instead, the proposed agreement would regulate the utility under a traditional format where the commission's Public Utility Division reviews the utility's costs to provide service to its customers. PSO serves about 550,000 customers in eastern and in southwestern Oklahoma. A spokesman for PSO confirmed Wednesday evening a proposed joint stipulation agreement to settle the increase request had been filed in the case. “We are hopeful” the commission will approve the deal, the spokesman said.