UTILITY GOES AFTER UPGRADES
Upgrades aim to save customers money, utility says
OG&E is asking customers for an extra $14 million in order to save Oklahomans millions more in the long run
Oklahoma Gas & Electric Co. is seeking approval to invest $14 million of your money over the next two years to improve the reliability and resiliency of the system used to deliver you power.
If approved by elected members of t he Oklahoma Corporation Commission, the average residential customer would see an increase of about 57 cents on his or her monthly bill over the next two years.
The utility proposes ultimately spending up to $810 million to upgrade the distribution grid it uses to provide electricity to 858,000 customers across eastern and central Oklahoma. However, future decisions about its overall plan won't be made until the utility files its next rate case, which authorities expect to see no later than two years from now.
In the meantime, the agreement stipulates that costs for its grid modernization plan would be capped at $7 million a year.
“Electricity powers the modern economy ,” Brian Alford, a spokesman for the utility, said Thursday. Alford, who noted OG&E's rates are lower today than they were in 2011, added, “without electricity, we wouldn't be able to learn or work from home. Greater expectations are being placed on grids across the country.”
What is grid enhancement, and what kind is included in this proposal?
Generally, a utility uses “Smart Grid” technologies
to improve the reliability and resiliency of distribution grids of lines that serve its residents.
All utilities use an interconnected system of transmission and distribution lines to deliver power to homes and businesses. Transmission lines deliver power to substations. From there, energy is carried on regional distribution lines into neighborhoods and business developments.
Electricity is delivered to each metered customer using a combination of branch distribution lines that carry energy to smaller subsets of customers and individual service lines that extend from branch lines to each individual electric meter.
Smart meters, which OG&E deployed a few years ago, certainly fall into that category.
But the deal before commissioners now proposes to pay for other upgrades involving control systems that assess grid stability, relays that sense grounding faults and attempt
to recover those automatically, feeder switches that re route power around problems, and other physical upgrades to critical system points like sub stations to prevent unscheduled out ages involving those facilities.
Information technology upgrades that also are needed to fully take advantage of the other improvements are also proposed.
Pole and line replacements are not included as part of the proposed agreement. Those types of upgrades won't be on the table until the utility files its next rate case.
Why is it needed?
Utility officials say customers will benefit financially and will enjoy a better quality of service as grid enhancement improvements are made.
They estimate OG&E's customers would see quantitative and qualitative benefits worth about $1.9 billion during the next 30 years if the entire $810 million program is carried out, thanks to fewer and shorter-lasting outages.
The company embarked on a project implementing similar upgrades to its distribution system in Arkansas in 2019, and while the project is only about two- thirds complete, i ts customers are already seeing out age duration times improve between 70% and 90%, utility officials say.
“The demands for improved reliability and resiliency placed on the electric grid, not just within our service area but across the nation, have increased exponentially over the past several years,” said Ken Miller, OGE vice president of state regulatory and legislative affairs.
Innovative features
The agreement sets up some approval processes and parameters that go beyond what has been traditionally used in past typical rate cases. Agreement features include:
• OG&E will submit a list of planned grid modernization projects it proposes over the next two years to stakeholders within 30 days after elected members of the Oklahoma Corporation Commission approve the proposed agreement.
• Any particular project or projects objected to by stakeholders will be set aside for further review by agency staff and elected commissioners before being started.
• While the utility will be allowed to start agreed upon projects, it won't be allowed to begin recovering related costs until after the agency's Public Utility Division completes appropriate reviews.
•Stakeholders that signed the agreement won't forfeit their rights to question whether or not the work and related expenses were prudent whenever the utility files its next rate case.
• OG&E will be required to refund expenses plus interest to customers for any projects later determined to fall short in that pruden cy test whenever that next rate case is considered.
• Customers who are aided by the Low Income Home Energy Assistance Program or receive senior citizen discounts won't see any changes to their monthly bills.
The request's status
The utility presented its plan last week as part of a stipulated agreemen tb et ween O GE, regulators and major utility customer groups to Linda Foreman, an administrative law judge at the Oklahoma Corporation Commission.
Signatories to the agreement include OGE Energy's shareholders organization, Oklahoma's Attorney General, who represents the utility's customers, the commission's public utility division and the Oklahoma Industrial Energy Consumers organization and Wal-Mart Inc., representing large power users on the system.
After reviewing prepared testimony and listening to more on Thursday, Foreman asked attorneys representing the utility to prepare a draft recommended order approving the agreement for the elected corporation commissioners to consider.
Commissioners are expected to take up the issue before the end of the month, officials said.