OG&E agrees to $64 mil­lion rate cut

The Oklahoman - - FRONT PAGE - BY ADAM WILMOTH En­ergy Ed­i­tor aw­ilmoth@ok­la­homan.com

Oklahoma Gas and Elec­tric Co. res­i­den­tial cus­tomers will save an av­er­age of $18.17 on their July bills and re­ceive $4.44 on­go­ing in monthly sav­ings if a set­tle­ment an­nounced Wed­nes­day is ap­proved by state reg­u­la­tors.

OG&E reached the set­tle­ment with At­tor­ney Gen­eral Mike Hunter’s of­fice, the Oklahoma Cor­po­ra­tion Com­mis­sion’s Pub­lic Util­ity Division and util­ity con­sumer groups. The agree­ment calls for the util­ity to cut its an­nual rates by $64 mil­lion, with half of the sav­ings go­ing to res­i­den­tial cus­tomers and half go­ing to other cus­tomers, in­clud­ing busi­nesses and gov­ern­ment agen­cies.

“The his­toric $64 mil­lion rate re­duc­tion rep­re­sents the largest re­ceived by an Oklahoma util­ity,” Hunter said. “It will put real money in the pock­ets of Ok­la­homans. We’re hope­ful the Cor­po­ra­tion Com­mis­sion will take swift ac­tion to ap­prove this be­fore the end of the month so it can be en­joyed by ratepay­ers as soon as pos­si­ble.”

An Oklahoma Cor­po­ra­tion

Com­mis­sion ad­min­is­tra­tive law judge is sched­uled to take up the set­tle­ment pro­posal on Fri­day.

If ap­proved by the Cor­po­ra­tion Com­mis­sion, the agree­ment would set­tle the rate case OG&E filed last year. The case ad­dresses the nearly $400 mil­lion OG&E has in­vested to mod­ern­ize its Mus­tang En­ergy Cen­ter along with sav­ings from changes to the fed­eral tax rate.

“We’re pleased we were able to get this set­tle­ment agree­ment,” OG&E spokesman Brian Al­ford said. “The par­ties rec­og­nized in this agree­ment the value and strate­gic im­pact of the Mus­tang En­ergy Cen­ter to our cus­tomers, our com­mu­ni­ties and the state.”

Mus­tang En­ergy Cen­ter up­grades in­cluded re­plac­ing a 78-year-old gen­er­a­tor with a new, 462-megawatt, nat­u­ral gas-fired power plant.

OG&E in Novem­ber asked for a $1.8 mil­lion rate in­crease, while the at­tor­ney gen­eral’s of­fice called for a $100 mil­lion rate re­duc­tion. The set­tle­ment plan in­cludes sav­ings to the util­ity, which OG&E in Novem­ber es­ti­mated at about $70 mil­lion.

“We needed to re­turn those dol­lars to cus­tomers in what would be the most ef­fec­tive way to do that,” OG&E’s Al­ford said. “We be­gan look­ing at that and came to the con­clu­sion that we should in­cor­po­rate the ben­e­fits of tax re­form into our fil­ings. So we de­ferred the fil­ing to early 2018 to en­sure Pres­i­dent Trump did sign the re­form and we could in­clude that in our fil­ing.”

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.

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

“To­day’s set­tle­ment agree­ment will help mit­i­gate the ef­fects of the cost in­creases as­so­ci­ated with these en­vi­ron­men­tal projects,” Al­ford said.

The set­tle­ment deal in­cluded ne­go­ti­a­tions with sev­eral con­sumer groups, in­clud­ing the­at­tor­ney gen­eral’s of­fice, AARP, Oklahoma In­dus­trial En­ergy Con­sumers, and Wal­mart.

“This is wel­come news to the thou­sands of OG&E cus­tomers across the state who are strug­gling with the high cost of util­i­ties, pre­scrip­tion drugs and rent,” said Sean Voskuhl, AARP’s Oklahoma direc­tor.


OG&E CEO Sean Trauschke speaks dur­ing Oklahoma Gas and Elec­tric Com­pany’s ded­i­ca­tion of its new nat­u­ral gas-fired power gen­er­a­tors at its Mus­tang power plant in Novem­ber 2017.

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