URGENT UPDATE: Tensions escalate in Oklahoma as consumer advocacy groups challenge OG&E’s proposed utility rate increase, a pivotal test of the controversial Senate Bill 998, designed to alter how utilities fund new construction. The Oklahoma Corporation Commission is set to hear this contentious case on January 8, 2024, as both sides prepare for a showdown that could impact thousands of ratepayers.
Consumer advocates, including the Oklahoma Industrial Energy Consumers (OIEC) and AARP Oklahoma, have vehemently opposed OG&E’s request to raise rates to fund two new power plants slated for completion east of Oklahoma City in 2029. “If there is a Scrooge this holiday season, it is OG&E,” declared Sean Voskuhl, State Director of AARP Oklahoma, emphasizing the financial burden on consumers.
In a striking statement, Voskuhl noted that OG&E’s previous attempt to recover an additional $100 million in financing costs was rejected, yet the utility is now pursuing another rate hike. “OG&E simply cannot take ‘No’ for an answer, but they should,” he added, highlighting the frustration of many ratepayers.
The crux of the debate lies in the new regulatory framework established by Senate Bill 998, which allows utilities to seek rate increases for Construction Work In Progress (CWIP). OG&E argues this law permits them to finance projects during construction, potentially saving an estimated $173 million in interest costs, which would otherwise accumulate until the projects are operational. OG&E Vice President Christi Woodworth stated, “Historically, we’d go borrow the money to build facilities. Then, when they’re operational, we’d start putting it into rates.”
However, advocates argue that this shift could unfairly burden consumers who may never benefit from these facilities. “Many customers could end up paying for facilities they won’t see the benefits of,” cautioned Adam Singer, attorney for AARP Oklahoma. He emphasized scenarios where customers might move away or pass before realizing any benefits from their payments, calling the situation “unjust.”
OIEC Executive Director Thomas Schroedter echoed these concerns, suggesting that the new law ultimately jeopardizes the financial interests of ratepayers. “It’s not in the best interest of ratepayers,” he stated, warning that the legislation could lead to higher costs for consumers than traditional financing methods.
The implications of this rate hike extend beyond immediate financial concerns. Schroedter warned that if upheld, the law could force current customers to subsidize large-load artificial intelligence data centers that won’t contribute to financing until years after the plants are operational. “This is fundamentally unfair,” he asserted.
As the clock ticks toward the January hearing, both sides brace for a critical moment that could redefine utility financing in Oklahoma. The stakes are high, with potential impacts on monthly bills for countless customers across the state.
In this rapidly developing situation, all eyes will be on the Oklahoma Corporation Commission as it weighs the merits of OG&E’s request against the backdrop of consumer advocacy. The outcome of this case could shape the future of utility regulation in Oklahoma and influence how similar disputes are handled nationwide.
Stay tuned for updates as this story unfolds and the January hearing approaches. Share your thoughts on this urgent issue as consumer advocacy groups rally against what they call an unfair rate increase!
