UPDATE: Tensions escalate in Oklahoma as consumer advocacy groups vehemently oppose a rate hike request from Oklahoma Gas & Electric (OG&E), potentially setting the stage for a landmark showdown over the new Senate Bill 998. The proposal, announced earlier today, seeks approval for two new power plants slated for completion east of Oklahoma City by 2029.
Consumer advocates, including AARP Oklahoma and the Oklahoma Industrial Energy Consumers (OIEC), are calling for the Oklahoma Corporation Commission to reject OG&E’s request. “If there is a Scrooge this holiday season it is OG&E,” stated Sean Voskuhl, AARP Oklahoma State Director. In a blistering statement, Voskuhl criticized the utility for asking for a rate increase just after a previous request was denied.
This conflict revolves around the controversial Senate Bill 998, which alters how utilities can fund new construction. Advocates argue the law is unconstitutional, allowing utilities to request rate increases for projects still under construction, a significant departure from previous regulations requiring completion before rate adjustments.
OG&E contends that this new approach, known as Construction Work In Progress (CWIP), is essential for managing its $506 million in construction loan debt. The utility estimates that employing CWIP could save up to $173 million in interest costs, a burden ultimately passed on to consumers. “Historically, we’d borrow money to build facilities, and customers wouldn’t contribute until they were operational,” explained Christi Woodworth, OG&E’s vice president of marketing and communications.
However, OIEC’s Thomas Schroedter warns that this method could financially disadvantage ratepayers, making them responsible for costs associated with projects that may not benefit them directly. “It’s not in the best interest of ratepayers if you take the time value of money into account,” Schroedter argued, emphasizing that current customers could end up paying for facilities that won’t serve them.
The ongoing debate raises critical questions about the future of energy costs for Oklahoma residents. Advocates fear that the bill will primarily benefit large data centers, with current consumers subsidizing infrastructure meant for future, high-demand users. “If upheld, this law will require customers to finance capital investments needed to serve large-load artificial intelligence customers,” Schroedter stated.
As the situation unfolds, the Oklahoma Corporation Commission is expected to hold an initial hearing on this contentious rate case before an administrative law judge on January 8. This marks the second time OG&E has sought advanced funding for its planned plants at Horseshoe Lake, following an earlier denial in December.
The stakes are high, and as the debate intensifies, both sides are gearing up for a fierce battle over utility financing in Oklahoma. The implications of this decision could have lasting effects on energy costs and fairness for consumers across the state. Stay tuned for updates as this story develops.
