A natural gas distribution and storage contract between Oklahoma Gas and Electric Co. and its sister company Enogex should be given a one-year extension, a Corporation Commission administrative law judge recommended Tuesday.
Enogex pipelines and storage units supply the natural gas for six OG&E electricity generating plants. OG&E and Enogex, both subsidiaries of OGE Energy Corp., have been working under a year-to-year contract since 2009, when the original 7-year contract expired.
The one-year extension should give enough time for OG&E and other parties to review a delayed report by a third-party evaluator, Black and Veatch Co., on the appropriateness of the contract. A group of industrial users, the Oklahoma Industrial Energy Consumers, questioned extending the contract in a 2009 review of OG&E fuel usage.
Black and Veatch's report was due in January but was delayed by extensive interviews and a late start on the project, said Kimber Shoop, an attorney for OG&E. The review includes whether OG&E should use a competitive process to choose a gas distribution and storage vendor and if other alternatives are available.
OG&E paid $41.9 million a year to Enogex for natural gas distribution and storage. That amount fell to $39.8 million a year in 2009 and will stay at that level until April 2014 under a joint stipulation and settlement agreement recommended Tuesday by Administrative Law Judge Jacqueline Miller.
Consumers won't be affected by the one-year extension, since it essentially preserves the existing terms of the contract. Those costs are already factored into customers' bills.
The proposed extension still needs the approval of the three-member Corporation Commission.