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Environmental compliance costs could reach $1.5 billion, OG&E says

To comply with federal rules on visibility at national parks and wilderness areas, OG&E told investors it might have to spend between $1 billion and $1.5 billion in the next five years. Much of those costs could be passed along to customers.
by Paul Monies Published: November 7, 2013

Oklahoma Gas and Electric Co. estimates it will have to spend up to $1.5 billion to comply with several environmental rules, including compliance costs for a recent court ruling that went against the electric utility.

OG&E said its coal-fired generating plants have 52 to 55 months to comply with federal rules on regional haze, which are designed to curtail emissions that affect visibility in federal parks and wilderness areas. Last week, the utility and Oklahoma lost their bid for a full rehearing of an appeal over the state's regional haze compliance plan by the 10th U.S. Circuit Court of Appeals in Denver.

The compliance plans for regional haze and other rules could cost between $1 billion and $1.5 billion, CEO Pete Delaney said Wednesday during a conference call with analysts to discuss third-quarter results. Much of those costs, which could include installing scrubbers on coal units or retrofitting them to use natural gas, could be passed on to customers, he said.

“Fuel diversity remains very important, an important element of protecting our customers over the long run, and we have been taking these necessary steps to move forward with our plans to be able to scrub some or all of our coal units,” Delaney said.

Delaney said OG&E likely will have details on environmental compliance plans ready by the first quarter of 2014. The utility will recover the costs for the plans from customers through an application at the Oklahoma Corporation Commission, he said. Oklahoma law allows utilities to pass the costs of environmental mandates on to customers, subject to commission review.

“We continue to focus on managing costs in an effort to protect customers' bills in anticipation of future environmental compliance expenditures,” Delaney said.

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by Paul Monies
Energy Reporter
Paul Monies is an energy reporter for The Oklahoman. He has worked at newspapers in Texas and Missouri and most recently was a data journalist for USA Today in the Washington D.C. area. Monies also spent nine years as a business reporter and...
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