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OG&E faces compressed environmental compliance deadlines

Oklahoma Gas and Electric Co. must meet major environmental deadlines in 2016 and 2019 and plans to spend $1.1 billion to install emissions-control devices and replace its aging Mustang plant. The costs could increase residential customer bills 15 percent by 2019.
by Paul Monies Published: August 7, 2014

The clock is ticking for Oklahoma Gas and Electric Co. as the utility has a rash of projects to complete before major environmental compliance deadlines hit in 2016 and 2019.

OG&E filed a $1.1 billion application this week with Oklahoma regulators to recover those costs from ratepayers. Residential customers could see their monthly bills rise 15 percent by 2019 from the environmental compliance plan.

OG&E wants to install scrubbers on coal units at its Sooner plant and convert two of its three coal units at Muskogee to natural gas. The utility also plans to replace its aging Mustang natural gas steam units with quick-start combustion turbines.

Utility executives said Thursday the capital expenditures ramp up and peak in 2018.

“Some of this can be attributed to the long lead items and construction time frame, but the other part of the driver is that we intend to run the Muskogee coal units as long as possible for the benefit of our customers,” OG&E President and Chief Financial Officer Sean Trauschke said in a conference call with analysts to discuss second-quarter earnings.

The utility requested a final order from the Oklahoma Corporation Commission by February. Unlike a rate case, where the commission has 180 days to make a decision, there are no deadlines for environmental compliance plans.

OG&E wants commission approval to begin collecting charges for its plan starting in 2015. The utility is applying under a 2005 state law that allows charges for environmental mandates to be passed through to customers.

“We have to be in compliance and we want to make sure that everybody had a fair amount of time to get their arms around this,” Trauschke said. “And so we’re in constant communication with the staff and the commission. Everybody is aware of the timeline and the need to be in compliance here.”

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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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