Regulators at the Oklahoma Corporation Commission have asked Oklahoma Gas and Electric Co. to begin a rate case, saying the utility missed a June 30 deadline to file for a general rate review.
The commission's public utility division wants an administrative law judge to find the utility failed to comply with several commission orders requiring OG&E to file for a rate case using the costs and revenues from 2012 as the basis for calculating new rates for customers.
OG&E has requested a hearing on the matter Sept. 12 in Oklahoma City.
In early August, OG&E filed a request with the commission to modify the dates for a rate review in several orders covering extra costs for its smart meter program, its Crossroads wind farm in Dewey County and for transmission projects requested by the Southwest Power Pool.
The extra costs in the orders, called a “true-up” in regulatory language, were the result of three settlements in 2010 and 2011 between OG&E and other parties, including the attorney general's office and Oklahoma Industrial Energy Consumers, a group of large industrial electricity consumers.
At issue is whether those settlements can be modified. Brandy Wreath, director of the public utility division, said doing so would create a bad precedent for future settlements. He said the commission lacks jurisdiction to modify the orders.
“The commission is duty bound to enforce the orders it issues, and the parties under the direction of commission orders must adhere to them,” Wreath said in a filing this week.
OG&E spokesman Brian Alford said the utility's last rate case was filed in July 2011 but wasn't settled until a year later. Those rates went into effect in August 2012. He said a rate review that makes 2012 the test year for revenues and costs would cover only five months under the new rates.
“We deployed the smart meters on time and under budget, and there really is no need for a rate case to deal with any of the cost overruns,” Alford said. “Everyone thought a 2013 case was going to be necessary, but today we don't want to subject customers to the cost of a case for three or four relatively minor modifications.”
Alford said the utility prefers to wait to file for a rate case because costs for implementing environmental rules, such as limits on emissions affecting visibility at national parks and wilderness areas, are still uncertain.
Tom Schroedter, an attorney for the Oklahoma Industrial Energy Consumers, said his group agreed with the commission's public utility division staff. He said settlement agreements are favored by the courts.
“They should not be lightly cast aside,” Schroedter said. “Those settlement agreements can only be modified, in my opinion, with the mutual consent of all the parties.”
The commission is duty bound to enforce the orders it issues, and the parties under the direction of commission orders must adhere to them.”
Director of the public