Electric utility Public Service Co. of Oklahoma filed for a $45 million rate increase with regulators Friday but said it wants the changes to take effect after the peak summer months.
If approved, the typical residential customer using 1,000 kilowatt-hours of electricity would see an increase of $3.97 per month, PSO said.
The Tulsa-based utility, with 540,000 electric customers in eastern and southwestern Oklahoma, said its filing with the Oklahoma Corporation Commission supports a rate increase of 4 percent.
Stuart Solomon, PSO’s president and chief operating officer, said the filing includes recovery of costs to install smart meters across its customer base and investments totaling $500 million since the utility’s last rate case in 2010.
“Even with this modest price increase, amounting to about one percent per year since our last base rate increase, PSO’s rates remain among the lowest in the United States,” Solomon said in a statement. “Together with service reliability that ranks among the best in the nation, PSO continues to provide great value for its customers.”
Several groups plan to weigh in on the rate case, including the Attorney General’s office, Oklahoma Industrial Energy Consumers and the AARP.
“AARP Oklahoma will be intervening in this rate case and fighting to ensure that PSO receives only what is fair and reasonable,” said Dusty Darr, associate state director of AARP Oklahoma. “We will thoroughly review today’s filing and continue advocating for affordable utilities on behalf of Oklahoma ratepayers.”
With the proposed increase, PSO said its overall rates would be 10 percent below the Oklahoma average and 29 percent lower than the national average.
PSO spokesman Stan Whiteford said residential customers would see their cost per kilowatt hour rise to 8.84 cents, up from 8.44 cents per hour. Commercial customer costs would go to 7.62 cents per kilowatt hour, up from 6.64 cents per hour. For industrial users, the cost would rise to 4.62 cents per kilowatt hour, up from 4.45 cents per hour.
About $38 million of PSO’s requested increase is to make up for revenue lost since 2010. The utility also wants another $7 million to recover the first year of costs from its planned roll out of smart meters.
PSO, a unit of Ohio-based American Electric Power Co. Inc., said in November it will start smart meter installations for its eastern and southeastern customers by the end of 2014. The effort will expand to Tulsa and northern customer areas in 2015, with western and southwestern parts of PSO customer territory getting smart meters in 2016.
Regulated utilities are allowed to earn set amounts relative to the amount of capital they have invested, known as the return on equity. In commission filings supporting the rate increase, PSO said it wants its return on equity to go to 10.5 percent, up from 10.15 percent. The utility also said required transmission projects and higher taxes have increased its costs.
PSO’s rate case filing doesn’t address environmental compliance costs from the planned shutdown of one of its coal units at Northeastern Station near Oologah in May 2016. PSO plans to install emissions upgrades on another Northeastern coal unit before retiring it by 2026, part of its plan to address regional haze and other environmental rules. PSO said it will recover those costs later.
“An appropriate time to address the cost recovery issues associated with the ECP (environmental compliance plan) is at the time PSO has incurred the costs to be in compliance with EPA rules,” PSO’s David Sartin said in testimony filed Friday.