Oklahoma Gas and Electric Co. customers will be paying higher rates for electricity beginning Saturday while an administrative law judge weighs arguments in an interim rate case.
But the $24 million in increased rates will be offset by a separate, $50 million reduction in fuel costs for the utility's customers, a result of lower natural gas prices. Combined, most residential customers can expect to pay about $1 less each month.
Under a 1993 state law, a utility can choose to implement interim rates if a pending rate case takes longer than 180 days. OG&E filed its rate case in July and asked for a $73.25 million increase.
The interim rates are subject to refund, with interest, if the Oklahoma Corporation Commission finds they were too high.
Opponents speak out
OG&E will implement the interim rate hike over the objections of several groups, including the state attorney general's office, a group of industrial consumers and the AARP. They argued in a hearing Thursday the utility's attorneys waived its right to implement interim rates at a Corporation Commission hearing in January.
“A waiver was made, it's enforceable against the party making it, and it's not appropriate in this process to ignore that,” said Deborah Thompson, an attorney for AARP.
OG&E attorney Bill Bullard said the decision to implement interim rates was based on a change in circumstances.
“On that date in January, we simply had no real reason to believe we would be sitting in the middle of May and an order not issued by this commission,” Bullard said. “This commission routinely and regularly recognizes changes of condition as a reason for reconsidering a matter. The idea that a waiver in one context cannot be revisited in another context is just bad policy.”
Bullard said the utility doesn't need the formal approval of the three-member commission to implement interim rates. The increase will go into effect Saturday, the first day of OG&E's next billing cycle. However, it will be offset by a fuel-cost reduction, he said.
“Our motives were to keep costs down for our customers,” Bullard said.
In public comments, Douglas Holsted, a certified public accountant from Oklahoma City, asked the commission not to implement an interim rate increase. He said the utility remains profitable and has yet to detail possible costs for upgrades or retrofits that might result from pending Environmental Protection Agency emissions rules. He said OG&E should live up to its earlier promise not to implement interim rates.