Oklahoma Watches and Warnings

Commissioners will vote on utility settlement next week

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OKLAHOMA CITY -- An administrative law judge has recommended the Oklahoma Corporation Commission approve a settlement with OG&E, which would provide the largest energy utility rate reduction in state history.

On Friday, the case was heard in front of administrative law judge Michael Norris and the three-member commission. Under the terms of the $64 million deal, residential customers are expected to save around $4.44 monthly after July. Non-residential customers, such as businesses and government agencies, are also expected to see rate reductions with the remaining $32 million.

"Both parties ultimately started with different numbers, but this is the result of the debate and the compromise we ultimately ended up with," Jason Bailey with OG&E said.

Judge Michael Norris commended all of the involved parties in the settlement, describing the deal as "professionally conducted" and "hard fought."

"All of the parties agreed to this agreement and all of them but one signed it," Norris said.

Initially, OG&E filed a rate case requested to increase rates. Part of the reasoning included not being able to return on equity.

In December, Oklahoma Attorney General Mike Hunter filed five motions with the Oklahoma Corporation Commission asking for an immediate reduction in customer rates from the state's leading utility companies, including OG&E. This came after a federal tax reform bill was signed in law, lowering the highest corporate income tax rate from 35 percent to 21 percent.

At Friday's hearing, commission chairman Dana Murphy questioned whether decisions made from this settlement case will bind any future rate cases involving OG&E and the commission.

"As a commissioner, I don’t know what went on in this case. I still have my real concerns about policy being set in this case for this issue," Murphy stated.

"I can’t imagine how anything that we say in the stipulation could bind the future commissions’ hands in writing rules or making future decisions for future programs," said attorney Curt Long.

There were also questions on how the rate reductions would be weighted.

"Let’s say you had two customers they live next door to each other and one’s got a big house and one’s got a small house," commissioner Bob Anthony said. "Their average electricity bill is twice what the other one is. They’re going to get the same amount?"

Jason Bailey, director of Revenue Requirements for OG&E, explained the figures of expected savings reflected the average customer.

The commission will vote on the settlement on Tuesday, June 19 at 9:30 a.m.

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