Okla: Consensus near on utility rate

Okla: Consensus near on utility rate

	Published : Fri, 31 Aug 2007 22:08 By : Agencies Print this Story

OKLAHOMA CITY (AP) - The Oklahoma Corporation Commission moved closer to reaching a consensus Friday on a power company's request for a rate increase in a proposed order that stresses energy conservation and efficiency to reduce consumer costs.

The commission authorized Administrative Law Judge Jacqueline T. Miller to finalize a draft order in the rate request by Public Service Company of Oklahoma. The Tulsa-based utility is seeking a $47.9 million rate increase it says it needs to pay for more than $2 billion in new generation and distribution facilities.

But the commission did not agree to the level of rate relief sought by the utility that serves about 520,000 customers in eastern and southwestern Oklahoma, officials said.

'I suspect it's a reduction from the request -- significant,' Commissioner Jim Roth said following a 90-minute meeting where the three-member commission deliberated the case and posed questions to Miller and PSO officials.

Roth and commission officials stressed that the effect on PSO's rates will not be fully known until Miller calculates the financial impact of the commission's decision on rate-related issues, including depreciation expenses and the utility's authorized return on equity, and finalizes the proposed order.

The order could be signed as early as Wednesday.

In addition to rate issues, the commission's draft order encourages PSO to explore ways to reduce energy consumption by implementing demand-side management plans to lower demand for electricity and conserve energy.

'It's a new direction,' Roth said. 'We have got to play catch-up and get ahead.' States like California, Connecticut and Texas have already imposed demand-side management plans to reduce consumption, he said.

'It is the responsibility of PSO to build and operate its utility system in a manner that minimizes its long-term cost to customers, including the deployment of all cost-effective energy efficiency,' the commission's proposed order states.

It orders the utility to submit a proposed demand-side management and energy efficiency program to begin next year. It also orders PSO to fund the effort with a 'robust budget.'

The plan must include education and information for customers, energy efficiency assistance for low-income customers and incentives for high efficiency appliances, motors and lighting.

PSO is part of a coalition of utilities including Oklahoma Gas & Electric Company that has proposed a $1.8 billion, 950-megawatt coal-fired power plant in northern Oklahoma to meet rising demand. The commission's proposed order states that a significant demand reduction program by PSO might have avoided or delayed construction of the plant.

Hearings on the plant are scheduled before the commission on Wednesday. Commissioners postponed a decision on whether PSO should be allowed to recover costs for construction work in progress until then.

PSO President and CEO Stuart Solomon said following the hearing he does not know what impact the proposed order will have on PSO's bottom line.

In July, PSO increased rates by $8.6 million pending a final order by the commission. The decision raised bills for residential customers using 1,000 kilowatt hours of electricity per month by $1.67.

Utility spokesman Stan Whiteford said PSO officials believe the commission's final order will result in a small rate increase for the utility and it will not have to refund any of the rate hike already implemented.

'It will take several days to take what we heard and try to plug that into our models and determine what the impacts will be,' Whiteford said.

PSO is a subsidiary of American Electric Power Co. Inc.