Consumers Challenge OG&E’s Proposed Rate Hike in Oklahoma

Consumer advocacy groups are fiercely opposing a rate increase request from **Oklahoma Gas and Electric (OG&E)**, a dispute that is poised to test the implications of a new Oklahoma law regarding utility financing. The **Oklahoma Industrial Energy Consumers (OIEC)** and **AARP Oklahoma** are urging the **Oklahoma Corporation Commission** to reject OG&E’s request for a rate hike to fund two new power plants scheduled for completion east of **Oklahoma City** in **2029**.

In a statement released in December, **AARP Oklahoma State Director Sean Voskuhl** criticized OG&E, stating, “If there is a Scrooge this holiday season, it is OG&E.” Voskuhl highlighted the utility’s recent **$500 million** pre-approval case, where the commission denied OG&E’s attempt to recover an additional **$100 million** in financing costs. “OG&E simply cannot take ‘No’ for an answer, but they should,” he added.

This conflict centers on the provisions of **Senate Bill 998**, which was enacted during the last legislative session. The legislation allows utilities to request rate increases to cover **Construction Work In Progress (CWIP)**. OG&E argues that the new law mandates the use of CWIP, enabling them to secure funding for projects while they are still under construction. This approach, they believe, could save the company as much as **$173 million** in interest costs associated with **$506 million** in construction loans.

**Christi Woodworth**, OG&E’s vice president of marketing and communications, emphasized that the law provides a pathway to savings for ratepayers. “Historically, we’d go borrow the money to build facilities. Then, when they’re operational, we’d start putting it into rates,” she explained. “Meanwhile, we’re making interest payments all along the way, but customers aren’t helping provide the dollars for that until the project is fully operational.”

Conversely, AARP’s attorney, **Adam Singer**, argues that this model could unfairly burden customers. “They’re asking some, or many of their customers to pay for facilities that they may never see the benefit of,” he said. Singer pointed out that transient customers or those nearing the end of their lives might end up paying for infrastructure they will not utilize.

**Thomas Schroedter**, executive director of OIEC, believes that the new law and OG&E’s request could ultimately lead to higher costs for ratepayers compared to traditional financing methods. He asserted that the law undermines the Corporation Commission’s authority to ensure fair rates. “It’s not in the best interest of ratepayers if you take the time value of money into account,” Schroedter remarked. He called for the legislature to repeal what he described as an “ill-conceived law.”

The law is particularly significant as it is expected to subsidize a burgeoning data center industry in Oklahoma. Schroedter argues that current OG&E customers will be forced to finance these power plants for new large-load customers, such as data centers, that will not contribute to financing until their facilities are operational, which may take years. “If it’s upheld, the new law will require customers to finance capital investments needed to serve large-load artificial intelligence customers that will be coming onto OG&E’s system in the future,” he stated.

This proposed rate increase marks the second time OG&E has sought advanced funding for its planned plants at **Horseshoe Lake**. The Corporation Commission previously denied the utility’s request in early December, and Schroedter believes that OG&E should not have another opportunity to pursue this matter. The utility maintains that its initial request was rejected on legal grounds, submitted prior to the new law’s enactment.

An initial hearing on this contentious case is set for **January 8, 2024**, before an administrative law judge. As this situation unfolds, the implications for both consumers and the future of utility regulation in Oklahoma are likely to be profound.