OKLAHOMA CITY – All parties who participated in the process that resulted in an agreement allowing OG&E to recover $ 739.1 million in costs incurred by the winter weather event in February have expressed support for the plan – except of AARP.
The Oklahoma Corporation Commission heard oral arguments on the joint stipulation agreement on Tuesday in response to an AARP request.
“You only have one party in the proceeding opposing the settlement, and that is the AARP,” said Thomas P. Schroedter, representing the Oklahoma Industrial Energy Consumers.
In addition to the OIEC, staff at the OCC, the Oklahoma attorney general’s office and a number of stakeholders, including Walmart, consumer groups and OG&E, support the agreement, Schroedter noted.
“The settlement is the result of prolonged negotiations conducted in good faith,” said Schroedter. “We had solid settlement negotiations and there was a lot of give and take… OG&E gave up some of the things they were asking for, including money.”
While the OIEC did not get everything the organization wanted out of the deal, the parties all agreed that the end result was a reasonable settlement that will result in fair prices for customers.
Lawyer and utilities expert Deborah Thompson, representing AARP, disagreed.
“The winter weather event was catastrophic in many ways,” said Thompson. “The likely result will be that more than $ 3 billion will be extracted from the Oklahoma economy, the majority of which will come from individual residential customers. … How can we ensure that residential customers and the parties they rely on to operate and plan their system share this burden appropriately? “
Thompson took issue with OG&E’s planning for the event, questioning why some facilities were not operational due to routine maintenance and wondering why alternative fuels such as coal were not more accessible.
The deal allows OG&E to keep certain transaction amounts private for reasons of ownership, which Thompson also disputed.
OG&E had to pay an exorbitant amount for natural gas for production during the storm, as the weather event simultaneously boosted demand and reduced supply. Given the circumstances – a “one-time storm per century,” OG&E actually did a very good job, said William L. Humes, OG&E representative.
“We’re in a house fire – we’re not worried about the cost of the hose to put out the fire,” Humes said. “It’s a life and death situation. The main objective was reliability …
“We haven’t had the loss of life that has happened in Texas, we haven’t had the downtime that has happened in other areas, and when you look at the actual availability of our factories and so on. as a result, it was actually pretty decent, ”Humes says.
The stipulation agreement focuses on conserving the costs incurred, Humes noted, based on the situation at the time and not in hindsight.
The deal, finding that $ 739.1 million in costs is deemed prudent and reasonable, is in fact $ 100 million lower than the $ 838.6 million originally requested by OG&E, the OIEC filing notes.
If the commissioners approve the deal, it will allow OG&E to get a lower finance rate for the amount that will save clients millions of dollars in finance charges, said Jared Haines of the Attorney General’s Office. Oklahoma.
Still, AARP officials urged commissioners to reject the deal.
In its documents and in its public statements, AARP officials cited a recent survey that found that 41% of Oklahoma seniors said an increase in the utility bill would be a major problem, and only 25% of Oklahoma seniors believe state officials are doing enough to maintain public services. affordable.
“Oklahoma’s elected commissioners must step in and not impose a decades-long rate hike on residential and small business OG&E customers,” AARP State Director Sean Voskuhl said in a statement. communicated. “Too many fixed-income seniors, already facing higher natural gas prices this winter, depend on them. AARP Oklahoma will continue to fight to ensure that OG&E customers get a fair deal and that OG&E is held accountable for its mistakes in this process.
The OCC has said it will take the arguments under advisement.