Corporation Commission approves PSO settlement

CapitolBeatOK Staff Report

Published: 05-Jan-2011

What began as an $82.3 million dollar rate increase request from Public Service Company of Oklahoma (PSO) ended today with approval by the Oklahoma Corporation Commission of a settlement agreement reached by parties to the case that reduces some rates and results in no additional revenue to PSO. State Rep. Eric Proctor of Tulsa immediately criticized the Commission’s action.

Under the settlement, the increase in the non-fuel portion of the average (1,000 kilowatt hours/month) residential bill would be about 35 cents a month. PSO originally requested an increase of about $4 a month.

Parties recommending the agreement included the Commission’s Public Utility Division, the Attorney General – who represents all consumers before the Commission – PSO, Oklahoma Industrial Electric Consumers, Quality of Service Coalition, Wal-Mart Stores East LP, and Sam’s East, Inc.

Commission Chair Dana Murphy said she is pleased with the successful effort to resolve the case and the assurances made that PSO service will be reliable but urged caution regarding the issue of cost-of-service.

“One of the key elements of the settlement is the adjustment across rate classes to better reflect the actual cost of providing service to a particular class,” Murphy said. “While I support this small adjustment, we must be careful that harm is not done to customers in the future as further adjustments are proposed in the name of cost-of-service.”

Commission Vice Chairman Jeff Cloud called the settlement a step forward for Oklahoma: “The settlement is a result of negotiation involving parties that are often on opposite sides of the fence,” Cloud said.  “I applaud the company and representatives of consumers for their hard work in reaching an agreement that lets PSO generate revenue needed to maintain its electric system reliability and earn a reasonable return while also upholding consumer interests.”

Cloud continued: “The parties obviously took into account the tough economic times we face by reallocating the money that PSO collects in rates in a way that benefits major employers in PSO’s service area while holding rate impacts for residential customers to a minimum.”

Commissioner Bob Anthony said the settlement contains provisions that lay the groundwork for the future.

“The settlement contains provisions regarding time-of-use rates for customers on smart meters, allowing them to take more direct control over their electrical costs,” Anthony said. “It also contains provisions encouraging the use of energy saving LED’s by municipalities in street lighting and traffic lights, moves that can save municipalities thousands of dollars a year. Further, the drop in the fuel costs may mean that in real terms no one will see an increase on their total bill.”

Rep. Proctor, a Tulsa Democrat serving as Deputy Minority Floor Leader  in the incoming Legislature, decried the commission’s decision in concluding the case. In a statement sent to CapitolBeatOK, he said: “The timing of AEP-PSO’s requested rate increase could not be worse. Evidently the Corporation Commission is not aware of how another rate hike will add to the burden families and seniors face. Hardworking Oklahomans are already struggling to make ends meet. Another increase in residential utility bills will only make life more difficult for everyone, especially our veterans and seniors on a fixed income.” 

Representative Proctor had sent a letter to the Commission in December asking commissioners to vote down the request and detailing how another rate hike on residential users would hurt Oklahoma seniors. He and other critics describe AEO-PSO as an “Ohio based” company.

The parent company’s net income last year totaled over $1.3 billion on nearly $13.5 billion in total revenue.

Hours before the formal decision from the Commission, state Sens. Judy Eason McIntyre of Tulsa and Jim Wilson of Tahlequah had opposed the anticipated settlement.

In a statement sent to CapitolBeatOK, the pair said: “It’s our sincere hope that the Corporation Commissioners are aware of the many families and seniors that are struggling to make ends meet and put food on the table. This rate hike is reckless and will hinder Oklahoma’s ability to rebound from our current recession.” They asserted the “hike” would “take money out of the pockets of hardworking Oklahomans.”

NOTE: Editor Patrick B. McGuigan contributed to this report.