Newspaper article THE JOURNAL RECORD

OG&E Stands by $1.1B Plan, despite Judge's Recommendation

Newspaper article THE JOURNAL RECORD

OG&E Stands by $1.1B Plan, despite Judge's Recommendation

Article excerpt

OKLAHOMA CITY - Oklahoma Gas & Electric stands behind its billion- dollar proposal to reduce air pollution and upgrade an aging power plant, despite a judge recommending against it.

The company's proposed financing method relies on a 10-year-old statute that allows utilities to pass along federally mandated costs to consumers. However, utilities have other ways to pay for changes to their power plants that don't involve shifting major risks to customers, attorney Lee Paden said.

Utilities face major challenges when considering how to finance power plant upgrades, he said. Technology changes so rapidly that it could be outdated or noncompliant by the time it's installed. Oklahoma's 2005 statute that allows regulators to preapprove environmental compliance projects passes costs to consumers and shifts the risk away from the company, Paden said.

The utility sought preapproval for a $1.1 billion proposal, including $700 million to reduce air pollution from two of its power plants to comply with federal clean air laws. It plans to convert one power plant to natural gas from coal and plans to add pollution scrubbers to another.

The company also sought $400 million to upgrade an aging power plant near Mustang; it was unrelated to air pollution.

On Monday, Oklahoma Corporation Commission Administrative Law Judge Ben Jackson recommended against major portions of the utility's proposal, including its preapproval request for Mustang upgrades.

He partially approved its environmental compliance plan, including portions that are already under contract. Jackson didn't specify exactly how much he recommended the agency preapprove. Utility spokeswoman Kathleen O'Shea said company representatives were still trying to interpret how much the judge recommended.

House Bill 1910 from 2005, which created the state statute that allows for preapproval, is very important for federally mandated environmental projects, she said. Receiving preapproval gives the company confidence it can recover costs before it spends millions of dollars, she said.

Attorney Cheryl Vaught represented Oklahoma Energy Results, one of nearly a dozen groups that intervened in the case. …

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