Newspaper article THE JOURNAL RECORD

Hearing Delayed on Costs for Cogeneration Energy

Newspaper article THE JOURNAL RECORD

Hearing Delayed on Costs for Cogeneration Energy

Article excerpt

The Oklahoma Corporation Commission granted a delay Tuesday in an emergency hearing called to consider proposed changes in the way costs from a cogeneration plant are passed on to electricity customers.

Pat Petree, a spokesman for the commission, said Oklahoma Gas & Electric Co. is buying power from a cogeneration plant in eastern Oklahoma and is passing the costs on to customers through a fuel adjustment clause on their electric bill.

Petree said the commission staff believes a different procedure should be used to pass the costs on to customers.

A commission attorney asked for the delay to reissue the notice about the meeting to clarify what was to be involved in the hearing, Petree said.

The hearing has been rescheduled tentatively for March 27.

The $460 million Applied Energy Services Shady Point cogeneration plant began producing electricity Jan. 15.

OG&E entered a 32-year contract with Applied Energy Services in 1985 for the plant's construction and power production. Once construction had been approved by the corporation commission, OG&E was bound to accept power generated at the plant.

Cogeneration is a process that takes one fuel source - coal or natural gas, for instance - and creates steam and electricity.

The fuel adjustment clause originally was instituted to allow utilities to increase rates as a result of higher fuel costs without a hearing before the commission. The cost to residential and industrial customers would be the same per kilowatt hour.

``It's the staff position that capacity costs for power production and operation and maintenance expenses should not be collected through the fuel adjustment clause but through base tariff rates of the utility company,'' said Jim Proctor, director of the commission's Public Utility Division.

OG&E spokesman Dave Raybern said OG&E's request to the Corporation Commission last year for permission to collect part of OG&E's costs for Applied Energy Services through another method, rather than through the fuel adjustment clause, was denied. …

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