Newspaper article THE JOURNAL RECORD

Closing Arguments Set in OG E Case

Newspaper article THE JOURNAL RECORD

Closing Arguments Set in OG E Case

Article excerpt

Journal Record Staff Reporter

Closing arguments in the Oklahoma Gas and Electric Co. rate case were tentatively set Tuesday for Nov. 30 at the Oklahoma Corporation Commission.

Rate hearings began April 29 and broke from mid-June until after Labor Day, continuing through Tuesday: in all, there have been about 70 days of hearings before the three-member panel. The rate case was filed by commission staff in January 1991.

Unless there is a scheduling conflict among the six parties in the case, on Nov. 30 each party will be given an hour to make a last pitch to commissioners.

Commission staff argues that OG E is making too much money from the rates charged to its Oklahoma customers. About 14 percent of OG E's customers are in western Arkansas or are wholesale buyers that fall under federal regulation.

Thus, commission staff asks that OG E's rates be lowered by $49.4 million and that the utility be ordered to refund $106.4 million to its in-state customers. The refund stems from a July 1991 interim order issued by the commission, which lowered OG E's rate of return on equity from 13.5 percent to 12 percent.

Conversely, OG E asserts that a $12 million rate hike could be proved. A rate increase is not being sought, but OG E protests a rate decrease, saying its rates are fair and generally low.

Part of the proposed rate decrease would come from rearranging OG E's method of passing through some $170 million in annual payments for electricity from two private cogeneration plants in Oklahoma. Under 1985 and 1986 commission orders, which also set the amount of cogeneration payments, only Oklahoma customers are now charged.

Commission staff propose that OG E's customers in Oklahoma either pay less for utility-owned plants or that the in-state customers only be charged 86 percent toward the cogeneration payments.

OG E has said it is almost certain that Arkansas and federal regulators will not approve higher rates if Oklahoma regulators amend the cogeneration payment method; thus, OG E stockholders would take the hit. …

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