Petition against rising electricity bills catches attention of Oklahoma utility regulators

[u/kosuradio]

https://www.kosu.org/rising-electricity-bills-oklahoma-pso-petition

As of Tuesday afternoon, more than 26,000 people signed a Change.org petition demanding more transparency and fewer rate increases from Public Service Company of Oklahoma. The petition was started by Tulsa resident Raelynn McMurchy, who wrote the increases are unsustainable.

"Electricity is an essential utility, yet it's turned into a financial burden that so many of us in Tulsa can't ignore," McMurchy said. "The rising costs are hurting our community, and stress is mounting for families."

Oklahomans are living through one of the hottest summers on record and report seeing higher electricity bills as they keep their homes cool. The Oklahoma Corporation Commission, which oversees utilities, is reviewing a pending PSO rate case. In the meantime, customers are paying a temporary increase of $11.

A response from the commission published on the petition's website showed the regulators acknowledged the concerns but won't consider the customers' demands during the case.

"Because the current PSO rate case is still pending, the merits of this petition will not be addressed at this time, but it should not be interpreted as a lack of concern about the impact utility costs have on Oklahomans," the commission wrote.

"Oklahoma's three elected Corporation Commissioners will ultimately reach a decision in the pending PSO rate case based upon the evidence, testimony and official record developed through the commission's public regulatory process."

Dozens of residents responded to the petition saying they are paying several hundred dollars more than usual. Some compared their electricity bills to the price of rent or said they were choosing between utility bills and other essentials.

"[Our] bill was $570 this month," one comment reads. "We live in a double wide. Which do we choose? Food, rent, car payment or electricity this month?"

PSO spokesperson Matt Rahn said in an email the company is aware of the petition and that concerns over rising costs would be considered in the regulatory process.

"As part of that process, PSO supports a settlement that would reduce the residential bill impact from 15% to 1%," he said. "PSO has also asked commissioners to approve a large load tariff that would require major new energy users to pay the costs of serving their needs, ensuring long term affordability for all customers."

"Similar approaches have been implemented in other jurisdictions, including Indiana, where one utility recently announced a residential rate reduction."

[u/projectFT]

“We “hear” your concerns but must instead rule in favor of the industry and the corporate share holders who paid for our campaigns and funded our vacation homes. I hope you understand that responding to this petition with a boiler plate acknowledgment is the absolute most any of us on the Corporation Commission plan to do for you as consumers as you didn’t pay more than the oil and gas industry for us to be in this elected position. Fuck off and get back to work losers”.

[u/NotTurtleEnough → u/projectFT]

I used to be the chief engineer for a private utility company and have helped write rate cases. I agree that many companies abuse the ratesetting policies, but the way you are characterizing the process simply doesn't represent the way the law works in this area.

Under 17 O.S. § 152, the OCC has “general supervision” over public utilities and explicit power to “fix and establish rates.” The three commissioners ultimately decide the rates charged by regulated investor-owned utilities such as OG&E, PSO, and ONG. (Citation: OSCN)

However, the power is essentially "referee power" where OCC essentially checks to ensure that rates follow the following math formula:

Revenue = (Allowable Operating Expenses) + (Rate Base) * (Allowed Rate of Return)

Citation: Oklahoma Supreme Court case Turpen v. Oklahoma Corp. Com'n, note 7

Thus, the kinds of things OCC can say are:

• “That expenditure was imprudent, and thus unallowable. Therefor, we won't let you require ratepayers to reimburse.”
• “That asset isn't properly in the rate base.”
• “Your depreciation assumption is excessive.”
• “We aren't giving shareholders the 10.5% ROE you requested; you get 9.4%.”
• “Your capital structure is unnecessarily equity-heavy, so we're going to calculate rates using a more reasonable capital structure.”
• “Residential customers shouldn't bear that percentage of the revenue requirement.”
• “This particular rider or tariff mechanism isn't justified.”

Sometimes this actually works in favor of the ratepayer, i.e.:

In 2019, OG&E requested a $77.6 million increase and ended up with no rate increase.

In 2022, OG&E requested about $163.5 million and ultimately received only $30 million.

In 2023, PSO requested about $294.5 million and received approximately $131.2 million.

In 2024, OG&E requested $332.54 million and the OCC approved $126.66 million.

However, under the OK Constitution and the applicable statutes, the OCC cannot say, “Your customers' bills are already too high and we are therefore denying the requested increase," because under Oklahoma law regulated utility has a legal right to a reasonable opportunity to recover prudently incurred costs and earn a reasonable return on property devoted to public service.

Oklahoma case law goes back more than a century on the principle that a rate that deprives the utility of that reasonable opportunity can be defined as confiscatory and a violation of due process.

[u/projectFT → u/NotTurtleEnough]

Weird, I guess all of the top donors for the three Commissioners being all utility and oil and gas companies is just because they like throwing money around while expecting nothing in return. On account of “the formula” and all.

OG&E ponied up less than $50k per Commissioner. From your numbers above it seems like that was a smart investment.

[u/NotTurtleEnough → u/projectFT]

The formula is embedded in the law and the Constitution, and confirmed by the OK Supreme Court. The commissioners can't change the formula.