The first day of a multi-million dollar rate increase case being proposed by Oklahoma Gas and Electric (OG&E) was heard by an administrative judge at the Oklahoma Corporation Commission (OCC) Tuesday.
The electric and gas company, which is the state’s largest energy provider, is asking for a rate increase of $92.5 million. The increase would mean adding roughly $7.22 to the average monthly residential energy bill. If passed by the judge, the OCC commissioners would have the final say in the proposed rate.
Because energy costs are regulated, OG&E must get approval from the state via the OCC. OG&E filed the request in Dec. 2015 to offset falling fuel costs during an historic drop in energy prices.
“We have put all this money into our system to make a better system for our customers. So all we're asking is to get a reasonable return and recovery on that,” OG&E Spokesperson Kathleen O’Shea said Tuesday.
O’Shea added the net increase in a monthly bill over the next six years would only be 47 cents after the company adjusted fuel costs last year and reduced bills by $6.75. The increase would be the company’s first increase in four years. In 2012, OG&E asked the state for a $73.25 million increase, but settled for a $4.3 million.
The company is also asking the state to approve doubling a monthly service fee. Normally fixed at $13, the fee would rise to $26 per month. The doubled fee could add as much as $315 a year in energy costs.
OG&E is also looking to implement a mandatory demand charge, which is based on the maximum amount of energy used per month per customer. The charge would be $2.75 per kilowatt O’Shea said. According to OG&E, the average customer uses between six and eight kilowatts during peak usage. The charge could add as much as $30 to a monthly bill, but O’Shea said it would be offset by lower usage periods, similar to the utility’s Smart Hours program.
During the case, each side calls witnesses and allows the judge to examine evidence. Several groups including AARP Oklahoma, environmental groups, OCC’s public utility division have voiced opposition to the bill, alongside Oklahoma Attorney General Scott Pruitt who represents the people of Oklahoma in the case.
“When you add all these costs up, it's a three-headed monster. It could be an additional $812 per year that residential rate payers could be shouldering,” AARP Oklahoma State Director Sean Voskuhl said. “Many folks can't get by with that increases they're living month-to-month with fixed incomes.”
Matt Skinner with OCC said the case could last the entire month of May although similar rate cases have usually ended in settlements known as joint stipulations. OG&E officials have said they hoped to have the increase in place by June.