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OG&E seeks $77.6M rate hike in Oklahoma to recover power plant investments

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Essential Energy Insights - September 17, 2020

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OG&E seeks $77.6M rate hike in Oklahoma to recover power plant investments

Oklahoma Gas and Electric Co. is seeking a rate increase of $77.6 million per year, or 4.4%, to recover $609 million in costs tied to environmental upgrades at the Sooner and Muskogee coal-fired plants in Oklahoma.

In a filing with to the Oklahoma Corporation Commission, the OGE Energy Corp. subsidiary said it invested approximately $534 million to install emissions-reducing scrubbers at two Sooner units and is spending another $75 million to convert two Muskogee units from coal to natural gas to comply with the federal Regional Haze Rule.

"The first Sooner scrubber is online and the second is scheduled to go into service in January 2019," said OG&E spokesman Brian Alford. "It's important to note that this project is on schedule and approximately $80 million under budget. Similarly, the Muskogee conversion is scheduled to go online in January 2019, also on time and under budget."

The utility expects overall plant emissions to be significantly lower from 2005 levels, thanks in large to its investments in the two facilities. Beginning in 2019, sulfur dioxide emissions are expected to be lower by nearly 90%, nitrogen oxide to be lower by nearly 75% and carbon dioxide to be lower by approximately 40%.

If approved, average residential customers will see a monthly increase of $7.60 in their bills.

In addition, the company requested the commission to align its return on equity more closely to the industry average for utilities like OG&E and to align its depreciation rates to more realistically reflect actual asset lifespans.