The three-member Oklahoma Corporation Commission on March 14 unanimously approved a $46 million rate hike for Public Service Co. of Oklahoma.
The commission on Feb. 27 approved a settlement, giving the company a 9.4% return on equity, below the national average of 9.59% in 2018, and finalized the decision on March 14. (Oklahoma Corporation Commission Cause No. PUD201800097)
"The settlement will allow PSO to make necessary investments to maintain and improve the safety, security and reliability of the electric system while mitigating impact on customer bills," the company said in a statement.
The increase is just under half of the $88.5 million, or 6.5%, base rate increase, initially requested by the American Electric Power Co. Inc. subsidiary.
The company in September 2018 applied for the rate increase to recover increased costs and system investments since 2017, a grid modernization plan to replace and upgrade aging infrastructure, and requested the adoption of performance-based ratemaking.
Under the settlement, the company cannot seek a performance-based rate plan or a cost-recovery rider for grid modernization. But, the company said, it does provide for more timely recovery of transmission and distribution investments.
Commissioner Bob Anthony said in a statement that approval of the agreement "means customers in all sectors and PSO now know what to plan for, without waiting months while the rate case is litigated."
"The agreement also sets up a process in which PSO will be able to address, in a timely manner, reliability projects" that would otherwise have to wait for a lengthy approval process.
PSO President and COO Peggy Simmons said in a separate statement, "The agreement approved [March 14] will create a path forward for us to continue providing safe, secure, reliable and affordable service."
The average residential customer's bill will increase roughly $2.38 per month, under the approved settlement. According to the commission, the company's original request would have hiked the average residential utility bill by up to $7 per month.
PSO, headquartered in Tulsa, Okla., serves more than 550,000 customers in eastern and southwestern Oklahoma.