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Okla. lawmakers aim to prohibit interim rate increases in long rate cases

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Okla. lawmakers aim to prohibit interim rate increases in long rate cases

If the Oklahoma legislature has its way, regulated utilities in the state will no longer be able to charge interim rates during prolonged rate cases.

The state Senate and House filed bills on Jan. 18, 2017, and Dec. 27, 2016, respectively, that would stop the utilities from implementing interim rates if the Oklahoma Corporation Commission takes more than 180 days from the date of the filing to make a decision. Rep. Pat Ownbey introduced H.B. 1891, and S.B. 282 was introduced by Sen. Nathan Dahm.

Both bills stipulate that when a utility files for a review of its rates and charges, that case must be given "immediate attention" by the OCC, which has general supervision over all public utilities in the state, including the authority to set rates. The OCC would be required to complete any analysis related to reviewing the request within 120 days from the application filing date. Any related public hearings must begin within 45 days of the end date of the review by the OCC, the House version of the bill said. The existing rule enables a utility seeking a rate increase to implement interim rates, subject to refund with interest, if the case goes on for more than six months.

Stan Whiteford, spokesperson for American Electric Power Co. Inc. subsidiary Public Service Co. of Oklahoma, said the company "invests hundreds of millions of dollars each year" to make sure that its customers have the "reliable and affordable electric service that they expect."

"The existing 180-day rule is critical in trying to achieve timely recovery for those investments," he added.

Randy Swanson, spokesperson for OGE Energy Corp., said, "The bills filed regarding interim rates are, I am sure, well-intentioned, but it would undo a very fair law that has been on the books for more than 20 years."

"At that time, [subsidiary] Oklahoma Gas and Electric Co. for example, was involved in a rate case that took more than three years to resolve," Swanson said in an email. "It is difficult to operate a business with that much uncertainty for so long."

Mark Nichols, associate state director of advocacy for Oklahoma's AARP chapter, said Oklahoma is "one of only six states in the country that allow utilities the ability to set their own interim rates."

AARP worked with Dahm to craft the bill, the organization confirmed. "AARP's position is that without regulatory oversight, customers should not be forced to pay interim rates," Nichols said.

If passed, the Senate bill would go into effect Nov. 1. The Oklahoma legislature convenes its 2017 legislative session Feb. 6.