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OG&E reaches settlement in rate case


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OG&E reaches settlement in rate case

Oklahoma Gas and Electric Co. will keep base rates unchanged under a non-unanimous joint stipulation and settlement agreement for its Oklahoma rate case.

But the company will still be able to fully recover environmental investments at two power plants. This is due to the reduction of costs related to cogeneration contracts and the acceleration of unprotected deferred tax savings over a 10-year period.

In connection with the settlement, the stipulating parties will also not object to OG&E's request for findings that installing dry scrubbers at the 1,040-MW Sooner plant's units 1 and 2 and converting the 1,508.5-MW Muskogee plant's units 4 and 5 to natural gas are prudent, used and useful. These environmental investments are for compliance with the U.S. Environmental Protection Agency's Regional Haze Rule.

Under the settlement, the utility's current depreciation rates and 9.5% return on equity for calculating the allowance for funds used during construction, and various recovery riders that include a full return component, will stay the same.

Parties to the settlement include the Oklahoma Corporation Commission staff, the Attorney General's Office of Oklahoma and the Oklahoma Industrial Energy Consumers. The commission still needs to approve the settlement.

On Dec. 31, 2018, the OGE Energy Corp. subsidiary filed an application requesting a rate increase of $77.6 million per year to recover its environmental investments. The request was based on a return on equity of 9.9% and a rate of return of 7.52%.

The OCC staff recommended on April 22 that the company be granted a rate increase $40.1 million, based on a return on equity of 9% and a rate of return of 7.04%. (OCC Cause No. PUD 201800140)