OKLAHOMA CITY (KOKH) — OG&E customers might see a spike in their energy bills.
The company wants $769 million from its customers to cover fuel costs from the February storms.
Before the costs can be passed onto customers, the request has to go through the Oklahoma Corporation Commission (OCC).
Matt Skinner, a spokesperson for OCC, said severe winter weather coupled with skyrocketing fuel prices led to a perfect storm.
"Practically overnight we saw natural gas costs go from two dollars and some odd cents to a thousand dollars," Skinner said. "We've never had a situation like that before. No state has ever faced a situation like that."
When the storms hit in February, OG&E spent more money on fuel to keep power flowing to around 858,000 Oklahomans.
Now, they're looking for that money back.
Rates will not be affected, the only cost that could increase would be the fuel recovery cost.
"It's whatever they had to pay for the fuel they can pass on to customers," Skinner said. "However, there are a number of legal requirements that have to be met."
Some of the legal items the OCC will look at include making sure OG&E will not make a profit off the recovery costs and that all the contracts used for the buying are legal.
While the recovery costs are being audited, the case is also going through the court system.
"What's different this time other than the sheer amount is the fact that these are being done under a new law passed by the legislature, called the securitization act," Skinner said. "And basically this is a way of enabling utilities to whatever their cost recovery is, to spread it out over a long time."
OG&E sent this statement to FOX25 News explaining their reasoning behind the request:
OG&E customers received a notice this week regarding plans to securitize the unprecedented fuel cost expenses associated with February’s historic winter storm. To date, customers have not been billed for any fuel costs related to that storm. Since February, OG&E has been exploring ways to minimize the impact on customer bills and we are now seeking to take advantage of the "securitization" law recently enacted by Oklahoma legislators. Oklahoma law provides for fuel costs to be passed directly to customers with no profit to the utility. Passing along the high costs for natural gas and wholesale energy during February’s unprecedented winter weather event through our normal process would have created a significant burden to our customers. Securitization provides utilities a way to spread fuel costs out over a much longer time period. As a regulated utility, hearings must be held with the Oklahoma Corporation Commission (OCC) to review and approve our request for securitization. The notice customers received is related to these hearings.
While $875 million is the original fuel cost and included in OG&E’s original securitization filing, the amount OG&E seeks to recover today is $769 million. This reduction is due to resettlements from the Southwest Power Pool for power utilized by SPP participants that was generated by OG&E. If our request is approved, the average residential customer would see an increase to their monthly bill of either $3.12 over 15 years, $2.52 over 20 years, or $1.99 over 28 years, as determined by the hearings.
The judge in the case is expected to make a recommendation by the end of this year.
The final decision will be in the hands of the OCC commissioners.
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