OG&E accepts Arkansas utility rate case settlement

Wind turbines located on the western edge of Grady County near Minco, OK.

Oklahoma Gas and Electric Co. accepted a settlement in an Arkansas utility rate case.

The company will receive a $7.1 million rate increase and a 9.5-percent return on equity. The settlement process and rate-making process are easier and more straightforward there than in Oklahoma, said spokesman Brian Alford.
The settlement process is easier in Arkansas in part because there are fewer intervening groups in cases, he said. The last Oklahoma rate case had 15 intervenors, which include the Oklahoma Corporation Commission staff and the attorney general’s office. The Arkansas case had five intervenors.
“That makes it easier for parties to reach a settlement and everyone can walk away from the table feeling good about (it),” Alford said.
The company announced the agreement Tuesday in a regulatory filing. The Arkansas Public Service Commission approved on May 18 a settlement among the utility, the agency’s staff, Attorney General Leslie Rutledge, Wal-Mart, Arkansas River Valley Energy Consumers and the Sierra Club.
OG&E asked for a $16.5 million rate increase and a 10.25-percent return on equity. The company spent $3 billion in Arkansas on infrastructure upgrades since 2011, including replacing poles, wires and tree trimming. Alford said it’s important to continually make upgrades to ensure reliable electric infrastructure for businesses and for residential customers.
The deal included an agreement to use a formula rate rider, which is an easier, more reliable way to recover the investment the company makes than the rate formula used in Oklahoma, Alford said. The formula determines return on equity and depreciation rates, and can be adjusted year by year. Rate cases using formula rate riders are filed every five years.
Sean Trauschke, CEO of parent company OGE Energy, previously criticized Oklahoma’s regulatory environment. The Corporation Commission approved a 9.5-percent return on equity for the utility’s most recent rate case.

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