A bill that requires the OCC to allow companies that are expanding or building new natural gas facilities to recover construction costs from consumers before their facilities are operational will become law in August. The practice is known as “construction work in progress” (CWIP).
Senate Bill 998, authored by Sen. Grant Green (R-Wellston) and Rep. Trey Caldwell (R-Faxon), also shortens the OCC’s review window for natural gas expansion or construction.
Oklahoma is one of several states that recently passed CWIP legislation. Missouri and Arkansas passed similar bills this year, and Kansas implemented one in 2024.
According to a May OCC filing, OG&E withdrew a rate review request because it plans to resubmit the application once SB 998 becomes law. Rate reviews are among the first steps utilities take to change customer monthly bills.
When asked if OG&E submitted the request to raise monthly rates, the company said it generally files when current rates are not sufficient to cover operations. It did not specify if it plans to raise rates.
A spokesperson for the OCC said it’s the first time a utility has referenced the legislation in a filing.
“With the passage of SB 998, which will become effective ninety (90) days following the end of the current Oklahoma legislative session, OG&E believes that a delay in the timing of the rate case proceeding is appropriate,” the OG&E document reads.
It also points to a pre-approval application it filed on May 19, which includes its plans to use CWIP for two new simple-cycle natural gas turbines at its Horseshoe Lake power plant. It’s unclear how much the construction could cost its 909,000 customers.
Commissioners have vocalized disagreements with the bill this year. In May, the OCC sent a memo to lawmakers urging them to block the bill’s passage.
“SB998 only benefits the utility company at the expense of the ratepayer, who will be forced to fund these projects prior to receiving the benefits,” Kim David, OCC chairman, said in the memo.
Although the use of CWIP has previously been available to companies, it’s rarely used. David said it had been more than a decade since a utility company attempted to recover CWIP costs before a plant was proven operational and useful.
Proponents of Senate Bill 998 say CWIP could save customers money in the long term. In an email, OG&E estimated the cost recovery for its new gas turbines will save customers about $190 million in the future.
Yet, Corporation Commissioners said the practice increases the financial load on Oklahomans.
“This radical approach shifts the burden from shareholders to customers to fund capital investment and allows for a utility to profit from this investment before it produces electricity,” Commissioner Todd Hiett said in May.
OG&E’s withdrawal document, which references its new natural gas turbines, states it plans to refile its rate review “at an appropriate time.”
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