On Thursday, the Oklahoma Corporation Commission voted to deny a second request from OG&E to implement “construction work in progress,” or CWIP. The utility regulating body had initially denied it in November.
The procedure would be used to finance the construction of two new natural gas turbines at its Horseshoe Lake Power Plant in eastern Oklahoma County. In November, OG&E was approved to build them and eventually charge customers for the cost, but regulators specifically denied the use of CWIP.
Shortly after Thursday’s meeting, OG&E announced it planned to file an appeal with the state Supreme Court. The company estimates CWIP would save customers $173 million in interest over the life of the units.
In a statement, Christi Woodworth, chief communications officer and chief of staff, said the commission ignored state law in its decision.
“Supreme Court action is necessary to ensure these savings for our customers,” she said. “OG&E will also file a motion for expedited review, as time is of the essence to secure these customer savings.”
“CWIP is the mechanism by which the legislature provided a solution to the challenges of meeting upcoming energy demand and necessary power generation. The commission refuses to implement the legislature’s policy determination aimed at building new generation at the lowest cost to customers."
At the center of the case is a new law requiring the regulators to approve CWIP requests for new or expanded natural gas projects. Senate Bill 998 became law in August, despite the OCC urging the legislature to vote against it.
The commissioners said it would increase immediate costs for customers and erode their authority in the rate-making process.
Oklahoma is one of several states that recently passed CWIP legislation. Missouri and Arkansas passed similar bills last year, and Kansas implemented one in 2024.
OG&E points to the law as a reason its request for CWIP should be approved. However, the OCC argued the law was not yet in effect when the company filed its application. The commissioners have also said it could add costs for people who may not benefit from the new energy generation.
“The math is so absolutely clear that CWIP treatment is a detriment to rate payers, where if they enjoy any savings at all, it's going to be 25 years and beyond before they get that savings,” Commissioner Todd Hiett said in November.
The law’s language was deliberated during the most recent meeting.
While discussing an order to deny OG&E’s CWIP request, Commissioner Kim David said she interprets the law differently from Hiett and Commissioner Brian Bingman. David voted against the order, saying she wants the courts to make a final decision.
“We've all struggled with the fact that the legislature gave us CWIP, and we're not sure about the constitutionality of them even telling us how to do rate-making,” she said. “So, I would like for the courts to be able to decide that too because we are not a policy-making body.”
Bingman and Hiett voted in favor of the order.
“I stand by the order I put forward, and I appreciate the vote of the commission to adopt that order,” Bingman wrote in a statement to StateImpact. “This was not a decision made in agreement or disagreement of a policy, but one rooted in the law.”
OG&E planned to file the appeal by the end of the day Thursday, according to a spokesperson.
“Given the discussion amongst the commissioners today, it’s clear we need a legal decision, and there is not alignment on interpretation of the law,” Woodworth said.
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