The legislation was written by Senators Todd Gollihare (R-Kellyville) and Grant Green (R-Wellston) with Rep. Trey Caldwell (R-Faxon) serving as the House author.
The bill requires the OCC to permit utilities to charge customers for the construction costs of new or expanded facilities, as long as they use natural gas. The construction-work-in-progress expense recovery is not new, but is usually given to companies on a case-by-case basis.
“It's extracting dollars from rate payers to subsidize the construction of natural gas plants,” Corporation Commissioner Todd Hiett said Thursday.
Hiett, who joined other commissioners Kim David and Brian Bingman in an opposition vote against the bill in April, said it will likely end up in court. He said he does not know whether the OCC would be part of the challenge, but the commissioners would vote on it during a meeting.
“ I'm certain it will be challenged at the [Oklahoma] Supreme Court on the basis of constitutionality,” he said.
The bill also directs the commissioners to speed up their application review time for natural gas builds and give special rates for construction recovery expenses to the companies.
Utilities that terminate their projects are required to issue refunds of the recovered expenses within 90 days.
During a debate on the House floor before the legislation passed, Caldwell defended the bill, saying it would reduce costs for customers.
“In the long term, it will save rate payers money,” he said.
Opponents of the bill say the added costs from expense recovery could mean some consumers would pay for facilities they may not benefit from.
“Many struggle to pay their electric bills,” Hiett said. “If they're 80 years old, they don't want to wait 20 years to get a benefit.”
The OCC’s next meeting is scheduled for May 19. A discussion about the bill is not on the regulator’s agenda as of May 16.
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