PSO, Consumer Group Dispute Over Proposed Rate Hike

Wednesday, January 9th 2013, 6:51 pm
By: Emory Bryan

Tulsa's electricity provider, PSO, will ask for a rate increase to pay for new rules on exhaust from their Oologah power plant.

A group representing large electric users says PSO is asking for too much, too soon.

The Oologah station is PSO's only coal-fired power plant, but it, alone, consumes 3 million tons of coal each year.

The emissions from the plant have been under scrutiny, and to satisfy a likely set of new regulations, PSO decided to retire the two coal fired generators at Oologah over the next 14 years, leaving the rest of the plant operating on natural gas.

In the meantime, they'll install new equipment to cut down on pollution.

"Certain rules are already in place and others are pending and one of the critical things is to have a plan and get moving, so the costs don't escalate," Stan Whiteford, of PSO, said.

PSO's plan starts with $350 million dollars of expenses and an expected 11 percent rate increase, but that's unnecessary, according to a group representing PSO's largest customers.

"That is a huge increase and would be, to my knowledge, the largest increase ever awarded by the Corporation Commission," said Tom Schroedter, of Oklahoma Industrial Energy Consumers.

The plan to mothball the coal plant requires state approval, and the rate change wouldn't start until 2016.

The industry group wants to keep the plants operating, figuring it's less expensive than PSO's planned switch to natural gas.

"Those plants have a life of 60 years, so they have a lot of life left and we believe the retirement of those plants is premature," Schroedter said.

But Whiteford said, "We disagree with their assessment of the costs associated with the plan."

PSO says they've picked the least expensive option that complies with the regulations.

"The scenario we came up with is one of the least cost options, and one that will put us in compliance with the EPA, and there's not a way to escape a rate increase in this," Whiteford said.

The state hearings on all this begin in April and a decision should come before the end of the year.

The proposed rate increase would be considered separately, and is now projected at 11 percent, to start in 2016.