OKLAHOMA CITY (AP) -- Oklahoma Natural Gas customers could see a rate reduction averaging $23 a household if the Oklahoma Corporation Commission approves a proposal to drop the base rate about $20 million a year.
But the drop won't automatically mean lower bills because the cost of natural gas is passed on to consumers and makes up about half the bill. If gas prices are higher, then that cost is passed on to consumers.
The agreement approved Monday by a pair of administrative law judges at the commission requires Oneok, ONG's parent company, to give customers a rate reduction of about $20 million a year beginning in the June billing cycle.
Seventy percent of the reduction would go to residential and small business customers and the remainder would go to large corporate customers.
The agreement was brought to the law judges by Oneok, the commission staff, Attorney General Drew Edmondson and Enogex and Transok, two competing gas suppliers.
Oneok had hoped to raise its rates. Oneok spokesman David Crisp said the proposed decrease was agreed to because of the company's improved management efficiencies.
Crisp said the company estimates the reduction will me about $23 in annual base rate savings for an average household, but pointed out that the base rate typically accounts for only half the bill.
Oneok also has agreed to the creation of Oklahoma Gas Transmission, a new company that would unbundle the gas transmission operations from the remainder of ONG and would bid against other gas transmission companies that supply ONG next winter.
Also included in the agreement is a plan to transfer Kansas Gas Service customers in Oklahoma to ONG. Oneok acquired Kansas Gas last year and has a few customers in northeastern Oklahoma
If there are no appeals, the agreement will be passed on to the commissioners.