Corporation Commission accepts settlement in ONG rate cases

Tuesday, April 30th 2002, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) _ The Oklahoma Corporation Commission agreed Tuesday to settle a pair of rate cases involving Oklahoma Natural Gas for $34 million in a deal that one commissioner described as inadequate.

Following a daylong hearing where commissioners clashed with ONG's attorneys, the commission voted 2-1 to accept an agreement that will reduce the average ONG customer's gas expense by more than $35 over the next three years.

The agreement is still subject to a written order that is to be drafted by Friday that must be signed by commissioners as well as ONG officials.

ONG President Samuel Combs III said the utility will study changes to ONG's proposal requested by the commission.

The changes involved crediting the accounts of ONG customers who have disconnected their service and ONG's demand that the commission not review gas contracts completed prior to 1997.

``It has been a very long and contentious issue,'' Combs said. ``This global settlement is about getting past these issues.''

Commissioner Bob Anthony, who cast the no vote, criticized the plan for not going far enough to provide ``direct cash refunds to ratepayers'' that the commission maintains have been overcharged for more than eight years.

``It's inadequate,'' Anthony said. ``It can be characterized as accounting manipulation.'' He said the actual value of the deal in real dollars is closer to $12 million.

Under the plan, ONG's residential customers would receive a $13 credit in June.

``The credits will be itemized on the customers' bills,'' said ONG attorney Jay M. Galt.

Bills will go down beginning in April 2003 due to changes in the company's gas purchasing practices that will reduce reservation fees and gas expenses.

Anthony said the public was more interested in receiving direct refunds than credits to their accounts.

``The public deserves openness. The public deserves honesty,'' Anthony said. ``We don't need any funny money. Cost avoidance is not as clearly understood as direct cash refunds to ratepayers.''

Commissioner Ed Apple moved to accept the plan, stating that he wanted to solve problems ``not prevent solutions.''

``To dwell any longer on any comments is counterproductive,'' Apple said.

``I do believe it provides benefits to consumers,'' said Commissioner Denise Bode. ``The agreement today does move us forward.''

Experts who testified in the case estimated that ONG overcharged its customers by $72 million through gas purchases during the winter of 2000-2001.

ONG customers were overcharged $100 million due to the company's gas purchases in 1993 from Dynamic Energy, according to expert testimony.

Commission spokesman Jim Palmer said the commission's staff estimated $34 million in overcharges from gas costs in the winter of 2000-2001 and $40 million in the Dynamic case.

Commission officials claim that ONG gave preferential treatment to Dynamic and its customers paid too much for natural gas.