Rising electrical costs focus of House energy bill

Saturday, March 5th 2005, 11:45 am

By: News On 6

OKLAHOMA CITY (AP) _ Legislation that would give the Oklahoma Corporation Commission more authority to scrutinize utilities and curb rising electrical costs will not be heard by a state House committee, the committee's chairman said Friday.

The measure would require Oklahoma utilities to purchase the lowest reasonably priced power for their customers. It has the support of industrial electricity consumers who say their utility costs have steadily risen in recent years.

Oklahoma had the 22nd lowest energy costs in the nation in 2003, up from eighth lowest in just five years, according to the U.S. Department of Energy.

``We think the costs are rising greater than they are nationally,'' said Tom Schroedter, executive director and general counsel of Oklahoma Industrial Energy Consumers.

Oklahoma Corporation Commissioner Bob Anthony expressed sympathy for the bill's goals. The commission regulates Oklahoma utilities and the oil and gas industry.

``I think the commission has been lax in the last decade in having a thorough prudence review of fuel costs incurred by electric and gas utilities,'' Anthony said. ``Industrial and residential consumers understandably are entitled to more thorough review.''

But the chairman of the House Energy and Utility Regulation Committee, Rep. Dennis Adkins, R-Tulsa, said he will not give the measure a hearing when the committee meets Tuesday. The bill will die in committee if it is not heard next week.

``It would just be an unnecessary law,'' Adkins said.

A spokesman for Oklahoma Gas and Electric, Oklahoma's largest utility, described the measure as ``smoke and mirrors legislation.''

Spokesman Brian Alford said OG&E already shops for the lowest reasonable cost power and blamed increases in electrical costs on the rising cost of natural gas, which fuels many power plants.

``Through no fault of our own, the state has slipped,'' Alford said. He said 70 percent of OG&E's fuel is coal, which is one-sixth as expensive as natural gas. Oklahoma also utilizes wind power but other states harness inexpensive hydroelectric and nuclear power.

``It's the fuel mix that we use in this state,'' Alford said.

He said the measure is a bailout bill for private companies that have spent billions of dollars in the state in recent years on independent power plants that are under used.

``It's the lawyers' full employment act,'' Alford said of the drafters of the bill.

Supporters say Oklahomans are paying more than necessary for utilities to produce power from their own generators instead of buying cheaper power from newer plants. Utilities are currently passing more than $1 billion in fuel costs each year to ratepayers.

``We have new and more efficient plants that aren't being utilized,'' said Cheryl Vaught, legal counsel for Redbud Energy, which operates a state-of-the-art natural gas-fired power plant in Luther.

The measure would give the Corporation Commission new authority to conduct a prudency review of utility operations to assure they are purchasing the lowest reasonable cost power rather than producing it themselves at higher cost.

``When fuel costs are the majority of the bill consumers pay every month, it should be a priority,'' Anthony said.

Alford said the Corporation Commission already has ``a very detailed process in place'' to scrutinize what OG&E does and conducts an annual fuel hearing to ensure prudency.