Attorneys Navigate Regulatory Maze In PSO Rate Case

OKLAHOMA CITY (AP) _ Attorneys for Public Service Company of Oklahoma and groups that oppose PSO's proposed $47.9 million rate increase outlined their positions Wednesday to members of the Oklahoma

Wednesday, June 13th 2007, 5:56 pm

By: News On 6

OKLAHOMA CITY (AP) _ Attorneys for Public Service Company of Oklahoma and groups that oppose PSO's proposed $47.9 million rate increase outlined their positions Wednesday to members of the Oklahoma Corporation Commission, who will decide whether to give PSO any or all of what it wants.

The attorneys helped members of the commission navigate the regulatory maze they will have to follow before deciding whether the Tulsa-based utility will receive the rate increase it applied for in November to help pay for more than $2 billion in new generation and distribution facilities the company plans over the next five years.

A final decision is expected by the end of the month. PSO serves about 514,000 customers in eastern and southwestern Oklahoma.

Attorneys gave their closing arguments in the complex rate case two weeks after an administrative law judge handed down a 376-page recommendation to the commission. Under the recommendation, PSO would receive a rate increase of between $9 million and $23 million a year, depending on how the rates are calculated, authorities said.

If rates rise $23 million, an average PSO customer using 1,000 kilowatt hours of electricity a month would pay $3.55 more under the proposal, according to PSO officials. Residential rates would rise about 8 percent, or around $6.50 per month, under PSO's original rate increase request, the company said.

Jack Fite, attorney for PSO, said the company has not received a rate increase since December 1993. Since then, PSO has invested about $1.3 billion in electric infrastructure across Oklahoma, according to company officials.

PSO has reduced its base rates twice in the past decade, in 1997 and 2005, Fite said. Rates were also reduced through a series of rate credits following a merger involving its parent company, American Electric Power.

But several groups, including Oklahoma Industrial Energy Consumers, Attorney General Drew Edmondson's office, which represents ratepayers in public utility cases, and the commission's own staff opposed PSO's request and suggested that PSO's electricity rates be reduced.

They also opposed PSO's plan to adopt an adjustable rate mechanism to reflect the investment PSO will make in the new facilities. The plan would allow annual review of PSO's rates and earnings and would substitute for the filing of traditional rate cases over the next several years.

Lee Paden, attorney for the Quality of Service Coalition, said PSO did not meet the burden of proof required to merit a rate increase or adoption of its proposed formula-based rate structure, which he said ``is virtually a request for a blank check.''

``What PSO is asking here is tantamount to relaxed commission oversight,'' said Cheryl A. Vaught, attorney for Redbud Energy.

Approval of the new rate structure would be like a rate increase, said Thomas P. Schroedter, attorney for OIEC.

``It's a windfall for the company,'' Schroedter said. ``In essence what you're doing is transferring wealth from the customers to the company.

``You would be awarding a blank check to the company. A decrease is the way to go here,'' he said.