Rate hike proposed for OG&E

OKLAHOMA CITY (AP) _ Neither Oklahoma Gas and Electric Co. nor its industrial consumers say they're happy with a recommendation by an Oklahoma Corporation Commission referee on a proposed rate hike

Saturday, November 5th 2005, 12:02 pm

By: News On 6

OKLAHOMA CITY (AP) _ Neither Oklahoma Gas and Electric Co. nor its industrial consumers say they're happy with a recommendation by an Oklahoma Corporation Commission referee on a proposed rate hike by the utility.

The commission did not release a dollar figure attached to the recommended increase, but both sides say it represents an annual hike of about $41 million.

``The amount is less than what's needed to cover the cost of the McClain power plant, which we acquired last week and is providing power to tens of millions of customers,'' OG&E spokeswoman Sondra Longcrier said. ``The recommendation also fails to recognize more than $400 million in necessary reliability improvements.''

The utility's industrial consumers, however, said the recommended amount is too high.

``We think such an increase is not justified and would be adverse to business and industries,'' said Thomas P. Schroedter, attorney for Oklahoma Industrial Energy Consumers. ``We don't think it is supported by the evidence.''

The state's largest electric utility in May asked for an $89 million annual rate increase. Under OG&E's proposal, residential consumer bills would increase about $3 a month.

While the utility asked for an increase, however, the attorney general's office said the company's rates instead should be reduced by $24.5 million. The industrial consumers called for a reduction of $31 million, and the Oklahoma Corporation Commission staff suggested an increase of $13 million.

The referee also endorsed a proposal that would more evenly distribute the rate increase among OG&E customers.

The utility's initial rate request called for a 3.5 percent rate hike for residential consumers, a 9.6 percent increase for large industrial consumers, a 3 percent to 6 percent drop for schools and a 7 percent decrease for most small businesses.

The joint counterproposal, however, would give residential and large industrial customers the same percentage increase while small businesses and schools would experience no rate change.

Corporation commissioners are expected to begin deliberating the issue at 9:30 a.m. Monday in the commission's main, third-floor courtroom.