OKLAHOMA CITY (April 27, 2023) – Attorney General Gentner Drummond and several parties representing customer interests have entered into a joint stipulation and settlement agreement with Public Service Company of Oklahoma (PSO) regarding its pending application for approval of six capacity projects. The settlement paves the way for a decrease in PSO customer rates beginning in 2026.
The project is projected to add an average amount of $1.95 per month for PSO customers for a few months in 2025. By 2026, due to the production tax credits and reductions in fuel usage, the project is expected to reduce the average customer’s bill by $2.58 per month. This will result in a net rate decrease of $0.64 for the average utility customer in 2026.
If approved by the Oklahoma Corporation Commission, the settlement agreement would authorize PSO to move forward with plans to add three solar farms and three wind farms that will provide 995 megawatts of power production capacity in exchange for significant protections for PSO’s customers. The six projects have a combined projected cost of $2.5 billion.
“With a project of this magnitude, it was imperative to put in place customer protections to safeguard Oklahoma ratepayers,” Drummond said. “I am pleased that this settlement will result in more capacity in times of need, at cheaper rates for PSO customers. I am thankful for the hard work and dedication of my office’s utility regulation unit leader, Deputy Attorney General Chase Snodgrass, who worked in good faith with PSO representatives to achieve the best possible outcome for Oklahoma families and businesses.”
Drummond said the Attorney General’s Office advocates each day for affordable utility rates for public utility customers. As a result, the latest settlement agreement includes extensive protections for ratepayers.
Customer protection measures outlined in the settlement include:
* Requests for proposals – Future requests for proposals must include all types of energy sources to keep costs competitive and ensure customers receive the benefit of lowest cost resources regardless of their fuel source.
* Cost cap – PSO will cap the cost of the project at $2.47 billion, ensuring any cost overruns are not passed on to ratepayers. It also guarantees that any reduction in project costs are recognized to the benefit of customers.
* Production tax credits – PSO agreed to guarantee that the renewable resources in this project will qualify for tax credits, which offsets a large portion of the project cost.
* Net capacity factor – PSO will guarantee that the project will produce a certain level of power, which offsets the costs of other resources that use fuel commodities. This guarantees a large part of the underlying economics for the projects.
* Gas procurement and gas storage – PSO will conduct a collaborative process for its fuel supply plan and evaluate gas procurement and gas storage options to ensure reliability and lower customer costs. This measure is designed to prevent surging energy prices, such as those utilities encountered during winter storm Uri.
* Accountability provisions – The settlement includes language to ensure PSO upholds its obligations. Should the company fail to meet any of its guarantees, PSO will be required to make its customers whole.