The Oklahoma Corporation commission breaks down the rising costs

Over the past year, here in Oklahoma and across the country, we have seen price increases on everything from gas to groceries and of course our electric bills.

We’ve broken down where the cost increase is coming from and it’s mainly due to rising fuel costs.

We spoke to the Oklahoma Corporation Commission, which has broken down both utility companies’ cost increases since January 2022 to date.

“We’re very affected by increases in energy costs, and we’ve seen that over the past year,” said Matt Skinner of the Oklahoma Corporation Commission.

The average customer using OG&E and ONG saw a monthly increase of about $23 on their OG&E bill and a monthly increase of about $8 on their ONG bill. But these increases aren’t just a “price hike” by utilities.

“It’s important to understand that there is a difference between the fares we pay and the fuel costs we pay,” Skinner said.

Fuel costs account for 84% of the increase in ONG bills and 86% of OG&E bills. The average ONG customer saw a monthly increase in total fuel costs of $6.33. The average OG&E customer experienced a monthly increase in total fuel costs of $13.07.

The average OG&E customer saw a price increase of $1.15 monthly on their ONG bills and $2.07 monthly on their OG&E bills.

“So fuel costs are where we really get hit,” Skinner said.

Both utilities saw increases in fuel costs following winter storm Uri in 2021. The average ONG customer saw a $6.33 increase and the average OG&E customer saw a $3.34 increase.

“Under state law, a utility can reclaim the fuel it paid for and pass it on to the consumer, but it can’t make a profit,” Skinner said.

While this is federally regulated and audited by the OCC to ensure utilities do not benefit from the costs, the price of natural gas is not federally regulated.

In a statement today, ONG said: “Natural gas prices have fluctuated significantly over the past year, which has caused customer bills to fluctuate as well. These prices are set by the market, Oklahoma Natural Gas does not set the gas price.”

In a statement on Tuesday, OG&E said, “No one – including OG&E – wants utility bills to go up,” adding that during the 2021 winter storm, “the natural gas market saw a dramatic increase in demand that led to a large price spike.”

Full statement from ONG:

  1. Natural gas prices have increased over the past year, which has a direct impact on customers’ bills based on the amount of gas consumed. It is important to note that Oklahoma Natural Gas does not set the price of gas or increase gas costs. Natural gas is a cost passed on to our customers. Customers can reduce the impact by following the preservation tips on our website.
  2. We had two requests this year. The first, performance-based installment (PBR) is an annual filing we have each year, which is determined by the amount we invest in our system each year to continue delivering safe and reliable energy. This year we also had an additional request for an adjustment due to Winter Storm Uri, the cost reimbursement for the winter event. This amount was added to customers’ invoices in September.
  3. As part of the regulatory process, the performance-based settlement agreement (PBR) approved today allows our company to continue investing in infrastructure and operational costs that ensure the safe and reliable delivery of natural gas to our customers. Finally, we know these are difficult times for Oklahoma, and we understand that even a small increase in monthly bills could impact the ability of many of our customers to pay. We encourage our customers who are having difficulty paying their utility bills to contact us or visit oklahomanaturalgas.com/CARES for information about assistance programs and payment options.

Full statement from OG&E:

We know that rising inflation has increased the cost of many household items, including groceries and fuel, and is creating financial hardship for many of our customers. Nobody — including OG&E — wants electric bills to go up. We strive to provide a reliable and resilient electricity service at the lowest possible prices. OG&E understands the financial impact each increase has on our customers and remains committed to continuing our long-standing track record of providing affordable plans and program offerings to help customers manage their monthly bill and energy consumption. We encourage individual customers who are having trouble paying their bill to contact us at 1-800-272-9741. OG&E offers various programs and services to help customers manage their energy consumption and monthly bills:

· OG&E offers qualifying customers payment plans that include extended payment terms and no late fees;

· OG&E also connects customers to social services who can help with billing. For example, qualifying low-income customers can receive a $13 per month credit on their monthly bill for 24 months through the LIHEAP program administered by the Oklahoma Department of Human Services (DHS);

· Customers with household incomes of $60,000 or less can sign up for free home weathering services at oge.com/weatherization, and several home energy efficiency programs are available to all customers, including air conditioning tuning at oge. com/escore; or

· To have more control over their bills during extreme temperatures and ensure a more consistent and predictable bill each month, customers can opt-in at oge.com/amb for average monthly billing or at oge.com/gfb for guaranteed flat-rate billing.

2022 OG&E rate and fuel adjustments

In 2022, the average consumer saw an increase of about $23.25 per month.

August 2022: Implementation of the 2021 winter event securitization

· During the winter weather event in February 2021 – Winter Storm Uri – the natural gas market saw a dramatic increase in demand, which led to a sharp rise in prices. OG&E’s priority has been, and continues to be, providing power to the grid that powers customers’ homes and businesses. During the February event, OG&E customers did not experience uncontrolled or rolling power outages like in Texas, as OG&E’s natural power plants feed energy into the grid. Limited service disruptions of no more than two hours have been experienced by some customers.

After the February 2021 winter storm, the Securitization Proposal passed through Legislature 2021 (SB 1050) and was signed by the Governor on 04/23/2021.

In December 2021, the Oklahoma Corporation Commission (OCC) issued a securitization order authorizing the collection of $760 million in fuel and electricity costs related to the winter storm, to be spread over 28 years.

In January 2022, the Oklahoma Supreme Court began hearing arguments regarding securitization, eventually finding that the securitization met legal standards, and ruling in favor of the OCC’s order in May 2022.

During this period, interest rates rose significantly due to market forces. The price of the securitization rose to an estimated $3.34/month from an initial estimate of $2.12/month.

The securitization was implemented on customer invoices in August 2022. This fee will appear as a Winter Event Securitization line item on customer invoices.

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