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OIEC challenges AEP-PSO’s fourth requested rate hike in four yearsBy
2010-10-19
“PSO is asking for a nearly 17 percent overall rate increase, which PSO has not justified and is certainly not appropriate in this current economic environment,” said Tom Schroedter, executive director of OIEC, an association of companies with facilities in Oklahoma that advocates for the lowest, reasonable energy costs.
In less than two years after the Commission determined an appropriate profit percentage for PSO, the public utility is seeking an increase in its return on equity of about 10 percent. This increase, which PSO wants to pass on to its customers, is sought at a time when home prices have fallen, almost 10 percent of Americans are out of work, wages are stagnant and retirees are seeing their incomes shrink through unheard of low interest rates.
“If anything, PSO’s profits should be reduced to reflect the economic reality of Oklahoma,” said Schroedter.
Of equal concern is PSO’s attempt to increase its depreciation expense charges to ratepayers. In the recent rate case, after a full trial involving PSO’s depreciation experts, the Commission rejected PSO’s approach and instead adopted a methodology that was fair to everyone. Now, PSO is simply re-urging its old approach. No valid reason exists for the Commission to change its mind and raise rates on Oklahomans.
In addition to the current request, PSO has requested and been granted three other rate hikes in the last four years including:
• November 2006, PSO filed an application seeking a rate increase of $49.5 million dollars. In an order entered October 2007, the Commission awarded PSO a $9.7 million dollar increase in rates.
• In July 2008, PSO filed another request for an increase in its rates, this time for $132.5 million dollars. In January 2009, the Commission awarded PSO a rate increase of $59.255 million along with recovery of other costs through a separate rider in the approximate amount of $22 million effectively awarding PSO a rate increase in excess of $80 million.
• In August 2009, PSO filed yet another request for an increase in its rates, this time seeking a capital reliability rider which would raise rates by $30.27 million dollars. By order in December 2009, the Commission approved a settlement agreement in this case authorizing the rate increase for PSO but making the rate increase subject to review and refund in PSO'S pending rate case.
OIEC is recommending rejection of PSO’s requested $52 million rate increase and instead is proposing a rate reduction of approximately $18 million dollars.
OIEC represents industrial companies with thousands of employees across the state. The organization works to ensure just and reasonable utility rates for OIEC members based upon the utilities’ cost of providing service to those members. OIEC has been active on behalf of industrial and other large consumers of energy for more than 15 years, successfully advocating for utility cost reductions or avoidance of utility cost increases for its member companies. For more information on OIEC, call Tom Schroedter at (918) 594-0400. < < Back to News