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OIEC Files Motion in PSO Rate Case
By
2009-01-27
 
TULSA, OKLA. – Oklahoma Industrial Energy Consumers, an association of companies with facilities in Oklahoma that advocates for fair energy prices, announced today that it has filed a motion with the Oklahoma Corporation Commission asking state regulators to reconsider and modify the $81.4 million electric utility rate hike that could have a devastating impact on key businesses during the deteriorating economic situation. OIEC is urging commissioners to reduce the rate increase by approximately $26 million to ensure that the utility is charging customers the lowest reasonable rates.

OIEC also recommends a public hearing to voice the concerns of the state’s diverse industrial companies, which employ more than 10,000 hard-working Oklahomans and create products that are fundamental to the economical well-being of the state. Ohio-based American Electric Power-Public Service Company of Oklahoma’s rate hike, approved on Jan. 14, threatens the ability of Oklahoma’s businesses to compete with businesses in other states, especially for industrial classes of electric utility customers. Under the current rate hike, PSO customers that are small industrial users will pay 20 percent more, while large industrial users will pay 15 percent more. Of the $26 million rate reduction recommended by the OIEC, approximately $10 million relates to a reduction in AEP-PSO’s return on equity.

“This excessive and unjustified increase to the cost of doing business in Oklahoma could not have come at a worse time,” said Tom Schroedter, OIEC Executive Director. “Not only does it put additional pressure on some of the state’s largest employers in a time when other costs are on the rise and product demand is in decline, but it takes money out of Oklahoma and moves it to the utility’s corporate headquarters in Ohio.”

OIEC also contends any rate increase should be spread properly among customer classes to eliminate rate class subsidies and to avoid inequitable shifting of costs to Oklahoma job-creating employers. OIEC members represent a diverse set of manufacturing and processing industries including, but not limited to, cement, paper, refining, glass and industrial gases. These industries are highly competitive, and the costs of electricity have a direct bearing on the ability of industries to compete in regional, national and global markets.

In testimony before the Oklahoma Corporation Commission in December, representatives of several large companies and members of the OIEC said PSO’s proposed rate increase would damage their ability to compete with companies in states that have business-friendly utility structures. Additionally, some companies said the rate hike would jeopardize jobs.

OIEC 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 10 years, successfully advocating for utility cost reductions or avoidance of utility cost increases for its member companies. For more information on OIEC or the motion filed with the Oklahoma Corporation Commission, call Tom Schroedter at (918) 594-0400.

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