Oklahoma Corporation Commission Breaks Down Rising Costs

This past year we’ve seen price hikes here in Oklahoma and nationwide on everything from gas to groceries, and of course our utility bills. 

We broke down where the increase in cost is coming from and it's largely because of rising fuel costs. 

We spoke with the Oklahoma Corporation Commission who broke down the cost increases from both utility companies since January 2022 to present day. 

“We are very much impacted by a rise in energy cost and that's what we have been seeing for the past year," said Matt Skinner with the Oklahoma Corporation Commission. 

The average customer that uses OG&E and ONG has seen about a $23 monthly increase on their OG&E bill and about an $8 monthly increase on their ONG bill. But these increases are not just a "price hike" from the utility companies.  

“It's important to understand that there's a difference between the rates we pay and the fuel costs that we pay," said Skinner. 

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

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

“So, fuel costs are where we're really getting hit," said Skinner. 

Both utility companies had a fuel cost increase following the 2021 Winter Storm Uri. 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 company can recover what they had to pay for fuel and pass it onto the consumer, but it has to be at no profit," said Skinner. 

While that is regulated by the state and audited by the OCC to ensure utility companies are not profiting from the costs, the price of natural gas is not regulated by the state. 

In a statement today ONG said- “Natural gas prices have fluctuated significantly in the past year, which has caused customers’ bills to also fluctuate. These prices are set by the market, Oklahoma Natural Gas does not set the price of gas.” 

In a statement Tuesday OG&E said, “No one – including OG&E – wants to see electric bills go up.” adding that during the 2021 Winter storm- “ the natural gas market experienced dramatic increased demand, which led to a large spike in price.” 

Full Statement from ONG: 

1. Natural gas prices have increased in the past year, which has a direct impact on customers’ bills based on the amount of gas used. It is important to note that Oklahoma Natural Gas does not set the price of gas or mark up the cost of gas. Natural gas is a passthrough cost to our customers. Customers can reduce the impact by following the conservation tips on our website. 
2. We have had two requests this year. The first, performance-based rate (PBR), is an annual filing that we have every year and is determined by the amount we invest each year in our system to continue delivering safe and reliable energy. This year, we also had an additional request for an adjustment due to Winter Storm Uri, the Winter Event Cost Recovery. This amount was added to customers’ bills in September. 
3. As part of the regulatory process, today’s approved performance-based rate (PBR) settlement agreement allows our company to continue to invest in infrastructure and operating expenses that ensure the safe and reliable delivery of natural gas to our customers. Lastly, we know these are difficult times for Oklahomans and understand that even a slight increase in monthly bills could have an impact on many of our customer’s ability to pay their bills. We encourage our customers who are struggling to pay their utility bills to reach out to us or go to oklahomanaturalgas.com/CARES for information about assistance programs and payment opportunities. 

Full statement from OG&E: 

We know that rising inflation has increased the cost of many household items, including food and fuel, and is creating a financial pinch for many of our customers. No one – including OG&E – wants to see electric bills go up. We are committed to delivering reliable and resilient electric service at the lowest rates possible. OG&E understands the financial impact any increase has on our customers and remains dedicated to continuing our long track record of providing affordable rates and program offerings to help customers manage both their monthly bill and energy usage. We ask residential customers who face challenges paying their bill to please contact us at 1-800-272-9741. OG&E offers several programs and services that help customers manage their energy usage and monthly bills:  

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

·         OG&E also connects customers to social service agencies that may help with bill assistance. For example, low-income qualified customers can receive a $13-per-month credit on their monthly bill for 24 months through the LIHEAP program managed by the Oklahoma Department of Human Services (DHS);  

·         Customers with household incomes of $60,000 or less can sign up for no-out-of-pocket home weatherization services at oge.com/weatherization and several home energy efficiency programs are available to all customers, including air conditioner tune-ups at oge.com/escore; or  

·         To have more control of their bills during extreme temperatures and ensure a more consistent and predictable bill each month, customers can sign up for Average Monthly Billing at oge.com/amb or Guaranteed Flat Bill at oge.com/gfb.  

2022 OG&E rate and fuel adjustments  

In 2022, the average residential customer has seen an increase of approximately $23.25 per month.   

August 2022: Implementation of 2021 Winter Event Securitization  

·         During the February 2021 Winter weather event – Winter Storm Uri - the natural gas market experienced dramatic increased demand, which led to a large spike in price. OG&E’s priority was, and continues to be, providing energy to the grid that powers customers’ homes and businesses. During the February event, OG&E customers did not experience uncontrolled or rolling blackouts like those in Texas due to OG&E’s natural power plants providing energy to the grid. There were some customers who experienced limited service interruptions of no more than two hours.  

·         Following the February 2021 Winter storm, the securitization proposal passed through the 2021 legislature (SB 1050) and was signed by the Governor on 04/23/2021.  

·         In December 2021, the Oklahoma Corporation Commission (OCC) issued a securitization order approving the collection of $760 million in fuel and purchased power costs associated with the winter storm, which were to be spread out over 28 years.  

In January 2022, the Oklahoma Supreme Court began hearing arguments about securitization, ultimately finding securitization met the standard of law 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 securitization rose from the originally estimated $2.12/month to an estimated $3.34/month.  

Securitization was implemented on customer bills in August 2022. This charge appears as Winter Event Securitization line item on customer bills.