A settlement could be near in a long-running rate case for Oklahoma Gas and Electric Co.
The parties were scheduled to have a settlement conference this morning at the Oklahoma Corporation Commission. During a three-hour hearing Tuesday afternoon, commissioners asked several times about the possibility of a settlement in the case, which started last July.
Commissioner Bob Anthony asked if appointing a settlement judge or mediator could be helpful at this point in the rate case.
“Commissioner, I have to tell you that I think the realm of a potential settlement is relatively small, the moving parts are relatively small, so I frankly think bringing a third party up to speed might actually not be productive,” said OG&E attorney Bill Bullard. “The others may have a different view.”
Chairwoman Dana Murphy said she didn’t support a mediator at this point.
“I would not be in favor of that. I think the parties have really worked hard on it,” Murphy said of a potential settlement.
Attorneys for the parties were mum on a settlement after the hearing. They will tell you settlements are always a possibility in rate cases, although nobody talks on the record about the details. OG&E settled its last rate case in 2009 with a $48 million increase. That was offset by an unrelated fuel-cost reduction for customers. OG&E had asked for a $110.3 million rate increase in the 2009 case.
Tuesday’s hearing centered on responses to a May 30 administrative law judge report that recommended OG&E be given what amounts to a $19.2 million rate increase. Much of the testimony was technical in nature, but it boiled down to how much the electric utility should be granted on its “return on equity.” OG&E asked for an 11 percent return on equity, which would amount to a rate increase of $73.25 million. The administrative law judge, Jacqueline T. Miller, recommended a return on equity of 10.75 percent, or a rate hike of $19.2 million.
Several other parties in the rate case, including AARP, commission staff, the attorney general’s office and groups representing industrial users, want OG&E to lower its electric rates. They suggested cuts between $4 million and $57 million.
Because of the length of the rate case, OG&E tried to implement higher interim rates earlier this month. But commissioners rejected those interim rates and held OG&E’s attorneys to an earlier statement on the record in January that the company would not implement interim rates.