Corporation seeks approval for rate hike when earnings at all-time high
Occupy OG&E: The Hearings
The Public Hearing for the $73.2 million rate increase proposed by OG&E began Monday, December 13, 2011 before the Oklahoma Corporation Commission in the 3rd floor courtroom at the Jim Thorpe Building. Testimony and cross examination of witnesses is scheduled for the morning sessions with public comments at 1:30pm each day. At stake is a monthly increase of about $6.60 in the base rate for most OG&E residential customers and increased usage cost to many commercial users. What has made this hearing different is that it is coming not only at a time when people in Oklahoma and Arkansas are coming off of a summer with the highest electric bills of all time, but at a time when OG&E’s profits are at an all time high. Most affected are the fixed income groups like seniors and the disabled, including aids-related disabilities. Disturbing to many is the fact that conserving electricity doesn’t help in this situation because the fee increases are fixed regardless of usage to the residential customer.
OG&E is requesting this increase so it can make an 11.25% return on equity (ROE) to its investors in order to be able to raise money on Wall Street for its projects. Another rate increase request is scheduled for sometime in 2013. The Oklahoma State Attorney’s office is asking for a $4 million decrease in rates considering the excess revenues this summer. According to PRNewswire, the board of directors of OG&E Energy, OG&E Utility’s parent company on December 6, 2011 approved an increase to $1.57 per share annual dividend to its stockholders up from the originally projected $1.50 per share. Also in December 2011 OG&E Energy stock hit a 52 month high of $54.21.
The only OG&E executive scheduled to testify before the Commission is Jessie Langston, VP of retail Natural Gas. OG&E is also presenting testimony from experts within its company as to why it needs the increase at this time. Attorneys for the Oklahoma State Attorney General’s office, the AARP, the Oklahoma Industrial Energy Consumers, Sam’s Club and Wal-Mart, and with several other interests were represented on the first day of testimony to dispute OG&E’s claim that this rate hike is required.
In the afternoon, many individual consumers and consumer groups let their feelings be known to the Commissioner. The Oklahoma Sponsoring Committee comprised of 25 congregations and non-profit groups concerned about pressures mounting against families in the Oklahoma City metro area presented their findings through spokesperson Melodie Garneau. Not only had OG&E Energy made record profits in the last couple of years, but they also had 5.5 times the net income to pay their bondholders. This in comparison to the 2-3 times net income that comparable utilities in other areas have.
Many individual consumers statewide spoke to the Commission about the hardships the past summer had imposed upon them and how this rate increase would make things even more difficult. One consumer asked, “How much money does OG&E spend on the statewide commercials telling everyone what a good job they do?” Other speakers included Zakk Flash of the Occupy Norman movement who appeared with four other members. Mr. Flash stated, “In 2009, OG&E demanded $110 million from their customers in Oklahoma. That year they also got $13.5 million dollars out of 65,000 people in Arkansas, via the Public Service Commission. Now, the electrical monopoly asks for $73 million dollars more per year, right on the heels of receiving $8.8 million in June from the Arkansas Public Service Commission.”
Mr. Flash went on to say, “Keep in mind that this is not a one-time increase – OG&E is seeking to once again increase the base charge borne by all customers every single month, regardless of how little electricity a customer uses. In 2002 the charge was $2/month. We currently pay $13/month and, if this proposal passes, we can expect to see $20/month as the bare minimum. That means those who use the least are already paying the most per kilowatt hour. And now OG&E would like them to pay even more.”
The hearings continued to December 22, 2011. However, should additional time be needed the hearings will pick up again on January 3, 2012 on the 3rd floor of the Jim Thorpe Bldg. near the State Capitol in Oklahoma City. The decision of the Oklahoma Corporation Commission is expected in early January, 2012.
For more information or questions about the rate increases, contact the Oklahoma Corporation Commission; OKC office (405) 521-221, or Tulsa office, (918) 581-2296. You may also call OG&E (405) 553-3000 and ask for Brian Alford or Donald Rowlett.