PSO customers paying interim rate while awaiting OCC decision on settlement

TULSA, Okla. — Public Service Company of Oklahoma (PSO) customers are paying higher electric bills under an interim rate increase while they wait to learn whether a much smaller permanent increase will be approved by the Oklahoma Corporation Commission (OCC).

Earlier this year, FOX23 reported PSO had requested an approximately 15% base rate increase, which would have increased the average residential customer’s monthly bill by abut $25.

Since then, PSO, the Oklahoma Attorney General’s Office, the OCC Public Utility Division, AARP Oklahoma and the Petroleum Alliance of Oklahoma have reached a settlement that would significantly reduce the increase if it’s approved by the OCC.

If approved, PSO said the average residential customer would see an increase of about only $2.45 per month instead of the originally proposed amount.

However, while that settlement waits for approval by the OCC, customers are currently paying an interim rate as the case moves through the regulatory process.

PSO Regulatory Director Amy Brown told FOX23 that Oklahoma rules allow interim rates to take effect 180 days after a utility files a base rate case.

According to Brown, PSO attempts to make those interim rates as close as possible to what it expects the Commission will ultimately approve.

“For the average person, it means that the anticipated interim rate impact is actually a little higher than what we anticipate the final rate impact will be,” Brown said.

One question many customers have asked FOX23 is whether the higher interim rate could result in a refund if the Commission approves the lower settlement.

Brown said the answer is yes, explaining that interim rates are designed to protect customers during the regulatory process.

If the Commission ultimately approves the lower rate, the customers who are currently paying the higher interim rate would automatically receive a refund on a future bill.

Customers would not be required to file paperwork or to request the refund.

Brown also emphasized customers would not owe additional money if the Commission were to approve a higher rate than the interim amount.

Inola resident Casey Jones was among the customers who spoke out against PSO’s original proposal during public hearings before the OCC.

Jones told FOX23 he’s relieved the proposed increase has been significantly reduced, but believes customers still deserve more transparency.

“Obviously, I’m happy about the fact that it’s not going to be that big,” Jones said. “However, it still raises questions.”

Jones said repeated utility increases over the past several years have many families concerned about affordability.

He also wants more detailed explanations from PSO about why additional revenue is needed and what customers are paying for.

“Just be honest with us. It seems a little excessive to the average Joe.”

Brown said base rate cases are based on historical costs, not future projections.

Rather than estimating future expenses, the OCC reviews the utility’s actual books and records from a historical test year to determine what costs were incurred providing electric service.

Those costs include maintaining electric infrastructure, operating the system safely and reliably and responding to inflation affecting equipment and labor.

Brown said the Commission independently reviews those records before deciding what rates are “fair, just and reasonable.”

Some customers have expressed concerns that new large industrial developments, such as data centers, could increase costs for residential customers.

Brown said that is not how PSO expects the system to work.

She said the current rate case is based on costs incurred before any new large-load customers began taking service from PSO.

Looking ahead, Brown said additional large industrial customers would also pay into the electric system.

She compared the process to dividing a pie.

As more large-load customers begin paying for service, Brown explained that they would cover a larger portion of the electric system’s shared costs, potentially reducing the percentage paid by residential customers.

Currently, the settlement is awaiting approval from the Oklahoma Corporation Commission before it can become final.

Brown told FOX23 an administrative law judge is expected to complete the review of the case around early September before the Commission considers a final order later this fall.

Until then:

• PSO customers will continue paying the current interim rate
• The proposed settlement has not yet taken effect
• If the Commission approves a lower final rate than the interim amount, any applicable refund would automatically appear on customers’ bills

For more information about the rate case, customers can visit PSO’s website here or follow updates from the Oklahoma Corporation Commission here.