OKLAHOMA CITY – Oklahoma Natural Gas Co. has a rate hike application pending with the Oklahoma Corporation Commission.
The utility filed its application on March 15 – one day before the Oklahoma Development Finance Authority asked the Oklahoma Supreme Court to authorize the issuance of up to $1.45 billion in ratepayer-backed bonds that would enable ONG to recover abnormal fuel costs it incurred in the winter storm that gripped Oklahoma in February 2021.
If the Supreme Court approves the securitization bonds, the typical ONG residential customer will pay an extra $7.82 for the next 25 years.
ONG wants to raise its base rates by $19,668,043.
If approved, the monthly bill for an “average” residential customer would increase by $1.95, or $23.40 annually, and 51 cents, or $6.12 annually, for a low-income residential customer, the company said.
However, because of the federal Tax Cuts and Jobs Act of 2017, ONG “will continue to return to its customers excess deferred income taxes” (EDIT), the commission was informed. The one-time annual EDIT for 2022 is $9.1 million, the utility reported. That credit equates to an estimated average of $9.43 for a residential customer and $2.86 for a low-income residential customer. The 2022 EDIT will be paid in February 2023, ONG announced.
Consequently, because of the EDIT credit, the increase in the annual bill for an average residential customer would be $13.97, or $1.16 per month, and $3.26, or 27 cents per month, for a low-income residential customer.
ONG, which serves approximately 905,000 residential, commercial and industrial customers, reported it has invested $119, 678,523 since its last base rate increase in 2021.
One ONG representative said, in pre-filed testimony, that 83% of the additions were for installing, replacing and rebuilding vintage pipeline infrastructure as well as relocations of infrastructure for government projects, plus new meter and service installations for new customers. The remainder is “specifically related to tools, equipment, and software necessary to provide natural gas service, the company executive said.
An adjustment for Fort Sill Army post’s $3.65 million in military assets is reflected in the calculations.
ONG acquired the distribution assets at Fort Sill in 2001. In accordance with a Corporation Commission order that approved the transaction, the company tracks the assets, expenses and revenues associated with Fort Sill and “removes them” from the rate base for ratemaking purposes “to avoid subsidization” by ONG’s other customers.
The Corporation Commission on April 14 authorized the agency’s staff to establish a “procedural schedule” for gathering evidence in the rate case.