PSC approves OG&E wind farm recovery costs

BusinessFort SmithNews on the Wire

by The City Wire staff ([email protected]) January 21, 2011 10:14 am 100 views 

The Arkansas Public Service Commission has approved a request by Oklahoma Gas & Electric Co. allowing it to recover from Arkansas customers about 11% of $2.1 million in costs related to the OU Spirit Wind Farm.

However, expected reductions in fuel costs may result in lowered charges for OG&E customers.

The OU Spirit Wind Farm, located between Woodward, Okla., and Oklahoma City, came online in December 2009 and was energized during April 2010. The project also included construction of a transmission line from the farm to the grid. The cost for both projects was about $475 million.

In a Jan. 19 order, the PSC said OG&E’s purchase and development of the wind farm was “prudent and in the public interest” and that costs associated may be passed on to Arkansas customers through the “Energy Cost Recovery Rider” (ECR). The Arkansas portion of the $2.1 million is set at 11.0149%, according to the PSC order.

According to OG&E Spokesman Brian Alford, the average residential bill will increase by 14 cents in 2011, but is estimated to be reduced by 32 cents in 2012, reduced by 60 cents in 2013, reduced by $1.01 in 2014 and down $1.44 in 2015.

The estimated reductions are based on the lower fuel costs from wind-produced electricity, Alford said.

OG&E has until March 15 to file the ECR with the commission, and Alford said he believes April bills will be the first to show the adjustment.

The ECR is separate from a $17.7 million general rate case OG&E filed Sept. 28, 2010, seeking to recover costs associated with the wind farm transmission lines and other recent and planned expenses for a distribution system that covers 30,000 square miles.

The increase, if approved by the PSC, will add an estimated $6.61 by the third quarter of 2011 to the average residential electric bill among the company’s 64,700 western Arkansas customers, according to information provided by OG&E. The company has about total 776,500 customers.

A PSC decision on the general rate case is expected on or before June 30.