A proposal by Oklahoma City-based OG&E to collect more than $6.49 million in higher rates from about 66,000 utility customers in western Arkansas was reduced by almost 51% after objections from the Arkansas Public Service Commission, the Arkansas Attorney General’s office, and Arkansas River Valley Energy Consumers.
OG&E first sought in October 2018 new revenue of $6,497,749 from western Arkansas customers. The increase was 6.4% across all rate classes. The PSC staff objected to the amount, and instead proposed an increase of $4.337 million. The energy consumer group filed objections with a rate increase adjustment to $3.976 million, and the AG office pushed the rate increase down to $3.778 million.
In a series of hearings and negotiations that begin in February, all parties agreed to a revenue increase of $3.3 million, according to a PSC filing posted Wednesday (Jan. 30). The change results in a 3% rate increase for all rate classes.
OG&E spokesman Brian Alford said the rate increase request was reduced, but the company believes what was a new rate request process resulted in a fair deal for all involved.
“This was our first formula-rate filing in Arkansas, so it’s a new process and we’re happy to now have completed this process. The outcome wasn’t as much as we had asked, but we believe we received an equitable settlement with the parties,” Alford told Talk Business & Politics.
The settlement also requires OG&E to keep the PSC updated on planned investments in grid modernization efforts across its system, and to document how such investments will be paid for by customers in other states.
Arkansas Attorney General Leslie Rutledge praised the settlement.
“Protecting Arkansans’ wallets also means overseeing utility companies in the services they provide,” Rutledge noted in a statement. “There are over 66,000 OG&E customers in Arkansas and I take seriously the duty of reviewing and challenging any utility company’s proposals to raise rates that will harm Arkansans’ pocketbooks.”
OG&E has more than 840,000 customers in Oklahoma and western Arkansas, with an electric transmission and distribution system of 30,000 square miles. The company reports 6,300 megawatts of electric capacity generated from low-sulfur coal, natural gas, wind and solar.
OG&E (NYSE: OGE) shares closed Wednesday (Jan. 30) at $40.27, up 20 cents. During the past 52 weeks the share price has ranged between $29.59 and $41.80. The company is set to post 2018 earnings on Feb. 21. The consensus estimate is the company will post full-year per share earnings of $2.07 on revenue of $2.31 billion. The company posted $2.61 billion in total revenue in 2017, with net income of $619 million, or $3.10 per share.