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OG&E and PSO seek to establish new compensation rates for customers’ solar power

This guest column was originally published in The Journal Record on Sept. 9, 2019.


Eric Davis

Eric Davis is an attorney in the Firm’s Clean Energy Practice Group and the Government Relations and Compliance Practice Group. He represents clients in a range of regulatory and energy matters.

By Phillips Murrah Attorney C. Eric Davis

Homeowners and businesses interested in utilizing rooftop solar panels to produce their own power should take note. Cases were filed Aug. 19 and Sept. 4 at the Oklahoma Corporation Commission that will determine how Oklahoma’s two largest electric utilities compensate customers for self-produced solar power.

Oklahoma Gas & Electric and Public Service Co. of Oklahoma filed the cases in response to new commission rules. The rules provide that customers who produce surplus electricity that is fed back onto the grid must be compensated, a standard practice in many states across the country. This is a departure from previous rules, which contemplated customers’ ability to offset their own energy usage with self-produced power, but any excess power was treated as a donation to the utility, which then could resell it without paying the homeowner.

As a result of the rule changes, OG&E and PSO are proposing to overhaul the terms and conditions applicable to customers who produce their own power. Among other things, the utilities propose paying for customers’ power based on the wholesale cost the utility would have paid in the market – a cost several cents lower per kilowatt-hour than retail rates.

In determining rates, the commission will consider whether solar customers are paying their fair share to maintain the utility’s grid that continues to support them.

Meanwhile, the commission may consider whether rooftop solar customers are fairly compensated for the value their energy offers to the grid. For example, as customers’ self-produced power reduces overall power demand, utilities will realize cost savings as their power plants operate less, and the need to build new, costly power plants is delayed or even avoided. Moreover, reductions in power demand will reduce the utility’s need for expensive upgrades to power lines, and less electricity is lost in long-distance transmission. These infrastructure-related savings would result in lower rates for all customers.

The commission’s ultimate determination regarding rates applicable to rooftop solar customers will impact whether it makes financial sense for customers to adopt solar to begin with. The issue is notable in Oklahoma, given the state is consistently ranked in the bottom 10 (approx. 46th) in the country in terms of solar energy production, yet it is ranked in the top 10 (approx. 6th) in terms of solar energy potential.

Recognizing this deficit, interim studies are scheduled this fall at the Capitol to explore how Oklahoma can improve its standing in solar production. Benefits of increased solar production include energy diversification, new job opportunities, improved grid resiliency, water conservation, and reduced greenhouse gas emissions. With industry projections calling for strong growth of rooftop solar installations nationwide, OG&E’s and PSO’s cases at the commission will impact the extent of that growth, or the risk of zero growth, in Oklahoma.

Those interested in these cases can participate in a number of ways, ranging from emailing comments to the commission, to formally intervening as a party. Formal parties have the right to issue discovery, present witnesses and cross-examine witnesses of other parties, including the utility’s witnesses. By intervening, parties optimize their ability to influence the utilities’ policies and terms of service.

Oklahoma’s solar opportunity is unlike any other form of energy. If the sun shines on your home, farm, or business, you have an opportunity to harness that energy for your own usage. Whether customers are paid fairly for what they share with the grid will affect the technology’s adoption in the future.

C. Eric Davis is an attorney with Phillips Murrah.

Roth: PSO, AMI and ROI

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on July 25, 2016.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

PSO, AMI and ROI

Wow, it’s hot. And it looks like it’s gonna be hot for a while still, as is not a surprise to us Oklahomans.

And once you recall the incredibly warm winter we just had, one can only imagine what August may feel like here. And as we’ve been discussing the last few weeks, a high-temperature weather month can often be followed by a high-cost electric utility bill the next billing cycle.

And as we’ve learned, deployment of new technology is providing customers near real-time price information and abilities to monitor and manage monthly costs, while also providing utility providers with a new slew of information and efficiencies to improve service and lower costs. It’s proving to have a real return on investment for both sides of the meter, so-to-speak.

Case in point: AEP’s Public Service Company of Oklahoma and their advanced metering infrastructure, as of this month, is now fully deployed across PSO’s vast Oklahoma service territory with the installation of more than 560,000 new meters, including those first pilot program meters in the Owasso area beginning in 2010. And with a seemingly huge reception from all territory customers, with over 99.5 percent of customers participating in the AMI program.

PSO has rightly indicated that the AMI program will provide an array of benefits to customers.

And they are not alone as several Oklahoma electric utilities have been using this type of technology for many years and the penetration rate nationwide is nearly 50 percent. I’m glad to see our customers are faring better than the national average and I’m also glad to know that PSO meets the highest standards of cybersecurity with encrypted technology to safeguard customer information. In fact, the Oklahoma Electric Usage Data Protection Act prohibits all utilities from providing any customer information to outside third parties.

And now for the extraordinarily good news for PSO customers: With the full installation of this metering technology, PSO was greatly aided in responding to the devastating storms and outages earlier in July (with 109,000 customers out at one point it was the third-largest storm by customers affected in PSO’s history), the AMI made possible the restoration of service to nearly everyone within three days.

And for those regular storm-free days when Oklahoma’s heat bakes the state, AMI has helped PSO provide new programs for customers’ budget needs, such as PowerHours and PowerPay.

PowerHours, which is similar to OG&E’s SmartHours program, runs June through October and allows enrolled customers to choose from four programs to save money through managed use.

Information on the options is available at www.psopowerhours.com.

Likewise, PowerPay is a voluntary program where customers can prepay for their usage, giving them greater control over the frequency and timing of their payments. No more surprise utility bills the month after high prices. Instead the customer is engaged in energy consumptions, management and related savings in this pay-as-you-go approach. It’s not for everyone, but is a good option for many, so please check it out and see if it’s right for your budget and household.

The return on PSO’s AMI investments can be directly enjoyed by its customers who explore these options, enroll in those that make the most sense for them, and control their own destiny through price signals, energy shifts and energy savings. It’s an exciting time when the cost of next month’s utility bill is based upon what customers choose to do this month for themselves.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah PC in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: It’s 4 p.m. Do you know where your thermostat is?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on July 11, 2016.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

It’s 4 p.m. Do you know where your thermostat is?

It used to be asked if people knew where their children were at 10 p.m. as a form of safety check and good parenting. And that edict proved a helpful reminder.

But now, other times of the day pose danger for your families and only until recently can we help avoid or lessen those dangers.

It’s the risk to your families’ budgets from extraordinarily high electricity prices that occur often in the summer afternoons. For many decades before now, Americans never knew what cost spikes existed, leading to unpredictable monthly electricity bills. But the times they are a-changin’.

This past week as I stood in line at the post office a few minutes before 4 p.m., I received a text message as a participant in OG&E’s Smart Hours Program alerting me to a “critical price event,” beginning at 4 p.m., where the price of electricity would escalate to 44 cents per kilowatt-hour, more than four times the usual average.

A gentleman in line behind me must have received the same text as he soon thereafter called home to ask his wife to “turn up the thermostat and turn off the unnecessary appliances for the next three hours.”

And this man was probably in his mid-80s and seemed delighted at the opportunity to react to a price signal and save his family money. Each day’s text message also forecasts the price of the next day’s prices between 2 and 7 p.m., usually at the “high rate of 18 cents per kWh.” This is revolutionary.

And we Americans have seen other, once-dominant, mostly utility-like monopolies move to finally provide price signals for the consumers. I am referring to telecommunications and the growth of price transparency and ultimately competition.

Once we Americans learned to not “call family and friends until after 7 p.m.” it revolutionized the cost of long-distance and base rates for phone service and led to consumer choice, innovation and competitiveness. It also led to the decline in landline phones and the emergence and now prolific existence of wireless devices.

Today, we are just 20 years after the federal deregulation of telecommunications under President Bill Clinton, when the Telecommunications Act of 1996 was the first significant change in 60 years, and included the first inclusion of the internet in these issues. And today, most Americans have more technology in the palm of their hands than ever before and consumer price signals and consumer choice have ushered in a whole new reality.

The same is on the verge of being true for your electric utility bill, although not required by federal enactment, but driven by new technologies, consumer education and electricity providers working to usher in a new generation of electric generation.

Next week I’ll highlight a few of the global trends and the local utility options available to us Oklahomans in this relatively new and exciting frontier.

In the meantime, if it’s between 4 and 7 p.m. today, you might consider adjusting your electricity usage and saving your family some of that hard-earned money.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah PC in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Phillips Murrah attorneys quoted in OCC, OG&E story in The Oklahoman

Oklahoma Corporation Commission judge says no to replacing OG&E’s Mustang plant in $1.1 billion compliance case

By Paul Monies, Published: June 9, 2015 – Read the entire story here.

William Humes

Bill Humes represents individuals and both publicly-owned and private companies in matters involving energy and environmental issues, state and federal regulatory practice, public policy concerns, and government relations.

Oklahoma Gas and Electric Co. should be able to recover some costs related to environmental compliance, but should not get pre-approval to spend $400 million to replace its aging Mustang generating plant, an administrative law judge recommended Monday.

Corporation Commission Administrative Law Judge Ben Jackson said the utility also should explore adding wind energy, echoing a request by nearly all the parties in OG&E’s complex and lengthy case for environmental compliance and replacement generation.

In his 30-page report, Jackson recommended against any increase in rates at this time. But he said OG&E should be allowed to recover environmental costs already expended or under contract.

Jackson said other costs for environmental compliance should be decided in the utility’s next rate case, which is expected to be filed later this year.

Read the entire story here.
The last section of the story quotes Bill Humes and Jim Roth:

Reaction from intervening parties

Jim Roth copy

Jim Roth represents individuals and both publicly-owned and private companies in a range of business, energy and environmental issues, as well as a variety of public policy and regulatory matters.

Some of the parties involved in case were still studying the report Monday. Attorney Bill Humes, who represented The Wind Coalition, the Oklahoma Hospital Association and Oklahoma Cogeneration LLC, said at first glance the administrative law judge agreed with many of the recommendations of his clients.

“To disallow Mustang and to require more investigation into wind is exactly what our clients were looking for,” Humes said. “Everyone is sympathetic to OG&E’s need to comply with the EPA rules, but it has to be reasonable and the lowest cost. OGE’s plan was neither. It was a great plan for shareholders, but not for customers.”

Former Corporation Commissioner Jim Roth, who represented The Wind Coalition along with Humes, said he was glad the judge recommended additional wind power as a condition of the environmental compliance.

“It appears the judge’s recommendation takes to heart the unanimous request of all customer class parties that OG&E should be required to add low-cost, clean wind energy before any costs for extending their older coal plants should be considered.”