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

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.

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.

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.


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

By Phillips Murrah Attorney C. Eric Davis

C. Eric Davis is an attorney with Phillips Murrah.

Director Jim Roth to moderate Energy Roundtable discussion

Phillips Murrah Director Jim Roth will take the helm as moderator for an upcoming roundtable discussion on Oklahoma’s energy future.

Oklahoma City University School of Law will host the Energy Roundtable at 11:45 a.m. on March 9.

Steve Dixon, President and CEO of Tapstone Energy, will be the speaker for the discussion alongside panelists including Mike Teague, Oklahoma Secretary of Energy and Environment; Michael Ming, General Manager at GE Global Research Oil and Gas Technology Center; and Dana Murphy, Oklahoma Corporation Commission Chairwoman.

“With Oklahoma companies expanding their drilling budgets in Oklahoma, re-employing people and getting back to work around exciting new formations such as the SCOOP and STACK, this is an opportunity to learn what it all means and why there is reason for optimism,” said Roth, Chair of the Firm’s Clean Energy Practice Group. “Oklahoma posted its first GDP gain in four quarters, and just last week Oklahoma added more rigs than any other state in America.”

Roth began his role as OCU Law’s Distinguished Practitioner in Residence at the beginning of the Spring 2017 semester and is co-organizer of the roundtable.

This is the first open forum on energy hosted by OCU Law. Registration is $20, and lunch is included. Register online here.

Roth: Deaths in the oil patch from exposure to fumes

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

Deaths in the oil patch from exposure to fumes

When I first joined the Oklahoma Corporation Commission years ago, the agency’s many talented Oil and Gas Division employees and inspectors taught me a lot about the issues in the field.

One new lesson that was a shock to learn was about the enormous dangers of deadly hydrogen sulfide in and around tank batteries, where oil and gas is collected from nearby wells. This killer gas is deadly in small amounts and it can stop a person’s breathing in seconds, rendering them unconscious or dead without much warning. In fact, as the concentration increases it apparently deadens a person’s sense of smell, rendering them unable to even detect the danger.

Since 2010, at least nine workers have died from exposure to hazardous gas vapors on oil production and storage tanks. These workers were alone, usually in the middle of the night, and were later found dead near an opening on top of the tanks. There seemed to be a pattern going unnoticed, and Mike Soraghan, a reporter for Energy Wire, sought to reveal it.

Five of the deceased workers were collecting fluid samples, and the remaining four were manually measuring production levels. To perform both of these tasks, workers had to climb ladders to access so-called “thief hatches” on top of the tanks. Once the hatch is opened, gas vapors that have built up in the tank rush out of the hatch. These vapors greatly displace oxygen in the air surrounding the hatch that can asphyxiate a person in a matter of seconds.

What makes these deaths even more tragic is that they were completely avoidable. There are ways to perform these tasks automatically without exposing workers to these toxic vapors. Unfortunately, the cost of installing the necessary equipment has caused many operators to continue using these dangerous methods.

Another problem is that safer practices cannot be employed on federally owned land due to outdated government agency rules. On federal and tribal leases, strict federal regulations allow only two methods of measurement: Lease Automatic Custody Transfer or manual measurement. LACT is the only automated method of measurement currently allowed on federal land. Because this system is so expensive, the vast majority of storage tanks on federal land are still checked manually.

The Bureau of Land Management is finally revising its rule regarding storage tank measurement, which has not been updated since 1989. However, the proposed new rule adds only one additional automatic measuring method. This additional method is also expensive, which will still prevent smaller operators who cannot afford the necessary equipment from upgrading their storage tanks.

Many of the incidents were reported as deaths from natural causes, such as cardiac arrest. Some were even attributed to the workers attempting to get high off of the fumes. Initially, the Occupational Safety and Health Administration did not find any safety violations where these nine workers died. But OSHA has now recognized the risks involved in manually measuring and sampling fluids in storage tanks. In February, it issued an alert warning operators and workers of these risks. Let’s pray these warnings help save lives.

If interested, you can also find out more on National Public Radio’s website at www.npr.org/sections/health-shots/2016/03/30/472341181/mysterious-death-uncovers-risk-in-federal-oil-field-rules and to learn ideas for avoiding the exposure risks, please check out Inside Energy at insideenergy.org/2016/03/03/what-workers-need-to-know-about-oilfield-gas-exposure.

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.”