Coal Instead Of Wind In Oklahoma? Sierra Club Fights Back In Court

Posted by Betsy Lillian on December 22, 2016 No Comments
Categories : Policy Watch

The Sierra Club has filed its opening brief with the Oklahoma Supreme Court in an effort to overturn a decision by the Oklahoma Corporation Commission (OCC) that approves Oklahoma Gas & Electric’s (OG&E) proposal to spend $500 million to retrofit OG&E’s Sooner Power Plant.

According to a press release from the group, the 37-year-old coal-fired power plant has “barely operated since last year.”

The Sierra Club contends that the OCC’s decision unlawfully puts protecting shareholders from financial risk above protecting ratepayers.

If the decision stands, the group says, families, small businesses and churches in much of Oklahoma will experience large monthly rate increases to subsidize the operation of a plant that cannot economically compete with more modern sources of electricity – especially wind power, according to the Sierra Club.

“Customers are exasperated and ready to push back on OG&E’s many attempts to get ratepayers to bail out an idle, dirty coal plant built in the 1970s,” comments Johnson Bridgwater, director of the Oklahoma Chapter of the Sierra Club. “OG&E should use this money, time and effort to implement cleaner sources of energy that benefit the ratepayer, advance Oklahoma’s economy and provide entrepreneurs with a share in the booming clean energy economy. The OCC is constitutionally empowered to stand up for ratepayers, and right now it is only standing up for OG&E’s shareholders.”

According to the Sierra Club, OG&E first requested approval in 2014 from the OCC to retrofit the Sooner Power Plant and to recover half a billion dollars of ratepayer money for the retrofit. The OCC denied that request, along with other requests, finding that OG&E failed to demonstrate the financial benefit.

Notably, according to the group, the OCC also concluded that OG&E’s plan put customers at risk because it missed opportunities to lock in record-low prices for wind power.

Barely two months after the OCC rejected OG&E’s first request for a bailout, the company filed another request seeking pre-approval of its decision to install scrubbers at the Sooner plant to remove the risk that shareholders would not be able to recover the $500 million for the retrofit.

The Sierra Club says OG&E did not provide any new information to alleviate the OCC’s concerns about risks to ratepayers; in fact, OG&E asked the OCC to make its decision based on the same record from the previous case, the group claims.

The Sierra Club and other parties asked the OCC to stand by its previous decision to protect ratepayers, considering the risks for ratepayers had increased since its previous decision. The independent regional electricity transmission organization, the Southwest Power Pool, had shut down OG&E’s Sooner plant in the intervening period and put it on standby reserve.

In May of this year, the OCC approved OG&E’s latest request. The OCC determined that its authority allowed it to pre-approve OG&E’s plan without addressing the plan’s impacts upon ratepayers, the Sierra Club says.

However, the group claims the OCC bypassed the “crucial questions” of cost and ratepayers’ interests, as well as stated it was relieving the risk to OG&E and its shareholders that it would be unable to recover those costs from the ratepayers in the future.

The Sierra Club’s brief filed today argues that both the Oklahoma Constitution and statutes prohibit the OCC from shirking its obligations to protect ratepayers. The group says the commission’s general constitutional and statutory mandate is limited to ensuring that a utility’s decisions have “a reasonable and fair effect upon the rights of the public” – most importantly, a reasonable impact to ratepayers.

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