OG&E consumers could face a historic rate hike. Where does all the extra money go?

When it comes to increasing electricity bills, Rick Dowell see Oklahoma Gas and Electric Co.. as a public service which pursues a historic rise in rates This will not only hurt residential consumers, but could also sink Oklahoma City’s economy.

Dowell and thousands of other OG&E customers will face a 13.85 percent increase in their bills if the utility’s application is approved by the Oklahoma Corporation Commission.

OG&E estimates that the average residential customer will see an average of $19.02 added to their monthly bill. Dowell, who owns and manages 30 office buildings, says the impact on businesses will be much worse.

By Dowell’s calculations, his annual bill increased from $485,383 in 2020 to $736,019 in 2023. He estimates the cost of electricity at his properties with rising rates will increase his annual OG&E bill to $837 $957.

The increases on Dowell’s bills also represent frequent fluctuations in separately assessed fuel costs that OG&E says do not include any profit taking by the utility. But similar complaints have been made by residential customers writing to the Corporation Commission, with one showing how their bill rose from $1,288 in 2019 to $1,882 in 2023.

“He’s a killer, I don’t know what these guys are thinking,” Dowell said. “And it seems so sneaky.” Nobody seems to know what’s going on.

More: Why OG&E customers could see their bills drop by $25 before a $19 increase

The requested increase coincides with the drop in fuel prices

Hearings are scheduled to begin June 17 when OG&E and opponents of the increase will present their arguments to an administrative law judge who will then make a recommendation to the three Corporation Commission members who will have the final say on the matter.

If approved, the requested rate increase would be the third increase in customer bills since 2017, outside of separately assessed fuel costs. None of the previous increases come close to the $332.5 million increase currently sought by OG&E.

A $9 million request added $1 to the average monthly residential bill in 2017. A rate review in 2018 resulted in a $64 million decrease, reducing the average residential bill by $4.44 per month. A 1.9% rate increase was approved in 2022, which added $2.07 to the average monthly residential bill.

Kimber Shoop, director of regulatory policy and planning at OG&E, said the utility was timing the rate increase to coincide with recent declines in discrete fuel prices that had soared in recent years.

OG&E crews work to repair power lines on NW 162 and Western after a traffic accident in this 2022 photo.

“It’s been a while since we’ve had a significant increase in rates,” Shoop said. “We’ve tried to contain those costs and maintain affordability. But we have needed a lot of investment in our tower delivery system, particularly to strengthen the network, maintain reliability and replace aging assets and infrastructure.

Shoop said the utility faces challenges from inflation in material and labor costs, climate change…

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