Despite an Oklahoma Supreme Court decision looming on whether Corporation Commissioner Todd Hiett may vote on cases involving companies with direct knowledge of his alleged misconduct, he took part in actions Tuesday that allowed large rate increases to proceed for the state’s two biggest electric utilities. Both proposals were whittled down in settlement agreements and had been expected to win approval, as administrative law judges in both cases recommended the three-member regulatory panel accept them.
Hiett and Commission Chairwoman Kim David voted Tuesday afternoon to approve an interim order for Oklahoma Gas & Electric’s $126.6 million proposal.
Earlier in the day, commissioners rejected a request from AARP Oklahoma to cap the increase facing residential customers of Public Service Company of Oklahoma owing to the company’s $119.5 million rate hike. Hiett and David said they were concerned about PSO’s 15 percent increase to residential customers — among the largest in the utility’s history — before directing attorneys to draft a final order, for which commissioners will consider granting final approval at a later date.
Although final approval is pending, ratepayers are already paying the higher rates, which can be typical in utility rate approval cases. OG&E residential ratepayers have been paying an additional $9.58 per month since June. PSO residential customers have been paying an additional $12 per month since October.
About 45 minutes after the afternoon’s 2 to 1 vote, Commissioner Bob Anthony filed a 146-page dissenting opinion with the commission.
“In almost 36 years at this commission, today’s vote is one of the most appalling, brazen assaults on the rule of law I have ever witnessed — and by two elected officials who took an oath to support, obey and defend the constitutions of Oklahoma and the United States,” Anthony wrote. “Commissioners Hiett and David have declared today that they don’t care what the court says. Due process rights of OG&E ratepayers and their own oaths of office be damned. They are going to give OG&E its $127 million rate increase anyway.”
Case against Hiett continues
Oklahoma House Reps. Kevin West (R-Moore), Tom Gann (R-Inola) and Rick West (R-Heavener) have sought a writ of prohibition from the Oklahoma Supreme Court to ban Hiett from voting on cases involving companies with direct knowledge of his “alleged criminal conduct.” The justices heard oral arguments Nov. 12, and a ruling could come anytime.
The high court hearing stemmed from allegations of misconduct made against Hiett this summer. The man whom Hiett allegedly groped at a June conference in Minnesota reportedly works for a company regulated by the OCC. A pair of Kansas Corporation Commission employees made written reports that an “extensively intoxicated” Hiett repeatedly rubbed the man’s arm and crotch in a group setting. Hiett has said he has no memory of the incident owing to his struggles with alcohol and that he is pursuing treatment. Since the Minnesota allegation came to light, a report surfaced of misconduct allegations a year earlier at a party in Oklahoma City.
Since Hiett’s behavior has come under scrutiny, he has “continued to participate and vote in judicial cases involving regulated public utility companies whose employees/agents/representatives have direct knowledge of his alleged criminal conduct,” the legislators wrote in their petition.
Anthony has called for the resignation of Hiett, who chose instead to relinquish only his chairmanship of the body Aug. 7. The Oklahoma Corporation Commission agency approved an internal investigation, which is being led by attorneys Melvin Hall and Don Bingham of the law firm Riggs Abney. Their findings have not been announced.
In June, OG&E, which serves nearly 900,000 customers, reached an uncontested settlement dropping its original $332.5 million rate hike request to $126.6 million. The initial proposal would have raised their customers’ average monthly residential bill by $19.02, while the settlement has about half of that impact for residential customers.
But the settlement did not include how OG&E charges rates to large customers — those using one megawatt of electricity or more — outside of OG&E’s service area. The Corporation Commission heard arguments on that issue Sept. 12 and took the matter under advisement. Eric Turner, an attorney representing the Oklahoma Association of Electric Cooperatives, said OG&E is not charging its actual cost to serve the one-megawatt customers, which are mostly oil and gas operations. He cited state law, created by House Bill 2845 in 2023, that requires utilities to establish rates for one-megawatt customers and avoid unfairly shifting costs to residential customers. Bill Humes, an attorney with OG&E, argued that HB 2845 does not apply because it deals with one-megawatt customers seeking service after Nov. 1, 2023, when the measure took effect.
The interim order that commissioners approved Tuesday includes a clause stating it does not resolve the one-megawatt issue, and the ultimate resolution of the issue could result in rates changing. The order states that commissioners have not reached a final decision on the one-megawatt issue and will continue to deliberate on it and issue a final order at a later date.
By the same 2 to 1 vote, commissioners approved a supplemental order that allows the new cost-of-service study to be ordered for OG&E’s one-megawatt customers.
Aaron Cooper, manager of corporate communications for OG&E, said revenue from the rate increase will go toward strengthening the grid and improving reliability and customers’ experience.
“Other customer benefits include an $85 annual discount for senior citizens enrolled in the company’s SmartHours program, as well as more resources for tree trimming to reduce outages caused by trees and tree limbs in power lines,” he said. “OG&E’s rates remain the lowest in Oklahoma and we will continue making smart investments like these, with affordability and reliability at the top of mind, to strengthen the energy grid.”
‘Great concerns about this huge increase’
PSO, which serves nearly 573,000 customers in the Tulsa area and other sections of Oklahoma, originally proposed a $218 million rate increase. Among other changes, the approved settlement agreement dropped the average monthly increase for residential customers from nearly $16 to $12.
“I’m not willing to really mess up the joint stipulation agreement at this time,” David said. “I hope everybody takes note of the concern that we’re expressing today, because (…) whether we do something with this case or we do something going forward, I want everyone to take note of that concern, because this is a huge increase for the residential ratepayers.”
Adam Singer, an attorney representing AARP Oklahoma, said more than 3,000 people had filed public comments indicating how difficult the residential rate increase would be for them.
“This, as far as I can tell, is the single-largest rate increase ever for PSO, and it comes on the heels of several and repeated rate increases,” he said. “I understand that if rates are raised on businesses, that the cost of goods may increase for residents generally, but I think the big difference is that residents can choose whether or not they go buy those goods. They don’t have any choice whether or not they buy electricity. It’s a very important difference.”
Deputy Attorney General Chase Snodgrass said a valuable concession for residential ratepayers that PSO made in the settlement was agreeing it would not file another base rate increase before Jan. 1, 2026.
“The settlement that is before you includes a stay-out provision and the only way to obtain a stay-out provision is through a settlement,” he said. “This commission cannot order the utility to stay out. The parties cannot otherwise require the utility to stay out. The only way we can get a stay-out provision is if PSO agrees to it through a settlement agreement. PSO has committed to not file another rate case until no earlier than 2026.”
If the utility were to file for a rate increase on the first day of 2026, he said that means there would be no impact on customers until roughly July of 2026 at the earliest.
“So essentially, customers are getting over a year and a half of a guarantee that their base rates will remain the same for a year and a half,” Snodgrass said. “Given the trend that we’ve seen in the utility industry of annual rate case filings, I believe that to be a valuable consideration to have the assurance that their base rates will remain the same.”
PSO received approval for a rate increase last year that raised residential bills about $5 a month, and the company is proposing another increase next year that would raise residential bills about $7 a month. That rate increase would go toward PSO’s plans to purchase a natural gas combined-cycle generation plant in Jenks. If approved by the OCC, the facility would add 795 megawatts of long-term power to PSO’s generation mix by June, which primarily includes renewable energy and natural gas, according to the utility.
In addition, PSO is seeking another rate increase next year of $5 a month for a net operating loss case.
“I just want to note that we have some great concerns about this huge increase that residential ratepayers have paid,” David said. “So going forward, I hope you guys take note of that. And the next time you meet to put together an agreement, keep that in mind. I may not feel inclined to go along with it otherwise.”
Kenneth Tillotson, an attorney representing PSO, said David’s concerns were “definitely noted.”
“One of the things that I think is admirable about PSO in working for them as their attorney and the commissioners don’t always have insight into this, but in many, many meetings I have with the company, concerns about increases in rates are always at the forefront of the company,” Tillotson said. “And you may not see that every time, because you see attorneys and witnesses up here advocating during a rate case for a rate increase based upon the needs of the company and the needs of the customers that are based upon what the company has put into the system. But your concerns are noted, and I think that that is appropriate to address in future cases.”
After the hearing, Matt Horeled, PSO vice president of regulatory and finance, said PSO is aware of the impact electric rates have on consumers.
“Affordability is always front of mind for us in trying to find rates that are fair, just and reasonable and meet that crucial need of electricity, because we all know how important it is for all of us to have electricity,” he said. “But that comes at a cost, and we’re always trying to minimize that cost and the impact to customers as much as possible.”
(Editor’s note: AARP and PSO are both charitable sponsors of the Sustainable Journalism Foundation.)
