Amid tax cut talk tension, drama with forestry services and investigations into financial fiascos at the state mental health department, several contentious electricity policy questions have short-circuited the Oklahoma Legislature’s annual negotiations — to little public fanfare.
Behind the scenes, however, the combined bluster from competing parties has blown the year’s biggest policy bubble that has yet to burst.
“All these conversations are similar in nature,” said House Speaker Kyle Hilbert (R-Bristow). “It would be difficult to pass one of them without knowing what you’re going to do on the other end of things. You’ve kind of got to figure out the whole package — what you are or are not going to do.”
At their core, all four topics involve nuanced elements of the energy and electricity markets, and each asks a question that can draw competing answers:
- Whether industrial energy consumers have the right to operate generation facilities “behind the meter” of the investor-owned utility required to serve the area; (SB 480; HB 1374)
- Whether electric utilities that add natural gas generation assets should receive an expedited Corporation Commission approval process and whether those utilities should be able to implement associated rate increases when “construction work in progress” begins; (SB 998; HB 2747)
- Whether — and at what parameters — wind turbines should be required to be set back from property lines or dwellings; (SB 2, HB 2751)
- Whether the Grand River Dam Authority — a state asset that generates electricity and sells it to commercial and municipal consumers — should be granted a $1.6 billion increase in its bonding capacity for additional generation assets. (SB 1000; HB 1422)
“It’s a bunch of complicated, complex utility energy policy that is all tied together,” said House Appropriations and Budget Committee Chairman Trey Caldwell (R-Lawton). “Everybody’s getting a little bit. Everybody’s giving a little bit. (…) The net benefit for the state of Oklahoma in my opinion, is if we can get all this policy moved through this year — and it’s all kind of tied together — Oklahoma will be in a better position as a net.”
As might be expected, Caldwell’s argument has failed to assuage the concerns various stakeholder groups hold about the individual topics. Likewise, the House and Senate have different preferences on the devilish details contained within complicated legalese.
For instance, on April 24, the Senate Energy Committee rejected HB 2751’s wind farm setback proposal — 0.5 miles from dwellings or a calculated amount from the tip height of a wind turbine — by a 4-6 vote.
However, SB 2 — which only prohibits turbines 0.25 miles from the dwellings or property lines of an non-participating neighbor — advanced 9-6 from the House Energy and Natural Resources Oversight Committee one day prior. While HB 2751 was a “live round” that could have been sent to the governor with Senate approval, the House struck SB 2’s title, meaning it would need additional approval before becoming law. HB 2751’s failure means SB 2 will likely head to a conference committee for further negotiation.
“No, we haven’t (seen the last of it),” said Senate Energy Committee Chairman Grant Green (R-Wellston). “I just feel like energy has been somewhat polarizing in this session, and I absolutely think it’s an opportunity for us to get just some parameters and structure around renewables.”
Underscoring the “polarizing” nature of energy bills this session, an industry lobbyist approached Green cordially after Thursday’s tense meeting.
“I’m glad I’m not you,” the lobbyist told the chairman.
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‘Behind the meter’ bills moving along
Asked about the major electricity bills gumming up this year’s legislative pipes, Green highlighted the proposal that seems to have the most momentum.
“If I put a priority, it would probably be ‘behind the meter,’ because in all reality, that’s legal in the state of Oklahoma now,” Green said of his SB 480, which has yet to see a single vote cast against it. “You can do that on private property now, but this codifies it to where big industry would not be afraid to make the investment. So I think that’s probably where we need to start, with it being the strongest piece of legislation.”
The “behind the meter” concept refers to an industrial entity — such as a data center or manufacturer — building its own electricity generation on site to limit reliance on investor-owned utilities, or IOUs. And because those utilities would not be required to guarantee backup capacity to service such “behind the meter” electricity load, the utilities have avoided opposing SB 480 and HB 1374. (The bills also mandate a “natural gas component” for the electricity being generated.)
A major player in the localized generation industry is supporting the proposal.
“Intersect Power partnered with the Oklahoma Petroleum Alliance to champion new legislation in Oklahoma. This collaborative effort centers on a behind-the-meter strategy, which supports a comprehensive ‘all-of-the-above’ energy approach,” said Elizabeth Van Holt, director of state government affairs for Intersect Power. “The legislation lays the groundwork to bring new energy infrastructure opportunities and local economic benefits to parts of the state that have historically been overlooked. It also sets the stage for a future project with significant potential for economic growth and enables energy diversification across the state.”
Corporation Commission opposes ‘construction work in progress’ bill
For more than 20 minutes on April 22, the three statewide elected members of the Oklahoma Corporation Commission criticized a pair of bills — SB 998 and HB 2747 — they say would circumvent their constitutional duties and short circuit their regulatory authority over investor-owned utilities seeking to recover costs for building new generation assets.
Known as CWIP — “construction work in progress” — the proposed regulatory process would allow utilities to begin charging ratepayers to recover construction costs immediately, as opposed to years later when construction concludes and additional interest has accumulated on the debt.
“This significantly erodes the commission’s constitutional authority to stand as a proxy for competition between monopolies and the consumers of electricity. I have many problems with this,” Corporation Commissioner Todd Hiett said to open the discussion. “This statute would direct commissioners to violate their own oath, and therefore cases could possibly be challenged as a result of that.”
Commissioner Kim David and Commissioner Brian Bingman echoed Hiett’s concerns, voting unanimously to oppose SB 998 and HB 2747, which would also shorten review periods for new natural gas facilities by 60 days.
“We are tasked with ratemaking here at the Commission, and we have very stringent ethical standards that we live by as commissioners because we have that responsibility of being that stopgap between the ratepayer and the utility company,” said David, a former state senator elected to the Commission in 2022. “My biggest concern with this type of legislation is that it’s basically going around the Commission and going to the Legislature and asking them to put into statute something you’d like to have done without those same ethical boundaries put in place.
“I have a lot of friends that are lobbyists, and it seemed like every time I turned around there was somebody else that was working for one of the utility companies pushing this bill, so there’s a plethora of lobbyists over there.”
Those lobbyists and OG&E officials, however, argue the proposal for expedited approval and cost recovery will save ratepayers from the millions of dollars in compounded interest they currently pay on such projects.
“OG&E supports Senate Bill 998 and House Bill 2747 because they significantly lower the cost of new, reliable natural gas power generation, keeping costs low for customers and helping us meet the growing demand for electricity in Oklahoma’s communities,” said Aaron Cooper, OG&E’s manager of corporate communications. “Demand for electricity is growing significantly as Oklahoma continues to attract new and expanding businesses, creating jobs and continuing migration into the state. Cost pressures are also increasing, and OG&E supports reasonable solutions to mitigate the impact of these cost increases.”
Cooper and others supporting the proposal have pointed to Title 17, Section 286 of state statute, which was passed in 2005 when Hiett was Oklahoma’s first Republican speaker of the House. The existing law says the Corporation Commission “shall transmit rules to implement the requirements” of CWIP recovery on transmission lines, but the industry representatives say the Commission has never complied.
“We need additional natural gas generation in Oklahoma in order to stay competitive with surrounding states,” said Jeff Cloud, a former corporation commissioner who now works as executive director for the Alliance for Secure Energy. “Opponents to this legislation are standing in the way of saving ratepayers millions, because the legislation will prevent unnecessary construction costs. This legislation does not change the Oklahoma Corporation Commission’s authority. The OCC will continue to oversee any cost increase to customers.”
But Tom Schroedter, executive director of the Oklahoma Industrial Energy Consumers, said his organization opposes SB 998 and thinks it “will increase electric rates for Oklahoma utility consumers and usurp the authority of the Corporation Commission to adequately regulate.”
“SB 998 requires utility customers to finance new gas-fired electric generation and bear the risk that such investments will adequately perform and produce throughout their useful life,” Schroedter said. “Utility customers should not be forced by the Legislature to assume such risk. Also, SB 998 allows a utility to record a regulatory asset on its books without Corporation Commission review and approval of the reasonableness of such investment. This provision will eliminate a utility’s incentive to control its costs and also provide a blank check to utilities at the expense of their customers.”
Caldwell, the House author of the proposal, has been working with various stakeholders for three years in an effort to splice together some significant policy changes.
“What [SB 998] does is it uses accounting principles to essentially say, instead of letting these [investor-owned utilities] borrow a bunch of money in the three to four years of construction and then taking all that interest that they accumulated during that time period and apply that as a cost of the entity — like a [capital expenditure] cost — and then for the next 30 years, be able to have a 9.5 percent [return on equity] on that,” Caldwell said. “This is saying you immediately put it into the system, and so that brings that overall CapEx down about 30 percent. Now, the trade off to that is you’re recovering as that money gets deployed. You’re recovering that 9.5 precent ROE during that three-year period, but you’re only recovering it on the actual money spent to build the facility. You’re not also paying 9.5 percent ROE on the money they borrowed and the interest they paid to some lender.”
Hiett noted that groups like AARP Oklahoma and other consumer organizations oppose the CWIP bills, while David criticized Caldwell for remarks he made presenting SB 998 in the House Energy and Natural Resources Oversight Committee. Speaking April 16, Caldwell told his colleagues they should ask the Corporation Commission members “why they cannot see the associated savings and why they don’t want to pass that on to the ratepayers.”
“It is the purview of this Legislature that when we see things in bureaucratic governmental agencies that are not working correctly [we] help direct them to the right thing,” Caldwell said.
David fired back April 22, saying the House budget chairman “called this commission out quite aggressively in a committee meeting, which I thought (to be) extremely unfair and uneducated on his part.”
“So I really do not appreciate whoever gave the representative his talking points, because I am tired of being slandered in the building across the street with our Legislature when it’s not true,” David said.
On one point, David and Caldwell found some agreement: that an 80-year-old homeowner would pay a higher rate now for savings they might never experience a decade down the road.
“In my opinion, the only good argument against this is that, in the short term, it theoretically could be more expensive for the ratepayers, like in a two-year, three-year time horizon,” Caldwell said. “But we’re talking about a monopolistic, regulated entity where there is no switching. So a customer is going to be a customer. So when someone builds a house in OG&E territory, they’re going to be an OG&E customer until the house is torn down. So if you look at it from a perspective of what’s the cost to that house going to be and not the individual person, it’s going to have a net savings — up to 10 to 15 percent savings for the ratepayer over the history of that asset that is put on the back of the ratepayers. The ratepayer’s responsible for paying for that. I mean, when OG&E or PSO borrow money, they’re borrowing money on the ability of the ratepayers to pay the debt. So anytime we can try to save ratepayers money in the long term, I think we should do that.”
Despite being the lead Senate author on the measure, Green was judicious about SB 998.
“It was probably the toughest bill I’ve run since I’ve been out here,” Green said. “I plant my flag on ratepayers out here and constituents, but that’s just such a fine line that I did carry it. It’s just a fine line whether it helps the utilities more than it helps the ratepayers. I do respect the Corporation Commission, so that’s probably some conversation I’m going to have more with them.”
House wind farm setback bill blown over, Senate’s spins without title
Perhaps none of the electricity policy gusting through the Capitol this session has stirred up more guff than HB 2751 and SB 2, competing proposals for expanded wind farm setback requirements. At their core, the bills — and their respective chambers — share the same priority: restricting the property rights of those wanting to profit from leasing land to wind companies to support the property rights of those who don’t want turbines towering over and flickering their homes.
Senate President Pro Tempore Lonnie Paxton (R-Tuttle) said April 24 that he sees the debate playing out in Grady County.
“I’ve got neighbors who really appreciate the wind turbines on their property because it helps make their mortgage payments on their farmland,” Paxton said. “I’ve got neighbors right next to them who are aggravated because they may have contracted with the wind company, but they didn’t get any turbines. All they get is roads going to their neighbors’ turbines. So that’s the kind of things that create the discussions we are dealing with right now. There are passionate people on both sides of that, and I understand that. I feel really good that we are having these discussions.”
Unlike SB 2, HB 2751 proposes a population density equation limiting where new half-mile setbacks would apply, and it allows countywide votes to opt out of the state statute. But when HB 2751 spun up for a vote in the April 24 Senate Energy Committee, it failed 4-6.
“I do like SB 2 better,” Green said after the meeting. “I mean, it’s my bill. I do think it’s more of a compromise with the landowners and the developers, but I was alright wherever we were at with these bills.”
Other renewable energy bills to watch
On April 24, the Senate Energy Committee advanced:
• HB 2756, which requires companies building high-voltage transmission lines to obtain a “certificate of authority” from the Corporation Commission and hold public meetings in all affected counties;
• HB 2155, which proposes a more robust Corporation Commission approval process for wind and solar energy projects;
• HB 2156, which proposes setbacks on 10 megawatt solar energy fields and associated batteries;
• HB 2142, which proposes restrictions on wind farms within certain proximity to military installations in Oklahoma.
Mark Yates, executive director of the Oklahoma Power Alliance, opposed HB 2751 and issued a statement saying SB 2 and other proposals restricting renewable energy “create more regulation and business uncertainty, which does nothing but stifle growth.”
“Large manufacturers, data centers, population growth, artificial intelligence, and other changes to how we live our daily lives are driving the insatiable need for more electricity,” Yates said. “As we compete against other states for economic growth, it’s imperative we maintain our edge with affordable and reliable energy. At a time where permitting is laborious and supply chains are constrained, states that remove impediments to building more natural gas, wind, solar, and energy storage will end up winning the race, plain and simple.”
Yates said he hopes “leadership will prevail at the Capitol.”
“These needless mandates being pushed by environmental NIMBY activists will end up increasing the cost of electricity, negating our state’s competitive edge and raising utility bills for all Oklahomans,” he said.
Among those mobilizing against the wind industry and in favor of stringent setbacks is Saundra Traywick, a Lincoln County resident known at the Capitol as a donkey milk advocate who opposes the application of human waste-based fertilizer. Traywick says she fears the health and environmental impacts of wind turbines that deteriorate over time.
“Everyone says you can do whatever you want on your property if it’ll make you money. That’s bull,” Traywick said April 24. “There are regulations for pig farms, there are regulations for chicken farms. There are regulations for milk, and you have to jump through more hoops to do basic farming operations than you do to sign a lease for a 750-foot-tall industrial machine that will hurt your neighbors.”
Like Traywick, Craig County residents Monty and Tedde Hartley visited the Capitol last week to speak about HB 2751 and SB 2. But unlike Traywick, the Hartleys oppose the wind farm setbacks and say the industry offers rural communities a way to stay alive. For years, the Hartleys have held leases with wind companies in anticipation of a development that could pay dividends. If the setback proposals pass, however, they fear the projects would die.
“This could kill everything,” Monty Hartley said. “Both those counties, Craig and Nowata, are very poor counties.”
In November, Craig County voters roundly rejected a proposal to create zoning regulations for unincorporated areas — an effort pitched as a way to stop wind and solar farm development. Nearly 78 percent of ballots were cast in opposition.
“We need a tax base,” Tedde Hartley said. “We don’t have the Eastern State Hospital there anymore. Our schools (…) would all benefit from the tax base for the school systems, and that’s important for survival of any community.”
On April 23, the House Energy and Natural Resources Committee advanced SB 2 by a 9-6 vote. Rep. John Pfeiffer (R-Orlando) carried the bill and described the challenge at hand.
“What we’re trying to do (…) is balance two competing property rights and find a way to make it fair to everybody,” Pfeiffer said. “I think it’s our job to be up here and measure these two competing rights and figure out how to compromise the best we can.”
Stitt wants Grand River Dam Authority to pay a percent
In terms of numbers floating around this session, the $1.6 billion requested hike in the Grand River Dam Authority’s bonding capacity stands atop the heap of proposals.
Hoping to build two new natural gas units, refurbish a third facility and ultimately add hundreds of megawatts of electricity generation into its portfolio, leaders of the state-owned power company are asking the Legislature to hike GRDA’s bonding like lawmakers did in 2022 when the debt load capacity climbed from $1.41 billion to $2 billion.
But this year, GRDA — which sells electricity to municipalities, private industry and other customers in a four-state region — is facing greater pressure to agree to something it has never done: send money back to the state of Oklahoma’s General Revenue Fund.
“Am I favorable for GRDA getting more bonding authority so they can build more generation? The answer is, ‘Yes. 100 percent,'” Gov. Kevin Stitt said March 12. “What I’ll also caveat and say — that I’ve been telling the (legislative) leadership and GRDA themselves — (is) this is a state-owned asset. They need to be returning a return to the taxpayers. So in other words, if you had a $2 billion asset, you would demand a return for it. Otherwise you’d sell it, right? So I think before I got here, people were talking about selling GRDA. I don’t think we need to do that, but I do think we should look at them returning some kind of return to the treasury or basically the taxpayers for the asset we have.”
Stitt’s suggestion has bristled GRDA executives.
“GRDA is a non-appropriated agency that has never received any funding from the state of Oklahoma. Any requirement to pay money to the state would necessitate GRDA to pass that cost on to all our customers, including our 15 Oklahoma cities and all of our customers at MidAmerica Industrial Park,” said John Wiscaver, GRDA’s executive vice president for strategic communications. “Ultimately, our customers strongly believe this would constitute a tax and necessitate a rate increase. Taxing our customers will impact our ability to maintain affordable rates for current and future customers. GRDA cannot support imposing a tax on its customers to obtain approval for additional bonding.”
Caldwell, the House budget committee chairman, opposes the idea of requiring GRDA to pay the state a portion of its revenue. Even if that fee were only applied to out-of-state customers, Caldwell fears it would open a can of worms.
“I would push back on that. I’m naturally not inclined to do that because it’s all passed through. It would be no different if you tried to do it to an electric co-op,” Caldwell said. “GRDA, they don’t retain profit either. It’s a direct cost to consumers — to the customers — if you do that.”
But Paxton, the Senate’s leader, is more supportive of Stitt’s position that GRDA should pay a pound of powered flesh.
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“My position is that the state is basically guaranteeing the $1.6 billion bond, and the state really doesn’t get anything out of that other than a portion of the state is getting reduced rates, because GRDA is not paying ad valorem taxes the same way that PSO or OG&E or anyone else pays,” Paxton said April 24. “GRDA will argue that the state doesn’t really have any exposure. I just don’t agree with that. I think at the end of the day if there was some kind of catastrophic event at a GRDA facility and they couldn’t repay their bonds, I believe the state would be on the hook for that.”
While Paxton’s statement did not reference the police protection and Illinois River services provided by GRDA, it underscores the divided nature of legislative conversations on the topic and the reason state law requires a Joint Legislative Task Force on the Grand River Dam Authority to meet this session.
But with only five weeks of regular session remaining, no meeting has been called. In fact, the House has yet to name its 2025 task force members, and Paxton said he did not know the task force “shall be required to meet” this year even though he named Green and others to it Feb. 7.
“I’m not sure about the task force and how that works,” Paxton said.
In 2021, a meeting of the task force spurred robust discussion about the bonding capacity increase that lawmakers ultimately approved. Among other stakeholders, Wiscaver has been waiting for the year’s meeting to be called.
“There is a clear and growing demand for additional generation capacity in Oklahoma,” he said. “We appreciate the governor’s support in enabling us to secure the additional bonding and aligning our efforts with our desire to invest in additional power generation. It is also important to note that increasing our bonding capacity does not have any financial impact on the state. We are continuing our efforts to work with the Legislature to secure the necessary bonding increase during this session. This will enable GRDA to make the investment in more affordable and reliable power. Doing so will bring Oklahoma more jobs and significant economic growth, ensuring our state’s competitiveness for current and future energy demands.”
(Correction: This article was updated at 10:20 a.m. Tuesday, May 6, to correct the bill number of SB 1000.)
