Empire's rate case concluded Thursday morning with the Commissioners finding there was insufficient evidence to support most of the amount requested.
OKLAHOMA CITY – The Oklahoma Corporation Commission (OCC) denied most of the substantially large electric rate increase requested by the Empire Electric Company.
Empire electric utility customers will see a 10.29 percent increase instead of an estimated 29.9 percent increase Empire requested for the average residential customer.
Empire's rate case concluded Thursday morning with the Commissioners finding there was insufficient evidence to support most of the amount requested, according to OCC spokesperson Matt Skinner.
Empire originally applied for a $3.8 million increase and later revised the request to $3.02 million. Empire's initial request would have resulted in an increase of 29.9 percent for residential customers and 16.4 percent for commercial customers.
The OCC did approve of $917,000 for the recovery of Empire's compliance costs for equipment to meet federal environmental mandates now already in service to customers.
According to Skinner, these costs will be subject to review in any future case.
With the approval of the recoverable federal mandate costs, the estimated increase the average residential customer will see is now a 10.29 percent electric rate increase and commercial customers will see a 6.65 percent increase, a little over a third of the initial proposal.
Miami Regional Chamber of Commerce Executive Director Steve Gilbert said he was awaiting more details on the OCC's decision to become available to review. He is pleased overall with the outcome given what Empire requested, but still has concerns over the economic impact of such rate hikes.
“With the news of a 10.29 percent increase, it's a significant increase for the customers, because nothing's changed about the economics of the people and the companies that are going to be impacted by this, schools and so on and so forth,” Gilbert said. “But 10.29 percent is a lot more manageable than 20 plus percent and the recovery costs seem reasonable. I'm anxious to see the details.”
Gilbert pointed out that keeping rates at a competitive level would not only benefit the customer but Empire as well.
“Empire's leadership knows that they have to be competitive to attract these big industrial customers and it puts some of our more rural communities at a real competitive disadvantage because of the cost of power,” he said. “That's' a big consideration from a pure economic development perspective. Economic development depends on availability and quality, and cost of power is a big deal.”
Smaller incremental increases would have been easier to help customers phase in the extra expenses, Gilbert said. His concerns, of course, include senior citizens, fixed, and low to moderate income customers, but says as an economic developer the impact hurts the area's existing industries and commercial customers and future economic growth as well.
“Industries are a major user of power, and we don't want to put our industries at risk because the costs would become so prohibitive from doing business and it could stifle expansion,” Gilbert said.
Local customer school districts, industry leaders, business owners, residents, government and tribal leaders, the AARP of Oklahoma, and the Oklahoma Industrial Energy Consumers (OIEC) banded together in efforts to intervene on behalf of the Oklahoma customers and requested the full rate case before the OCC.
“I really would like to say at the end of this, the partners and companies and tribes and casino operations who contributed real dollars to OIEC to become a party to this, I want to thank them for their investment because they certainly were a major factor in the results of this,” Gilbert said. “We appreciate them ponying up to fight the fight.”
Empire serves about 4,000 Oklahoma customers with the majority of its customers in other states.
“Given the very small customer base in Oklahoma, the Commission is encouraging the utility to work on developing business plans that could address the issues posed by having relatively few Oklahoma customers,” Skinner said.
Empire's Director of Corporate Communications Julie Maus said the company had not yet been able to review the OCC's decision in entirety as of press time.
“We haven't received the actual order yet. Once we have an opportunity to review it, we should be able to have a comment,” Maus said.
Melinda Stotts is the associate editor of the Miami News-Record. She can be emailed at firstname.lastname@example.org or followed on Twitter @MelindaStotts1.