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Cooperatives, utilities continue to spar as Supreme Court considers critical arguments over service rights

An OG&E truck drives in a neighborhood near 21st and McKinley after an apparent tornado moved through the area in Oklahoma City, Sunday, May 26, 2019.  [Sarah Phipps/The Oklahoman]
An OG&E truck drives in a neighborhood near 21st and McKinley after an apparent tornado moved through the area in Oklahoma City, Sunday, May 26, 2019. [Sarah Phipps/The Oklahoman]

Cases involving fights to provide power to large electrical loads outside of normal service territories between large, investor-owned utilities and electric cooperatives are beginning to stack up.

While specific facts differ from case to case, there currently are several pending before the Oklahoma Corporation Commission as the utilities, cooperatives and the agency itself wait for Oklahoma’s Supreme Court to issue a decision in the earliest case that both sides hope will resolve a central question in the debate.

On Tuesday, two of three elected commissioners heard a little about the growing backlog of cases as they considered whether one filed earlier this year should be held in abeyance — or, essentially paused — until the court rules.

Commissioners Dana Murphy and Bob Anthony, vice-chairman of the panel, took arguments over the issue under advisement, but didn’t vote.

The case before the supreme court and the others pending before the commission involve the Retail Electric Supplier Certified Territory Act, which sets out ground rules electric cooperatives and utilities are expected to follow to meet the electrical needs of their customers.

The 1971 law sets out electrical service territories for cooperatives and big, investor-owned utilities, granting each an "exclusive" right to furnish power to all electric-consuming facilities located within its territory.

The act aims to minimize service disputes between retail electric suppliers. It also, however, includes language that allows one supplier to “extend” its service into another supplier's territory in cases that would serve a customer that needs at least 1 megawatt of power capacity, or more.

That language, known as the “1-megawatt exception,” likely was intended to boost economic development in rural parts of Oklahoma, as it allows larger consumers of electrical power to find the cheapest source of electricity possible to power their operations.

The question that needs to be decided is language included in that law which only authorizes that extension of service if it comes from the provider’s existing retail distribution system.

In the case before Oklahoma’s Supreme Court, CKenergy Cooperative asserted OG&E violated the act when it began providing electricity to a large power consumer — in that case, ONEOK, which needed energy to power a pipeline pumping station near Binger — by using power supplied by a nearby transmission line operated by another provider.

Two of the commissioners agreed, ruling that OG&E had violated the act and would need to terminate its service.

OG&E appealed the case to the supreme court.

The case before commissioners Tuesday, meanwhile, involves People’s Electric Cooperative.

In its case, it seeks an order from the commission that would require OG&E to quit providing electricity to a natural gas processing plant owned within the cooperative’s service area in Coal County that is owned and operated by Tall Oak Midstream.

Mike Snowdon, OG&E’s senior manager of sales and business solutions, testified in the case that the utility was asked to bid its costs to provide electrical service to the plant in April 2018, that the utility signed an agreement with Tall Oak to provide service to the facility in late June of the same year, and that construction on the project was completed in April of this year.

Like in the CKEnergy case, OG&E is getting the power it is supplying to the plant from a transmission line operated by a third party, via an interconnect agreement the utility negotiated with the Southwest Power Pool.

The cooperative argues that violates the act’s legislative intent, while the utility contends it doesn’t.

On Tuesday, attorney J. Eric Turner, representing People’s Electric Cooperative, argued against delaying the case, stating that the cooperative “deserves its day in court.”

Attorney Patrick Shore, on the other hand, argued that his client, OG&E, sees no harm in delaying further action on the case until the supreme court makes its decision.

An administrative law judge hearing the case recommended the case be paused.

Corporation Commissioner Todd Hiett, chairman of the elected members, did not attend Tuesday’s hearing.

Murphy indicated Tuesday she was ready to cast a vote to decide whether the case should be paused. But Anthony, who chose not to vote in the original case on appeal, said he would take the matter under advisement.

Jack Money

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›