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Oklahoma Corporation Commission turns away utility's request to dismiss or pause service dispute case

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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]

Elected Oklahoma Corporation Commissioners on Thursday turned away a request to either dismiss or pause a case where an electric cooperative is trying to stop a large investor-owned utility from serving a customer in its area.

Oklahoma Gas and Electric Co. sought the dismissal or pause of an action brought against it by People’s Electric Cooperative.

The cooperative is asking the commission to order OG&E to quit providing electricity to a natural gas processing plant within the cooperative’s service area in Coal County that is owned and operated by Tall Oak Midstream.

OG&E asked for the dismissal or a pause, given the case’s arguments mirror ones made in another case that the utility lost and subsequently appealed to the Oklahoma Supreme Court.

Both cases involve agreements the investor-owned utility executed with large power consumers outside of its service territory to provide them with electricity.

They made the agreements under a 1-megawatt exception that is included in the Retail Electric Supplier Certified Territory Act.

The 1971 law, which aimed to minimize service disputes between retail electric suppliers, set out electrical service territories for cooperatives and big, investor-owned utilities, granting each an "exclusive" right to furnish power to all customers within their respective territories.

Its 1-megawatt exception language, however, allows one supplier to furnish electricity to a customer outside of its normal territory in cases where that customer needs at least 1-megawatt or more of power capacity.

That language 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.

In both cases, cooperatives are arguing the law only authorizes such an exception if the invading service provider extends its existing retail distribution system to provide the electricity.

But OG&E is providing service to those clients by using energy it is taking from nearby transmission lines operated by a third-party, via interconnect agreements it negotiated with the Southwest Power Pool.

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

In the earlier case, CKenergy Cooperative challenged a deal that OG&E executed to provide electricity to a ONEOK-owned pipeline pumping station near Binger.

Two of the three elected commissioners found OG&E had violated the act and signed an order requiring it to cease providing power to the consumer, which OG&E appealed to the court.

In December, attorneys representing People’s argued against a delay in its case, saying the cooperative deserves a timely resolution to the dispute.

An administrative law judge considering the case recommended against dismissing the action, but supported OG&E’s request that it be paused.

Thursday’s order, drafted by Commissioner Dana Murphy and signed by all three commissioners, denied both of OG&E’s requests.

“We don’t have any idea on when the supreme court is going to make a ruling” on the earlier case, Murphy said Thursday.

“Given the stipulated facts and timing of things, it just makes a lot of sense to allow the hearing on the merits (in the People's case) to take place."

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 ›