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Coronavirus in Oklahoma: Public Service Co. of Oklahoma seeks to lower customers' bills, thanks to lower natural gas costs

Public Service Co. of Oklahoma’s Tulsa Power Station. [THE OKLAHOMAN ARCHIVES]
Public Service Co. of Oklahoma’s Tulsa Power Station. [THE OKLAHOMAN ARCHIVES]

TULSA − Public Service Co. of Oklahoma has been paying less than planned for natural gas used to help generate electricity.

The company notified the Oklahoma Corporation Commission it intends to pass along those savings to customers, starting in May.

For a residential customer that uses 1,100 kilowatt-hours a month, the savings will decrease a monthly bill by more than $9, or about 24%, officials said.

For a larger commercial and industrial customer, for which fuel costs make up a significantly larger portion of a bill, the adjustment will add up to thousands of dollars in savings.

The adjustment will be provided through a monthly fuel costs assessment.

If approved as filed with the Oklahoma Corporation Commission, utility officials expect savings to show up on customers’ bills in May and to last through the remainder of 2020.

“The reduction in the fuel cost adjustment is largely the result of continued lower prices for natural gas, which PSO uses to generate a substantial portion of the electricity used by our customers,” said Matthew Horeled, its regulatory and finance vice president.

A trend?

PSO is the first electric utility to file a fuel costs adjustment case with Oklahoma regulators since the coronavirus pandemic-enhanced energy bust began.

Utilities and other power providers across the nation that rely on natural gas to generate substantial portions of their electricity are seeing cheaper prices and should be passing those cost savings along to their customers soon.

The U.S. Energy Information Administration’s short-term energy outlook published this week stated the Henry Hub natural gas spot price averaged $1.74 per million British thermal units (MMBtu) in March, attributing its low cost to warmer-than-normal temperatures that reduced space heating demands.

Reduced energy demands because of businesses idled by the coronavirus also are playing a role.

The EIA estimates that total U.S. working natural gas in storage ended March at 2 trillion cubic feet, 17% more than the five-year average.

The EIA, however, also predicts natural gas prices will begin to rise at the end of the second quarter as domestic production of the fuel declines along with drilling and completion activities and as utilities move into generating more power to handle the summer cooling season.

It forecasts that Henry Hub natural gas spot prices will average $2.11 per MMBtu in 2020 and then increase in 2021 to reach an annual average of $2.98 per MMBtu.

Domestic dry natural gas production set a record in 2019, averaging 92.2 billion cubic feet per day.

The EIA forecasts it will average 91.7 Bcf per day in 2020, falling incrementally on a monthly basis to about 87.5 Bcf per day in December.

PSO customers in northeastern, southeastern, southwestern and western parts of the state will enjoy some relief because of lower costs for the fuel, Horeled said.

“With the current state of the economy due to the COVID-19 pandemic, this reduction in fuel costs comes at a good time for our customers.”

Related Photos
<figure><img src="//" alt="Photo - " title=""><figcaption></figcaption></figure><figure><img src="//" alt="Photo - Public Service Co. of Oklahoma’s Tulsa Power Station. [THE OKLAHOMAN ARCHIVES] " title=" Public Service Co. of Oklahoma’s Tulsa Power Station. [THE OKLAHOMAN ARCHIVES] "><figcaption> Public Service Co. of Oklahoma’s Tulsa Power Station. [THE OKLAHOMAN ARCHIVES] </figcaption></figure>
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 ›