Order directs utilities to prioritize natural gas and electric services to preserve the health, safety and welfare of the public
Oklahoma Corporation Commissioners were all about addressing natural gas supply issues on the upstream side Monday.
Tuesday, they refocused their attention on downstream natural gas and electricity needs of critical businesses and residents by considering a proposed emergency order aiming to keep both flowing.
A divided commission adopted the order, with Commission Chairman Todd Hiett and Commissioner Dana Murphy supporting it.
Commissioner Bob Anthony opted not to participate in the vote, after arguing Oklahoma’s constitution already provides state utilities with the authority they need to make those kinds of decisions.
“I believe there are unintended consequences we will face,” Anthony said.
Specifically, the order directs regulated utilities (in a manner consistent with commission rules) to prioritize natural gas and electricity services necessary for life, health and public safety, and to prioritize deliveries of natural gas to electric generation facilities that serve human needs customers.
It also orders the utilities to coordinate those activities with commercial and industrial consumers in order to reduce loads in safe and reasonable ways.
Additionally, the order directs utilities to advise customers to take steps to help conserve energy, including turning off external lighting not needed for public safety, unplugging unneeded electrical equipment and lowering thermostats.
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“We need emergency relief because of the weather pattern we have seen in the past few days,” said Brandy Wreath, who as director of the commission’s Public Utility Division proposed the order for approval. “It would allow utilities and pipeline operators to make decisions that would be necessary to divert natural gas to help keep people alive.
“We want to be sure that if there is a decline in the system that necessitates more drastic actions, want to be sure there are reasonable, feasible things they can do for the purposes of public safety, health and welfare. Through the many conversations we have had, we realize this does not come without costs, issues and concerns for businesses that experience diversions.
“But when it comes to public health and safety, we really are making sure these providers have all tools we can make available. People have done as much as they could, voluntarily,” Wreath said.
Commissioners took their vote Tuesday evening after spending more than 90 minutes debating the issue earlier in the day.
The version approved Tuesday evening included refinements that Murphy put into the proposal with the help of her team and the commission’s public utility division staff.
Anthony’s main issue with the proposed order was that he believed Oklahoma’s regulatory utilities already had the authority to make the kinds of calls the order provides authority for through the state’s constitution, which empowers those companies to serve the public dutifully.
He also said it would have been more appropriate if the proposed order had been submitted by each impacted utility, although Wreath disagreed, saying just having one order was a desperately needed time saver.
“It is my duty to raise the issue as quickly and as efficiently as possible,” he said.
Comments related to the proposed order were also made by Deborah Thompson, representing independent power producers and AARP Oklahoma, and Bill Hume, representing Oklahoma Gas and Electric Co.
Thompson told commissioners the current supply crisis for natural gas and electricity provides another example of why demand-side management is critical throughout the year.
And while she agreed it is vitally important to keep services flowing to state residents, she emphasized all other alternatives should be exhausted first.
“Our utilities have reduced their load where they could, early in this process,” Wreath responded. “The SPP has exhausted its resources and has had to rely on importing energy from neighboring systems to support demand.”
Hume said he understood concerns some industrial and commercial utility customers might have about the prospect of having their electrical or natural gas services terminated without much warning. But he added it was possible those services could be terminated anyway if delivery systems were to fail.
“To put it very bluntly, if it comes down to between the production of widgets and saving human lives, we all know what needs to be done,” Hume said.
Thomas P. Schroedter, who represents the Oklahoma Industrial Energy Consumers organization, said he worried the order could potentially cause companies he represents equipment damages if their electric or natural gas services had to be disconnected.
“To the extent that it is feasible, reasonable notices to those customers should be provided,” Schroedter said.
Commissioners also heard from Edmond resident Alesia Wright, who told them how curtailments OG&E implemented Tuesday morning impacted her home and the homes of others in her community.
Wright thanked commissioners for their attention to the issue, including discussing how non-essential businesses might get hurt.
“But when it gets down to the nitty gritty, it is people who matter the most,” Wright said.
Chairman Hiett thanked Wright for her comments, noting everyone involved in the process agreed with her sentiment.
“Our discussion isn’t about what’s the priority, but how it should be executed. I agree, it creates an uncomfortable situation, but it is something I will be willing to support,” Hiett said of the order.
Murphy agreed, saying, “This has been a challenging situation for everyone. We understand we have rules utilities follow and that they are supposed to have plans for situations that occur.”
But Murphy went on to point out that the commission’s public utility division opened an inquiry after the late-October ice storm to see how all electrical entities responded to that event.
“It sent a message to the public, to legislators and others that we are on the job and take these kinds of things seriously,” Murphy said. “We can cite to our rules all we want ... but we need to do what we feel is right and best.”