News from the Oklahoma Corporation Commission

Jim Palmer, Director of Information

May 30, 2000

COMMISSION APPROVES $20 MILLION ONG RATE DECREASE

(OKLAHOMA CITY) Residential and small commercial customers will receive the lion’s share of a $20 million Oklahoma Natural Gas Co. (ONG) annual rate reduction contained in an order approved unanimously by the Oklahoma Corporation Commission May 30, with additional savings possible through competitive bidding on natural gas supply and transmission.

The Commission order approves a joint stipulation reached between the company, the Commission’s Public Utility Division staff, the Office of the Attorney General, Enogex Inc., Transok LLC, Public Service Company of Oklahoma and Octagon Resources Inc. The order calls for a net reduction in ONG rates of $20,642,366 with 70 percent of the reduction targeted to residential and small commercial customers to be applied after the initial pricing block.

Commission staff estimates that the average residential customer using natural gas for space heating and hot water will see an annual reduction of $23.55, with most of the savings occurring in the heavier use winter months.

In a concurring opinion, Commission Chairman Bob Anthony said "This is a balanced order that provides immediate ratepayer savings while opening the door to a competitive market in natural gas utility service in Oklahoma. In addition to the cost savings, the order contains other significant ratepayer benefits. ONG is authorized to conduct a five-year cathodic protection plan on its pipeline system, and to assist customers with maintenance of service lines on the customer’s property. With repair, replacement or new installations, ONG will work with customers to find mutually acceptable meter locations, taking into account safety, cost and aesthetics."

Anthony said "This will result in substantial savings to ratepayers faced with repair or replacement of service lines and improve public safety through the routine periodic testing of those lines. ONG has promised in their testimony to contract with local licensed plumbers to assist in this work. This will hold down labor costs to the utility while helping to mitigate the impact of the change on the plumbers and supply companies currently providing service line repair and replacement."

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Commissioner Denise Bode said "The conclusion of this rate reduction is not only important for the $20 million in savings provided to consumers today but also for future savings we have guaranteed through a competitive gas marketplace."

The order also merges Kansas Gas Services’s Oklahoma customers into Oklahoma Natural and completes the unbundling process by separating Oklahoma Natural Gas, the distribution company, and ONEOK Gas Transportation LLC, the transmission company, into separate utilities. ONG is in the process of taking competitive bids for both natural gas supply and transmission services for the upcoming heating season, which begins Nov. 1. Should the company receive a bid to provide lower cost transmission service to a particular geographic area, the current transmission cost will be backed out and the new charge inserted. Transmission rates will then be determined on a statewide basis so that all customers share in the savings.

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