News from the Oklahoma Corporation
Commission
Phone: (405)
521-4180, FAX: (405) 522-1623, www.occ.state.ok.us
(Oklahoma
City) Citing the huge
ice-storm-related losses and their potential impact on ratepayers of
investor-owned utilities, the Corporation Commission has requested that
Oklahoma’s congressional delegation give “serious and expeditious”
consideration to legislation authorizing government help.
At
issue is the fact that while the Federal Emergency Management Agency can and
will provide disaster funding to the public power and cooperative power
utilities to aid in the restoration of their electric grids destroyed in the
ice storm, investor-owned utilities are not normally eligible for such
assistance.
However,
there have been exceptions to this rule. In January of 1988, Congress enacted
legislation authorizing FEMA to extend equitable relief to investor-owned
utilities in the wake of an ice storm in the Northeast that was very similar to
the recent disaster in Oklahoma.
In
their letter to the delegation, the Commissioners note that taking such action
in the Oklahoma case is necessary in order to spare Oklahoma’s citizens the
potential impact of increased electric rates and charges that may be made
necessary because of the damage done in the ice storm.
-occ-
Attachement:
March 18, 2002
Honorable Don Nickles
133 Hart Senate Office
Washington, DC 20510
Dear Senator Nickles,
On January 30th
of this year, an ice storm of unprecedented magnitude and destructiveness
devastated northwestern Oklahoma. The storm left hundreds of thousands of
Oklahomans, variously served by investor-owned, municipal and cooperative
utilities, without power. The damage
was so severe that President Bush declared 45 counties to be federal disaster
areas. Thankfully, the costs of restoring
the electrical grids of the public power and cooperative power utilities will
be largely borne by disaster funding from the Federal Emergency Management
Agency (FEMA). However, the enormous costs of rebuilding the transmission and
distribution systems of the investor-owned utilities are simply not eligible
for FEMA disaster assistance.
Consequently, in the absence of some form of federal assistance, it is
anticipated that the investor-owned utilities may pursue state rate increases
to recoup their emergency response and reconstruction costs in their
entirety. By illustration, one
investor-owned utility is facing damages of almost $140 million dollars, which
if passed into its rates would have a material impact on electric
consumers. We are aware that in
reaction to a very similar ice storm that besieged the northeast states in
January of 1998, Congress indeed enacted legislation authorizing FEMA to extend
equitable relief to investor-owned utilities to help defray the cost of
responding to the emergency and some portion of the expense of rebuilding their
infrastructure.
In that regard, we would urge your serious and expeditious consideration of similar relief for Oklahoma. We believe that given the extraordinary nature of this event and its impact on Oklahoma, it is appropriate to fashion a legislative response that provides investor-owned utilities timely assistance that equitably parallels the kind of relief already being provided to their public and cooperative utility counterparts. Noting that Oklahoma’s municipal and cooperative utilities are primarily distribution service providers and would qualify for FEMA disaster assistance for rebuilding their distribution systems, I would hope that at a minimum Congress would authorize FEMA to similarly extend financial assistance to help cover the investor-owned utilities’ costs for their emergency response and the restoration of their distribution systems. Such relief would directly benefit Oklahoma’s citizens by sparing them the potential impact of increased electric rates and charges.
If we can provide any further assistance, please let us know.
Sincerely,
Denise A. Bode Bob Anthony Ed Apple
Chairman Vice Chairman Commissioner