News from the Oklahoma Corporation Commission
Phone: (405)
521-4180, FAX: (405) 522-6945
m.skinner@occemail.com
Move will ensure reliable electric service, strengthen Oklahoma’s
economy and provide ratepayer savings
(Oklahoma City)
In a unanimous vote, the Oklahoma Corporation Commission today approved
a power sales agreement (PSA) between Oklahoma Gas and Electric (OG&E) and PowerSmith. The PSA sets forth the conditions under which
OG&E will buy needed electricity from PowerSmith’s
cogeneration facility in Oklahoma City. The facility also provides steam used
by the Dayton Tire manufacturing plant in Oklahoma City.
Commission
Chairman Denise Bode said the deal is a classic “win-win”.
“First
and foremost, the agreement will ensure the area served by OG&E can count
on having the reliable, affordable power it needs both for current customers,
for economic development and for jobs. Studies show reliable and affordable
electricity is one of the most important items on the lists of companies who
are scouting locations or considering expansion plans.
“The
agreement’s economic benefits to Oklahoma are multi-faceted,” Bode
continued. “It is estimated that over 15
years, OG&E customers will realize a savings of approximately 30 million dollars over what they would
otherwise have had to pay in fuel charges on their electric bill. At the same
time, the agreement opens the door for PowerSmith to
continue providing the steam Dayton Tire officials say they need to keep the
Oklahoma City plant open. With about 1800 employees, the Dayton Tire facility
has an estimated economic impact of some
800 million dollars a year on the Oklahoma economy.”
Commission
Vice-Chair Bob Anthony said the agreement “presents the Commission with a
unique set of circumstances.”
“This
is the first time the Commission has been presented with a proposed agreement
under the federal Public Utility Regulatory Policies Act (PURPA) involving an
existing plant that has been in operation for some years. Further, this is the
first time such an agreement was independently negotiated and agreed to by the
utility and the cogeneration facility.
“But
most noteworthy is the fact that this agreement breaks new ground by allowing
OG&E to decide, within certain parameters, just when to purchase
electricity from PowerSmith. This is very different
from other cogeneration contracts that basically require the utility to take
all the power the facility produces, regardless of whether or not it’s
needed. The bottom line is that OG&E
will now have the flexibility it needs to be able to meet its customers’ power
needs in a cost-effective manner, and it opens the door to significant
potential savings.”
Commissioner
Jeff Cloud said the agreement meets both the mandate of the Oklahoma
Constitution and PURPA that the contract be “fair, just and reasonable.”
“The
numbers that make up the debate over such issues are incredibly complex, and
the Commission has the daunting task of carefully weighing, reviewing and
triple-checking the data used by the parties to the case to back up their
sometimes competing claims. This would
be impossible without the extraordinary effort and expertise of this agency’s
staff. It would be an understatement to say the successful conclusion to this
case is the result of a great deal of very hard work; work that in the end,
will benefit the people of Oklahoma.”
The
power sales agreement is scheduled to take effect September 1.
-OCC-
All OCC
advisories and releases are available at www.occ.state.ok.us