News Clips

Sides in EPA fight plot strategy after delay
D. Ray Tuttle, The Journal Record

Trucks dispose of fly ash in the containment area as a water truck wets the ash to keep it from blowing in the wind at the PSO electric generation plant in Oologah.

TULSA – Now that Public Service Company of Oklahoma’s proposed environmental compliance plan with the U.S. Environmental Protection Agency has been delayed, both sides in the legal battle are maneuvering for the next step.

The Oklahoma Corporation Commission decided in March to put hearings on American Electric Power-PSO’s proposed environmental compliance plan on hold. The hearings, which had been planned for April 23, could raise rates by 11 percent or more beginning in 2016.

Tulsa-based PSO, a unit of Ohio-based AEP, sought to move forward with the hearing on its tentative settlement with the EPA and the Sierra Club. Last fall, PSO filed an application with the Corporation Commission asking for approval of a plan to meet the requirements of that settlement.

PSO will reduce sulfur dioxide emissions by 75 percent along with other pollutants that cause health problems, said Whitney Pearson, an associate field organizer for the Oklahoma Chapter of the Sierra Club. PSO has also asked the commission for preapproval to recover $350 million in costs associated with the proposed settlement. The OCC must review the compliance actions and later rule on proposed rate changes stemming from that settlement once it is approved by regulators.

On the other side is the Oklahoma Industrial Energy Consumers, which opposes the tentative EPA agreement with the PSO and Sierra Club. The OIEC said it asked for a delay because state and federal agencies were still reviewing the plan. Corporation Commission staff also favored a delay.

The OIEC claims the rates would be much higher.

“We totally disagree with that,” said Stan Whiteford, PSO spokesman. “If we followed OIEC’s plan, costs would have been $850 million to $900 million. We feel strongly our analysis is correct.”

Pearson said the there is a 1-percent difference between PSO’s plan and the OIEC plan.

“They are putting up a pretty good fight for 1 percent,” Pearson said on Tuesday.

The hearing at the Corporation Commission, and the subsequent delay, is not a rate case, but an opportunity for everyone to understand the environmental settlement, Whiteford said.

Meanwhile, the Oklahoma Department of Environmental Quality and EPA are moving forward on their approval of the proposed settlement. A key factor in the tentative settlement is something called the State Implementation Plan, or SIP.

The DEQ has set a May 20 hearing on the SIP, Whiteford said.

“Until the SIP is resolved, the commissioners did not feel comfortable making a decision,” Whiteford said. “Once the SIP is approved, it might be the trigger that would allow the commission to set a date.”

This week, Lee Paden, representative for the Quality of Service Coalition, said the Corporation Commission made the best decision on behalf of Oklahoma ratepayers.

“Moving forward, it is paramount that Oklahoma ratepayers, those who will be saddled with the financial burden of AEP’s action, be heard on the matter,” Paden said on Tuesday. “Even the most conservative of estimates will cost ratepayers at the very least a hundred dollars a year and for many it will be hundreds of dollars immediately.”

Meanwhile, PSO said all of the information needed to go forward with the hearing had been filed, Whiteford said.

“There’s a ton of pre-filed testimony – a ton of information – so we did not see any reason for it to be delayed,” Whiteford said.

Consumers benefited by a stay, said OIEC Executive Director Tom Schroedter, during testimony to commissioners.

“Shrewd businessmen do not make decisions without all the facts in front of them; nor should the government,” Schroedter told the commissioners.

In an uncertain regulatory environment, the OCC’s decision rightly sends the case back to the federal government to make the necessary determinations as to how to proceed, Paden said.

“Commissioner (Patrice) Douglas put it best when she expressed the desire for Oklahoma ratepayers to have the full story on what is going on here,” Paden said. “We certainly respect that position.”

Last September, the state’s second-largest utility informed state regulators of its tentative federal compliance deal. The plan calls for PSO to shut down its two coal-fired generation units in Oologah by 2026. The utility would install emission controls to meet EPA rules on regional haze and other air toxins.


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