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Corporation Commission Approves sale of AES Shady Point to OG&E Featured

Last modified on Wednesday, 15 May 2019 14:11
Written by  Tuesday, 14 May 2019 14:19
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Information from multiple sources

 

The Oklahoma's Corporation Commission approved the sale of the AES Shady Point to OG&E for approximately $27 million.

 

The agreement was reached on Friday, May 10, 2019 after the corporation commission spent hours hearing arguments about the competitive bidding process that OGE used to make its selections and about a rate adjustment connected to its plan. The actual vote by the Commissioners took place on Monday after the Friday opportunity for OER to state their disagreements.

 

The sale was announced in Dec 2018, that OG&E would purchase AES Shady Point, 360 Mega Watt coal and natural gas-fired plant utilizing circulating fluidized bed boilers that produce lower emissions due to their design features and emissions controls.

 

OGE also announced they would also purchase a 146-megawatt natural gas-fired, combined cycle plant in west Oklahoma City owned by Oklahoma Cogeneration.

 

The proposal approve the purchase of both plants.

 

The agreement won't allow the utility to begin recovering costs for acquiring the facilities until a pending rate case it has before regulators is settled.

 

While the deal to acquire the plants does affect customers, OGE officials say customers won't see an increase.

 

According to a press release from OG&E, “This will help meet the growing needs of its customers.”

 

The OGE purchase does comes with some opposition.

 

According to an article in the Oklahoman, written by Jack Money, on May 14, 2019, - Jon Laasch, representing Oklahoma Energy Results, has a problem with the competitive bidding process the utility used to select the two plants for purchase.

 

Laasch argued the OGE should have required interested bidders to include long-term fuel and maintenance costs for their facilities, and, that those costs should have been considered by the utility as part of its decision-making process.

 

Laasch stated that a witness testified for Oklahoma Energy Results in the case said that it was estimated that OGE would spend more than $500 million to own and operate the two facilities during the remainder of their useful lives.

 

According to OGE attorney William Hume, "when Oklahoma Energy Results complains it (the process) was biased, what it really means is that the criteria didn't provide an advantage for its client, who was a (losing) bidder.”

 

The Oklahoma Energy Results is considering filing a Stay in the case.

 

Walmart and Sam’s Club representative, Richard Chamberlain, said the retailers were concerned the deal could set a precedence allowing utility companies the ability to avoid the type of analysis regulators conduct whenever a rate increase is sought.

 

OGE Attorney William Hume, stated the joint stipulation requires annual reviews and “True Ups” of cost the same way a rate case would, adding that if additional costs must be recovered by three years, a rate case then would be required.

 

Hume also stated that there were 19 bidders submitted 94 proposals that included fuel sources of coal, natural gas, wind, solar and batteries located at 26 sites within 350 miles of Oklahoma City.

 

Sierra Club of Oklahoma, who planned to obtain AES Shady Point, didn't make arguments Friday, though they did express concern about how AES Shady Point disposed of coal ash generated by its operations.

 

According to OG&E, acquiring the facilities makes financial sense. They estimate it will save OG&E's customers at least $40 million annually because it will cost the utility less to operate them than to buy their power.

 

David Deaton

Digital Editor at Oklahoma Welcome

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