OG&E adding 'fuel cost adjustment' charge to bills in October

OKLAHOMA CITY (KFOR) - Another added charge could pop up on your OG&E utility bill soon. KFOR has learned the company will add the fee to your bill to recoup costs for higher natural gas and coal prices.

This added charge, called a Fuel Cost Adjustment, will be for under-collected fuel costs the company has experienced due to inflation. The company will begin collecting $424 million in October and the fee will be in your bill for the next two years.

However, Oklahoma Corporation Commission spokesperson, Matt Skinner, said the charge was not a done deal yet.

"To my knowledge the public utility division staff that is responsible for reviewing fuel costs has not initiated any official action approving, disapproving or opening any case on any current fuel adjustment for OG&E. Public Utility Division staff is still reviewing fuel costs for several utilities."

The move does not have to be approved by the city’s Public Utilities Department or the Corporation Commission, although they can file a case against the company if the commission feels OG&E has been unreasonable in its request.

OG&E sent KFOR a statement on the matter, which read:

“The financial picture is tough right now, and no one wants to see rising electric bills as Oklahoma families continue to face inflation. We understand our customers depend on us daily to energize their lives, which is why we work hard to keep energy bills as low as possible. Every monthly bill includes the cost of fuel, and electric companies like OG&E usually adjust the factor used to determine the cost of fuel on the bill each year. Like the price of food, gasoline and other household essentials, the price of natural gas has risen substantially this year. OG&E, like most local electric companies in the region, uses natural gas to fuel a large part of our electric generation fleet. That means it’s become much more expensive to generate electricity.” 

“Throughout all of this, OG&E has kept our customers from feeling the financial burden of natural gas price hikes. However, that path is no longer sustainable as elevated natural gas prices are not projected to moderate for well into the next year. We know our customers expect us to deliver reliable and resilient electricity, and we will continue to do what we can to manage the increasing costs of electricity generation. We will continue to provide a variety of programs to help customers manage their energy bill and energy usage. We know this is a tough decision, and it’s not made lightly, but it is necessary in order for us to continue to provide our customers with reliable service, a secure electric grid and resilient service following Oklahoma’s extreme weather.” 

With the new charge, along with the recently added 2021 Winter Storm charge, and the approved OG&E rate hike by the commission earlier this year of nearly 2 percent, customers could see more than $20 in additional costs on their bill.

Many people who have reached out to KFOR have asked why Attorney General John O’Connor has not stepped in to fight for Oklahoma consumers. We reached out to O’Connor’s office and did not hear back.

Former Attorney General Drew Edmondson said he saw cases similar to this while in office and said the AG’s role during times of inflation was vital.

“That's something we would keep an eye on. If we thought that process was being abused, we might intervene,” said Edmondson. “It's supposed to be a recoupment of costs, not a mechanism to gain more revenue.

It is against Oklahoma law for utility companies to profit from fuel cost adjustments under OCC regulations. The charges must be the “actual cost” of rising fuel prices.