Oklahoma Gas and Electric acquires AES Shady Point after federal approval
- May 24, 2019 12:52 am GMT
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May 23-- May 23--Oklahoma Gas and Electric Co. on Wednesday received the last approval it needed to proceed with plans to spend about $27 million to buy a 360-megawatt coal-fired plant near Poteau owned by AES Shady Point, officials said.
The deal closed the same day.
The approval came from an administrator at the Federal Energy Regulatory Commission, who reviewed the utility's request to not only acquire Shady Point, but also to buy a 146-megawatt natural gas-fired, combined cycle plant in west Oklahoma City owned by Oklahoma Cogeneration.
Previously, approvals to acquire the plants were obtained from the Oklahoma Corporation Commission and the Arkansas Public Service Commission.
"We are pleased to have achieved regulatory approval on all fronts and to have closed on the Shady Point acquisition," OG&E spokesman Brian Alford stated in a release.
"These transactions will save our customers tens of millions of dollars each year and keeping good paying jobs in Oklahoma."
The Oklahoma Corporation Commission's order approved earlier this month stipulates the utility won't be allowed to begin recovering costs for acquiring the facilities from its Oklahoma customers until a pending rate case it has before regulators is settled, which should happen before the end of June.
The order also limits to three years the length of time OG&E will have to recover those expenses. The utility is a subsidiary of Oklahoma City-based OGE Energy Corp.
While the deal to acquire the plants does affect customers' bills, utility officials have told an administrative law judge and corporation commissioners that customers won't actually see an increase.
They have said the costs to acquire the plants is less than what OG&E had been paying each for power under previously existing power purchase agreements in place with owners of both facilities, noting they expect customers will save at least $40 million each of those three years.
In an unrelated matter before the Oklahoma Corporation Commission on Thursday, commissioners approved about $730 million in fuel costs the utility had collected from customers in 2017, issuing an order that decreased the total slightly because of concerns Commissioner Dana Murphy had about a contract the utility had negotiated with the natural gas supplier to its Mustang Energy Center.
The decrease of about $300,000 will be credited to ongoing fuel adjustments in customers' bills, officials said.
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