Anthony Berates Panel's Agreement

by Ray Tuttle

The Tulsa World - February 12, 1997

Corporation Commission vice chairman Bob Anthony on Tuesday called last month's Oklahoma Gas & Electric Co. rate settlement "arbitrary" and "capricious," and said it would not stand up if contested in court. 

In January, all three Corporation Commissioners -- Anthony, Cody Graves and Ed Apple -- approved the OG&E rate settlement that had been hammered out a month earlier. The rate reduction awarded OG&E customers an 8.1 percent rate reduction in their summer electric bills. 

The reduction, to take effect March 1, will be $ 50.7 million this year and $ 55.7 million in 1998 and 1999 -- for a total of $ 162 million. It will cut residential rates $ 20.7 million, an average of $ 7.65 a month for customers from June through October. 

But in a concurring opinion filed Tuesday with the written order, Anthony said the settlement could be found unlawful if challenged. 

"During proceedings, I advised the parties of my concern that the record needed to meet certain legal requirements for a commission dealing with a 'black box settlement. '" "Black box" refers to negotiated settlements behind closed doors where no record is kept. The Legislature mandated utilities work out rate cases in such a manner. Anthony cited legal opinions from Kansas and Missouri rate cases that called the black box settlements unlawful. 

"However, I concur in accepting the rate decrease ordered herein because it will benefit the ratepayers of OG&E and the economy of Oklahoma. Yet, I regret that larger benefits may have been possible upon a more thorough presentation of evidence. " 

Anthony could not be reached for further comment. 

Graves said negotiated settlements and resulting stipulations were designed not to go on record. 

"The parties agree to have no record. The fact is OG&E and the commission started this rate case nearly $ 100 million apart, yet came to a settlement in which 13 of the 16 participating parties signed. " 

Graves, commission chairman, called Anthony's action "duplicitous at best and disingenuous at worst. " 

OG&E spokesman Grant Ringel said the utility was "very encouraged that the settlement was accepted on a 3-0 vote. " 

"We think it is a good settlement -- good for our customers in Oklahoma and fair to the company. " 

The Oklahoma City-based electric utility, the state's largest serving 625,000 in Oklahoma and western Arkansas, filed the rate reduction because it wanted to pass along savings, in the form of lower bills, realized from operating efficiencies accomplished over the past two years, Ringel said. 

About 538,000, or 86 percent, are residential customers. 

© 1997 The Tulsa World

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