Dive Brief:
- Oklahoma Gas & Electric (OG&E) has reached an agreement with several stakeholders that would allow the utility to recover its investment in the new Mustang Energy Center while also lowering rates for customers.
- The utility invested almost $400 million in the modernization project, but customers will see a net rate reduction of approximately $64 million. The average customer will see their bill decline almost $4.50/month.
- OG&E completed work on the Mustang project earlier this year. The seven new gas turbines can generate 462 MW and they can start up and provide power within 10 minutes — a significant improvement over the 1950s-era units that were replaced.
Dive Insight:
The Mustang facility, which includes seven modern, efficient gas-fired units, is already operational and has been called on many times to help meet high demand. Along with helping to lower customer bills, utility officials say it is also working to balance the grid.
"In the short time the plant has been operational, its units have been called upon more than 700 times to support regional grid reliability, producing more energy than the old plant did in its last full year of operation," OG&E spokesman Brian Alford said in a statement announcing the rate settlement.
Alford also said that the Southwest Power Pool and the Arkansas Public Service Commission had each concluded the Mustang project to be in the public interest.
If approved by regulators, OG&E would see a net rate reduction of approximate $64 million, and average customer bills would decline about $4.44/ month. The new rates could take effect July 1 and would follow a $13.34 /month fuel cost reduction in March.
The settlement agreement includes Oklahoma Attorney General Mike Hunter and staff of the Oklahoma Corporation Commission's Public Utility Division. The Oklahoman reports utility consumer groups have also signed onto the arrangement.
OG&E is also working to lower the carbon footprint of existing resources. The company said the installation of dry scrubbers at its Sooner Power Plant, located near Red Rock, Okla., and the conversion of two of three coal-fired units to natural gas at its Muskogee plant, are on track to meet EPA Regional Haze Rule requirements.
"We're making great progress with these necessary environmental projects," Alford said. "Both the Sooner and Muskogee projects are on time and under budget."
OG&E said it would ask regulators later this year to consider rate adjustments to recover those projects. The settlement announced Wednesday will "help mitigate the effects of the cost increases associated with these environmental projects," the company said.
