Attached files
| file | filename |
|---|---|
| 8-K - OGE8K060110 - OGE ENERGY CORP. | oge8k060110.htm |
| EX-99.01 - OGE8K060110EX9901 - OGE ENERGY CORP. | oge8k060110ex9901.htm |
Exhibit
99.02
BEFORE
THE CORPORATION COMMISSION OF OKLAHOMA
IN THE
MATTER OF THE APPLICATION
OF )
OKLAHOMA GAS AND ELECTRIC
COMPANY )
FOR AN
ORDER OF THE
COMMISSION ) CAUSE
NO. PUD 201000029
GRANTING
PRE-APPROVAL OF
DEPLOYMENT )
OF SMART
GRID TECHNOLOGY IN
OKLAHOMA )
AND
AUTHORIZATION OF A RECOVERY
RIDER
)
AND
REGULATORY
ASSET
)
JOINT STIPULATION AND
SETTLEMENT AGREEMENT
I. Introduction
The undersigned parties believe it is
in the public interest to effectuate a settlement of the issues in Cause No. PUD
201000029.
Therefore, the undersigned parties to
this Cause present the following Joint Stipulation and Settlement Agreement
(“Joint Stipulation”) for the Oklahoma Corporation Commission’s (“Commission”)
review and approval as their compromise and settlement of all issues in this
proceeding between the parties to this Joint Stipulation (“Stipulating
Parties”). The Stipulating Parties represent to the Commission that
the Joint Stipulation represents a fair, just, and reasonable settlement of
these issues, that the terms and conditions of the Joint Stipulation are in the
public interest, and the Stipulating Parties urge the Commission to issue an
Order in this Cause adopting this Joint Stipulation.
The
Stipulating Parties agree that the Commission has jurisdiction with respect to
the issues presented in this proceeding by virtue of Article IX, §18 et seq. of the Oklahoma
Constitution, 17 O.S. §152, 17 O.S. §286(C), the Commission’s Rules of Practice
(OAC 165:5), and the Commission’s Electric Utility Rules (OAC
165:35).
It is hereby stipulated and agreed by
and between the Stipulating Parties as follows:
II. Stipulated
Facts
A. On
July 24, 2009, the Commission issued its Final Order No. 569281 in Cause No.
200800398. In its Order, the Commission authorized Oklahoma Gas and
Electric Company (“OG&E” or “Company”) to proceed with implementation of
OG&E’s Smart Grid program in Norman, Oklahoma, following a test program in
northwest Oklahoma City, Oklahoma.
B. On
August 6, 2009, OG&E filed an Application with the United States Department
of Energy (“DOE”) seeking a federal grant for the Company’s Positive Energy®
SmartPower Project to develop a Smart Grid program under DOE’s Smart Grid
funding
| Joint Stipulation & Settlement Agreement | |
| Cause No. PUD 201000029 | |
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guidelines. On
October 27, 2009, the Company received Notification of Selection for Smart Grid
Investment Grant – Funding Opportunity Announcement (FOA) DE – FOA – 0000058,
Control # 09 – 0111, Project Title: Positive Energy Smart Power Program – Total
3 Year Project, Topic Area: Integrated and/or Crosscutting
Systems. Following negotiations with DOE officials, OG&E received
final funding authorization on December 29, 2009, in the amount of
$130,000,000.
C. In
order to qualify to receive the full amount of funding from DOE, OG&E
committed, during the negotiation with DOE and contingent upon the approval of
this Commission, to expend a total of $357,400,000 during a three-year period
ending December 29, 2012, for a system-wide deployment of Smart Grid components.
Included in this commitment are the costs authorized by the Commission for
implementation of the Smart Grid program in Norman, Oklahoma.
D.
On March 15, 2010, OG&E filed an Application in this Cause and
simultaneously submitted the prefiled Direct Testimony of Company
witnesses. The relief requested by the Company in the Application
included: (i) a Commission Order finding that deployment of the next phase of
the Smart Grid project, as described in the testimony, is preapproved, a prudent
investment and used and useful when placed in service; (ii) Commission approval
of the Smart Grid Recovery Rider proposed by the Company; and (iii) Commission
authority to establish a regulatory asset or regulatory assets for certain
costs.
E.
On May 21, 2010, the Commission Public Utility Division and the Oklahoma
Industrial Energy Consumers submitted Responsive Testimony and the Office of the
Attorney General submitted a Statement of Position.
F. On
May 27, 2010, the Parties to the Cause conducted a Settlement Conference that
resulted in this Joint Stipulation.
III. Settlement
Agreement
A. The
Stipulating Parties request that the Commission issue an order granting
pre-approval of OG&E’s system-wide Smart Grid deployment as requested in its
Application and the direct testimony of the Company’s witnesses, except as
modified by this Joint Stipulation (“Smart Grid Deployment”) and finding that
the Smart Grid Deployment is a prudent investment and, when constructed and
placed in service, will be used and useful to OG&E’s customers. In addition,
except as otherwise provided in this Joint Stipulation, the Stipulating Parties
request that the Commission authorize the recovery of costs associated with
OG&E’s Smart Grid Deployment through a recovery rider (“Smart Grid Rider” or
“SGR”), which is attached hereto as Stipulation Exhibit 1, which will become
effective in accordance with the order approving this Joint Stipulation and
Commission Rules. The annual revenue requirement for the SGR includes
a rate of return (“ROR”) on rate base and recovery of O&M expense,
depreciation, property tax, and the amortization of a regulatory
asset. Federal and state income taxes are then added to the
ROR.
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B. The
Stipulating Parties agree that the SGR is designed to collect, on a levelized
basis, the revenue requirement associated with the estimated project cost of
$357.4 million and shall be subject to a true up in 2014 after the SGR expires,
including a true up for project costs in excess of $357.4 million but less than
the Smart Grid Cost as defined below. Any over/under recovery
remaining will be passed or credited through the FCA to the service levels
defined in the SGR.
C. The
Stipulating Parties agree that OG&E’s total recovery related to project
costs (“Smart Grid Cost”) shall be capped at $366.4 million expended or accrued
by OG&E prior to the termination of the period authorized by DOE as eligible
for grant funds, inclusive of the DOE grant award amount as referenced in
OG&E’s direct testimony and the credit provided in Section III(F)
below. The Smart Grid Cost represents the projected cost of $357.4
million plus a 2.5% variance allowance. The Stipulating Parties
further agree that Smart Grid Cost represents an investment that is fair, just
and reasonable and in the public interest and is deemed prudent and will be
included in the revenue requirement in OG&E’s 2013 general rate case and
will be allocated in the same manner as the SGR.
D. The
Stipulating Parties agree that to the extent OG&E’s total expenditure
exceeds the Smart Grid Cost, OG&E shall be entitled to offer evidence and
seek to establish that the excess above the Smart Grid Cost was prudently
incurred and any such contention shall be addressed in the 2013 OG&E rate
case.
E. The
Stipulating Parties agree that OG&E shall, beginning January 1, 2011, make
the Smart Grid web portal available to all customers having a smart
meter. OG&E shall expend no less than $2.3 million to educate
customers regarding the best use of the information available on the
portal. In addition, OG&E shall make available to all customers
who do not have internet access the opportunity to receive a monthly Home Energy
Report. This report shall be made available, free of charge, to customers
eligible for the Company’s LIHEAP and/or Senior Citizen program who are without
internet service.
F. The
Stipulating Parties acknowledge that OG&E has projected certain Operation
and Maintenance (“O&M”) cost reductions that the Company expects to
experience because of the Smart Grid Deployment; and as part of this Joint
Stipulation, OG&E guarantees that customers will receive the benefit of
those reductions as a credit to the SGR. These credits shall be in
the amounts shown in Exhibit HM -1, line 15, of the Direct Testimony of Mr.
Howard Motley and credited through the life of the SGR as set out in Stipulation
Exhibit 1.
G. The
Stipulating Parties further agree that:
1. a
regulatory asset shall be established to capture Smart Grid O&M costs
incurred during 2009 and prior to the implementation of the SGR (“O&M
Regulatory Asset”). The amortization of the O&M Regulatory Asset
is included in the revenue requirement recovered through the SGR.
2. a
regulatory asset shall be established to capture the stranded costs associated
with the existing meters that will be retired due to the installation of smart
meters (“Stranded Meter Regulatory Asset”) as
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described
in the Direct Testimony of Mr. Howard Motley. The Stranded Meter
Regulatory Asset will accumulate during the Smart Grid Deployment and recovery
of the stranded costs will be included in future rate cases. In the
2011 rate case, the June 30, 2011, Stranded Meter Regulatory Asset balance will
be included in rate base. The test year of the 2013 rate case will be
calendar year 2012 and the Stranded Meter Regulatory Asset balance at December
31, 2012, will be included in rate base. Additionally, in the 2013
rate case, the Company shall be authorized to recover the remaining balance of
the Stranded Meter Regulatory Asset over six years beginning January
2014.
3. a
regulatory asset shall be established to capture the actual costs associated
with the web portal related activities described in Paragraph E,
above, in an amount not to exceed $ 6.9 million (“Web Portal
Regulatory Asset”). The Web Portal Regulatory Asset will accumulate
beginning with the effective date of an order adopting this Joint Stipulation
and ending December 31, 2013. In the 2013 rate case, the Company will
be authorized to earn a return on and recovery of the Web Portal Regulatory
Asset amortized over six years.
H. The
Stipulating Parties agree that the Smart Grid Cost proposed by OG&E in this
proceeding represents the expenditures necessary to operate and maintain the
Smart Grid Deployment in Oklahoma for the benefit of Oklahoma
customers. However, if this Joint Stipulation is approved by the
Commission, OG&E will file an application with the Arkansas Public Service
Commission in 2010 requesting pre-approval and a recovery rider for the costs of
deploying the Smart Grid for the benefit of its Arkansas
customers. If the Arkansas Public Service Commission approves the
Company’s application, those expenditures that are necessary for the Oklahoma
Smart Grid Deployment and useful in the Arkansas smart grid deployment will be
allocated between the two jurisdictions, as determined in the OG&E 2013 rate
case, thereby lowering the costs recovered from Oklahoma
ratepayers.
I. The
Stipulating Parties agree that OG&E shall evaluate the feasibility of
implementing an hourly-differentiated fuel adjustment clause and address the
implementation of such a clause in its 2011 rate case. The
Stipulating Parties further agree that a public workshop shall be held at the
Commission before March 31, 2011, for the purpose of considering the
implementation of such a clause.
J. The
Stipulating Parties agree that OG&E shall provide the Public Utility
Division of the Commission with periodic reports regarding complaints and
customer input received by the Company related to Smart Grid
Deployment.
K. The
Stipulating Parties agree that OG&E shall consult with the Public Utility
Division with respect to the 2011 demand response study discussed in the Direct
Testimony of Mr.
Kenneth Grant at page 12, lines 23-28. OG&E further agrees to
provide the Public Utility Division the results of both the 2010 and 2011 demand
response studies.
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IV. General
Reservations
The
Stipulating Parties represent and agree that, except as specifically
provided:
A.
Negotiated
Settlement. This Joint Stipulation represents a negotiated
settlement for the purpose of compromising and resolving the issues presented in
this Cause.
B. Authority to
Execute. Each of the undersigned counsel of record
affirmatively represents to the Commission that he or she has fully advised his
or her respective clients(s) that the execution of this Joint Stipulation
constitutes a resolution of issues which were raised in this proceeding; that no
promise, inducement or agreement not herein expressed has been made to any
Stipulating Party; that this Joint Stipulation constitutes the entire agreement
between and among the Stipulating Parties; and each of the undersigned counsel
of record affirmatively represents that he or she has full authority to execute
this Joint Stipulation on behalf of his or her client(s).
C. Balance/Compromise of
Positions. The Stipulating Parties stipulate and agree that
the agreements contained in this Stipulation have resulted from negotiations
among the Stipulating Parties. The Stipulating Parties hereto
specifically state and recognize that this Joint Stipulation represents a
balancing of positions of each of the Stipulating Parties in consideration for
the agreements and commitments made by the other Stipulating Parties in
connection therewith. Therefore, in the event that the Commission
does not approve and adopt all of the terms of this Joint Stipulation, this
Joint Stipulation shall be void and of no force and effect, and no Stipulating
Party shall be bound by the agreements or provisions contained
herein. The Stipulating Parties agree that neither this Joint
Stipulation nor any of the provisions hereof shall become effective unless and
until the Commission shall have entered an Order approving all of the terms and
provisions as agreed to by the parties to this Joint Stipulation.
D. Admissions and
Waivers. The Stipulating Parties agree and represent that the
provisions of this Joint Stipulation are intended to relate only to the specific
matters referred to herein, and by agreeing to this settlement, no Stipulating
Party waives any claim or right which it may otherwise have with respect to any
matters not expressly provided for herein. In addition, none of the
signatories hereto shall be deemed to have approved or acquiesced in any
ratemaking principle, valuation method, cost of service determination,
depreciation principle or cost allocation method underlying or allegedly
underlying any of the information submitted by the parties to this Cause and
except as specifically provided in this Joint Stipulation, nothing contained
herein shall constitute an admission by any Stipulating Party that any
allegation or contention in this proceeding is true or valid or shall constitute
a determination by the Commission as to the merits of any allegations or
contentions made in this proceeding.
E.
No Precedential
Value. The Stipulating Parties agree that the provisions of
this Joint Stipulation are the result of negotiations based upon the unique
circumstances currently represented by the Applicant and that the processing of
this Cause sets no precedent for any future causes that the Applicant or others
may file with this Commission. The Stipulating Parties further agree
and represent that neither this Joint Stipulation nor any Commission order
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approving
the same shall constitute or be cited as precedent or deemed an admission by any
Stipulating Party in any other proceeding except as necessary to enforce its
terms before the Commission or any court of competent
jurisdiction. The Commission’s decision, if it enters an order
approving this Joint Stipulation, will be binding as to the matters decided
regarding the issues described in this Joint Stipulation, but the decision will
not be binding with respect to similar issues that might arise in other
proceedings. A Stipulating Party’s support of this Joint Stipulation
may differ from its position or testimony in other causes. To the
extent there is a difference, the Stipulating Parties are not waiving their
positions in other causes. Because this is a stipulated agreement,
the Stipulating Parties are under no obligation to take the same position as set
out in this Joint Stipulation in other dockets.
F.
Discovery. As
between and among the Stipulating Parties, any pending requests for information
or discovery and any motions that may be pending before the Commission are
hereby withdrawn.
WHEREFORE,
the Stipulating Parties hereby submit this Joint Stipulation and Settlement
Agreement to the Commission as their negotiated settlement of this proceeding
with respect to all issues raised within the Application filed herein by
Oklahoma Gas And Electric Company or by Stipulating Parties to this Cause, and
respectfully request the Commission to issue an Order approving the
recommendations of this Joint Stipulation and Settlement Agreement.
| PUBLIC UTILITY DIVISION | |||
| OKLAHOMA CORPORATION COMMISSION | |||
| Dated: 05/27/2010 | By: /s/ Brandy L. Wreath | ||
| Brandy L. Wreath | |||
| Deputy Director |
| OKLAHOMA GAS AND ELECTRIC COMPANY | |||
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Dated: 05/27/2010
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By: /s/ William J.
Bullard
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William
J. Bullard
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| OKLAHOMA OFFICE OF THE ATTORNEY GENERAL |
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Dated: 05/27/2010
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By: /s/ William L.
Humes
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William
L. Humes
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| OKLAHOMA INDUSTRIAL ENERGY CONSUMERS | |||
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Dated: 05/27/2010
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By: /s/ Thomas P.
Schroedter
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Thomas
P. Schroedter
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| OG&E SHAREHOLDERS ASSOCIATION | |||
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Dated: 05/27/2010
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By: /s/ Jack G.
Clark,
Jr.
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Jack
G. Clark, Jr.
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7
| STIPULATION EXHIBIT 1 | |
| OKLAHOMA GAS AND ELECTRIC COMPANY | 1st Revised Sheet No. 52.00 |
| P.O. Box 321 | Replacing Original Sheet No. 52.00 |
| Oklahoma City, OK 73101 | Date Issued XXXX xx, 2010 |
| STANDARD PRICING SCHEDULE: SGR | STATE OF OKLAHOMA |
| SMART GRID RIDER | |
EFFECTIVE
IN: All territory
served.
PURPOSE:
Recover the annual revenue requirement associated with the Positive Energy®
Smart Grid Program which includes guaranteed O&M reductions resulting from
deployment of Smart Grid technology.
APPLICABILITY: Applicable to all customers
taking service at Service Levels (SL) 3, 4, & 5.
SMART
GRID RIDER FACTOR (SGRF) CALCULATIONS: The following formula for
the SGRF calculates the charges on a per kilowatt-hour (kWh) basis for each of
the major rate classes and the combined minor rate classes (Other).
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SGRF
Class =
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(A – B) * C
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;
($ per kWh)
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D
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Where:
Major
Rate Classes = Residential,
General Service, Power and Light, and Large Power and Light.
Combined Minor Rate Classes (Other) = Municipal Lighting + Municipal
Pumping + Outdoor
Security Lighting + Public Schools (demand and non-demand)
+ Oil
and Gas Producers.
A = Smart Grid Rider “Levelized” Revenue
Requirement
The
revenue requirement will be based on the Rate of Return (adjusted for income
taxes) and Distribution Demand allocator approved in OG&E’s most recent
general rate case. The revenue requirement will be based on the capped Smart
Grid expenditures that are not recovered in existing rates or
riders.
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2010
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2011
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2012
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2013
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$ 14,538,271
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$ 32,612,554
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$ 44,092,219
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$ 52,118,839
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B = Guaranteed O&M
Reductions
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The
“Levelized” Revenue Requirement (A) will be reduced by the following
O&M reductions resulting from Smart Grid
technology:
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2010
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2011
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2012
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2013
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$171,396
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$3,583,566
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$6,689,943
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$11,756,752
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| Rates Authorized by the Oklahoma Corporation Commission: | Public Utilities Division Stamp | ||
| (Effective) | (Order No.) | (Cause/Docket No.) | |
| XXXXX x, 2010 | xxxxx | PUD 201000xxx | |
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STIPULATION
EXHIBIT 1
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OKLAHOMA
GAS AND ELECTRIC COMPANY
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1st
Revised Sheet No. 52.01
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P.O.
Box 321
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Replacing
Original Sheet No. 52.01
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Oklahoma
City, OK 73101
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Date
Issued XXXX xx,
2010
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STANDARD
PRICING SCHEDULE: SGR
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STATE
OF OKLAHOMA
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SMART
GRID RIDER
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C = Applicable Distribution Demand
Allocator Percentage
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Class
(SL
3, 4, 5 only)
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Allocator
Percentage* |
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Residential
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52.4453
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General
Service
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9.7129
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Power
and Light
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27.5218
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Large
Power and Light
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4.4769
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Other
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5.8431
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*Adjusted
to exclude jurisdictions not at issue
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D =
Projected Oklahoma
Jurisdictional base kWh for each Class identified
above
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SMART
GRID RIDER FACTORS ($ per kWh): The following factors will
be applied to customer billing during each of the applicable years of this
rider.
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Class
(SL
3, 4, 5 only)
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2010
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2011
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2012
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2013
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Residential
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0.001772
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0.001829
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0.002294
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0.002435
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General
Service
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0.001668
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0.001726
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0.002173
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0.002319
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Power
and Light
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0.001113
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0.001171
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0.001532
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0.001684
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Large
Power and Light
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0.000739
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0.000797
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0.001099
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0.001255
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Other
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0.001590
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0.002223
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0.002626
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0.002250
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ANNUAL
REPORTING: A
report will be submitted to the OCC PUD each year by March 1st. The
report will summarize (by month) the prior period actual rider revenues
collected and the revenue requirement associated with the Smart Grid
Program.
TRUE-UP
PROVISION: The
Company shall provide to the OCC PUD a final report before April 30,
2014. The report shall summarize the actual collected revenues and the actual
revenue requirement for the SGR term. Any over/under recovery will be refunded
or collected through the Rider for Fuel Cost Adjustment.
TERM: The SGR will become
effective the first billing cycle in July 2010 and will continue through the
last billing cycle in December 2013.
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Rates
Authorized by the Oklahoma Corporation Commission:
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Public
Utilities Division Stamp
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(Effective)
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(Order
No.)
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(Cause/Docket
No.)
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XXXXX
x, 2010
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xxxxx
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PUD
201000xxx
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