OG&E seeks rate increase from Arkansas regulators

Oklahoma Gas & Electric on Friday filed papers seeking a rate increase that would cost its Arkansas residential customers an additional $12 per month.

The utility has filed documents with the Arkansas Public Service Commission for a general rate increase of approximately $26 million. OG&E says it wants the increase to help cover costs for a new power plant and improvements to its power lines, substations and other equipment.

OG&E says that if the request is approved it will be the first general rate increase in 25 years for its residential customers.

OG&E has 65,000 customers in western Arkansas among its 766,000 total customers.

The utility says its Arkansas rates are 36 percent below the national average and 23 percent below the regional average, and would still be among the lowest in the country if the commission approves the rate hike.

The utility said the Redbud natural-gas fired power plant near Luther, Okla., is the largest component of the increase. OG&E says it should complete its acquisition of the plant later this year, a purchase that it says costs at least 25 percent less than construction of a new plant. The plant is flexible in that it can easily reduce output to accommodate OG&E's use of wind power.

OG&E now has 170 megawatts of wind generation capacity, and plans to add 600 megawatts of wind capacity.

OG&E was granted a $5 million rate increase two years ago to recover investments in a power plant acquired in 2004 and a new wind farm in northwestern Oklahoma. Fuel savings from these two electric-generation facilities more than offset the rate increase, the utility said.