The legislation was written by Senators Todd Gollihare (R-Kellyville) and Grant Green (R-Wellston) with Rep. Trey Caldwell (R-Faxon) serving as the House author.
It would allow companies to recover construction expenses from consumers before a new or expanded facility is operational, as long as the site generates natural gas. It would also direct the Oklahoma Corporation Commission (OCC) to speed up its review time and give special rates for construction recovery expenses to the companies.
Utilities that terminate their projects would be required to issue refunds of the recovered expenses within 90 days.
During the House session, Caldwell said the proposed law is intended to meet growing energy demands through natural gas.
"A vote yes on this piece of legislation is a vote for lower utility costs in the state of Oklahoma, but also for a more secure grid," he said.
The lawmaker said some of the bill's text was formed from a request from the Petroleum Alliance of Oklahoma, a trade association and lobby group for the oil and gas industry.
Before the bill's passage, the OCC sent a memo to lawmakers urging them to vote no on the legislation. The agency, which regulates public utilities, oil and gas and some transportation, said its authority would erode under the proposed law.
"The Construction Work in Progress (CWIP) issue as imagined in SB998 goes against 100 years of ratemaking principles and usurps the constitutional duty of the statewide-elected Corporation Commissioners to keep rates fair, just, and reasonable," Commissioner Kim David wrote in a news release.
The commissioners said the bill's expense recovery language could result in some consumers paying for the construction of new generation, but waiting years to benefit from it.
During the House session, Rep. Forrest Bennett (D-Oklahoma City) said he opposed further subsidizing utility companies, which have implemented higher rates in the years following Winter Storm Uri in 2021.
" I fundamentally disagree with the idea that the ratepayer should be on the hook for this, especially with the sweetheart deals that these utilities have," Bennett said.
The legislation is now headed to Gov. Kevin Stitt's office. The bill's emergency measure failed without a two-thirds majority vote.
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