The Norman Transcript

September 10, 2013

Count the cost of emission requirements

By Dana Murphy
The Norman Transcript

NORMAN — The Oklahoma Corporation Commission’s recent dismissal of the application of Public Service Company of Oklahoma involving PSO’s settlement with the Environmental Protection Agency is by no means an end to the issues or their potential cost to all Oklahomans.

For PSO customers, it’s important to understand that the company and the EPA have already signed the agreement dealing with the utility’s approach to meeting certain EPA emission requirements. Assuming final approval from the EPA, which has opened the public comment period on the agreement, there will be a cost, and it is a cost the utility will no doubt try and recover from its ratepayers.

PSO’s rough estimate of the cost is $88 million a year, about an 11 percent rise in the average bill. Critics of the plan say it will be much more. The agreement also was signed by the Oklahoma Department of Environmental Quality, the Oklahoma Secretary of Environment and the Sierra Club before it was submitted to the Corporation Commission.

Meanwhile, Oklahoma Gas and Electric and Oklahoma Attorney General Scott Pruitt have taken a different approach and launched a legal challenge against the EPA. But even if the state or the utility wins a victory, there still will have to be a plan and price tag for dealing with federal environmental mandates.

Regardless of where you stand in the debate over proposed or actual federal rules regarding power plant emissions, the costs involved will impact far more than just our electric bills.

The cost of new emission requirements is of huge concern not only to residential consumers but Oklahoma’s employers, as well. From oil and gas production and exploration to manufacturing and retailing, the price of electricity is a critical element to the question of success or failure and whether there will be more or fewer jobs.

Ironically, even the alternative energy sector is impacted. While growth in Oklahoma’s alternative energy sector is certainly something to cheer, the fact is that biofuel production and commercial wind turbines and related infrastructure do not eliminate the need for affordable “baseload” electric generation (i.e., power that is available in sufficient amounts 24/7). Barring some technological breakthrough, Oklahoma’s fossil fuel-powered generation is critical to meeting that demand.

The rate cases that will result from all this are already a main topic of discussion for state utility regulators in America who are faced with the increasingly difficult task of ensuring reliable but affordable electric service.

There is no magic bullet, no simple answer for those of us who must grapple with the federal mandates and their costs. My hope is for all those who might be impacted to realize these issues will not go away and to engage in helping find the best solution.

Dana Murphy is an Oklahoma corporation commissioner.