Okla. Stat. tit. 17, § 17-251

adjustment clauses - Rules for making determination.

A. No fuel adjustment clause of any kind shall hereafter be

authorized by the Corporation Commission if such clause operates

automatically to permit charges, assessments or amendments to

existing rate schedules to be made which have not been first

approved as provided by Sections 251 through 255 of this title,

except as otherwise provided for purchased power adjustments by

electric distribution cooperatives in Sections 258 through 262 of

this title.

Oklahoma Statutes - Title 17. Corporation Commission Page 185

B. If the Commission finds that the changes in the price of

fuels required for the generation of electricity by any electric

public utility, that the changes in the price of purchased

electricity required for distribution by any public utility or

changes in the price of purchased gas required for distribution by

any gas utility, portends a likely and substantial threat to the

ability of the utility to earn a reasonable rate of return, or are

likely to cause the utility to have an excessive rate of return, or

are likely to substantially impair the ability of the utility to

acquire adequate supplies of fuel or gas, the Commission may, after

investigation and public hearing, approve suitable fuel adjustment

clauses to be superimposed upon the existing rate schedules of the

public utility. The Commission shall design the fuel adjustment

clause to allow the electric or gas public utility to increase or

decrease charges to the consumer according to changes in the cost of

fuel, purchased power or purchased gas as compared to the price of

such fuels or power as reflected in the base rates.

C. In the Commission's design of fuel adjustment clauses, the

following rules shall apply:

1. For the purpose of determining fuel or gas costs, the price

paid for the fuel or gas shall be computed at the actual cost of

fuel or gas purchased from nonaffiliated persons, firms and

corporations; and the actual cost of the production of fuel owned by

the public utility or received from affiliated persons, firms and

corporations, and in the case of gas, the fair field price for gas

owned by the public utility or received from affiliated persons,

firms or corporations;

2. The cost of fuel or gas shall be the price paid at the point

of delivery into the utility system. In the event the

transportation is performed by an affiliated person, firm or

corporation as defined in this act which is not subject to the

regulatory jurisdiction of the Commission, a regulatory agency of

another state having jurisdiction, or the Federal Energy Regulatory

Commission or successor agency, the charges made for transportation

shall be, if allowed at all, only such as the Commission finds fair,

just and reasonable, for purposes of this section. Transportation

charges approved by this Commission, a regulatory agency of another

state having jurisdiction, or by the Federal Energy Regulatory

Commission, or successor agency shall be included for purposes of

this section, if allowed by this Commission. The proposed

adjustment charge shall not include the cost of transportation

beyond its point of delivery into that portion of the utility system

regulated by the Corporation Commission unless there is presented to

the Commission and it is persuaded by reliable evidence which

clearly points to the conclusion that failure to do so will

substantially threaten the ability of the utility to earn a

reasonable rate of return;

Oklahoma Statutes - Title 17. Corporation Commission Page 186

3. The amount of electric energy produced by hydroelectric

generating plants and purchased by the public utility proposing the

adjustment charge shall be deducted from the amount of electric

energy to which any fuel cost applies;

4. The actual efficiency or heat rate of electric public

utilities shall be utilized and line losses shall be considered only
le 17. Corporation Commission Page 186

3. The amount of electric energy produced by hydroelectric

generating plants and purchased by the public utility proposing the

adjustment charge shall be deducted from the amount of electric

energy to which any fuel cost applies;

4. The actual efficiency or heat rate of electric public

utilities shall be utilized and line losses shall be considered only

if reliable evidence clearly points to the conclusion that failure

to do so will substantially threaten the ability of the utility to

earn a reasonable rate of return;

5. Fuel or gas removed from storage or stockpiles shall be

taken into consideration on the basis of the weighted average cost

method of inventory accounting; and

6. No estimated fuel adjustment shall be allowed.