Okla. Stat. tit. 17, § 17-286

recoverable – Applications for capital expenditures, facilities.

A. 1. The portion of costs incurred by an electric utility,

which is subject to rate regulation by the Corporation Commission,

for transmission upgrades approved by a regional transmission

organization to which the utility is a member and resulting from an

order of a federal regulatory authority having legal jurisdiction

over interstate regulation of transmission rates, shall be presumed

recoverable by the utility. The presumption established in this

paragraph may be rebutted by evidence that the costs so incurred by

the utility for the transmission upgrades exceed the scope of the

project authorized by the regional transmission organization or

order issued by the federal regulatory authority having jurisdiction

over interstate regulation of transmission rates. The Commission

shall transmit rules to implement the requirements of this

subsection to the Legislature on or before April 1, 2006. The rules

may authorize an electric utility to periodically adjust its rates

to recover all or a portion of the costs so incurred by the utility

for the transmission upgrades.

2. Reasonable costs incurred by an electric utility for

transmission upgrades:

a. needed to develop wind generation in this state,

b. approved by the Southwest Power Pool, and

c. placed into service before December 31, 2013,

shall be presumed recoverable through a periodic adjustment in the

rates of the utility, provided that the presumption of the recovery

of such costs or the recovery of such costs through a periodic

adjustment in rates may be rebutted by evidence presented to the

Commission. The determination of whether the costs shall be

recovered and whether the costs shall be recovered through a

periodic adjustment of rates shall be made by the Commission

following proper notice and hearing in a cause to be filed by the

electric utility in which it files such information as the

Commission may require.

B. An electric utility subject to rate regulation by the

Corporation Commission may file an application seeking Commission

authorization of a plan by the utility to make capital expenditures

for equipment or facilities necessary to comply with the federal

Clean Air Act (CAA), the Clean Water Act (CWA), the Comprehensive

Environmental Response, Compensation, and Liability Act of 1980

(CERCLA), the Emergency Planning and Community Right-to-Know Act of

1986 (EPCRA), the Endangered Species Act of 1973 (ESA), the National

Environmental Policy Act of 1969 (NEPA), the Occupational Safety and

Health Act of 1970 (OSHA), the Oil Pollution Act of 1990 (OPA), the

Pollution Prevention Act of 1990 (PPA), the Resource Conservation

and Recovery Act of 1976 (RCRA), the Safe Drinking Water Act (SDWA),

Oklahoma Statutes - Title 17. Corporation Commission Page 196

the Toxic Substances Control Act (TSCA), all as amended, and, as the

Commission may deem appropriate, federal, state, local or tribal

environmental requirements which apply to generation facilities. If

approved by the Commission, after notice and hearing, the equipment

or facilities specified in the approved utility plan are

conclusively presumed used and useful. The utility may elect to

periodically adjust its rates to recover the costs of the

expenditures. The utility shall file a request for a review of its

rates pursuant to Section 152 of this title no more than twenty-four
ilities. If

approved by the Commission, after notice and hearing, the equipment

or facilities specified in the approved utility plan are

conclusively presumed used and useful. The utility may elect to

periodically adjust its rates to recover the costs of the

expenditures. The utility shall file a request for a review of its

rates pursuant to Section 152 of this title no more than twenty-four

(24) months after the utility begins recovering the costs through a

periodic rate adjustment mechanism and no more than twenty-four (24)

months after the utility begins recovering the costs through any

subsequent periodic rate adjustment mechanism. Provided further,

that a periodic rate adjustment or adjustments are not intended to

prevent a utility from seeking cost recovery of capital expenditures

as otherwise may be authorized by the Commission. However, the

reasonableness of the costs to be recovered by the utility shall be

subject to Commission review and approval. The Commission shall

promulgate rules to implement the provisions of this subsection,

such rules to be transmitted to the Legislature on or before April

1, 2007.

C. 1. An electric utility subject to rate regulation by the

Corporation Commission may elect to file an application seeking

approval by the Commission to construct a new electric generating

facility, to purchase an existing electric generation facility or

enter into a long-term contract for purchased power, capacity and

energy, subject to the provisions of this subsection. If, and to

the extent that, the Commission determines there is a need for

construction or purchase of the electric generating facility or

long-term purchase power contract, the generating facility or

contract shall be considered used and useful and its costs shall be

subject to cost recovery rules promulgated by the Commission. The

Commission shall enter an order on an application filed pursuant to

this subsection within two hundred forty (240) days of the filing of

the application, following notice and hearing and after

consideration of reasonable alternatives, unless the electric

generation facility utilizes natural gas as its primary fuel source.

If the electric generation facility uses natural gas as its primary

fuel source, then the Commission shall enter an order on an

application filed pursuant to this subsection within one hundred

eighty (180) days of the filing of the application, following notice

and hearing and after consideration of reasonable alternatives.

2. Bids received by the utility through a competitive bidding

process within the twelve (12) months following the final bid due

date of such competitive bidding process shall be considered

substantial evidence to satisfy the consideration of reasonable

alternatives.

Oklahoma Statutes - Title 17. Corporation Commission Page 197

3. Following receipt of an application filed pursuant to this

subsection, the Corporation Commission staff may file a request to

assess the specific costs, to be paid by the electric utility and

which shall be deemed to be recoverable, for the costs associated

with conducting the analysis or investigation of the application

including, but not limited to, the cost of acquiring expert

witnesses, consultants, and analytical services. The request shall

be filed at and heard by the Corporation Commissioners in the docket

opened by the electric utility pursuant to this subsection. After

notice and hearing, the Commission shall decide the request.

4. Additionally, following receipt of an application filed

pursuant to this subsection, the Office of the Attorney General may

file a request with the Corporation Commission for the assessment of

specific costs, to be paid by the electric utility and which shall

be deemed to be recoverable, associated with the performance of the

Attorney General’s duties as provided by law. Those costs may

include, but are not limited to, the cost of acquiring expert
pursuant to this subsection, the Office of the Attorney General may

file a request with the Corporation Commission for the assessment of

specific costs, to be paid by the electric utility and which shall

be deemed to be recoverable, associated with the performance of the

Attorney General’s duties as provided by law. Those costs may

include, but are not limited to, the cost of acquiring expert

witnesses, consultants and analytical services. The request shall

be filed at and heard by the Corporation Commissioners in the docket

opened by the electric utility pursuant to this subsection. After

notice and hearing, the Commission shall decide the request.

5. The Commission shall promulgate rules to implement the

provisions of this subsection. The rules shall be transmitted to

the Legislature on or before April 1, 2006. In promulgating rules

to implement the provisions of this subsection, the Commission shall

consider, among other things, rules which would:

a. permit contemporaneous utility recovery from its

customers, the amount necessary to cover the

Corporation Commission staff and Attorney General

assessments as authorized by this subsection,

b. establish how the cost of facilities approved pursuant

to this subsection shall be timely reviewed, approved,

and recovered or disapproved, and

c. establish the information which an electric utility

shall provide when filing an application pursuant to

this subsection.

6. The Commission shall permit an electric utility to begin to

recover return on and return of Construction-Work-In-Progress

expenses prior to commercial operation of a newly constructed

electric generation facility subject to the provisions of this

subsection, provided the newly constructed electric generation

facility utilizes natural gas as its primary fuel source. The

Commission shall permit a separate rate adjustment mechanism,

adjusted periodically, to recover the costs described in this

section for new capacity in natural-gas-fired electric generation

facilities. The new natural-gas-fired electric generation capacity

eligible for those provisions shall also include new natural-gas-

Oklahoma Statutes - Title 17. Corporation Commission Page 198

fired capacity additions at an existing electric generation

facility. If a public utility implements a rate adjustment

mechanism pursuant to this section and subsequently terminates the

initiative to construct or acquire stake in a natural gas electric

generation facility, the public utility shall automatically refund

customers any amounts collected through such rate adjustment

mechanism plus interest at the one-year United States Treasury Bill

rate through the mechanism, over a period not to exceed ninety (90)

days from the effective date of the termination of the initiative.

7. For any new natural-gas-fired electric generation facility

constructed pursuant to this section, an electric utility shall

secure a firm contract to transport natural gas to the generating

facility. Such contract shall be secured pursuant to a competitive

solicitation process conducted in accordance with applicable

Commission rules. The cost incurred for the contract shall be

presumed recoverable by the electric utility through its applicable

fuel adjustment clause. Costs assessed upon the electric utility by

the Commission for non-compliance with this section shall not be

recoverable from the customers of the electric utility. If the

electric utility does not receive a bid for firm transportation as a

result of its competitive solicitation, the electric utility shall

be considered compliant with the requirements of this section

provided that the Commission determines that the competitive

solicitation is for a firm contract for transport of natural gas

which could be reasonably provided by an available pipeline.