House Utilities Committee approves bill to speed generation, change transmission oversight; 8-2 vote

The Oklahoma House Utilities Committee voted 8-2 to advance House Bill 2747, a package of measures the bill sponsor said is intended to speed new generation into service, allow recovery of refurbishment costs, curb certain ratepayer-funded appliance-swap subsidies and shift regulatory oversight for some transmission assets to the Oklahoma Corporation Commission (OCC).

The measure, presented by Representative John Caldwell, combines three main elements: incentives for new gas/thermal generation, a provision allowing up to 90% recoverable costs for remanufacture or refurbishing of existing facilities, and a transmission provision that the author said would expand competition for construction while giving state regulators oversight of monopolistic transmission owners.

Caldwell said the generation language draws on what he called “the Kansas language” to encourage faster construction of new thermal units. He described the refurbishing provision as intended “to shorten the time to market on the generational needs that we’re gonna need in the state for the next 5 to 10 years.” On appliance-subsidy concerns he said the bill “says essentially that you cannot…use ratepayers to subsidize the switching from one type of appliance to another.”

On the transmission piece Caldwell told the committee the bill “increases the amount of people that can bid on the construction of these assets” and would require monopolistic transmission owners operating in Oklahoma to be answerable to the OCC rather than the Federal Energy Regulatory Commission (FERC). He framed that change as preserving state oversight of owners granted monopoly rights. Representative Caldwell also said the committee adopted a working draft (PCS number 2) before debate.

Committee members pressed the author on rate impacts and legal risk. Leader Munson asked what in the bill would guarantee lower rates; Caldwell replied: “If anybody ever stands before this committee and tells you that they can guarantee you that rates are gonna go down, they’re…not being truthful with you,” and explained that while fuel and equipment prices cannot be predicted, lowering the allowed return on equity (ROE) and shortening construction timelines can put downward pressure on consumer costs. Caldwell compared an estimated FERC ROE of about 11% with OCC-authorized ROEs of roughly 9–9.5%, saying that difference represents “a 20% drop in the rate of return on equity” and that interest-savings on faster projects could reduce customer costs (he cited a 15% interest-savings example for a past project).

Members raised the possibility of judicial challenges to rules that restrict the rights of incumbent operators. Caldwell said the bill’s drafters spent years negotiating with utilities, co-ops and industry groups (he mentioned support from the Oklahoma Petroleum Alliance, electric cooperatives and investor-owned utilities) and that the text was designed to address likely judicial review by tying state authority to retail-customer relationships.

Action: Committee adopted PCS number 2 as the working draft with no recorded objection and later voted to pass the bill, tallying 8 ayes and 2 nays. The chair declared the bill passed by the committee.

The bill sponsor said he will continue to work with stakeholders as the measure moves to oversight committees and emphasized the package is intended to encourage more generation capacity and allow faster project delivery while preserving regulatory oversight at the state level.