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OCC Drops Agreement With ONG

OCC Drops Agreement With ONG

Wrangling over two Oklahoma Natural Gas Co. (ONG) rate cases and unbundling of the ONG system continues in Oklahoma. Oklahoma Corporation Commission Chairman Ed Apple last week voted against a stipulated agreement between the commission and ONG. The agreement, which was killed in a 2-to-1 vote, had previously been appealed by Oklahoma Attorney General Drew Edmondson. The AG maintained he was denied due process in negotiations between the commission and ONG. Edmondson also alleged ex parte communications took place between ONG and Commissioner Denise Bode.

Apple said he was particularly disturbed by Edmondson's appeal, which could have clouded the issue for months. Commissioner Bob Anthony also voted against the agreement; Bode voted for it.

In her dissenting opinion, Bode called the last minute change "a real bottom-line loss to Oklahomans." Bode said "moving forward to restructure the gas industry is a matter of profound importance to our state."

The commission declared Edmondson's motion to stay the stipulation pending appeal to be moot and denied it. A motion by the AG to recuse was also denied. The commission further ordered the ONG cases be remanded to administrative law judges June 23 to determine a procedural schedule.

The proposed stipulated agreement worked out between commission utility staff and Oneok Inc., the parent of ONG and Kansas Gas Service Co. (KGS), was approved May 26 by a 2-1 vote of the commission with Anthony the lone dissenting vote.

The agreement consolidated two ongoing rate cases and provided for an interim rate reduction for Oklahoma customers of ONG and Kansas Gas Service of $5 million per year beginning in September. The attorney general maintained a larger rate reduction might be in order. The agreement had set a procedural schedule for hearings, the topic of one of them being allocation of Oneok assets among distribution, transmission, storage, and gas gathering for the purpose of unbundling.

Two rate reviews of ONG remain in effect. One was instigated by commission staff and the other by an ONG application. ONG's appeal of the commission's unbundling order from last summer also remains in effect.

Joe Fisher, Houston

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