OG&E Monday proposed to the Oklahoma Corporation Commission (OCC) that it recover only 50% of its higher natural gas costs this summer — deferring the allowed recovery until later this year — to give customers a break on their bills.

Oklahoma City-based OG&E, a subsidiary of OGE Energy Corp., uses natural gas along with other fuels to generate electricity, and by law, the utility recovers only the actual cost of the fuels it uses. Those costs are then passed directly to customers based on how much electricity each customer consumes. OG&E serves more than 765,000 customers in a service territory spanning 30,000 square miles in Oklahoma and western Arkansas.

In its fuel adjustment filing to the OCC, OG&E proposed that it recover only 50% of its fuel costs during the summer months. The deferral also would include $60 million in higher fuel costs that the company has not yet recovered from customers.

“We share the commission’s concern that higher gasoline prices and the resulting price increases for food and other necessities, compounded by higher utility bills, would place added financial strain on our customers,” said OGE CEO Pete Delaney. “We believe that by working creatively with regulators and reevaluating fuel costs later this year we may lessen the impact higher natural gas prices will have on summer electric bills.”

The company’s proposal, which is scheduled to take effect July 1, would reduce the near-term impact on its customers of higher fuel prices, it said. The average summer bill, which is based on usage of about 1,500 kWh/month from July through September, would increase by about $15. Without the proposed deferral plan, bills would increase by $30 or more, OGE said. Bills received in the months of October through December, when average usage is about 950 kWh/month, would be higher to recover deferred fuel costs.

In addition, OG&E wants to increase the frequency of fuel forecast reviews with the OCC, which it said would help to avoid dramatic increases or decreases in customer bills.

“Typically, we look at fuel with the commission once or twice a year,” said Delaney. “More frequent fuel reviews will help to smooth any spikes — up or down — that may occur as a result of higher or lower fuel costs. For example, the company will review the status of its fuel costs with the commission in September and determine the appropriate fuel charge for the remainder of the year. We value the input from the commission as we are both concerned about how higher fuel costs will affect our customers.”

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