Oklahoma Attorney General Drew Edmondson last week accusedOklahoma Corporation Commissioners of having improper discussionswith ONG during recent settlement negotiations and has asked eachcommissioner to recuse him/herself from the proceedings if suchdiscussions indeed happened. None of the three commissioners agreedto do so.

The OCC last week resumed a hearing on the negotiated settlementbetween the commission and Oneok Inc. and its subsidiaries OklahomaNatural Gas (ONG) and Kansas Gas Service (KGS) on rates, unbundlingand competitive bidding.

Larry Lago, an aide to Commissioner Bob Anthony, said the OCC’scounsel advised commissioners meetings were not inappropriatebecause they took place in a legislative setting, not a judicialone in which they would be ex parte and not permitted.

The settlement agreement between the OCC and Oneok consolidatestwo ongoing rate cases. It provides for an interim rate reductionfor Oklahoma customers of ONG and KGS of $5 million on an annualbasis effective with the first billing cycle in September. A finalorder establishing permanent rates is expected next spring.

In addition to the rate reduction for Oklahoma customers and atimetable for the unbundling process, Oneok agreed to dismiss itsOklahoma Supreme Court appeal of the commission’s unbundling ordersand rules after orders in the consolidated rate case become final.The Oneok challenge to the commission order has been the hold-updelaying upstream unbundling.

Settlement terms call for new effective dates for ONG’scompetitive bidding for gas supplies and transmission servicebeginning Nov. 1, 1999 and November 1, 2000, respectively.

Also contained in the agreement are procedures and timetablesfor setting permanent rates and the identification and designationof Oneok assets for gas transmission, distribution, gathering andstorage and the process as outlined under OCC rules for obtainingthe deregulation of gathering and storage assets.

Joe Fisher, Houston

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