A long and often contentious processes came to a close last weekin Oklahoma with an Oklahoma Corporation Commission (OCC) orderapproving a comprehensive agreement between Oklahoma Natural Gasthe OCC staff and the Oklahoma Attorney General’s office.

The major results of the agreement are that ONG will lower itsrates by $20 million and withdraw its state supreme court appeal of a1998 OCC order that required unbundling of its upstream gastransportation and storage operations (see NGI, Aug. 10, 1998; and May31, 1999, July 19 and Sept. 6, 1999). The agreement also allowsONG to transfer to its utility service territory about 35,000 Oklahomacustomers of its affiliate Kansas Gas Service. In addition thecommission authorized ONG to begin assuming responsibility for themaintenance and safety of the service lines that connect customers’homes and businesses to ONG’s distribution mains.

“We believe this plan accomplishes several goals, includinglower costs for our customers,” said ONG President Ed Farrell. “Weare preparing for a future that will include greater customerchoice, in which Oklahoma Natural will be permitted to serve ourcustomers with more flexibility than in the past. This is one ofthe important steps we are taking in that direction. In addition,these decreases in base rates will help offset the rising price fornatural gas, which is now benefiting Oklahoma producers andOklahoma schools.”

The rate reduction for an average ONG residential customer willbe about $23 annually. Former Kansas Gas Service residentialcustomers should realize a rate reduction of $85 per year.

A significant part of the rate reduction is the result ofchanges in how ONG obtains “upstream” services, includingtransportation and storage. The transmission lines and gas storageformerly owned by the utility have been separated from ONG and arenow operating in competitive markets. ONG will use a competitivebidding process to purchase transportation services, as well as forgas supply.

Oklahoma Natural Gas Company is a division of Tulsa-based ONEOK,Inc, providing gas distribution service to 800,000 customers in thestate.

Rocco Canonica

©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.