The Oklahoma Corporation Commission (OCC) today approved a Joint Stipulation and Settlement Agreement that resolves pending generating supply issues for Public Service Company of Oklahoma (PSO).  Besides PSO, other parties to the agreement include OCC staff, the Oklahoma Attorney General’s office, the Oklahoma Industrial Energy Consumers and Lawton Cogeneration, L.L.C.
 
The Agreement stipulates that previously announced peaking capacity of approximately 166 megawatts (MWs) to be located at Southwestern Station and 170 MWs to be located at Riverside Station will be needed on the PSO system and are approved as “used and useful” investments for customers.  The Agreement also calls for a cost-recovery mechanism for these facilities, which are expected to be in service late this year or early next year.
 
The Agreement further provides for settlement of outstanding litigation related to the proposed Lawton Cogeneration Facility.  As a result of the settlement, PSO will acquire, in exchange for a fee, all rights related to the Lawton Cogeneration Facility including permits, site and equipment options and contracts, and studies and other technical information.  PSO has no current plans to build the Lawton facility.
 
“This is a positive settlement for our customers and for PSO,” said Stuart Solomon, PSO president and chief operating officer.  “The new generating units at Riverside and Southwestern Stations will help us meet increasing customer needs for electricity, and the settlement allows all parties to resolve lengthy and costly litigation concerning the proposed Lawton Cogeneration Facility.”
 
Under the settlement agreement, costs for the Southwestern and Riverside generating facilities and fee will be included in customer rates on a phased basis, beginning in September.  Once the cost recovery for the new peaking generating facilities begins in mid-2008, a PSO residential customer using 1,000 kWh a month will see an increase of approximately $2.32 in their monthly electric bill.
 
PSO, a unit of American Electric Power (NYSE: AEP), is an electric utility company serving approximately 520,000 customers in eastern and southwestern Oklahoma. Based in Tulsa, PSO has more than 4,150 megawatts of generating capacity, and is the largest provider of wind energy in the state.