Occupy OG&E: Citizens protest Oklahoma Gas & Electric rate hike
At a time when the unemployment rate is highest since the Great Depression of the 1930’s and Oklahoma families have suffered through a summer of the highest electric bills of all time, a large number of Oklahoma citizens are angry that OG&E is now proposing a $73 million rate increase. This increase would add an additional $6.50 per residential customer per month.
Last month, a group of concerned citizens, headed by the Oklahoma Sponsoring Committee (OSC), held a forum regarding the proposed rate hike. Attended by a large number of concerned citizens and members of the OSC, others attending included Donald Rowlett, OG&E’s director of regulatory policy and compliance; Brian Alford, corporate communications director for OG&E; Deborah Thompson, an attorney representing AARP in petition against the OG&E rate hike; and Bill Hume, an attorney from the attorney general’s office.
Despite record earnings in 2010, OG&E’s representatives said the proposed rate hike is necessary to recover costs of improvements made over the last two and a half years. This rate hike proposal comes after a $20 million reduction by OG&E of pensions and benefits for its employees in 2011.
Jim Tappan, a researcher for the OSC stated, “One in five Oklahoma children fear going to bed hungry,” and, “Oklahoma is the 4th hungriest state in the nation.” He also found, “OG&E made an increase of $54 million in revenue over last year (2010). This amounts to $2.18 per share earnings in 2010, a 7.6% increase over 2009.” Mr. Tappan also said the $24 million rate hike in 2009 was expected to earn $2.13 in 2011. In the first nine months of 2011, this rate increase had earned $2.48 per share.”
“As a stockholder, I am thrilled by OG&E’s performance.” Melodie Garneau, a leader with Mayflower UCC, said. “However, I am concerned that OG&E has failed to recognize the tight economy we are in at the expense of rate payers.”
She and other leaders point to:
- In a tight economy, OG&E has raised its dividends to stock holders every year since 2006.
- If a shareholder reinvested their dividends, their annual return on stock has averaged over 14% for 10 years, compared to the same investment in the S&P, which returned 2.9% for the same period of time.
- As of June, 2011, OG&E had an interest coverage ratio of 5.5 (the number bond investors look at to assure a company can pay the interest on its bonds). Comparable utilities in other communities have a ratio of 2 to 3, meaning that their net income is 2-3 times the money they need to pay the interest on their bonds. OG&E has five and a half times the net income it needs to pay interest to its bond holders. Given this high number, OG&E could very comfortably issue bonds for the infrastructure improvements they have made and possibly even offer rate payers a rate reduction.
Bill Hume from the Attorney General’s office spoke saying, “The Attorney General’s office has filed today for a $30 million dollar decrease in OG&E rates.” This was met with loud applause from the audience.
On Tuesday December 13, 2011 from 9:30 am-12:30 pm the Oklahoma Corporation Commission will begin hearing testimony regarding the proposed rate hike at the Commission office in the Jim Thorpe building on the grounds of the State Capitol. Two citizens groups, OSC (www.oksponsoring.org) and a group called “Occupy OG&E,” will be in attendance to oppose the rate hikes and support the rate decrease. All citizens are encouraged to show up and support the cause.
For more information about the rate increases, contact the Oklahoma Corporation Commission; OKC office (405) 521-221, or Tulsa office, (918) 581-2296. You may also call OG&E (405) 553-3000 and ask for Brian Alford or Donald Rowlett.