That’s a quote from hospitality guru, Danny Meyer. However, it’s a pretty evergreen statement in that most people and industries react to change similarly. It can raise suspicion and concern as it occurs. But, oftentimes, it represents progress and opportunity. So, as work to reimagine how electric power is restructured in Oklahoma, we want to share with you what we believe that change looks like for you.
When we consider how change will impact commercial and industrial power consumers versus how you’ve traditionally purchased your energy, the dynamic clearly falls into the category of HAPPENING FOR YOU. So, what exactly would the change be? The answer is simple, the Power of Choice. Now you’ll have a myriad of options of who supplies the electricity your company consumes.
Power marketers and brokers who have provided electricity in States that already have restructured power purchasing practices, would now be there to offer you purchase options for your energy requirements. For the first time in Oklahoma, there would be true competition in the purchasing of electricity.
Historically, the Investor Owned Utilities (IOUs) have been the sole source for power for those customers in their service territories. Regulated by the Oklahoma Corporation Commission (OCC), the IOUs have a two-part tariff: The first part are all the issues decided in a rate case proceeding (things like operating expenses, depreciation, taxes and return on investment.) that determine the rates for the various classes of customers, and the second part is the cost of energy. Power supply costs can be unbundled from other costs for ratemaking purposes. It is these costs which represent services which can be supplied by independent power marketers.
Change happens out of necessity or when we see opportunities. In this case, the real potential to reduce the cost of power. Economists tell us that competition will drive prices down, providing more options on how best to purchase power for your company while meeting your individual, unique needs.
The Alliance for Electrical Restructuring in Oklahoma (AERO) is working with all stakeholders to review and consider the way power is purchased in Oklahoma. The goal is simple: to expand options and create competition among power generators. Again, the result will be Power of Choice.
If a company elects to continue purchasing power from the traditional source, the IOUs, they surely can continue to do so. However, for those companies who choose to review other suppliers for consideration, that choice will be available to them. The benefits are obvious, a power consumer can compare prices for the delivery of power, including contract options that are not currently available to them. In a restructured marketplace a power consumer will be able to lock in prices, or hedge their purchases, which provides price security for a specified period of time.
To be clear, nothing physically would change. Power would continue to be delivered through the same transmission and distribution wires that you currently use to receive your power.
AERO began looking at this option of Choice by reviewing the October 1999 “Joint Electric Utility Task Force Report on Electric Restructuring Issues.” It was the first and only time electric restructuring has been considered in Oklahoma. Many things have changed since this report was issued. Most importantly, the role of the Southwest Power Pool (SPP) in purchasing and dispatching power has changed materially since 1999.
We at AERO believe the time has come to seriously reconsider the way power is purchased by commercial and industrial customers in Oklahoma.
An example of how this works, and has worked successfully for both the utility and the customer, is the way ONG changed its business model over 30 years ago. All natural gas was purchased from ONG, from the largest industrial customers to residential customers. But that changed for ONG’s commercial and industrial customers (anyone consuming volumes greater than 1,000 dth/year) and third party transportation became an option. Most qualifying companies in Oklahoma now purchase their natural gas requirements from third party suppliers, marketers and brokers.
AERO believes that the natural gas model is one worth following as it is tested and has proven results. We invite you to join us as we continue to move forward to bring the option of purchasing your power requirements from a third party suppliers to Oklahoma’s commercial and industrial power consumers.
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