Capitol Greetings Representative Ben Loring October 14, 2016

            Congratulations!  You have shown that “the system” does work.  Yes, this was just step one, but it was a huge step.  The remaining steps are also big.  Here is what I’m talking about.  Empire District Electric Company, a Kansas corporation, has applied to the Oklahoma Corporation Commission (OCC) for a massive rate hike for its Oklahoma customers.  Allow me to set the stage for you as to why this is a really bad deal for all of Northeast Oklahoma.

            Right now, the three main electric distribution systems in House District Seven are REC, the City of Miami and Empire District Electric.  Their current rates are relatively comparable.  REC is a customer-owned cooperative, the City of Miami system, obviously is a municipal system, administered through the Miami Special Utility Authority, which answers to the citizens, and Empire is an investor owned, for profit, corporation.  Right now, Empire is in the process of being bought by a Canadian company, Algonquin Power & Utilities Corp for $2.4 billion (US).  That is a premium of 21% over its market value as of the date the deal was struck (Feb. 9, 2016) that will be paid to the Empire shareholders.  Further, in its own press release of the merger, Algonquin said that this acquisition will be used to increase its annual dividends to its stockholders by 10%.  But it also said that this acquisition would not affect customer utility rates.  But, that was then.  As of June of this year, Empire got the Missouri Public Service Commission to grant new rates for its Missouri customers (88.9 % of its customer base) to raise its revenues by about $17.1 million.  It is important to note, however, that Empire has had other incremental rate increases in Missouri, the last one being on October 16, 2015.

            Now Empire is using a little known Oklahoma Corporation Commission rule (OAC 165:05-7-60 Reciprocity of Final Orders Between States), to try to circumvent the Oklahoma rate hike process and raise the Oklahoma customer (2.74 % of its customer base) rates by a whopping average of 37.8%, without so much as a hearing by the OCC!  This rate hike which would suck $4.7 million out of the Northeast Oklahoma economy to go to the Canadian company’s shareholders, would then match the Oklahoma customer rates to the Missouri customer rates - but without the incremental increases, just in one giant leap.  Another aspect of this is that by all accounts, Empire has invested little money into their Oklahoma distribution system, unlike what they do in Missouri.  As one customer stated at a recent meeting, “They don’t fix anything (in Oklahoma), unless it is completely broken.”  And a study by the OCC seems to bear that out.  In its 2015 RELIABILITY SCORECARD, they found, “Historically, Empire customers experiencing an average of 1.99 outages per year, lost power more often than customers of any other regulated electric utility in Oklahoma during the past five years.” (Page 5).

            So what does that mean to Empire’s Oklahoma customers?  For the average residential customer using around 2,000 kWh, aside from lousy service, it means the monthly bill will rise by approximately $85.00.  That is a pretty fair share of the grocery money for a low income or fixed income family.  For the Commerce, Fairland, Quapaw and Wyandotte (and I believe Bluejacket and Welch) schools that have already set their budgets for this school year, it could well mean laying off another teacher, which only adds to the educational crisis we are experiencing.  For the average industrial customer, it means an additional $21,545 per month in utility costs!  For some of those businesses, that means closing or moving to another location.  Either way, it means laying off employees.  So what does it mean to the rest of us who are not Empire customers?  It means $4.7 million that will not be spent at Marvin’s, Ace Hardware or Nott’s Grocery.  In other words, it seriously hurts everyone, except the Canadian shareholders.  And remember, a dollar spent locally turns over, on average, about six time in the community, so this really means a $28 million loss to our local economy!

            So why am I congratulating you?  Because you complained.  You complained and the Corporation Commission heard you.  It appears they are going to make Empire go through a full- blown rate hearing rather than just allow this outrageous rate hike sneak through.  As I said, the system worked.  And in that process you have the right to complain again.  You can appear personally at the hearing.  You can send e-mails or, better yet, you can send letters, and I really do believe that the OCC will listen again, if you make your story a compelling one to them.  That is, you need to tell them how this rate hike will affect you and your family personally.  How it will affect your business.  How it will affect your church.  And if you are an Empire customer, you also need to stress to them how the lack of Empire reliability has affected you over the years.  I was talking to an Empire customer just a few days ago who he told how his electric was out for seven days with that last big ice storm.  I urge everyone to write.  It is your right, and quite frankly, just like voting, your civic responsibility: Oklahoma Corporation Commission, Public Utilities Division, P.O. Box 52000, Oklahoma City, OK 73152-2000.  Don’t rely on someone else to do it for you.


Proverbs 31:9 Speak up, judge righteously, and defend the cause of the oppressed and needy.