Oklahoma's largest utility, Public Service Company of Oklahoma (PSO), is navigating a complex regulatory path as its proposed rate hike undergoes review. The company initially sought an average residential increase of roughly 15%, equating to about $25 more per month for typical customers, but a settlement reached on June 30th with Attorney General Gentner Drummond has trimmed that figure dramatically to roughly 1%, or about $2.45 monthly. This agreement, however, remains subject to final approval by the Oklahoma Corporation Commission, and in the meantime, customers have been seeing an interim charge of approximately $11 per month on their bills since July 1st.
The case is proceeding through the regulatory process, with Administrative Law Judge Kenneth Berens having submitted his recommended order around August 24th. Commissioner Todd Hiett has indicated to the Tulsa World that the case could reach the three commissioners for a final decision by late September, with a "best estimate" for a ruling in mid-October, though that timeline could shift considerably. The schedule faces potential complications as the same commission is set to hear a separate case on September 9th involving Oklahoma Gas & Electric (OG&E) and a special contract with Google, which could push PSO's timeline further back. Until a final order is issued, the $11 interim surcharge remains on customer bills.
Understanding the Three Separate Financial Components
PSO filed its application on January 2nd, citing investments already made in grid infrastructure, rising equipment and material costs, and increased statewide electricity demand. The company has communicated to residents that these funds are earmarked for enhancing reliability and resilience. The original proposal called for approximately a 15% increase, which would have meant around $25 more per month for the typical residential customer, or about $300 annually. Following June hearings, a settlement was reached between the Attorney General's office, the Commission's Public Utility Division, AARP, and other parties that would limit the average residential increase to about $2.45 per month. Drummond has called this agreement a "significant victory for Oklahoma families, businesses, and ratepayers," noting that consumers are already paying too much for goods and services amid high inflation.
It's crucial to understand that this settlement is not the final word; the Commission can approve, reject, or modify it. State law permits utilities to collect interim rates while a case is under review, and PSO has calculated its temporary charge based on the "most likely outcome" of the case. For a typical residential customer using around 1,100 kilowatt-hours, this means an additional $11 per month starting July 1st. The company has pledged to refund the difference if the final ruling results in a lower amount than what was collected. Commissioner Hiett has noted that whether refunds occur will depend on how the commissioners rule on Berens' recommendation. The bottom line for customers is that they are currently paying the interim rate, which is neither the proposed 1% settlement figure nor the original 15% request.
On August 20th, PSO President and CEO Leigh Anne Strahler sent a letter to customers acknowledging the challenges. She wrote that with more people moving to the state, communities building new homes, and various businesses increasing their electricity usage, "PSO must plan for growth while protecting existing customers." She acknowledged that customers have differing viewpoints on the matter, but the letter did not alter the interim charge amount or announce that the settlement had taken effect.
Judge Rejects Transmission Rate Restructuring, Establishes Separate Large-Load Tariff
Administrative Law Judge Berens has disagreed with PSO's proposal to restructure how transmission costs are calculated. His analysis suggests that if the company's approach were adopted, residential bills could increase by an additional $9.64 to $12.09 per month. Instead, he recommends approving the expansion and extension of various riders (additional charges not included in the base monthly usage calculation) and deferring this matter to the next comprehensive rate case. Berens also recommends approving a new large-load tariff that would create a separate category for customers consuming more than 75 megawatts of power, which is roughly equivalent to the load of more than 30,000 residential customers. PSO has not signed onto this particular large-load proposal, and data centers would likely fall into this new category. Hiett has said that while Berens' materials appear thorough and he agrees with most of the findings, he will still review the hearing transcripts, particularly regarding PSO's revenue request of approximately $72 million.
This $72 million figure represents the additional annual revenue PSO is seeking from regulators, not profits already booked. The three commissioners have not yet voted on the matter. Another regulated utility in the state is also seeking rate adjustments. Empire Electric (operating under the Liberty brand) filed a request on August 14th to adjust its basic Oklahoma rates, with a proposed effective date of the first quarter of 2027. For customers using approximately 1,000 kilowatt-hours per month, the current bill including riders is about $160.67. The company proposes implementing the increase in two phases: first year adding about $29.51 (approximately 18%), and a second year adding another $29.51 (about 15.5% relative to the first year). This is a request, not an approved rate. OG&E separately filed a large-load tariff in June, requiring new customers above 75 megawatts to bear their own interconnection costs, and proposing monthly fees from large users that would offset residential bills by roughly $25 million to $30 million annually. The Google special contract and two capacity pre-approvals are scheduled for the September 9th hearing.
Summer Bills Compounded by Extreme Heat and Disconnection Rates
The Tulsa case brings together the rate case and summer electricity usage. Raylene McMurchy, a night-shift nurse at a local hospital, reported a monthly bill exceeding $1,370, which included a $598 deposit from a previous overdue balance. She stated that her electricity costs now exceed her rent and has started a Change.org petition calling for regulators to more closely scrutinize electricity rates. Another customer, Eric Wigel, said his monthly bill has roughly doubled to $500, and if disconnected, reconnection could cost $700 to $800. The state has experienced more than double the typical number of days with temperatures exceeding 100 degrees Fahrenheit (about 38 degrees Celsius), and even without rate changes, air conditioning usage alone would push bills higher. According to a U.S. Department of Energy analysis based on 2024 disconnection data, PSO disconnects customers for non-payment at a rate more than five times the national average. NPR reported that at least 19,000 customers in the Tulsa area remain disconnected each month. State Corporation Commission rules allow disconnections when the heat index is below 101 degrees Fahrenheit. Local assistance organization Helping Hand Ministry helps roughly dozens of households per week avoid disconnection, spending up to about $14,000 weekly to cover overdue bills. The same report noted that nationally, more than 13 million people are disconnected annually for non-payment, with about 1 million in August alone. These figures describe bill collection enforcement, not the rate formula itself.
Strahler emphasized in her public letter that the company is adding generation capacity and strengthening the grid to handle more extreme weather. Spokesman Matt Rahn told KOSU that the company is seeking to recover investments that have already been made. Customers see the $11 increase since July combined with the effects of intense summer heat. These are two separate line items: one is the regulator-approved interim rate, and the other is weather and usage.
What Has Been Decided and What Remains Pending
What has already been implemented includes: the $11 per month interim surcharge for typical PSO residential customers since July 1st; the settlement signed on June 30th between the Attorney General and the company that would limit the average increase to about 1% or $2.45; and Berens' recommendation to reject the transmission rate restructuring while approving the extension of riders and the 75-megawatt large-load classification. What remains undecided includes: whether the Commission will approve the settlement, whether the interim over-collection will be refunded, how much of the $72 million revenue request will be granted, when the large-load tariff will take effect for PSO, whether Liberty's two-phase $59 increase will be implemented in the first quarter of 2027, and whether the September 9th OG&E-Google hearing will delay PSO's final ruling. Hiett has placed the final decision window around mid-October, clarifying that this is merely his personal timeline. Whether the $11 charge remains on bills until that window closes depends on when the commissioners vote, not on the date of the settlement press release.