When it comes to rising electric bills, Rick Dowell sees Oklahoma Gas and Electric Co. as a utility that is pursuing a historic rate hike that will not just hurt residential consumers but could also send Oklahoma City’s economy into a tailspin.

Dowell, and thousands of other OG&E customers, face a 13.85% increase in their bills if the request by the utility is approved by the Oklahoma Corporation Commission.

OG&E estimates the average residential customer will see an average of $19.02 added to their monthly bill. Dowell, who owns and manages 30 office properties, argues the impact on businesses will be far worse.

By Dowell’s calculation, his annual bill has gone up from $485,383 in 2020 to $736,019 in 2023. He estimates the cost of electricity at his properties with the rate hike will increase his annual OG&E bill to $837,957.

The increases on Dowell’s bills also represent frequent fluctuations in separately assessed fuel costs that OG&E states do not include any profit taking by the utility. But similar complaints were voiced by residential customers writing to the Corporation Commission, with one showing how their bill increased from $1,288 in 2019 to $1,882 in 2023.

“This is a killer, I don’t know what these guys are thinking,” Dowell said. “And it seems so sneaky. Nobody seems to know what’s going on.”

More: Why OG&E customers could see a $25 drop in their bills ahead of a $19 increase

Requested increase coincides with fuel price drop

Hearings are set to begin June 17 when OG&E and opponents to the increase will present arguments to an administrative law judge who will then make a recommendation to the three Corporation Commission members who have the final say on the matter.

If approved, the requested rate increase would be the third hike in customers’ bills since 2017 aside from separately assessed fuel charges. Not one of the prior increases come close to the $332.5 million hike currently being sought by OG&E.

A $9 million request added $1 to the average monthly residential bill in 2017. A rate review in 2018 resulted in a decrease of $64 million, cutting the average residential bill by $4.44 per month. A 1.9% rate increase was approved in 2022 that added $2.07 to the average monthly residential bill.

Kimber Shoop, director of regulatory policy and planning at OG&E, said the utility is timing the rate increase to coincide with recent drops in separate fuel prices that had spiked in recent years.

“It’s been a while since we’ve had a significant rate increase,” Shoop said. “We’ve been trying to hold those costs down and maintain affordability. But we’ve had a lot of needed investment on our tower delivery system in particular to bolster the grid, maintain reliability, and replace aging assets and infrastructure.”

Shoop said the utility faces challenges with inflated material and labor costs, a changing climate producing more weather extremes and cyber-security against hackers. Utilities in other states have been hit with attacks on substations by suspected domestic terrorists.

“Part of our effort is to strengthen the grid so whatever happens, our grid can survive those storms,” Shoop said. “We have done over 500 grid enhancement projects on 193 circuits, we’ve added 35 sub-stations, along with reliability improvements and distribution automation.”

Dowell questions why the request by OG&E involves no pain point for the utility and will allow the utility to make more profits while customers will be forced to make painful cuts in their own homes and businesses.

A stark difference, meanwhile, took place in public comments over the rate increase. At a recent hearing for public comments hosted by the administrative law judge and Corporation Commissioners, all but a couple of more than a dozen of those who appeared spoke in favor of the rate increase.

The supporters who traveled from across the state to a recent public comment hearing were civic leaders, nonprofit representatives and economic development executives who spoke of the utility’s public service efforts. All of those contacted by The Oklahoman confirmed OG&E requested they appear to support the rate hike.

Comments submitted via phone and email, meanwhile, were overwhelmingly against the rate increase.

Not all of the rate hike goes to infrastructure costs and improvements. The utility is facing paying up to $70 million in damages if it loses one or both cases filed in recent years by apartment developers who claim OG&E and its contractors were negligent in connecting their properties to the power grid. OG&E confirmed those damages, if assessed, will impact costs that will be charged to customers.

More: OG&E facing second lawsuit alleging contractor to blame for fires at apartment complexes

The $332.5 million increase includes $51 million to raise the cap on returns to shareholders from 9.5% to 10.5%. A majority of those shareholders consist of some the world’s largest asset management funds.

The largest shareholder in OGE Energy Corp., the parent company of OG&E, as of January was Blackrock Inc., which bills itself as the world’s largest asset manager with $10 trillion in assets under management as of Dec. 31, 2023. Reuters reports the compensation package for Lawrence Fink, the company’s CEO in 2023, was $26.9 million.

Other large shareholders include Vanguard Group, State Street Corp, Clearbridge Investments, and T. Rowe Price Investment Management.

Caron Rose, one of dozens writing to the Corporation Commission in opposition to the rate increase, argued utility executives, specifically OG&E CEO Sean Trauschke, are insensitive to the hardship of a $19 increase for ordinary customers when Trauschke’s compensation in 2023 totaled more than $8.4 million.

“Trauschke won’t be hurt by an increase in his electric bill,” Rose wrote. “After all, $19 is nothing to a man who got a $1.2 million bonus in 2022 (the bonus was $1.48 million in 2023). If the upper echelon at OG&E would give up their bonuses, they’d have a sizable slush fund to draw from for their projects without involving the hardworking, honest citizens who will never, ever see $1 million in their lifetimes.”

Attorneys representing shareholders wrote to the Corporation Commission arguing the increase in return on earnings is needed to stay competitive with other utilities. OG&E reports its net income for 2023 was $426.4 million, down from $439.5 million in 2022.

The attorneys, Jeff Clark and Ronald Stakem, wrote in support of the rate hike painting a grim picture of a failing economy, rising costs, political instability, climate change and war. Load growth, transmission inadequacy, cyber-attacks and network congestion, they noted, prompted many warnings of rolling blackouts.

“It defies common sense to suggest that the financial and business risks faced by the company are less today than in March of 2017 when the company’s current allowed return on earnings was set at 9.5%,” the attorneys wrote. “The trend of risk is up; the direction of allowed return on earnings in Oklahoma should be up as well.”

Utility promises for relief for senior citizens

The AARP, which represents 38 million seniors — about one-third of the country’s total senior population — is among groups filing a legal challenge to the rate increase. AARP Oklahoma State Director Sean Voskuhl argues the rate increase will hit seniors especially hard.

“This outrageous rate hike would increase residential customers’ bills by approximately 14 percent, raising bills $19 a month or a staggering $228 annually,” Voshuhl said. “Oklahomans should not have to choose between buying prescription drugs, putting food on the table, or keeping the lights on and staying warm.”

OG&E counters the utility is proposing a $60 annual increase to its Silver Energy senior citizen discount program as part of the rate review. But other critics counter that it won’t offset the entire increase and also doesn’t address the strain it will put on single parents and those living paycheck to paycheck.

Richard Linhardt was among those speaking out against the rate hike, and was the only one to ask that the rate be reduced. Linhardt said he was a therapist for over 50 years working with families and investigating conditions for children held in state custody.

“When this finally reaches the people marginally afloat or almost drowning, it has a significant impact on their lives,” Linhardt said. “If you ever sit in front of a woman with three kids, working two jobs, and she’s trying to make ends meet, it always felt it was a form of violence perpetrated on her. And I always felt helpless to do anything for her. We all need electricity to survive.”

This article originally appeared on Oklahoman: Oklahoma Corporation Commission will decide fate on OG&E rate hike