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State Energy Efficiency Policy Database

Oklahoma

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Summary

Oklahoma utilities offer a growing portfolio of energy efficiency programs, however their levels of investment and performance remain below the national average. The Oklahoma Corporation Commission (OCC) established rules for electric and natural gas efficiency programs following a series of stakeholder collaborative meetings in 2008, and utilities subsequently filed three-year program plans.  In 2012, AEP Public Service Oklahoma (PSO) received approval for another three-year (2013-2015) electric energy efficiency program cycle, and Oklahoma Gas & Electric (OGE) similarly received approval for their programs in early 2013.  Both utilities will be working with significantly larger budgets for the next few years, and savings as a percentage of sales are expected to double. The state’s major gas utilities, Oklahoma Natural Gas and CenterPoint, have also started administer energy efficiency programs since the rulemaking. The state’s IOUs may recover lost revenues and earn an incentive for implementing successful energy efficiency programs. 

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Customer Energy Efficiency Programs

All of Oklahoma's electric investor-owned utilities, Oklahoma Gas and Electric, Public Service Company of Oklahoma (PSO) and Empire District Company have implemented customer energy efficiency programs.  Under OAC 165:35-41-4, all electric utilities under rate regulation of the Oklahoma Corporation Commission (OCC) must propose, at least once every three years, and be responsible for the administration and implementation of a demand portfolio of energy efficiency and demand response programs within their service territories.

In Oklahoma, municipal and some cooperative electric providers do not fall under the regulatory authority of the Corporation Commission. Oklahoma Municipal Power Authority and Western Farmers Electric Cooperative also offer some customer energy efficiency programs. In 2009, the state legislature authorized municipal utilities and the Grand River Dam Authority to spend money encouraging energy conservation activities (S 293, enacted as Chapter 205).

Utility energy efficiency programs have been in place since 2008, when the Oklahoma Corporation Commission (OCC) initiated a "Demand Programs Collaboration" to examine issues associated with the funding and provision of customer energy efficiency programs by the state's energy utilities.  The collaborative meetings resulted in a permanent rulemaking for electric demand-side programs (Cause #200700007).  In 2010 both major electric investor-owned utilities, AEP Public Service Oklahoma (PSO) and Oklahoma Gas & Electric (OGE), received approval for a wide range of programs, including energy efficiency, for the 2010 – 2012 program cycle.  The programs have targeted residential and commercial customer classes, while large industrial customers have mostly opted-out of the programs.

In 2012, AEP Public Service Oklahoma (PSO) received approval for another three-year (2013-2015) electric energy efficiency program cycle, and Oklahoma Gas & Electric (OGE) similarly received approval for their programs in early 2013.  Both utilities will be working with significantly larger budgets for the next few years, and savings as a percentage of sales are expected to double. Empire District Electric Company’s current demand-side portfolio received final approval from OCC in January 2010. This approved portfolio contains three customer energy programs: Low-Income Weatherization and Central Air Conditioner Tune-up and Replacement on the residential side, as well as one commercial/industrial program.

Natural gas utilities also administer a growing portfolio of efficiency programs under the OAC § 165:45-23-1 et seq. In 2011, the Commission approved CenterPoint Oklahoma’s program portfolio (Cause No. PUD 201000148) and CenterPoint Oklahoma began to implement the program portfolio thereafter in 2011. In June 2013, CenterPoint Oklahoma requested approval of proposed energy efficiency programs for 2014-2016.  The Cause is still pending.

In 2010, the OCC approved 8 energy efficiency programs for Oklahoma Natural Gas Company, to be in effect from January 2011 to December 2013. In January 2013, Oklahoma Natural Gas (Oklahoma Natural) requested approval of proposed energy efficiency programs 2014 - 2016.  In addition, a request was made to increase the program administration budget. The Cause is still pending.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

Links:

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November 8, 2013


Energy Efficiency Resource Standards

There is currently no EERS in place.

For more information on Energy Efficiency Resource Standards, click here.


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August 9, 2013


Alternative Business Models

Both Public Service Oklahoma (PSO) and Oklahoma Gas and Electric Company (OG&E) currently have lost revenue recovery mechanisms. Additional revenue recovery mechanisms will be determined on a case-by-case basis. (Cause No. PUD 200700449, ID No. 3710105. April 8, 2008)

The Commission declined to adopt decoupling (termed a formula-based rate) proposed by Public Service Co.  The Commission found, however, that the mechanism has merit and said it will re-examine the issue in the future if other parties wish to file proposals (See Cause 200600285, Order 545168, October 2007).


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August 9, 2013


Reward Structures for Successful Energy Efficiency Programs

Both Public Service Oklahoma (PSO) and Oklahoma Gas and Electric Company (OG&E) currently have shared benefit incentive plans. The shared savings program for Public Service Oklahoma allows for a shared savings mechanism with two components: the shared benefit component for those programs whose Utility Cost Test (UCT) net benefit is above 1.0, and the program incentive component for those programs whose net benefits are difficult to quantify. For the shared benefit component, PSO is allowed to collect 15% of the UCT net benefit attributed to the demand portfolio. For the program incentive, PSO is allowed to collect 15% of the program costs. (Cause No. PUD 201200128; Order 604214). OG&E is also allowed to earn an incentive on the amount of energy efficient reductions achieved. This incentive is calculated using the Total Resource Cost Test (TRC) for each program (See Cause No. PUD 201200134; Order 605737).

Oklahoma Natural Gas and CenterPoint Oklahoma are allowed a shared benefit incentive plan for programs that pass the Total Resource Cost ("TRC") Test. The companies are allowed to collect 15% of the net benefits of such programs and 15% of the program costs for those programs that do not pass the TRC Test (See Cause No. PUD 201000143; Order 585366 and Cause No. PUD 201000148; Order 683869).


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August 21, 2013


Energy Efficiency as a Resource

There is currently no policy in place that treats energy efficiency as a resource.


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August 11, 2013


Evaluation, Measurement & Verification
  • Cost-effectiveness test(s) used: TRC, UCT, PCT, SCT, RIM
  • Uses a deemed savings database: no

The evaluation of ratepayer-funded energy efficiency programs in Oklahoma relies on regulatory orders and Commission rules, (Title 165 CC Chapter 35 Electric Utility Rules Subchapter 41. Demand Programs 165:35-41-7). The administering utilities are primarily responsible for timely evaluation, measurement, and verification of their energy efficiency programs. Oklahoma uses all of the five classic benefit-cost tests identified in the California Standard Practice Manual to evaluate energy efficiency programming. These are the Total Resource Cost (TRC), Utility/ProgramAdministrator (UCT), Participant (PCT), Social Cost (SCT), and Ratepayer Impact Measure (RIM). Oklahoma specifies the TRC to be its primary test for decision making. The benefit-cost tests are required for overall portfolio, total program, customer project, and individual measure level screening, with exceptions made for low-income programs, pilots, and new technologies. The rules for benefit-cost tests are stated in Title 165 CC Chapter 35 Electric Utility Rules.


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August 20, 2013