Southwest Power Pool Hopes to Prevent Utility Cost Spikes

OKLAHOMA CITY (AP) — An executive with the nonprofit corporation that oversees the electric grid across 14 states in the nation’s midsection told Oklahoma regulators it is taking steps to prevent future weather-related spikes in utility costs.

Lanny Nickell with the Southwest Power Pool updated members of the Oklahoma Corporation Commission with actions the company is taking following a severe winter storm earlier this year.

The deadly winter storm that descended on the region in February, combined with a spike in natural gas prices, blew past the worst-case planning of utilities and governments and led to sky-high utility bills for customers. It also forced utilities to shut off power to some consumers as demand for power outpaced supply.

The three-member Oklahoma Corporation Commission, which regulates utilities in Oklahoma, is still working to determine how much Oklahoma consumers will have to pay as a result of the cost spikes, but those costs are expected to be spread out over multiple years.

Among the main steps the SPP is taking is developing policies that enhance fuel assurance to improve the availability and reliability of electricity generation in the company’s 14-state region, Nickell told the panel. Another priority is advocating for the use of natural gas price-cap mechanisms to ensure gas supply is readily available and affordable during extreme weather events, he said.

“This is not something we ever want to see happen again,” Nickell said. “We don’t take this lightly, and we’re going to work diligently with our regulators and members to put the right mechanisms in place.”

Texas, most of which is not included in the Southwest Power Pool, was particularly hard hit with more than 4 million people left without power in subfreezing weather. Texas Gov. Greg Abbott signed legislation earlier this year that he proclaimed “fix all of the flaws” caused by the deadly winter blackout. Those changes include mandates to “weatherize” power plants for extreme temperatures and new processes to avert communications failures, although some energy experts say the reforms don’t go far enough.

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