Researcher warns Oklahoma’s “NOFER” bill could hurt consumers and run into issues with SPP and FERC

If Oklahoma moves forward with a bill that proponents contend is no longer a Right of First Refusal measure for utilities in the state, it could run into serious challenges with the electric grid manager, the Southwest Power Pool as well federal regulators.

It’s the claim of one official with the Washington, D.C. based research firm, R Street Institute in an interview with Mitchell Talks Energy with OK Energy Today’s Jerry Bohnen.

“This law would require something that is contrary to what is in the Southwest Power Pool,” declared Josiah Neeley who advises the R Street Institute’s energy team and is based in Austin, Texas.

He was referring to HB4097 by Rep. Trey Caldwell of Lawton. It’s being referred to by some as a “NOFER” building, based on Caldwell’s claims last week that it was not a ROFR bill. The measure had unanimous support in committee and was approved by the full House last week on a vote of 65-29. The bill, as explained by Caldwell would allow utilities to build major transmission lines by using competitive bidding. But once the construction was completed, the winning bidder or builder would have to transfer ownership to the utility.

Here’s why it could run into problems with the Federal Energy Regulatory Commission and SPP, which manages the electrical grid for Oklahoma and 13 other states. Currently, when a major line is constructed and electricity is shared with the other states, the costs are shared by the other states as well as the utility in Oklahoma.

“There’s a bunch of rules that go with it,” explained Neeley, “and one of those rules in there is, you cannot build a line and them transfer it to somebody else.”

Neeley said it would require that the SPP or FERC would have to change their rules or have a waiver to allow it.

“They might do it–they might not. The State would kinda have to go hat in hand to ask for that. But if that didn’t happen, then Oklahoma would not be able to participate in the regional cost allocation for those lines and Oklahoma residents would end up having to pay for all of it.”

Neeley said it would make things even worse for consumers potentially “then even just having a ROFR because you would not have access to regional cost allocation.”