STATE OF OKLAHOMA

1st Session of the 53rd Legislature (2011)

HOUSE BILL 1955	By:	McNiel

AS INTRODUCED

An Act relating to public utilities; stating findings; authorizing utilities to enter into long-term gas supply agreements in a certain manner; requiring long-term gas supply agreements to be filed with the Corporation Commission; requiring the Commission to make certain determinations; allowing utilities to recover certain costs upon approval of a long-term gas supply agreement; prohibiting the Commission from reversing approval under certain conditions; providing for codification; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 265 of Title 17, unless there is created a duplication in numbering, reads as follows:
A.  It is important to give financial markets confidence that utilities will be able to recover the costs of long-term gas supply agreements without the risk of future disallowance by the Corporation Commission of previously approved contracts or the rate recovery of the contract.  In order to achieve the greater benefit as set forth in this section, utilities shall be authorized to enter into long-term gas supply agreements for natural gas in a manner that protects electricity consumers.
B.  A utility may enter into long-term gas supply agreements to further the intent of this section.  All long-term gas supply agreements shall be filed with the Corporation Commission for review and approval.  The Commission shall determine whether the utility acted prudently by entering into the specific agreement, whether the proposed agreement appears to be beneficial to consumers and whether the agreement is in the public interest.  If the Commission approves an agreement, the utility shall be entitled to recover through rates the costs it incurs under the approved agreement, and any approved amendments to the agreement, notwithstanding any change in the market price of natural gas during the term of the agreement.  The Commission shall not reverse its approval of the long-term gas supply agreement even if the agreement price is higher than a future market price of natural gas.
SECTION 2.  This act shall become effective November 1, 2011.

53-1-6314	KB	01/03/11