Bury the power lines

[BDP]

A cost is going to be passed on to the customer in any business. Whether it is disguised somehow, a business still is going to charge more money than it takes in or it will fail. Or it will be subsidized by taxpayers.

Of course.

It just should be noted that this is not "any business" and there are many other factors involved. The fact that it could and probably would be subsidized by tax payers is just one of them. If new or raised taxes are on the table, then shouldn't the "for profit" part be as well?

That's probably more of an economic ideology discussion, but OG&E can hardly be framed as just another business, that's all.

[Bill Robertson]

I don't get this whole discussion. There is no such thing as just the cost of doing business. All expenses a business incurs ends up being paid for by the consumer. No business has a grove of money trees. Even subsidized things are paid for by taxes which the consumer pays. Nothing is free.

[Plutonic Panda]

At the end of the day burying power lines is not free and that’s obvious. Saying that just seems like a non-statement. It’s expensive but many developed modern countries have done it and there are several cities that are slowly doing it here in the states. Really though if there’s anywhere that I think it’s justified to do it in the US it would be right here in central Oklahoma.

I figure start small. Over the next 10 to 15 years require all major street reconstruction projects and new street construction projects to have underground utilities. Like the new roads in Chisholm Creek they could’ve buried the utilities but they placed them above ground. Then slowly start embarking on special projects specifically to bury the powerlines and dense urban areas and then tackle corridors like May Avenue Northwest Expressway etc.

Ultimately it will cost money but I’d be willing to pay my share. I think it needs to be brought to a vote.

[BDP]

I don't get this whole discussion. There is no such thing as just the cost of doing business. All expenses a business incurs ends up being paid for by the consumer. No business has a grove of money trees. Even subsidized things are paid for by taxes which the consumer pays. Nothing is free.

As a for profit company, OG&E has had a steadily increasing net operating profit margin in the double digits since about 2013. It dipped a little in 2019, took a dive during the pandemic and is now back in the double digits at 13.92% for Q3, or about 2 points higher than the average net operating profit margin for dow companies.

So, if tax payers are going to pay to cover their costs, then the next question is how much? Do tax payers pay to cover the added expense before or after net operating profit margin? As a publicly regulated for profit public utility, is it the tax payers responsibility to maintain OG&E's profit margin?

There's a difference between subsidizing costs and subsidizing profits, especially when asking the tax payers how much they should subsidize.

So, while you are right that most operating expenses incurred by a business ends up being paid for by the customer, it's not the same thing as those operating expenses being paid for by the tax payer, because most businesses do not have that option. And that's not even considering the whole "free market" ideology aspect of that model.

And, more on topic, when the services OG&E delivers fail, the economy as a whole suffers, similar to, say, when a road or bridge fails. So, combined with the fact that tax payers participate in that, it's just not like "any other business".

It is not the same model for most businesses. In America, it has become the model for a lot of BIG businesses, but not for most.

[Bill Robertson]

As a for profit company, OG&E has had a steadily increasing net operating profit margin in the double digits since about 2013. It dipped a little in 2019, took a dive during the pandemic and is now back in the double digits at 13.92% for Q3, or about 2 points higher than the average net operating profit margin for dow companies.

So, if tax payers are going to pay to cover their costs, then the next question is how much? Do tax payers pay to cover the added expense before or after net operating profit margin? As a publicly regulated for profit public utility, is it the tax payers responsibility to maintain OG&E's profit margin?

There's a difference between subsidizing costs and subsidizing profits, especially when asking the tax payers how much they should subsidize.

So, while you are right that most operating expenses incurred by a business ends up being paid for by the customer, it's not the same thing as those operating expenses being paid for by the tax payer, because most businesses do not have that option. And that's not even considering the whole "free market" ideology aspect of that model.

And, more on topic, when the services OG&E delivers fail, the economy as a whole suffers, similar to, say, when a road or bridge fails. So, combined with the fact that tax payers participate in that, it's just not like "any other business".

It is not the same model for most businesses. In America, it has become the model for a lot of BIG businesses, but not for most.

I don't disagree with any of this.
But, this is the reality:
1. We all want power lines to be underground so outages will be minimized.
2. OG&E is not going to pay for this out of their profits.
3. No government entity is going to force OG&E to do so.
So what is the answer except for accepting that the consumer is going to have to pay for burying the lines if we demand that it be done?

[Dob Hooligan]

As a for profit company, OG&E has had a steadily increasing net operating profit margin in the double digits since about 2013. It dipped a little in 2019, took a dive during the pandemic and is now back in the double digits at 13.92% for Q3, or about 2 points higher than the average net operating profit margin for dow companies.

So, if tax payers are going to pay to cover their costs, then the next question is how much? Do tax payers pay to cover the added expense before or after net operating profit margin? As a publicly regulated for profit public utility, is it the tax payers responsibility to maintain OG&E's profit margin?

There's a difference between subsidizing costs and subsidizing profits, especially when asking the tax payers how much they should subsidize.

So, while you are right that most operating expenses incurred by a business ends up being paid for by the customer, it's not the same thing as those operating expenses being paid for by the tax payer, because most businesses do not have that option. And that's not even considering the whole "free market" ideology aspect of that model.

And, more on topic, when the services OG&E delivers fail, the economy as a whole suffers, similar to, say, when a road or bridge fails. So, combined with the fact that tax payers participate in that, it's just not like "any other business".

It is not the same model for most businesses. In America, it has become the model for a lot of BIG businesses, but not for most.

I have always thought that the Oklahoma Corporation Commission reviews requests and sets the rules for what OG&E spends on capex and how they get repaid. Please suggest your remedy if I am correct, and set me straight if I am wrong.

[bombermwc]

I don't disagree with any of this.
But, this is the reality:
1. We all want power lines to be underground so outages will be minimized.
2. OG&E is not going to pay for this out of their profits.
3. No government entity is going to force OG&E to do so.
So what is the answer except for accepting that the consumer is going to have to pay for burying the lines if we demand that it be done?

#3 is a good place to start. I think BDP made my point a little better than I did as well. We're subsidizing the profit, which is not what we are supposed to be doing.
If they have a profit, then THAT's what should be used to fund things like generation construction/changes, line buries, grip improvement.

Think of OG&E like Newman's Own. Take what you have in profit and turn it around to fund things. Personally, I'd rather see them as non-profit so that those costs go in to either the employees, the grid (ie bury the lines), or rate control.

There just isn't any REAL check and balance in place. The Corporation Commission is mostly a "yes-man" for the utilities.

Now, I am in absolutely no way comparing OG&E to PG&E in my next statement, but rather it's an example of what can go wrong when there isn't sufficient control/oversight. Being a for-profit utility has caused PG&E to make the wrong decision for 50+ years in the pursuit of the dollar. OG&E is not corrupt like PG&E, but it's an example of what can happen. Save money today to be able to pay shareholders instead of replacing worn out gear. Well, we know what that got them.....multiple times. And what happened from that? The customers paid for it in more than one way. There's the fire victims, but then who has to help subsidize the cost of the legal fight or compensation? The customers again. The executives get to walk away without accepting any real fault or litigation too. So I'm thinking convert them to non-profit, set up oversight and safety boards to review the decision processes, invest that extra profit in the system, and like with preventative healthcare, you avoid LONG TERM costs by doing things like burrying the lines. Sometimes the ROI is long, but it's there.

[djohn]

#3 is a good place to start. I think BDP made my point a little better than I did as well. We're subsidizing the profit, which is not what we are supposed to be doing.
If they have a profit, then THAT's what should be used to fund things like generation construction/changes, line buries, grip improvement.

Think of OG&E like Newman's Own. Take what you have in profit and turn it around to fund things. Personally, I'd rather see them as non-profit so that those costs go in to either the employees, the grid (ie bury the lines), or rate control.

There just isn't any REAL check and balance in place. The Corporation Commission is mostly a "yes-man" for the utilities.

Now, I am in absolutely no way comparing OG&E to PG&E in my next statement, but rather it's an example of what can go wrong when there isn't sufficient control/oversight. Being a for-profit utility has caused PG&E to make the wrong decision for 50+ years in the pursuit of the dollar. OG&E is not corrupt like PG&E, but it's an example of what can happen. Save money today to be able to pay shareholders instead of replacing worn out gear. Well, we know what that got them.....multiple times. And what happened from that? The customers paid for it in more than one way. There's the fire victims, but then who has to help subsidize the cost of the legal fight or compensation? The customers again. The executives get to walk away without accepting any real fault or litigation too. So I'm thinking convert them to non-profit, set up oversight and safety boards to review the decision processes, invest that extra profit in the system, and like with preventative healthcare, you avoid LONG TERM costs by doing things like burrying the lines. Sometimes the ROI is long, but it's there.

There are a lot of companies that I wish were not-for-profit - think how much cheaper things would be.

I see your point, but having the government force business owners to change to not-for-profit would not be a good thing.

[Bill Robertson]

There are a lot of companies that I wish were not-for-profit - think how much cheaper things would be.

I see your point, but having the government force business owners to change to not-for-profit would not be a good thing.

And I understand that OG&E is a little different for-profit company. But do we really want the government dictating to for-profit companies what they are to do with their profits? That could be a bad precedent.

[Scott5114]

Why should OG&E even have the right to make a profit? If they want to make a profit, they should be in an industry where they compete against others, not be a utility. Go start a bakery or something if you want to profit. We don't put for-profit companies in charge of the water and sewer systems. The result is that my water bill is reasonable, and yet every time I turn on the faucet I still get water.

[mugofbeer]

Why should OG&E even have the right to make a profit? If they want to make a profit, they should be in an industry where they compete against others, not be a utility. Go start a bakery or something if you want to profit. We don't put for-profit companies in charge of the water and sewer systems. The result is that my water bill is reasonable, and yet every time I turn on the faucet I still get water.

That's not exactly correct. There are many utilities (both electric and water/sewer) that are publicly owned (by citizens) and many that are privately owned. Your electric bill is reasonable and your service is reliable but, obviously, there are occasions of severe weather that can interrupt your service. Most Americans are serviced by privately owned utilities while most land area is serviced by rural electric co-ops.

There is little difference between which type of ownership is better but the edge goes to privately owned utilities based on response times to about anything.

https://www.bloomberg.com/news/artic...ure%20upgrades.

[bombermwc]

And I understand that OG&E is a little different for-profit company. But do we really want the government dictating to for-profit companies what they are to do with their profits? That could be a bad precedent.

I would never count a utility in the same bucket as any other business. Unless i have the choice to choose which utility i have come to my house, then by absolute yes the government should be putting controls on it.

[Bill Robertson]

I would never count a utility in the same bucket as any other business. Unless i have the choice to choose which utility i have come to my house, then by absolute yes the government should be putting controls on it.

But they're not technically different. They're a publicly traded for- profit company. I'm not saying I'm for that. Just that that's the way it is. I'm also not sure I'm in favor of the govt owning utilities. Though our water/sewer system works pretty well city owned. I don't know if there's a good answer. But I do know that one publicly traded for-profit company can't be governed by different rules than another publicly traded for-profit company just because we think they should be. The Corp Comm control of OGE is probably as much govt control that you're ever going to see of a publicly traded for-profit company.

[soonerguru]

There are a lot of companies that I wish were not-for-profit - think how much cheaper things would be.

I see your point, but having the government force business owners to change to not-for-profit would not be a good thing.

Why not? They are a government sanctioned monopoly. Why shouldn't the consumers who are forced to use them have more say over their operations? The corporation commission, in its current composition, is not doing any regulatory favors for consumers.

[Jersey Boss]

Why not? They are a government sanctioned monopoly. Why shouldn't the consumers who are forced to use them have more say over their operations? The corporation commission, in its current composition, is not doing any regulatory favors for consumers.

Has it ever? I'd love to see some examples.

[mugofbeer]

Why not? They are a government sanctioned monopoly. Why shouldn't the consumers who are forced to use them have more say over their operations? The corporation commission, in its current composition, is not doing any regulatory favors for consumers.

That's what elections are for. Making something non-profit or publicly-owned doesn't change how well they provide or respond to consumers. Read my link above. It discusses what you are commenting about.

[bombermwc]

If it were that easy mugofbeer, then after 60 years, we would have had better results from elections a long time ago. You first have to have candidates that run for the office that are not friends of those they are supposed to regulate. I'll stand by what I said before, in the few times in the last 20 years that the commission voted against the utilities, those members tended to end up in short terms and have some reason to resign (feigned corruption). Although, we don't really see corruption cases for those that vote in favor of the utilities. They money that backs them, supports them and if anyone steps out of line, there's funding there to find a reason to get someone ousted. Maybe that is a little conspiratorial, but it's just what's been seen.

For Bill Robertson's point - one difference between individual cities doing this and something larger like a utility is that cities can create treatment plants, water towers, trash service, etc and it's still efficient. Generation and transport of energy can't be confined within municipal limits. Think of every suburb in OKC having it's own generation plant and what what would look like in the smaller areas like The Village/Nichols Hills/Del City/Nicoma Park/etc. The larger utilities get an economy of scale and the ability to create generation near water sources that are not available to suburbs or in large swaths of rural land for wind/solar. Now the co-op approach could step in and counter that where multiple communities come together to form their own service. But you'd have to have a LOT of cities join to make that work...like hundreds.

What I would envision is state law that prevents a utility from being for-profit. Remove any of the shareholder mess that pollutes that spending. Create regulatory teams that must be bi-partisan to control how the funds are spent so that it's not all sent to executive compensation instead of proper grid maintenance. That oversight is critical to ensuring that the profit dollars are not squandered. Then that group can evaluate if a rate hike should be presented to a DIFFERENT board (and the corporation commission would be dissolved in favor of a new type of approval structure) so the folks running the service are not also deciding the rates. If they can make a good argument for where funds will help the customers, then maybe we go for it. But show me proof in the numbers.

[mugofbeer]

If it were that easy mugofbeer, then after 60 years, we would have had better results from elections a long time ago. You first have to have candidates that run for the office that are not friends of those they are supposed to regulate. I'll stand by what I said before, in the few times in the last 20 years that the commission voted against the utilities, those members tended to end up in short terms and have some reason to resign (feigned corruption). Although, we don't really see corruption cases for those that vote in favor of the utilities. They money that backs them, supports them and if anyone steps out of line, there's funding there to find a reason to get someone ousted. Maybe that is a little conspiratorial, but it's just what's been seen.

For Bill Robertson's point - one difference between individual cities doing this and something larger like a utility is that cities can create treatment plants, water towers, trash service, etc and it's still efficient. Generation and transport of energy can't be confined within municipal limits. Think of every suburb in OKC having it's own generation plant and what what would look like in the smaller areas like The Village/Nichols Hills/Del City/Nicoma Park/etc. The larger utilities get an economy of scale and the ability to create generation near water sources that are not available to suburbs or in large swaths of rural land for wind/solar. Now the co-op approach could step in and counter that where multiple communities come together to form their own service. But you'd have to have a LOT of cities join to make that work...like hundreds.

What I would envision is state law that prevents a utility from being for-profit. Remove any of the shareholder mess that pollutes that spending. Create regulatory teams that must be bi-partisan to control how the funds are spent so that it's not all sent to executive compensation instead of proper grid maintenance. That oversight is critical to ensuring that the profit dollars are not squandered. Then that group can evaluate if a rate hike should be presented to a DIFFERENT board (and the corporation commission would be dissolved in favor of a new type of approval structure) so the folks running the service are not also deciding the rates. If they can make a good argument for where funds will help the customers, then maybe we go for it. But show me proof in the numbers.

Here are some comparisons between the two types of companies:

https://www.bloomberg.com/news/artic...ng-regulations

https://www.powermag.com/public-vs-p...wer-customers/

https://wgme.com/news/local/are-priv...lities-cheaper

In general, there's not a lot of difference between the two. Publicly owned utilities, on average, are a little cheaper for consumers. On the other hand, private investor owned generally provide better and faster customer service. So, it just depends on what you value more.

[FighttheGoodFight]

OG&E Rate rase coming it appears.

They had a 3.5% increase in profits last year

[TheTravellers]

OG&E Rate rase coming it appears.

They had a 3.5% increase in profits last year

And on top of the securitization BS they're doing.....

[CCOKC]

These hearing are open to the public and accept public comments. I have personally attended the meetings in the past with a group of people who successfully fought a rate increase. I am not sure how successful a fight will be this time but our voices should be heard!

[chssooner]

Only utility companies get bashed for raising their prices as the price of everything goes up. Not saying they are fair, but that is simple economics.

[Jersey Boss]

Only utility companies get bashed for raising their prices as the price of everything goes up. Not saying they are fair, but that is simple economics.

Post high school institutions have been getting bashed for raising tuition far exceeding the rates of inflation for over a decade.
The utilities are regulated by more than one commisioner getting campaign contributions from the utilities they are in bed with. That's not fair or ethical.

[Jersey Boss]

These hearing are open to the public and accept public comments. I have personally attended the meetings in the past with a group of people who successfully fought a rate increase. I am not sure how successful a fight will be this time but our voices should be heard!

Money speaks louder than public input.

[chssooner]

Post high school institutions have been getting bashed for raising tuition far exceeding the rates of inflation for over a decade.
The utilities are regulated by more than one commisioner getting campaign contributions from the utilities they are in bed with. That's not fair or ethical.

I don't bash colleges for raising fees or tuition, within reason. OG&E had to spend hundreds of millions at one time to recover from the storm last year. Not saying their rates are rising commensurate with the costs they truly incurred. I am not here to defend the big bad electric company. Just that raising rates when EVERYTHING is more expensive right now seems fair. Just my opinion. I understand that people want utility companies to almost be not for profits, But they are for profit entities, so they raise rates when costs increase, like they have now.