|
Server : Apache/2.4.62 System : FreeBSD fbsdweb2.web.rcn.net 14.1-RELEASE FreeBSD 14.1-RELEASE releng/14.1-n267679-10e31f0946d8 GENERIC amd64 User : www ( 80) PHP Version : 8.3.8 Disable Function : NONE Directory : /domains/enrgy/statelin/ |
Upload File : |
<html>
<head>
<title>February 2006: Oklahoma Commission Approves Competitive Procurement Rules</title>
</head>
<body style="font-family: Arial" vlink="#808080">
<div align="center">
<table border="0" cellpadding="8" cellspacing="0" width="98%" bgcolor="#000000">
<tr>
<td width="100%" valign="middle"><a name="top"></a>
<img src="../images/pmamagsm.gif" alt="PMA Online Magazine" border="0" align="right" width="229" height="100"></td>
</tr>
</table>
</div><div align="center"><center>
<table border="0" cellpadding="8" width="98%">
<tr>
<td width="15%" valign="top" align="center">
<!--webbot bot="Include" U-Include="sl_sidebar.htm" TAG="BODY" startspan -->
<table border="2" cellpadding="8" width="15%" id="table1" bordercolor="#FFFF00" bgcolor="#C0C0C0">
<tr>
<td width="100%" valign="top" align="center"><map name="FPMap0_I1">
<area href="http://www.powermarketers.com/adrates.html" shape="rect" coords="14, 297, 97, 322">
<area href="http://www.powermarketers.com/pmajobs.htm" shape="rect" coords="11, 230, 95, 257">
<area href="http://www.powermarketers.com/main.htm" target="_parent" shape="rect" coords="12, 163, 96, 189">
<area href="http://www.powermarketers.com/power2.htm" target="_blank" shape="rect" coords="12, 95, 96, 121">
<area href="../pmamag.htm" shape="rect" coords="11, 29, 96, 54"></map><img rectangle="(12,163) (96,189) http://www.powermarketers.com/main.htm##_parent" rectangle="(12,95) (96,121) http://www.powermarketers.com/power2.htm##_blank" rectangle="(11,29) (96,54) ../pmamag.htm" src="../images/magmenu.gif" alt="PMA OnLine Magazine Menu" border="0" align="center" usemap="#FPMap0_I1" width="110" height="350"><p><a href="../searchpma.htm"><img src="../images/archives.gif" alt="Archives Search" border="0" align="center" WIDTH="70" HEIGHT="40"></a></p>
<p align="left"><strong><small><font face="Arial">About The Author:</font></small></strong></p>
<p align="left"><font face="Arial" style="font-size: 9pt">Robert A. Olson is a partner in the law firm of
Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law,
public utility law and related commercial transactions.</font></p>
<p><small><font face="Arial"><font style="font-size: 9pt">He can be reached at:</font><br>
<br>
<b><font color="#0000FF">Brown, Olson & Gould, PC</font></b><br>
2 Delta Drive<br>
Suite 301<br>
Concord, NH 03301<br>
<a href="mailto:[email protected]">[email protected]</a><br>
(603) 225-9716<br>
<a href="mailto:[email protected]"></a></font></small></p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p><a href="#top"><img src="../images/b-t-top.gif" alt="Back To Top" border="0" width="71" height="35"></a></td>
</tr>
</table>
<!--webbot bot="Include" i-checksum="45188" endspan --></td>
<td width="75%" valign="top">
<img src="../images/statelin.gif" alt="STATELINE by Robert Olson" border="0" width="375" height="75">
</center><center>
<p ALIGN="left"><b><u><br>
<br>
February 2006</u></b><font size="6"><b><br>
OKLAHOMA COMMISSION APPROVES COMPETITIVE PROCUREMENT RULES<br>
</b></font><strong>by Robert Olson and
</strong><b>David J. Shulock</b><strong> -- Brown, Olson and Wilson, P.C.<br>
</strong><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine:
2006</em>/04/1)<br>
</font></p>
<p class="MsoNormal" style="text-autospace: none" align="left">The Oklahoma Corporation
Commission recently approved emergency rules requiring electric utilities to
competitively procure “long-term electric generation or longterm fuel supply
for self-generation of electricity,” subject to PURPA and other applicable
law, where “long-term” is defined as one year or longer. In the Matter of a
Rulemaking by the Oklahoma Corporation Commission Amending OAC 165:35,
Electric Utility Rules, Agency Rule Report, Cause RM No. 200500011 (January
20, 2006). According to one commissioner, the Oklahoma Corporation
Commission “is one of the first [c]ommissions in the country to get these
kind of rules in place,” although the emergency rules remain subject to
review and approval by the governor. Commission Press Release (January 12,
2006).<br>
<br>
Before issuing a request for proposal (“RFP”), the rules require the utility
to submit a draft RFP, supporting documentation, and bid evaluation
procedures to the commission, the attorney general, and an independent
evaluator for review and comment. � 165:35-34-3(a). The utility must
evaluate bids “to determine the lowest reasonable cost for long-term
reliable power or reliable longterm fuel sought that minimizes ratepayer
cost.” Id. at (d). The “variable cost of the utility producing power through
self-generation [serves] as the benchmark for comparing bids,” and “[o]nly
bids below the benchmark [are] eligible for acceptance.” Id.</p>
<p class="MsoNormal" style="text-autospace: none" align="left">With respect to bids from
affiliates, the rules require the bidding affiliate to publicly disclose the
names and titles of individuals on its “Bid Team” and require the soliciting
utility to publicly disclose the names and titles of individuals on its
“Evaluation Team.” Id. at (c). The rules generally prohibit individuals on
the two teams from communicating directly or indirectly about the RFP or the
procurement process and further require the utility and the affiliate to
execute an acknowledgement that no such communications have occurred apart
from submission of the bid. Id.</p>
<p class="MsoNormal" style="text-autospace: none" align="left">The rules require the
utility to file its final decision on the procurement with the commission
and mail copies to interested parties. Id. at (f). The independent
evaluator, the attorney general, and any unsuccessful bidder may challenge
the utility’s decision within fifteen days. Id. If such a challenge is
filed, the commission then determines “whether the utility’s decision
reveals either a clear departure from the criteria stated in [the] rules . .
. , the RFP Document and bid evaluation procedures for decision or is
erroneous.” Id. at (g). If so, the utility must immediately “rebid,” i.e.
re-procure the affected items. Id.</p>
<p class="MsoNormal" style="text-autospace: none" align="left">The rules provide that the
commission will conduct “prudence reviews on all generation and fuel
procurement processes and costs,” and will evaluate all fuel and generation
expenses in adjudicatory proceedings where the utility bears the burden of
proof as to prudence. � 165:35-35-1. Id. Placing the burden of proof in all
cases on the utility represents a departure from the rules as originally
proposed, under which the utility would have enjoyed a presumption of
prudence with respect to non-affiliate procurements using the competitive
bidding procedures. See Cause RM No. 200500011, Proposed Rules (August 30,
2005) at �165:35-34-9(d).</p>
<center>
<p class="MsoNormal" style="text-autospace: none" align="left">Citing upward pressure on
fuel prices due, in part, to Gulf Coast hurricanes in November of 2005, the
commission approved the rules on an emergency basis and submitted them to
the governor for approval on January 20, 2006. Oklahoma law gives the
governor 45 days to review the emergency rules. 75 Okla. Stat. � 253(A). The
rules will take effect immediately upon such approval, pending later
legislative review. Id.</p>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<center>
<p class="MsoNormal"> </p>
<!--webbot bot="Include" u-include="sl_bottom.htm" tag="BODY" startspan -->
<hr color="#FFFF00">
<blockquote>
<p align="left"><font face="Arial">
<small>Robert A. Olson is a partner in the law firm of Brown, Olson &
Gould P.C.
which maintains a nationwide practice in energy law, public utility law and related
commercial transactions. He can be reached at:</small></font><p align="center">
<font face="Arial"><small><font color="#0000FF"><b>Brown, Olson & Gould, PC</b></font><br>
2 Delta Drive, Suite 301<br>
Concord, NH 03301 <br>
<br>
<a href="mailto:[email protected]">[email protected]</a> | (603) 225-9716<a href="mailto:[email protected]"></a></small></font>
<!--webbot bot="Include" i-checksum="27861" endspan --></td>
</tr>
</table>
</div>
<p align="center"><a href="#top">
<img src="../images/b-t-top.gif" alt="Back To Top" border="0" width="71" height="35"></a></p>
</body>
</html>