The Oklahoma Municipal Power Authority (OMPA) Board of Directors approved at its February meeting a plan to help recover expenditures from extraordinary costs incurred from recent winter storm Gerri.
The plan approved largely avoids any impact on rates, thanks to utilization of the Authority’s Rate Stabilization Fund.
Power suppliers throughout the region were forced to deal with natural gas prices topping as much as 10 times beyond normal during the three-day-holiday weekend of Jan. 13-16. OMPA was able to take advantage of a variety of strategies – including calling on natural gas storage, hedging and purchasing physical deliveries at fixed prices – to avoid some of the expense but was still left with approximately $3.53 million in unexpected cost.
The Board agreed to fund $2.9 million of the unexpected costs through OMPA’s Rate Stabilization Fund, allowing the fuel cost for January to remain near what was anticipated.
“The OMPA Board electing to use reserve funds to cover the cost of severe storms is a great example of the value of Public Power and being a member of OMPA,” General Manager Dave Osburn said.
The Board then voted to replenish OMPA’s Rate Stabilization Fund with $4.3 million from excess revenues from 2023. OMPA’s average monthly cost to cities in 2023 was the lowest since 2019, leaving the Authority with lower-than-expected costs to the membership. A further $3.5 million in excess revenue from 2023 was also placed into the Decommissioning Fund, upon direction of the Board.
The Rate Stabilization Fund was previously called upon following winter storm Uri in 2021. OMPA incurred around $64 million in unexpected costs following that storm, but was again able to avoid raising wholesale rates by utilizing the fund and reissuing bonds.
