Oklahoma § 17-286A - Deferrals to regulatory assets of depreciation expenses

§ 17-286A. Deferrals to regulatory assets of depreciation expenses

and return associated with qualifying electric plants — Review of

regulatory asset balances.

A. 1. On and after the effective date of this act, a public

utility shall defer to a regulatory asset ninety percent (90%) of

all depreciation expenses and return associated with all qualifying

electric plants placed in service, provided the public utility has

provided notice to the Corporation Commission of the public

utility’s election to make such deferrals pursuant to this section.

Deferral under this section shall begin on the effective date of

this act if the public utility notifies the Commission of the

election prior to the effective date, or on the date that the

utility notifies the Commission of the election if such date is

after the effective date of this act.

2. For the purposes of this section, “qualifying electric

plant” means all incremental electric plants placed in service by a

public utility following the utility’s last general rate case,

excluding transmission facilities or new electric generating units.

Oklahoma Statutes - Title 17. Corporation Commission

B. The Commission shall conduct a prudence review of the

associated qualifying electric plant resulting in the regulatory

asset balances prior to moving such balances into the public

utility’s rate base. The regulatory asset balances arising under

this section shall be adjusted to reflect any prudence disallowances

of the associated qualifying electric plant, following notice and

hearing, as ordered by the Commission.

C. Unless otherwise provided by this section, in each general

rate proceeding concluded on or after July 1, 2025, the balance of

the regulatory asset as of the end of the test year shall be

included in the public utility’s rate base without any offset,

reduction, or adjustment based upon consideration of any other

factor with the regulatory asset balances arising from deferrals

associated with the qualifying electric plant placed in service

after the end of the test year.

D. Parts of regulatory asset balances created under this

section that are not included in rate base shall accrue carrying

costs at the public utility’s weighted average cost of capital plus

applicable federal, state, and local income or excise taxes.

Regulatory asset balances arising under this section that are

included in rate base shall be recovered in rates through a twentyyear amortization beginning on the date new rates reflecting such

amortization take effect.

E. Depreciation expenses deferred under this section shall

account for any qualifying electric plant placed into service.

Return deferred under this section shall be determined using the

weighted average cost of capital approved by the Commission in the

public utility’s last general rate case and applied to the change in

regulatory asset balances caused by the qualifying electric plant,

plus applicable federal, state, and local income or excise taxes.

In determining the return deferred, the public utility shall account

for changes in all plant-related accumulated deferred income taxes

and changes in accumulated depreciation, excluding retirements.

F. This section shall only apply to any public utility that has

elected to make the deferrals for which this section provides and

filed a notice with the Commission of such election.

Added by Laws 2025, c. 216, § 2.