Oklahoma Natural Gas Co. customers will pay about $20 million/year less for gas under the terms of an order approved by the Oklahoma Corporation Commission. Commissioners adopted an agreement negotiated between the company, the commission staff and the Oklahoma attorney general's office that will lower rates and allow ONG to prepare for a competitive market.
A significant part of the reduction is the result of changes in how ONG obtains "upstream" services, including transportation and storage. The transmission lines and gas storage formerly owned by the utility have been separated from ONG and are now operating in competitive markets. ONG will use a competitive bidding process to purchase transportation services, as well as for gas supply. These services are provided to customers at ONG's actual cost of acquisition in competitive markets.
The commission's order also authorizes ONG to begin assuming responsibility for the maintenance and safety of the service lines that connect customers' homes and businesses to ONG's distribution mains. Meters may now be installed at the building wall and customers can be relieved of the unexpected cost-for-service line failures.
In addition, the action paves the way for ONG to become the natural gas utility for approximately 35,000 residents of northeastern Oklahoma now served by Kansas Gas Service, a division of Oneok Inc. Kansas Gas Service was created in November 1997, when Oneok, Inc, Tulsa, Okla., purchased the natural gas assets of Western Resources Inc.
An average ONG residential customer can expect to save about $23/year for delivery and service. Former Kansas Gas Service residential customers should realize a rate reduction of approximately $85/year.
Under the terms of a previous agreement, ONG will dismiss its Oklahoma Supreme Court appeal of an earlier commission order that established guidelines for "unbundling" or the separation of the components of utility service and the introduction of competition.