April 24, 2018: The Oklahoma Supreme Court ruled in Sierra Club’s favor and vacated a decision by the Oklahoma Corporation Commission that found it was reasonable to retrofit the Sooner coal-fired power plant with scrubbers.
In 2014, OG&E filed an application with the Oklahoma Corporation Commission for preapproval to spend $500 million to put scrubbers on the Sooner plant. Sierra Club's Kristin Henry and Laurie Williams opposed the project before the commission because there were other, cheaper alternatives such as abundant Oklahoma wind. In December 2015, the Commission denied OG&E’s application and found that it had failed to provide sufficient information to establish that installing the scrubbers would be “reasonable, fair, and non-prejudicial to the ratepayers,” largely because the Company had failed to consider alternatives which could provide the same benefits to ratepayers at far lower expense (and, incidentally, which would produce far less pollution).
Two months later, OGE filed a new application that sought approval of the same scrubber project but this time under the Commission’s general authority, not the preapproval statute. The Company wanted the Commission to determine the reasonableness of the project in isolation, not with regard to its cost and impacts to ratepayers. The Company admitted that it sought this reasonableness determination to relieve the “risk” that the Company would be unable to recover the costs of the scrubber project from ratepayers. The Commission reversed course and found that the scrubber project was reasonable and that—unlike the preapproval statute—this “general” authority allowed the Commission to sanction the Company’s plan without addressing its “prudency,” or the “reasonableness” of the plan’s impacts upon ratepayers.
Sierra Club's Sanjay Narayan and Matthew Miller appealed this decision to the Oklahoma Supreme Court and argued that the Commission doesn’t have the authority to pronounce a utility’s construction plans “reasonable,” based on an abstract assessment of those plans’ value but that its authority is limited to ensuring that a utility’s decisions have a reasonable and fair effect on the ratepayers. On April 24, 2018, the Oklahoma Supreme Court vacated the Commission’s order and found that the Commission cannot grant preapproval in a way that is “completely untethered from the project’s effects on ratepayers” and noted that “pointedly” when the Commission did the appropriate analysis it found the project “would not be fair to ratepayers.”