The utility points to a proposed rate reduction at an Indiana sister company. OG&E has projected a similar potential benefit from its Google data-center agreements.
OKLAHOMA CITY — Public Service Company of Oklahoma says data centers and other large electricity users could eventually help lower bills for its existing customers — a possibility reflected in a proposed rate reduction at an Indiana sister company and projections filed by another Oklahoma utility.
PSO has pointed to Indiana Michigan Power, a sister company under American Electric Power, which has asked Indiana regulators to approve a rate reduction that would save an average residential customer about $100 a year.
The Indiana utility estimates customers would save $59 million in 2027. It attributes the proposed reduction in part to increased electricity demand and revenue from large customers, including data centers.
PSO says it wants to create the same opportunity in Oklahoma.
“PSO’s large-load tariff proposal in the current rate review was modeled after the Indiana approach, with the intent of achieving a similar rate reduction for PSO customers in the future,” PSO communications director Michael Gordon told OK Politics Today.
Any potential savings would depend on regulators approving the company’s proposed large-load tariff and new customers beginning to take service.
More customers sharing system costs
PSO says large customers would pay costs directly associated with serving them while also contributing toward broader system costs.
“Large-load customers will be required to pay their direct costs as well as make meaningful contributions to system costs, which will benefit all customers,” Gordon said.
The company’s pending rate review does not include revenue or expenses from large-load customers because none were taking service during the August 2024 through July 2025 period used to calculate the request.
That means any benefit from large-load growth would come later and would not be part of the rate case now under consideration.
“If the Oklahoma Commission adopts the Indiana approach, as PSO advocates it should, that would place downward pressure on rates as large loads begin taking service in the future,” Gordon said.
OG&E projects a similar benefit
A separate case involving OG&E and three planned Google data centers provides another example of how a utility says unusually large new customers could benefit existing ratepayers.
Direct testimony filed with the Corporation Commission projects that spreading existing system costs across Google’s additional electricity demand could produce an illustrative residential benefit of about $1.83 a month by 2027. The projected benefit increases to $5.33 by 2031 and $6.84 by 2036 as Google’s operations expand.
The figures are projections, not promised reductions in monthly bills.
OG&E’s analysis holds other factors constant and does not account for future generation additions, other customer growth or other future system costs. The company said the calculation was designed to illustrate Google’s incremental contribution toward existing fixed costs, not to set rates.
In later rebuttal testimony, OG&E regulatory accounting director Jason Thenmadathil said the analysis was not intended to be a comprehensive forecast of all future costs and benefits associated with the data centers. Actual effects would be examined using updated information in future rate proceedings.
OG&E regulatory affairs director Kimber Shoop testified that Google would pay an allocated share of existing system expenses, including power plants, transmission facilities and operating costs. He said Google would help pay the existing costs of the system and reduce the average cost of serving other customers.
Google also would pay the dedicated transmission and distribution costs necessary to connect its facilities under the proposed settlement. The Corporation Commission has not given final approval to the agreements.
Similar idea, different cases
The PSO and OG&E proceedings are not the same.
OG&E’s projections involve contracts negotiated specifically for Google’s three planned data centers. PSO is seeking approval of rules that would govern future customers with exceptionally large electricity demands.
But both utilities are making a similar economic argument: Large new customers can be required to pay the costs associated with serving them while also contributing toward an electric system whose costs are shared among customers.
Whether Oklahoma customers ultimately see lower rates will depend on the arrival of those large customers, the costs of serving them and how state regulators structure and review their service.
