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Oklahoma Industrial Energy Consumers, AARP Oklahoma Challenge the Constitutionality of SB 998 in the Oklahoma Supreme Court

AARP

Published June 01, 2026

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An appeal challenging the constitutionality of Senate Bill 998, a newly enacted law mandating utility Construction Work in Progress (CWIP) cost recovery, has been filed with the Oklahoma Supreme Court by Oklahoma Industrial Energy Consumers (OIEC) and AARP. Under the new law, utility companies such as OG&E and PSO are allowed to recover costs from their customers for power plant construction projects, some costing more than $500 million, before those projects are completed, in service, and providing benefits to customers.

Due to the newly enacted law that mandates CWIP recovery from customers, Oklahoma Corporation Commissioners were forced to authorize CWIP cost recovery from PSO ratepayers despite their reluctance to do so.

AARP’s expert witness testified that PSO’s CWIP recovery will cost customers approximately $46 million more than the traditional financing approach used by the Corporation Commission. In their appeal, AARP Oklahoma and the OIEC assert that the CWIP law is unconstitutional and unfairly burdens PSO ratepayers, especially older residents living on fixed incomes.

“CWIP forces Oklahomans to pay upfront for projects that may never deliver value to them,” said AARP Oklahoma State Director Sean Voskuhl. “Instead of utilities taking on the risk of building major projects, Oklahoma families, businesses and industries are required to pay in advance for infrastructure they may never use. That places a burden on many PSO customers that simply can’t afford that mandate.”

John Givens, a Senior Regulatory Analyst for the Corporation Commission offered testimony against the CWIP request, testifying, “It unfairly recovers all financing costs from customers before the plant is even providing service. This means that future customers who use the plant will experience savings, but the customers who financed it will see much higher costs in early years and may not see any savings unless they stay on the system for decades.”

He further cited a Manhattan Institute report that claimed CWIP incentivizes lengthy construction timelines and results in cost escalations and overexpansion.

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A recent AARP survey shows overwhelming concern about shifting infrastructure costs onto residential customers with 92% older Oklahomans saying policymakers should ensure residents are not required to pay for new large-scale energy demands, and 86% believe those costs should be borne by the companies driving them. Also, 80% oppose allowing utility companies to preemptively raise residential customers’ rates to subsidize future improvements that they may not actually use or benefit from.

The survey also underscores the financial strain many older Oklahomans are already facing. 65% of respondents report that their electricity bills have increased over the past year, and 77% say they are concerned about future increases. In fact, 40% say an increase in their electricity bill would pose a major financial hardship.

The U.S. Energy Information Administration (EIA) recently published its 2024 Residential Utility Disconnections Report, which shows Oklahoma’s electricity residential customer disconnection rate ranks highest among the various states, ahead of Texas, Florida, Louisiana, Mississippi, and Alabama. Oklahoma’s disconnection rate in 2024 was three times larger than the national average, at 2.53% compared to 0.78%.

“These findings make clear that many older Oklahomans are already at their financial breaking point,” said Voskuhl. “It’s not only unreasonable to ask customers to start picking up the tab for projects before they are completed and that they may never benefit from it’s unconstitutional.”

According to OIEC Executive Director Tom Schroedter, SB 998 will also adversely impact commercial and industrial customers of PSO and OG&E, as the law mandates CWIP recovery from businesses and industries while eliminating the Corporation Commission’s ability to set just and reasonable utility rates. Schroedter notes that the new law undermines long-standing Commission regulatory safeguards and exposes Oklahoma businesses and industries to unnecessary financial risk. The law effectively hands a blank check to Oklahoma’s electric utilities and removes the incentive to control costs.

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