State regulators have cleared Public Service Company of Oklahoma to move ahead with a roughly $1.2 billion energy expansion intended to shore up reliability as demand grows — a decision that carries direct implications for utilities, large electricity customers and Oklahoma households. The Oklahoma Corporation Commission approved a package of natural gas, battery storage and power contracts while adding new safeguards aimed at keeping basic customer rates from being pushed higher by large new loads such as data centers.
The commission’s vote green-lit PSO’s plan to add supply and flexibility to the grid through a mix of generation and storage. Commissioners said the order gives the utility the certainty to start projects but includes operational and billing conditions designed to protect ordinary ratepayers.
What the commission approved
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- Two new natural gas generating units at PSO facilities
- Three utility-scale battery storage systems — a component the commission flagged as the most expensive single element of the plan (about $715 million)
- Purchase-power agreements with existing wind and gas generators to supply additional capacity
The full program carries an estimated price tag of about $1.2 billion. PSO told regulators customers should not see immediate increases in their bills; an earlier filing projected an average monthly rise of roughly $10.34, though the company said the final impact is expected to be lower after the commission’s changes.
Central to the approval was the use of construction-work-in-progress — commonly abbreviated as CWIP — which allows utilities to recover a portion of project costs from customers while new plants are still being built. Oklahoma law requires the commission to permit CWIP for natural gas projects, and commissioners authorized it here with a condition: PSO cannot begin collecting those CWIP charges until it secures local rezoning for work at its Northeastern plant near Oologah in Rogers County.
Not all commissioners were convinced. Two voted to approve the package; one dissented, warning that the scale and novelty of PSO’s battery investments carry risk because the utility has not previously owned and operated systems of that size.
How the order protects everyday customers
The commission imposed several measures intended to prevent costs tied to new large users from shifting onto households and small businesses. Among the requirements are annual adjustments to rates as new demand comes online and specific conditions for how large facilities — particularly data centers and other heavy users — connect to the grid.
Those protections reflect recently enacted state legislation directing the commission to shield household rates as high-demand customers join the system. House Bill 2992, sponsored by state Rep. Brad Boles and signed by Gov. Kevin Stitt, informed the commission’s approach during this review.
PSO framed the package as necessary to meet rising demand and maintain reliability as Oklahoma’s population and commercial load grow. The company said different elements of the plan will come online at varying times, with the entire program expected to be complete by 2029.
Why this matters now
Oklahoma is seeing increasing strain on its transmission system from new data centers and industrial customers that require steady, high-capacity power. The commission’s decision balances two immediate priorities: enabling the utility to expand supply quickly while limiting short-term bill impacts for residential customers.
For residents, the near-term takeaway is modest: no sudden spike in bills. For larger customers and developers, the ruling clarifies how connection costs and future rate adjustments will be handled — a critical signal for companies planning major new deployments in the state.
Key details at a glance:
- Total estimated investment: ~$1.2 billion
- Battery storage allocation: ~$715 million (largest single component)
- Rate recovery method: CWIP authorized, subject to rezoning approval
- Commission vote: 2 in favor, 1 opposed
- Expected completion: Staggered, fully operational by 2029
The commission’s order illustrates how state regulators are adapting utility oversight as the grid evolves — allowing major investments while carving out protections so that the expanding demands of the digital economy do not fall unfairly on everyday electricity customers.
Reporting by StateImpact Oklahoma.
