OGE Energy : Direct Testimony of Kelly Riley

Published: 2025-05-19 16:43:06 ET OGE

Published on 05/19/2025 at 16:43

IN THE MATTER OF THE APPLICATION OF )

OKLAHOMA GAS AND ELECTRIC COMPANY ) Case No. PUD2025-000038 FOR COMMISSION PREAPPROVAL OF NEW )

GENERATION CAPACITY PURSUANT TO ) 17 O.S. § 286(C) AND RIDER COST RECOVERY )

Direct Testimony of

Kelly M. Riley on behalf of

Oklahoma Gas and Electric Company

May 19, 2025

Kelly M. Riley

Direct Testimony

Q. Please state your name, your employer, and your business address.

A. My name is Kelly M. Riley. I am employed by Oklahoma Gas and Electric Company

("OG&E" or "Company") and my business address is 321 N. Harvey, Oklahoma City,

Oklahoma 73102.

Q. What position do you hold with OG&E?

A. I hold the position of Director of Resource Planning. I am responsible for OG&E's resource

planning group and for all of its activities including the preparation of integrated resource

plan submittals and frequent resource planning analyses that are performed on an ongoing

basis.

Q. Please summarize your professional experience and educational background.

A. I have been employed by OG&E since 2007. I earned a Bachelor of Science Degree in

Business Administration from the University of Oklahoma (1991) and a Master of Science

in Management - Operations Research (2001) from Case Western Reserve University in

Cleveland, Ohio. Since joining OG&E, I have held various risk management and planning

positions. I joined OG&E's resource planning team in 2013 and have been in my current

role as Director of Resource Planning since 2019. My responsibilities include strategic

oversight for the resource planning group including the development and submittal of the

Company's Integrated Resource Plans and the analysis of particular capital investments. 22

Q. Have you previously testified or appeared before the Oklahoma Corporation

A. Yes, I have filed testimony in Case Nos. PUD 2023-000038, and PUD 2023-000087. 26

Q. What is the purpose of your testimony in this proceeding?

A. The purpose of my testimony is to support OG&E's need for additional generating

capacity, describe the design and administration of multiple RFPs for generating resources

to satisfy the capacity need, as well as the Company's decision to pursue execution of

capacity contracts and the acquisition of generating facilities after evaluating a large

number of offers into the Bridge Capacity ("Bridge Capacity RFP") and 2024 All Source

RFP ("All Source RFP.") First, I will discuss OG&E's Integrated Resource Planning

("IRP") process that established the Company's need for generating capacity. The 2024

IRP was submitted to the Commission on March 29, 2024.

Second, I will describe the RFPs issued pursuant to the 2024 IRP's Action Plan1to

secure the needed capacity, including their design, the robust response, the evaluation, as

well as the involvement of the Commission-appointed Independent Evaluator. My

testimony will also address the risks associated with recent federal policy initiatives.

Finally, I will discuss OG&E's 2025 IRP Update Draft, which addresses several

updates to Southwest Power Pool ("SPP") policies since the issuance of the 2024 IRP and

an updated load forecast. I will explain the projected impact of these changes on OG&E's

generation capacity requirements. 15

Q. Please briefly describe the Company's approach to the 2024 IRP.

A. The 2024 IRP identifies the resource plan that allows OG&E to meet its capacity

obligations at the lowest reasonable cost. OG&E submitted the 2024 IRP in compliance

with requirements established pursuant to the Commission's Electric Utility Rules (OAC

165:35-347). The 2024 IRP was submitted according to the prescribed triennial schedule

after the prior IRP was submitted in 2021. OG&E's 2024 Integrated Resource Plan is

attached as Direct Exhibit KMR-1.

The main objective of the 2024 IRP was to explore alternatives to maintain

OG&E's generation capability in accordance with the Southwest Power Pool ("SPP")

Planning Reserve Margin ("PRM") and expected future policy changes impacting

Resource Adequacy in a manner that achieves the lowest reasonable costs to customers and

improves reliability. The best way to accomplish this is by considering a range of capacity

options with varying degrees of scalability and timelines. As stated in previous IRPs, the

‌1The Action Plan is described in OG&E's 2024 Integrated Resource Plan at pages 57, 62-63.

Company continues to pursue fuel diversity by maintaining a reasonable balance among

gas, coal, and renewable generation resources, while adding advancing technologies as

they become cost effective. 4

Q. How did OG&E determine its capacity needs identified in the 2024 IRP?

A. Resource capacity needs in the 2024 IRP were based on an assessment of existing resource

capabilities, including planned retirements of aging infrastructure, compared to projected

customer demand growth over a 10-year period. Electric companies, such as OG&E,

which are responsible for serving customer load, must maintain sufficient generating

capacity to serve their customers' forecasted annual net peak demand plus a specified

amount of reserves above the forecasted peak. The amount above the forecasted net peak

demand is called the Planning Reserve Margin. 13

A. Yes. The Company's 2024 IRP showed a need for capacity of 556 MW in 2026, a capacity

deficiency of 1,215 MW in 2030 and 2,592 by 2034. Table 1 below provides the

information from the 2024 IRP, which shows growth in capacity throughout the forecast

horizon. Later in my testimony I will also discuss how OG&E's capacity needs have

changed since the 2024 IRP.

2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

Table 1 - 2024 IRP Needs Assessment Expected Future Case

Capacity

Owned Capacity

6,497

5,821

5,956

5,531

5,508

5,051

Purchase Contracts

530

505

674

Total Capacity

7,027

7,002

6,495

6,630

6,030

5,550

5,528

5,057

Demand

Demand Forecast

6,632

6,754

7,217

7,264

7,343

7,403

7,497

7,623

7,755

7,861

7,917

OG&E DSM

559

753

988

1,027

1,049

1,074

1,098

1,119

1,141

1,159

1,160

Net Demand

6,073

6,001

6,229

6,237

6,295

6,330

6,400

6,504

6,614

6,701

6,757

‌2This Table can be found OG&E's 2024 Integrated Resource Plan (Direct Exhibit KMR-1), Table 11, p. 30.

Margin

Reserve Margin3

16%

17%

-4%

-5%

-6%

-15%

-16%

-25%

Needs

Needed Capacity

556

431

1,096

1,136

1,215

1,812

1,960

2,529

2,592

Q. What was the conclusion of the 2024 IRP analyses?

A. The Company's 2024 IRP concluded the lowest reasonable cost capacity option for

meeting OG&E's future needs was a combination of natural gas-fired combustion turbine

and solar resources. The IRP analysis demonstrated this blend of resources mitigates risks

across the range of sensitivities and scenarios analyzed. Also, the balanced approach of

meeting OG&E's capacity needs with both combustion turbines and solar fulfilled the

objectives for fuel and technology diversity and improves OG&E's operational flexibility

and resiliency.

Q. Did the 2024 IRP include an Action Plan?

A. Yes. OG&E planned to issue multiple RFPs to address near-term capacity needs as

well as RFPs to address the capacity needs through 2030. 13

Q. What steps has OG&E taken to satisfy the capacity needs identified in the IRP?

A. Soon after OG&E submitted the 2024 IRP, the Company issued the Bridge Capacity RFPs

and the 2024 All Source RFP to solicit resources to meet capacity needs that begin in 2026.

The RFP allowed bidders to offer a variety of contracting structures from all generation

technologies available as SPP accredited capacity so that OG&E received a wide variety

of options for analysis to begin filling the capacity shortfall identified by the 2024 IRP. 20

Q. What SPP policy changes were included in the 2024 IRP analysis?

A. The 2024 IRP included in the analysis the potential impact of SPP moving to Effective

Load Carrying Capability ("ELCC") accreditation for renewable and battery storage

resources and to Performance Based Accreditation ("PBA") for conventional resources. In

ELCC, the accreditation of resources (or the amount of capacity from a resource that can

be used for meeting the SPP PRM requirements) is determined through studies performed

‌3Reserve Margin % = ((Total Net Capacity) - (Net System Demand)) / Net System Demand

Disclaimer

OGE Energy Corporation published this content on May 19, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 19, 2025 at 20:42 UTC.