OGE Energy : Redacted Direct Testimony of Jason Thenmadathil

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 )

Redacted Direct Testimony of

Jason J. Thenmadathil on behalf of

Oklahoma Gas and Electric Company

May 19, 2025

Jason J. Thenmadathil

Direct Testimony

Q. Please state your name and business address.

A. My name is Jason J. Thenmadathil. My business address is 321 North Harvey, Oklahoma

City, Oklahoma 73102.

Q. By whom are you employed and in what capacity?

A. I am employed by Oklahoma Gas and Electric Company ("OG&E" or "Company") as the

Sr. Manager of Regulatory Accounting. 8

Q. Please summarize your educational background and professional qualifications.

A. I received a Bachelor of Science degree in Accounting from the University of Central

Oklahoma. In 2005, I was employed by the Public Utility Division ("PUD") of the

Oklahoma Corporation Commission ("Commission") as a Public Utility Regulatory Analyst,

and later was promoted to Coordinator. As a PUD analyst, I testified in various utility cases

filed by electric and gas companies, including rate cases and fuel prudence reviews. In March

2010, I joined OG&E as a Senior Regulatory Accountant. In October 2017, I assumed

additional responsibilities as the Supervisor of Regulatory Accounting where I oversee the

work of members of the Regulatory Accounting group, whose responsibilities are to prepare

the minimum filing requirements ("MFR") for rate cases and determine revenue

requirements for various rate filings. In May 2018, I was promoted to Manager of Regulatory

Accounting and later to Sr. Manager in May 2023. 21

Q. Have you testified previously before this Commission?

A. Yes. As a witness for OG&E, I previously submitted testimony in Cause Nos. PUD

24 201500266, 201500273, 201600319, 201700261, 201700496, 201800084, 201800140,

202100164, and 202300087. I have also testified in numerous proceedings as an analyst

for the PUD.

Q. What is the purpose of your testimony?

A. The purpose of my testimony is to sponsor the estimated revenue requirement and

customer impact associated with the selected projects from OG&E's 2024 All Source RFP.

My testimony also covers the potential future benefits of adding new large load customers

to the utility system. 6

Q. Please explain how the revenue requirement was calculated for purposes of this

A. The revenue requirement consists of separate calculations for Horseshoe Lake Units 13 &

14 ("HL 13 & 14") and the Kiamichi and Black Kettle capacity purchase agreements

("CPAs").

For HL 13 & 14, we are applying a calculation to determine the required revenues

needed to recover cost, along with the inclusion of recovery for Construction Work in

Progress ("CWIP"). The return on capital investment is calculated by multiplying net rate

base by the rate of return ("ROR"), which is comprised of a return on equity and debt

interest weighted against each other plus a factor to collect income taxes. That return is

then added to depreciation expenses, operations, and maintenance ("O&M") expense, and

property taxes. After applying applicable tax credits, this total represents the revenues

needed by the utility to recover its costs.

For the CPAs, the calculation includes the annual capacity payments and a return

on the CPAs at OG&E's weighted average cost of capital ("WACC") as described in the

Direct Testimony of OG&E witness Charles Walworth.

For your revenue requirement calculations, when would recovery begin?

Rider cost recovery would begin once the Commission has approved the projects, and the

Company begins incurring costs. Costs for the Black Kettle CPA would be included in the

Generation Cost Recovery ("GCR") rider when OG&E begins paying for delivered

capacity in June 2027. Costs for the Kiamichi CPA would be included in the GCR when

OG&E begins paying for delivered capacity in 2029.

For HL 13 & 14, a return on the CWIP already incurred would begin as soon as the

Commission issues a final order in this proceeding. Then, once the HL 13 & 14 units are

placed in service (scheduled for the end of 2029), the revenue requirement would continue

to be recovered through the GCR until included in base rates. Please see the testimony of

Company witness Cash regarding the proposed GCR rider tariff language. 4

Q. Based on the cost recovery requested by OG&E in this case, have you calculated the

A. Yes. Chart 1 below shows the total Company and Oklahoma jurisdictional revenue

requirements, and the resulting customer impact. Lines 1-2 represent capacity payments

and the return requirement for the associated CPAs and Line 3 represents the revenue

requirement for HL 13 & 14. Years 2026 through 2029 represent the return requirement

on CWIP for HL 13 & 14, until the plant goes into service at the end of 2029 at which time

a full revenue requirement begins.

Q. Please explain how the customer impact was calculated.

A. To calculate the customer impact, the Company calculated 6 years of revenue requirement

associated with the resource costs as shown in Chart 1 above. To arrive at the average

residential cost per month, the revenue requirement was split using a production demand

allocator approved in OG&E's last rate case, Case No. PUD202300087. Applying the

average residential customer usage, the monthly bill impact is shown in Chart 1, Line 6

above.

Q. Did you evaluate the difference in customer impact between utilizing AFUDC

A. Yes. My customer impact calculation above includes CWIP recovery as requested in this

case. As discussed by OG&E witness Walworth, when analyzing the impact of AFUDC

over the life of HL 13 & 14, CWIP recovery produces approximately $190.5 million in

customer savings compared to using AFUDC recovery. Meaning, the approval of CWIP

recovery in this case related to HL 13& 14 significantly reduces overall costs to customers. 8

Laws, the total kWh sales for the Oklahoma jurisdiction could increase significantly. When

additional kWh sales are realized, costs are spread across more kWh, thereby reducing the

cost per kWh for all customers, including residential customers. To put it simply, as more

kWh are added to a particular class due to the addition of a very large customer to that

class, the cost allocators are reduced for other customer classes. Therefore, the potential

addition of large load customers can benefit all customers on the system, and this impact

would be realized in future general rate case proceedings when new large loads are factored

into the cost of service. 20

A. Yes.

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.