Oklahoma Gas & Electric bid-rigging alleged


TULSA, Okla., Sept. 29, 2000 (Tulsa World)—Two Oklahoma Corporation Commissioners accused Oklahoma Gas & Electric Co. on Thursday of rigging a competitive bidding process in favor of Enogex Inc., an OG&E subsidiary that supplies natural gas.

The contract in question involves natural gas shipments to six gas-fired power plants owned and operated by OG&E. Commissioners Bob Anthony and Denise Bode questioned whether the rules governing the bidding procedure ensured the contract would be awarded to the lowest bidder and result in the highest possible savings for consumers.

The controversy comes during the early stages of Oklahoma’s effort to deregulate the natural gas industry.

“We’re telling the ratepayers competitive bidding will save them money, but when the process is set up so only an affiliate of the company can win the contract, there is obviously a problem,” Anthony said.

Oklahoma City-based OG&E denied the claims, saying the bids were evaluated strictly under the rules established by Oklahoma regulators and that ratepayers were not harmed by the process.

“We followed the process that was in place at the time to the letter,” said OG&E spokesman Paul Renfrow. “Enogex was a contender and it won fair and square.”

Enogex, a large natural gas pipeline carrier, was the only company that submitted bids for all six OG&E gas-fired power plants, Renfrow said.

“If we had accepted any combination of the other bids, one plant is left unserved,” he said.

The commission delayed voting on the contract so Bode and Anthony could have more time to review it. Bode said the Corporation Commission’s credibility is at stake.

“We are not going to bless this competitive bidding process if it isn’t competitive,” Bode said. “I’m not going to sign anything that’s not going to produce competition.”

Commissioner Ed Apple disagreed and called for a vote on the matter.

“We are in the midst of a difficult transition from monopoly to competition,” Apple said. “We delude ourselves if we think we can get a level playing field instantly.”

Apple added that the delay could prevent ratepayers from receiving the first month of a more than $2 million annual rate savings.

“Not acting today means money lost,” Apple said.

But Anthony and Bode argued ratepayers will save more money once the problems in the bidding process are ironed out.

Earlier this year, similar allegations were levied against Oklahoma Natural Gas Co. by rival Enogex. The natural gas pipeline carrier claimed it was wrongly disqualified from the competitive bidding process ONG used to select transmission services for ONG customers. The business was awarded to ONEOK Gas Transmission Co., an ONG affiliate. The Corporation Commission, after investigating the claims, cleared ONG of any wrongdoing.

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© 2000, Tulsa World, Okla. Distributed by Knight Ridder/Tribune Business News.

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