PSO Demand Charges Are Nearly Doubling
- Brian Webster
- Mar 3
- 3 min read
In January 2026, Public Service Company of Oklahoma filed its latest rate case (PUD 2025-000075) requesting $597 million in new base rate revenue, resulting in a near-doubling of LPL demand charges and up to a 31% overall LPL bill increase.
PSO’s Estimated Total Bill Impact By Customer Class
Source: Witness Miller Direct Testimony (PUD2025-000075, Entry 26), JAM Figure 2
A 24% increase for LPL-3 is significant, but it's a class average. What your specific facility will experience depends heavily on how you operate. For some LPL customers, the increase will be closer to 31%. For others, it may be as low as 15%.
This article breaks down the mechanics of what's changing, shows what three different 20-MW facilities would actually pay, and explains why the same rate case hits different operations so differently.
Demand Charges Are Nearly Doubling
For LPL-246 (Primary service), three line items tell a striking story:
Source: Redlined Tariff Sheet 20-2 (Entry 30); WP M-4.1 Proof of Revenue (Entry 41)
The energy charge barely moves while the demand charges nearly double.
This is a rate design choice: PSO's Proof of Revenue (W/P M-4.1) shows that 99.98% of the LPL-3 base rate increase was placed on demand charges. The energy charge accounts for just $12,773 of the $58.9 million increase. The same pattern holds across all three LPL service levels.
The Rate Increase Disproportionately Harms Non-24/7 Facilities
Facilities that don’t run around the clock can see more than DOUBLE the rate increase compared to 24/7 facilities.
How can this be true?
(1) Demand charges represent a higher proportion of PSO bills for non-24/7 facilities.
(2) We’re facing a rate increase that places nearly all of the increase into demand charges.
As a result, non-24/7 facilities face a significant bill increase threat.
To make things even worse, PSO is proposing to convert some kWh usage charges to demand charges:
Two significant riders (DRR, RRR) are moving to base rates. For LPL-246 facilities, these not only carried demand charges, but also kWh usage charges:
DRR - $0.003757 per kWh Usage & $1.906625 per kW of Demand
RRR - $0.002407 per kWh Usage & $1.221578 per kW of Demand
These kWh usage charges might not look like much, but they combine to represent more than double the base usage rate ($0.003051/kWh) on the LPL-246 bill.
With these riders moving to base rates, one would expect usage AND demand charges to transfer over.
Not so fast.
The demand charges are moving to base demand, but the kWh usage charges are being converted to demand charges.
Three 20-MW Facilities: What the Numbers Actually Look Like
To see how this plays out in practice, consider three hypothetical facilities: all on LPL-246, all with 20 MW of peak demand, but with different operating schedules:
The demand charges increase is identical across all three at +$211,000 per month, because they all peak at 20 MW.
24/7 facilities enjoy a healthy amount of cost mitigation via the decreased usage charges, but this cost mitigation largely disappears for non-24/7 facilities which, by their nature, consume fewer kWh during off hours.
The result: Compared to 24/7 facilities, non-24/7 facilities can see more than DOUBLE the rate increase.
What’s Next and What You Can Do Now
Two big questions remain: How much of this proposed increase will survive the regulatory process? And when exactly will it hit your bill? Based on the current case schedule, we should have clarity on both by the end of June, with new rates likely hitting bills in July 2026.
But here’s what you don’t have to wait for: understanding your facility’s exposure.
The disparity in this article, 15% vs. 31%, comes down to one thing: how your demand profile interacts with the new rate design.
That’s knowable today.
Your facility’s 15-minute interval data reveals exactly where you sit on that spectrum and whether peak-shaving or other demand reduction strategies can materially change the math.
We’ll continue monitoring the case and sharing what we find. In the meantime, if you want to know what this rate case means for your facility specifically -- reach out.
Brian Webster - Sturgeon Energy CEO & Engineer
918-633-6863
Sturgeon Energy is an energy services firm based in Tulsa Oklahoma aimed at reducing industrial PSO bills via peak-shaving systems and onsite generation.
4-year payback periods are common for peak-shaving systems.
Your facility's 15-minute interval data (a simple PSO download) dictates the payback period for peak-shaving projects, we just need to plug your facility's interval data into the model and review the highest ROI system configurations.
Upload a recent bill or AMI export
Speak directly with an engineer about your load profile and options.