Capitol Connections: The 1-megawatt exception—Who serves large loads?

When Oklahoma lawmakers passed the Retail Electric Supplier Certified Territory Act in 1971, the goal was to bring order and reliability to a patchwork electric system by assigning exclusive service territories. Rural electric cooperatives would serve their members. Investor-owned utilities would serve their customers. Lines wouldn’t be duplicated unnecessarily. Disputes would be minimized.

But included in that law are exceptions, the “1-megawatt exception,” that continues to generate courtroom debate 50 years later.

At its core, the rule allows an electric utility, under certain conditions, to extend its service into a rural electric cooperative’s territory if the facility is located inside a rural electric cooperative’s certified territory. This exception was designed to better ensure service in certain areas near the edges of certified territory.

In practice, it has also created tension.

Much of the friction stems from how to interpret key phrases in the statute, including what qualifies as “connected load” and what it means for a utility to “extend” service into another supplier’s territory.

For Oklahoma’s electric cooperatives, the stakes are significant.

Co-ops are not-for-profit, member-owned utilities. Rates are set to cover the full cost of serving their entire membership. Large commercial or industrial accounts can help stabilize rates for all members by contributing substantial revenue to support fixed infrastructure costs.

From the cooperative perspective, “cherry-picking” loads raises concerns about long-term fairness and system planning. For co-ops, the conversation is not just about winning or losing individual cases. Co-ops argue that the certified territory framework was intended to prevent wasteful duplication of facilities and to ensure every Oklahoman has safe, affordable and reliable power.

Key Issues Update:

The 1-megawatt rule at a glance:

• Part of Oklahoma’s Retail Electric Supplier Certified Territory Act (1971)

• May allow a new facility to extend its services even within another supplier’s certified territory

Co-op position:

Oklahoma’s electric cooperatives support economic development and reliable service for all consumers. However, co-ops believe the certified territory framework remains essential to avoid costly duplication of electric infrastructure, public convenience and necessity. Policies should ensure that rural members are not disproportionately burdened by the missed opportunity or loss of large-load accounts. Any application of the 1-megawatt exception should preserve fairness, system reliability and long-term rate stability for all cooperative members.