Saddled with an estimated $1 billion in February winter storm costs, mostly due to the cost of natural gas needed for emergency generation of electricity, Oklahoma Gas and Electric notified state regulators this week of its intention to seek relief through a new Regulated Utility Consumer Protection Act.
In a filing (Application for Securitization) made with the Oklahoma Corporation Commission, OGE stated it wanted to avoid use of the Fuel Cost Adjustment process that the company said would “create a burden too excessive for customers.” Instead, the corporation now wants to take advantage of the new law that allows the use of bonds “so that customers can pay their utility bills at a lower amount over a longer period.”
OGE is asking authority to use the “securitization process” which it contends would demonstrate customer savings as compared to the traditional utility financing. As explained in the filing, OGE said such a process allows taking an additional two years after the issuance of a Corporation Commission order.
OGE stated that it would continue to finance the $1 billion with “both debt and equity for that period of time.” It also asked for “carrying costs” at an appropriate time.
One major question for consumers is what will be the cost to them in the use of the securitization and bonding process? Will consumers be faced with an interest charge and how much? Still to be resolved is whether OGE will be able to pass along its costs of the bond financing to the consumers? Who will determine such answers and who will be responsible for such negotiations?
According to the act, it authorized the Corporation Commission to determine costs eligible under act.
The Regulated Utility Consumer Protection Act (SB1050) was approved by the legislature and sent to Gov. Kevin Stitt last week. He signed the measure into law on Friday.