Even as an Oklahoma Supreme Court referee took under advisement the legal challenges to the financing method used by Oklahoma Gas & Electric for nearly $800 million in February 2021 winter storm costs, former legislator Mike Reynolds added to his protest in the case.
He doubled down on OG&E, the Oklahoma Development Finance Authority and the Oklahoma Corporation Commission stating the OCC did follow its own rules.
This time, in a filing on Thursday, Reynolds accused an attorney for the Oklahoma Development Finance Authority of making false, misleading and contradictory statements in his defense of the ratepayer backed bonds that will be used to extend customers’ costs over a 25-year period. He also claimed in his second protest that Corporation Commission chairwoman Dana Murphy was in conflict over what she stated in a TV interview on Wednesday, January 26, 2022.
Reynolds claimed in his filing that ODFA attorney, Jered T. Davidson “repeatedly mischaracterized the amount that would be owed by the average OG&E customer if securitization were not used.” He quoted Davidson’s claim made during the Wednesday morning supreme court hearing that without securitization, “It could have potentially added thousands of dollars each month to a customer’s utility bill over the court of a year.”
But Reynolds noted that in the Oklahoma Corporation Commission’s press release of Dec. 16, 2021 in which the OG&E Financing Order was announced, the OCC stated the “impact to the Average Residential Customer” would be a one-time payment of $454.14 if the order were not approved.
Reynolds also challenged the attorney’s claims to the Supreme Court referee that the process by which the prudence of OG&E’s extraordinary Winter storm 2021 fuel and purchase power costs were evaluated by the OCC was “just like” the OCC’s rules for the monitoring of Fuel Adjustment Clauses.
But the former South Oklahoma City State Representative charged in his protest filing that indeed that the Corporation Commission’s own Order Granting Motion to Establish Regulatory Asset did not follow the rules but rather circumvented the Fuel Adjustment Clause rules.
“Consequently, the OCC’s Public Utility Division did not follow the OCC’s Rules for the Monitoring of Fuel Adjustment Clauses when it “evaluated” the “prudency” of these costs as repeatedly described by Mr. Davidson,” wrote Reynolds.
He went on to charge that proper notice was not given and thus no other person objecting to the operation of a utility’s fuel, purchased gas, or purchased power adjustment clause “was afforded the opportunity to file with the commission a complaint in writing setting forth the reasons for such objection.”
As for Commission chair Dana Murphy, the former legislator pointed to an interview with KOCO Channel 5 in which she “collectively and conflictingly declared that the OCC’s ‘same process we’ve followed for years’ to review the fuel costs was followed in the case of the Winter Storm 2021 costs’ while at the time time denying it was even the OCC’s responsibility to undertake such an investigation of the true origins or actual prudence of those costs.
He stated she apparently does not believe the state law in which the OCC is charged with determining that amounts incurred would otherwise be recoverable from customers as “fair, just and reasonable expenses and prudently incurred.”
The final challenge by Reynolds focused on an obligatory debt by the state. He contended that the ODFA as owner of the securitization property indeed would be “guaranteeing the payment of the debt on behalf of OG&E.”
“For an admitted “agency and instrumentality of the state” to be the owner of a securitization property and issue bonds obligating it to pay hundreds of millions of dollars to bond-holders makes these bonds clearly “debts contracted by…this State.”