Oklahoma Corporation Commissioners could decide Monday whether to grant a request by Public Service Company of Oklahoma to securitize nearly $732.5 million in costs related to the February 2021 winter storm that hit the state.
The item, listed as CAUSE NO. PUD 202100076 is the only issue to be considered by commissioners in their 1:30 p.m. regular meeting. PSO included among its qualified costs $57.1 million in carrying charges.
Shawnna Jones, Staff Regulatory Consultant for American Electric Power Service Corporation, PSO’s parent company testified the proposal to securitize the firm’s costs associated with the 2021 winter storm is “in the best interests of customers.”
She stated that approval of PSO’s request for its proposed rider rates would be effective May 2022 and the company supported a 20-year plan rather than 30 years.
The bill impact on an average residential customer using 1,100 kWh is estimated to be an additional $4.02 a month. If traditional utility financing of debt and equity is allowed, the cost would be $6.03 a month.
William H. Thompson, Director of Treasury Operations at American Electric Power testified the principal amount of the securitization bonds would be $732,525,214. He explained it included fuel and purchase power-related system restoration costs of $667,641,837, other qualified costs estimated at $7,800,000 and the carrying charges of $57,083,377.
In order to pay for the costs at the time of the storm, PSO drew $100 million on its revolving credit facility and AEP entered into a $500 million, 364-day term loan and borrowed the full amount.
Testimony from other PSO and AEP witnesses revealed that during the February storm event, 12% of PSO’s total generating capacity was unavailable due to a maintenance outage while another 45% of the company’s generating capacity was not available due to forced outages.
The company explained that approximately 76% of the forced outages were due to gas restrictions on PSO.