In a meeting that lasted fewer than 5 minutes, Oklahoma Corporation Commissioners on Tuesday approved the securitization plan of Oklahoma Natural Gas to pay for its millions of dollars in February 2021 winter storm costs.
The vote was 2-1 in support of the plan which will allow the Oklahoma Finance Development Authority to sell bonds to help finance ONG’s efforts. ONG estimated storm costs at $1.3 billion.
Commissioner Todd Hiett initiated the motion for approval. He and Commission chairwoman Dana Murphy supported the plan while Commissioner Bob Anthony voted against it.
Murphy said it means the monthly impact to ratepayers will be less than it otherwise would have been.
“It’s estimated that the natural gas costs owed would have cost an average residential consumer $15.32 per month without securitization. Securitization allows the cost to be spread out over up to 25 years, dropping the monthly payment to an estimated $7.82 for the majority of ONG customers.”
The average customer of ONG will pay another $7.80 a month for the next 25 years.
While Commissioners approved the rate plan, they did not okay a proposal to impose a fee on ONG customers who might terminate their natural gas contract with the utility.
Commissioner Anthony, in a statement prepared for the meeting and released afterward stated, “In my opinion, these stipulated Ratepayer-Backed Bond proposals are ill-conceived, unconstitutional, and bad for residential ratepayers.”
The commissioner contended in his statement that the Winter Storm 2021 debt package by ONG leaves fundamental questions unanswered and commits Oklahoma ratepayers to pay unlimited, uncapped financing costs.
He pointed out that the order approved by the commission allows for the interest rate on the bonds could range from 2.35% up to 6.0% and ONG calculated it could mean $415 million in interest on top of the $1.357 billion principal amount.
He believes the bonds will run “afoul” of the Oklahoma Constitution and the securitization plan is built on “murky” Settlement Agreements designed to prevent a transparent examination of utility management decisions and fuel service purchases.
Another opponent of the securitization plans was in the courtroom prepared to offer a statement. But the meeting was so brief and no discussion was allowed that former State Rep. Mike Reynolds did not have an opportunity to speak. He is one of several who filed formal protests in the OG&E ratepayer bond case that will be handled Wednesday by a referee of the Oklahoma Supreme Court.
The commission vote drew a response from AARP Oklahoma which had opposed the original settlement agreement.
“While the removal of the exit fee is a positive step AARP Oklahoma is disappointed in yet another ruling by a majority of the Corporation Commissioners that does not include any shared sacrifice from the utility companies. While the assessed annual fees represent only a fraction of utility companies’ profits, it can be a substantial burden to older Oklahomans, especially those with fixed incomes,” stated State Director Sean Voskuhl.
But Voskuhl contends there should be criminal action.
“We are urging action by the Attorney General’s office to bring those who bilked Oklahomans out of more than $6 billion to justice. In light of the pending corporation commission orders, Oklahoma’s seniors and small businesses need relief from the harm brought about by illegal price gouging.”