In less than 10 minutes, Oklahoma Corporation Commissioners on Thursday approved the requests of two more utilities to use a special financing order to spread $800 million in 2021 winter storm costs out over an extended period of time and increase monthly costs to consumers for years to come.
No discussions were held on the requests by CenterPoint Energy and Public Service Company. The votes on each was 2-1 with Commissioners Dana Murphy and Todd Hiett in support and Commissioner Bob Anthony against the requests.
The first request covered the $88 million in storm costs by CenterPoint Energy. The second covered the nearly $690 million in costs requested by Public Service Company of Oklahoma.
The votes approved a Finance Order for securitization of the costs from Winter Storm Uri that hit the state a year ago and resulted in rolling blackouts caused largely by cold weather and shutdowns of the transportation of natural gas to power producing utilities.
The storm resulted in the state legislature’s approval of the Regulated Utility Consumer Protection Act which allows the use of ratepayer-backed bonds sold through the Oklahoma Development Finance Authority to extend the consumer costs.
CenterPoint Energy’s request covered $87,678,270 to be financed over a 15-year period. PSO’s request included $688 million over a 20-year amortization.
As Commissioners voted 2-1 on the PSO request, Commissioner Anthony stated he would vote “no” and include a dissenting statement at a later time for the record. It prompted Commissioner Hiett to respond by stating he “might” include a supporting statement for the record as well.
Neither Commissioner Murphy nor Hiett offered any public comments in support of the financial orders, other than to vote “aye” or “yes.”
The Act that allows the financial orders remains under constitutional challenge before the Oklahoma Supreme Court. Justices have been asked by opponents to declare the 2021 Act unconstitutional.
Commissioner Anthony’s dissent (Anthony Dissent re Bonds) was made public later in the day in which he warned “Unlawful, unwise, unjust and financially catastrophic potential consequences of the Corporation Commission majority’s fundamentally flawed financing orders imposing onerous, overpriced, nonconsensual debt on Oklahoma’s residential ratepayers are foretold…”
He said the vote in support of the financing order amounted to Corporation Commissioners “writing blank checks on the accounts of Oklahoma ratepayers” which was “nothing short of malfeasance.”
He went on to contend the financing order is a violation of Article X, 25 of the Oklahoma Constitution by contracting non-“self-liquidating” public debt without a vote of the people. The Commissioner added it amounted to an amendment of the state constitution without a vote of the people.
“These bonds are like the salesman who sold you a car calling you up years later and saying you actually owe 40% more – BUT, he says, he’s “saving” you money because he’s not charging you the price of a new luxury car,” wrote Anthony in his dissenting vote.
Anthony also charged it amounted to “retroactively violating” the Filed Rate doctrine and ratepayers’ constitutional contract rights under their tariff agreements with utilities. He said in essence, it now requires customers to pay for gas and electricity they did not consume in addition to bond-financing costs that are not part of the “actual cost of fuel or gas purchased.”
The Commission’s approval of the financing order brought criticism from AARP Oklahoma State Director Sean Voskuhl who likened it to a “bad version of Groundhog Day” that shifts more winter storm costs to residential customers and older Oklahomans.
“PSO just received a $5 a month rate increase and now is piling on another $4 monthly charge for the next 20 years without once being asked to tighten their belt and pitch in to help their customers. It’s just plain wrong,” said Voskuhl.
He again urged Attorney General John O’Connor to pursue “those who price gouged millions of Oklahomans during the February 2021 winter weather event and hold them accountable.”
