Oklahoma Attorney General John O’Connor is being accused of neglect of duty for not standing up for ratepayers in the growing Supreme Court legal case involving OG&E’s nearly $800 million storm recovery effort involving ratepayer backed bonds.
Former legislator Porter Davis, who previously had filed a protest with the Supreme Court after the Oklahoma Development Finance Authority filed a request for court approval of the bonds, responded to O’Connor’s move last week not to intervene in the case.
In his filing on Friday, Davis charged that O’Connor had a responsibility to take part in the case because the state is an interested party and accused him of being nothing more than a “spectator” in the case. He also accused the Attorney General of “surreptitiously pushing the agenda” of the legislature after it passed a securitization act in 2021 following the February winter storm that hit utilities with billions of dollars in costs.
At the same time, Davis raises issues that the state itself is a customer of OG&E. While he did not use the term specifically, his filing bordered on the claim that perhaps there is a conflict of interest for the Supreme Court justices to consider the bond case when they themselves are customers of the utility in question. At least one justice recused herself from the case because she has investments in a firm that contracts with OG&E for its program of collecting payments.
When the Corporation Commission considered OG&E’s financing order in August 2021, O’Connor came out in support of the securitization process that had been created by the state legislature. But by fall, O’Connor chose not to take part in the settlement agreement which eventually won support of the Commission on a 2-1 vote.
Davis pointed to another former legislator’s protest claim that the storm costs presented by OG&E were not “investigated” as required by the Corporation Commission’s fuel adjustment clause rules and O’Connor stated in February 2022 “the investigation is still under way” by his office.
Davis also argued the state of Oklahoma itself is a ratepayer in the matter because its agencies and bureaucracy use a lot of electricity from the utilities whose 2021 winter storm costs “are the subject of these Ratepayer-Backed bonds.”
“By definition then, validation by this Court of these OG&E Ratepayer-backed Bonds means the State of Oklahoma will be forced into debt along with the rest of OG&E’s customers for 28-years without its consent,” stated his filing. He further charged that “without a vote of the people” authorizing the bonds, “it appears this Court would itself be violating the Article X regulations about ‘public indebtedness’ in the Oklahoma Constitution.”
Davis pointed out that prior to the 2021 Winter Storm that hit utilities with high costs, OG&E’s carrying cost under the fuel adjustment clause of its Tariff, amounted to 0.12% interest while under the Oklahoma Development Finance Authority’s proposed bonds, the interest rate could be up to 6%. He called such a retroactive carrying-cost over charge “unconstitutional.”
Davis argued thus, OG&E will profit from the carrying debt and “will benefit handsomely from the debt no longer appearing on its balance sheet.” He contended that under the ODFA’s request, which has to be approved by the Supreme Court, OG&E will receive $10,640,000 for its $380,000 annual servicing fee over the 28-year payback period on the ratepayer backed bonds.
The former Representative from House District 85 continued that one can only wonder why the Attorney General does not deem it necessary to give his legal opinion on the issue as well as others arising from the proposed ratepayer-backed bonds. Davis said instead protesters like himself are carrying out the Attorney General’s duties when O’Connor is not.
“What Oklahoma citizens need right now are public officials who will do their duty, protect the public interest and defend the Constitution. In the absence of the Corporation Commission and the Attorney General, it appears it is up to the Oklahoma Supreme Court,” concluded his protest.
Click below to view the Porter Davis filing