Make it $3 billion in ratepayer backed bonds a state agency wants the Oklahoma Supreme Court to approve to cover 2021 February winter storm costs experienced by four utilities.
Filings were made March 16 by the Oklahoma Development Finance Authority to cover storm costs experienced by Public Service Company of Oklahoma, Oklahoma Natural Gas and Summit Oklahoma. Their securitization plans were previously approved by the Oklahoma Corporation Commission and as part of the legal steps required under the February 2021 Regulated Utility Consumer Protection Act, final approval for the ratepayer backed bonds must come from the Supreme Court.
ONG’s request is the largest at $1,450,000,000 followed by PSO at $725,000,000 and Summit at $95,000,000. Combined with the $800,000,000 in bonding approval sought by Oklahoma Gas and Electric in a filing made Dec. 22, 2021 and still under consideration by the Court, the total to be considered by the Supreme Court is $3,070,000,000.
The filings asked the Oklahoma Supreme Court to assume original jurisdiction and approve the bond packages.
In the case of ONG’s request covering $1.4 billion, the bonds would cover a planned 25-year period but allow a maximum 30-year period. However, the filing by the Development Finance Authority pointed out that “final details of the Bonds including interest rates, par amount, maturity and redemption provisions will be determined following approval of the Court.”
ONG won a Financing Order at the Corporation Commission after citing extreme purchase costs incurred during the winter storm of $1,284,101,405. But the inclusion of financing costs and upfront securitization costs brought the total to $1,357,300,000. The ODFA stated in the Supreme Court filing that ONG estimated the bonds will save its customers $700 million over the term of the bonds.
In the request for PSO’s ratepayer backed bonds, the Development Finance Authority asked the court to “give this matter precedence over other business of the Court” and approve it “as expeditiously as possible.”
Summit Utilities, which bought out CenterPoint Energy in early 2022, put in a request for $95,000,000 that included a 15-year bond period to pay for $76,090,134 in extreme storm costs and final costs, including securitization expenses, of $87,678,270.
While the original ratepayer bond request by OGE resulted in protests from the utility’s customers, the ODFA in the filing for CenterPoint Energy took note of protester’s claims that the original Act is unconstitutional because it did not allow a vote of the people.
“Any future legislative action amending the provisions of the Securitization Law or the financing order, whether by acts of the State Legislature, the voters through referendum, or the OCC, to impair the pledge of the Securitization Property or the securitization charges would have disastrous effects on the security of the Bonds, potentially jeopardizing their ratings and willingness of investors to purchase future Bonds of the Authority or other State issuers,” stated the filing.
The Supreme Court has yet to set a date regarding any more possible arguments in the original OGE request. However, an additional protest was filed this past week by OGE customer Thomas S. Austin after State Attorney General John O’Connor chose not to become a further party in the bond securitization request.
Austin called O’Connor’s “Notice of Non-Intervention” to be “perplexing” and stated in his Supreme Court protest that “the Attorney General gets it Wrong again.”
O’Connor stated in his non-intervention filing the lower interest rates of securitization bonds will save customers significant money over a likely term around 20 years. Austin disagreed and said the attorney “should put away his crystal ball.”
Austin told the Court that the Oklahoma Municipal Power Authority, the Grand River Dam Authority and all of Oklahoma’s Electric Coopers “who have gone looking found better alternatives to deal with their February 2021 Winter Storm costs than the Oklahoma Development Finance Authority’s proposed Ratepayer-Backed Bonds.”
“Demonstrably bogus claims of “saving” money mean the February 2021 Regulated Utility Consumer Protection Act fails by its own terms,” stated Austin.
He urged the justices to take note of the fixed interest rate of 2.465% for 10 years secured by Canadian Valley Electric Coop this week in an order approved by state regulators.
“How many more reasonable alternative financing deals by electric coops and others will it take to invalidate the ODFA’s proposed ratepayer-backed bond schemes in the eyes of this Court?” he asked in his protest filing.
Click below to view Austin’s filing
file:///C:/Users/User/Downloads/1051911863-20220317-152048-%20(1).pdf
Click below for latest bond applications
ONG
https://www.oscn.net/dockets/GetCaseInformation.aspx?db=appellate&number=120274
PSO
https://www.oscn.net/dockets/GetCaseInformation.aspx?db=appellate&number=120275
Summit Oklahoma
https://www.oscn.net/dockets/GetCaseInformation.aspx?db=appellate&number=120276
