The effort to sell nearly $1 billion in ratepayer backed bonds to be used in covering OGE Energy Corp.’s February 2021 storm costs was launched this week.
OGE Energy Corp, in the filing of a Form 8-K with the U.S. Securities and Exchange Commission indicated the Oklahoma Development Finance Authority began offering the bonds to potential buyers. The filing stated that the ODFA prepared a Preliminary Official Statement for distribution to potential buyers. It also discloses certain information about OG&E regarding its customers and use of electricity.
The filing stated the Bonds do not constitute a debt, liability or other legal obligation of OG&E, OGE Energy or any of their affiliates.
The sale of the bonds will affect the utility’s 882,000 customers in Oklahoma and western Arkansas. The filing revealed that 35.41% of the customers are residential, 24.28% are commercial, 12.62% are industrial, 16.73% are oilfield users and 10.96% are public authorities.
The Oklahoma Supreme Court issued a ruling in May that upheld the constitutionality of the use of the ODFA and the ratepayer backed bonds in raising OG&E rates to pay for costs associated with Winter Storm Uri. The ruling applied to $739 million in bonds issued by the ODFA.
The ruling means customers will be charged another $2.12 every month over the next 28 years. In addition to the $739 million in bonds, the customers will also end up paying $307 million in interest.
Some consumers filed legal challenges to the use of the bonds that were allowed under a year-old law passed by the state legislature within months of the disastrous storm.