Surprising news that ratepayer-backed bonds sought to cover Oklahoma Gas and Electric February 2021 winter storm costs were sold last week at a much higher interest rate than originally predicted means a higher total cost to consumers.
As OK Energy Today reported earlier, the anticipated monthly cost to OG&E customers of $2.12 will soar to $3.34 more a month.
Michael L. Velez, Attorney Section Supervisor at the Oklahoma Corporation Commission recently wrote that the total amount of principal and interest will increase by nearly $400,000,000 on the bond package.
When the Oklahoma Supreme Court in May approved the constitutionality of the Regulated Utility Consumer Protection Act, an act used to finance bond payments to cover the extreme winter storm costs, the ruling showed the total amount of principal and interest would have been $1,067,259,833. The figure was based on a financial order approved by Oklahoma Corporation Commissioners which showed an expected 2.58% rate to cover the 28-year amortization to cover the $760,000,000 in principal.
As stated in the court ruling, the total interest was anticipated to be $307,259,833 and the monthly impact to OGE customers was to be $2.12.
However, the new figures provided by Velez indicated the weighted average interest rate was now 4.947% on the updated principal of $761,654,000. Interest accrued will be $638,505,579 and the total principal and interest will total $1,400,159,579.
That’s where the new additional monthly fee to OGE customers of $3.34 originates.