Oklahoma Corporation Commissioner Bob Anthony continued his criticism this week of the ratepayer-backed bonds being used by Oklahoma Natural Gas to cover its February 2021 Winter Storm costs.
He also raised new allegations against the Oklahoma Development Finance Authority in issuing bonds for the utilities that used them to cover those costs.
In a second dissent filed by Anthony, he predicted more catastrophic financial harm is coming to ONG’s customers. Anthony stated ONG’s $1.28 billion debt used to acquire natural gas during the storm will end up costing ratepayers $2.25 billion over the 25-years of the bonds sold through the Oklahoma Development Finance Authority.
He called it an “ill-advised ‘securitization’ scheme defined by political back-scratching, regulatory negligence, special interest giveaways, reckless risk-taking, inept execution and a deplorable disregard for the best interest of Oklahoma ratepayers.”
In the dissent, Anthony claimed laws designed to protect consumers were violated, alleging the OCC and the ODFA were not required to follow Oklahoma’s basic Central Purchasing contracting rules when they hired an outside “financial advisor” to advise on the bond securitization applications.
“Astonishingly, the same firm was hired to work both ends of the deal!” wrote Anthony, stating that the financial advisor and counsel drafted the bond final financing orders which detailed how the bonds would be structured, marketed, issued and paid for.
“The same outside financial advisor was paid (by ratepayers) both to write the guidelines for the bond sale and then to follow them when it came time to sell the bonds. And what did those guidelines leave out? You guessed it – the ratepayer protections!”
“You’d be forgiven for thinking this sounds like Swadley’s special deal all over again –just a billion dollars worse!” he added.
Commissioner Anthony further charged that instead of saving money for customers, as Commission Chairman Todd Hiett stated in a letter to Gov. Kevin Stitt, the securitization for ONG’s storm costs will cost nearly half a billion dollars in extra financing.
“A lot of things are still murky, but one thing is now crystal clear: those wild, irresponsible claims of “savings” used to promote these bond schemes have turned into a horrible injustice for Oklahoma ratepayers,” charged Anthony in his filing.
He further pointed out that the 2.35% bond interest rate proclaimed by the two commissioners who approved the bond financing order for ONG came in at 4.714%.
Since OGE also was approved for the same kind of bond securitization program for its storm costs, Anthony went on to state that Oklahomans who are customers of OG&E and ONG will now ow more than $3,500 in total monthly payments for the ratepayer-backed bonds compared to their original average winter storm obligation of about $1.800.
“The sad truth is that no one should be surprised by these catastrophic results. They follow naturally from the fact that the Oklahoma Corporation Commission’s (OCC) open–ended bond financing orders amounted to blank checks written to the utilities for ratepayers to pay,” continued Anthony.
He also put the blame on Commissioners Dana Murphy and Hiett for approving the bonding in the first place and stated that the commission’s Public Utility Division did not follow the rules or state statutes governing purchased gas and fuel adjustment.
