Oklahoma Corporation Commissioners might consider a vote Thursday morning on the issue that hundreds of millions of dollars in local and state taxes won’t be collected because of the bond securitization used by ONG, OGE, PSO and Summit Utilities in covering their 2021 Winter Storm Uri costs.
The commission’s Public Utilities Division raised the issue in a filing late last month, proposing an order be approved prohibiting the utilities from billing customers for any franchise fees and/or municipal fees based upon securitized revenue. The bond securitization was part of the 2021 Regulated Utility Consumer Protection Act created by the legislature shortly after the winter storm that resulted in extreme storm costs by the utilities.
The franchise tax issue arose as the first bond sales, those by OG&E were carried out by the Oklahoma Development Finance Authority. It caught some organizations by surprise including towns and cities as well as the Oklahoma Municipal League. Leadership in some towns learned they might not be able to collect taxes on the bonds.
As the Attorney General’s office noted in its response to PUD order proposed before the Commission, one issue is whether a public utility may recover municipality franchise fees that include the bond repayment amounts in their calculation.
“More specifically, must the bond repayment amounts be excluded from those franchise fee calculations?” stated the AG’s filing in response to the order proposed by Commission representative Mark Argenbright in late July.
Argenbright’s proposal to be considered and possibly voted on Thursday would prohibit the utilities from billing the customers foe the fees based upon the securitized revenue.
The Corporation Commission meeting will begin at 9:30 am.
