Supreme Court accepts OKC’s lawsuit against state regulators

Justice Richard Darby


Oklahoma City’s lawsuit challenging the Corporation Commission’s approval to let utilities decide if they’ll collect franchise fees as part of billions of dollars in securitization bonds has been formally accepted by the Oklahoma Supreme Court.

Chief Justice Richard Darby signed an order accepting the lawsuit that was filed earlier in the month. However, no hearing date has been scheduled for the lawsuit to be heard by the justices.

The suit is a challenge to the Commission’s recent 2-1 vote to let the utilities participating in the bond programs to decide if they will collect franchise taxes for municipalities.


“The Oklahoma Corporation Commission erred in determining that the February 2021 Regulated Utility Consumer Protection Act relieves utility companies, who are vendors in taxable transactions, from their statutory duty to collect municipal sales taxes from utility customers, who are consumers in such transactions,” argued Oklahoma City in its lawsuit.

Oklahoma City also charged the action by the state regulators was an “unconstitutional invasion of the exclusive right of electors residing in Oklahoma City to negotiate and approve franchise agreements…”

It will be the high court’s second round of lawsuits stemming from the bonds used by four utilities in extending their winter storm costs. The court previously upheld the new state law when some former legislators filed suits challenging the constitutionality of the bond program.