Oklahoma Municipal League joins lawsuit against Corporation Commission

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Oklahoma City’s legal challenge of the Oklahoma Corporation Commission decision that allowed OG&E not to collect franchise fees on its winter storm securitization charges has been joined by the Oklahoma Municipal League.

The OML filed in late October a challenge to the Corporation Commission’s decision stating that the Commission acted outside of its jurisdiction “because a municipality has absolute control in establishing and controlling a franchise under the Oklahoma Constitution and state statutes.”

The League further charged the Commission “incorrectly extrapolated the general supervision power it has in regulating public utilities.” It also contended that the Commissioners “interfered with hundreds of citizen-approved franchise contracts between municipalities and utilities.”

Just as Oklahoma City argued in its original lawsuit that the decision against franchise tax collections was unconstitutional, the Oklahoma Municipal League made the same claim.

In response, the Oklahoma Corporation Commission contends it “acted within its limited authority.” It also argued that the Commission is not the place or “proper forum” to decide whether municipalities are owed Franchise-Related Payments.

The Corporation Commission also contends that under the February 2021 Regulated Utility Consumer Protection Act, the one that resulted in billons of dollars in bonds to be financed by consumers for up to 28 years, the utilities are prohibited from recovering the franchise-related payment expenses.

Two private individuals who also challenged the constitutionality of the Regulated Utility Consumer Protection Act before the State Supreme Court in January 2022, are also attempting to join Oklahoma City’s lawsuit.

They are Porter Davis and John Case. Both recently filed amicus curiae briefs or “friend of the court” filings. However Chief Justice Richard Darby ruled against them, saying their filings were incorrect.

Oklahoma City and the Oklahoma Municipal League contend that they are losing huge sums of money through the non-collection of franchise fees. The fees are payments by utilities for use of city easements and rights of way.