Commissioner has pointed questions for ONG

Oklahoma Corporation Commissioner Bob Anthony contends that if a public utility cannot properly and adequately justify its fuel costs, it should not be eligible for full recovery from ratepayers.

Yet that belief and Anthony’s questions were apparently ignored last week when an Administrative Law Judge held a prudency hearing for Oklahoma Natural Gas and its fuel procurement processes and costs.

The Commissioner filed a list of at least 6 questions to be asked during the hearing, but neither the Assistant Attorney General present at the hearing nor a representative of the Commission’s Public Utilities Division demanded answers of ONG.

The questions?

1. What preparations did the utility make to prepare for the February 2021 Winter Storm that would mitigate potential costs to customers?
2.  Did the utility question any of the historically high fuel and/or power prices it paid during the storm? Was any attempt made to investigate their legitimacy or the possibility that the prices were the result of price-gouging, fraud or market manipulation?
3.  To what extent were any 2021 fuel costs provided under contracts or by suppliers who did not fulfill their pre-existing contractual obligations during the February 2021 Winter Storm? Did the utility investigate or contest any possible breaches of contract before contract performance may have resumed? To what extent does the utility continue doing business with suppliers who perhaps engaged in fraud, price-gouging or market manipulation during the Winter Storm?
4. Must multi-year fuel or purchased power contracts, previously deemed “reasonable” and “prudent” necessarily still be considered to yield prudent and legitimate fuel costs? Should declaration of force majeure in February 2021 call into question the prudency of certain contracts going forward?
5. Under what authority did the utility “normalize” and charge to ratepayers under the fuel adjustment clause mechanism and methodology some “extreme purchase costs” from the February 2021 Winter Storm, as defined by the Regulated Utility Consumer Protection Act? Why does the utility even believe it was proper to collect those “extraordinary” or “extreme” costs from customers immediately instead of “securitize” them in total under the Securitization Act? How and by whom was the procedure to determine the “normalized” amounts authorized?
6. What was the total amount and total cost of fuel purchased by the utility for the period beginning February 7, 2021 and ending February 21, 2021, that was “normalized” (collected through the fuel adjustment clause rather than being securitized)? Were the contracts for these purchases reviewed by the Public Utility Division for prudency? What did the review entail? What steps were taken to ensure that double-dipping (collecting the same costs under “normalization” and “securitization”) has not and will not occur?

The absence of answers raises the specter that ratepayers might have been “steamrolled in absentia,” according to some observers. The nature of the questions points to Commissioner Anthony’s belief, one noted publicly on more than one occasion, that some Oklahoma utilities were guilty of “poor decision-making before and during the storm,” a similar charge also made by AARP.