An Opinion by Corporation Commissioner Bob Anthony
In just two weeks of February 2021, Oklahoma’s largest public utilities incurred some $2.8 billion in fuel and purchased power costs (compared to $1.3 billion for all of 2020). Then lawmakers and two Oklahoma Corporation Commissioners allowed those utilities to tack on another $2+ billion of financing (aka “securitization”) expenses by issuing pricey ratepayer-backed bonds with terms as long as 28 years.
2021’s Winter Storm “Uri” is now costing Oklahoma customers of OG&E, ONG, PSO and Centerpoint/Summit more than $5 billion. In my opinion, it is the worst financial abuse of Oklahoma ratepayers in more than thirty years, and the public has a right to know the truth about it.
In the 1.5 years since the Winter Storm bonds were issued, the Oklahoma Corporation Commission itself has never bothered to report the total price tag of the bond sales – apparently hiding the fact that they cost $1 billion more than the estimates. So much for transparency, let alone the promised “savings.”
There have also been no comprehensive, independent audits of the Winter Storm bonds or their estimated $3.3 million in annual “ongoing” costs, despite the statutory requirements.
In September, the OCC sent a one-page so-called “audit” of ONG’s $1.3 billion bonds to the governor and legislative leaders. I blasted it as “ludicrous,” “pitiful,” “farcically inadequate,” and “another attempt at whitewash and cover-up.” In November’s PSO rate case, the OCC didn’t even bother to produce a one-pager for PSO’s almost-$700 million of Winter Storm bonds. So much for compliance with the law.
Attorney General Gentner Drummond has said he is investigating the 2021 Winter Storm, but what exactly he is investigating remains unclear. If he is only going after out-of-state natural gas “market manipulators” in the initial $2.8 billion of Winter Storm “Uri” fuel costs and ignoring the unnecessary $2+ billion of additional securitization financing costs, he is leaving a lot of the ratepayers’ money on the table.
In November, the A.G.’s office subpoenaed the Corporation Commission, seeking “all internal and external communications relating to Winter Storm Uri.” But when the OCC’s response strategically excluded numerous people “who were involved, directly or indirectly, with Winter Storm Uri cost recovery” beyond any shadow of a doubt, the A.G.’s office seemingly raised no objection.
Immediately after the bonds were issued, in a 74-page filing in September 2022, I described dozens of potentially-unlawful problems with the $2-billion Winter Storm bond deals, including the apparent rigging of state contracts. I also described mysterious alterations made to the wording in OG&E and PSO’s bond financing orders that, by themselves, probably cost ratepayers hundreds of millions of dollars. How the Attorney General will find out specifically who falsified the language in the financing orders and hold them accountable without examining all the communications of everyone at the OCC involved with writing those orders remains to be seen.
Among those hundreds of millions of dollars in additional costs borne by ratepayers as a result of the deceitful wording changes are millions of dollars of annual “ongoing servicer fees” now being paid to the utilities for decades longer. The public deserves to know (after years of denials), “Are the utilities profiting on their Winter Storm fuel costs passed through to customers?” Without independent audits to determine the actual amounts of those costs, we may never know for sure.
I have written ad nauseum about the ongoing obstruction of my constitutionally-authorized attempts to find and share the facts about all of this with the ratepayers who are paying for it. State government emails, communications with the utility companies, and documents related to bond expenses that might shine a light on the issues above continue to be unlawfully withheld from me. As a result, even information as basic as the total cost of the bonds to customers, the actual amount of the annual ongoing costs, and many key specifics about “who was paid how much for what” remain indefensibly hidden from public view.
What’s more, despite my multiple filings detailing millions in cost discrepancies and apparent overpayments to Wall Street banks and others, no one has produced the statutorily-required bond audits that might expose more wrongdoing and allow all the funds fleeced from Oklahoma ratepayers to be identified and recovered.
At the very least, don’t ratepayers have a right to know how much all this is costing them and who is responsible? Or are we going to wait thirty years and tell their grandchildren?