With less than a month to serve in office because he is term-limited, Oklahoma Corporation Commissioner Bob Anthony is again reminding Gov. Kevin Stitt and elected legislative leaders that a one-page audit of one utility’s securitization bonds is not valid—it’s not legitimate.
Anthony has argued for the past few years that the Corporation Commission’s one-page showing of expenditures covered through bonds following the 2021 winter storm Uri does not meet audit standards. He stated so again in a Dec. 3 letter to the Governor and Senate President Pro Tempore Designee Lonnie Paxton and Speaker of the House Elect Kyle Hilbert.
“I regret to inform you that, in my opinion as a Corporation Commissioner, the OCC’s “PUD Audit pursuant to 74 O.S. § 9078” for Oklahoma Natural Gas provided to you on November 26,
2024 is nothing more than an admission of guilt by the Oklahoma Corporation Commission,” he began.
Anthony charged that the one-page audits presented by the Commission concerning the securitization bonds used by the utilities to cover their 2021 storm costs “do not actually comply with state law” and were fake because they do not comply with the Oklahoma Accountancy Act. He noted that former Oklahoma Accountancy Board President David Greenwell called out the OCC in a 41-page report in July for supplying the fake audits of the billions in the winter storm fuel and bond costs.
Anthony took his charges a step further by accusing Commission Chairman Kim David of being involved.
“In an attempt to dress up another bogus one-page “audit” of multi-billion-dollar 2021 Winter Storm bonds, this time the OCC’s new chairman, Kim David, attached 38 additional pages she clearly did not expect anyone to read.”
Anthony said 9 of the pages were a 2023 attestation by accounting firm PricewaterhouseCoopers saying that ONG complied with the servicing criteria for its winter storm bonds, but “NOT that PwC or anyone else complied with the audit requirements” of state law. The last 12 pages, declared Anthony, were Securitization Remittance Summary tables for 2023 produced by the utility.
“Someone apparently thought an “audit report” should have some numbers and tacked on those tables from ONG for good measure, even though there is no evidence they were independently audited – legitimately or otherwise – by anyone,” continued Anthony.
“So, in an appalling case of bait-and-switch, Chairman David has attached a different audit report by some actual licensed CPAs, apparently trying to fool people into thinking PwC had something
to do with the PUD’s noncompliant “Audit pursuant to 74 O.S. § 9078” and thereby legitimize it.”
“The idea that Chairman David thought she could get away with this indicates she thinks no one at the State Capitol really cares if the securitization law she helped author as a state senator is
actually followed – including you!” he informed the Governor and the legislative leaders.
Commission Chairman David issued a statement in response, saying the Securitization Act was written by the Attorney General’s Office and members of the House and Senate.
“While I was not the Senator author of the Act, the law was not intended to require the OCC to hire its own independent auditor to review all amounts received from customers under an irrevocable and nonbypassable mechanism and paid to a utility, and the amounts paid by the utility to the ODFA.”
The following is the remainder of Commissioner David’s statement:
In ONG’s recent rate case, PricewaterhouseCoopers LLP conducted an independent audit, which was reviewed by the OCC’s Public Utility Division, and was available for review by all parties to the Case. Audits conducted by a public accountant and reviewed by PUD witnesses are admissible evidence in rate cases pursuant to 17 O.S. Section 13. Additionally, during a rate case, the PUD, the Attorney General, and all other intervenors conduct audits of the utility’s financial records. Requiring an additional independent audit, as suggested by Commissioner Anthony, is repetitive and is an added expense to ratepayers.
A majority of this Commission determined that the audit and the information contained with the submitted 41-page letter complies with the requirements of 74 O.S. Section 9078. If Commissioner Anthony has a different interpretation, I welcome him to request an Opinion of the Attorney General.
The OCC acts in good faith to ensure transparency by providing all required securitization reports on its website in compliance with 74 O.S. Section 9082: https://oklahoma.gov/occ/divisions/public-utility/pudreports/securitization-reports.html. Further, the ODFA submits an annual report regarding the bond activity that goes beyond what was reviewed in the utility’s rate case.