A month after the Oklahoma Corporation Commission’s 2022 decision to prohibit winter securitization utilities from collecting tens of millions of dollars in franchise fees with municipalities was overturned by the state supreme court, the regulators got an earful this week about whether to dismiss the case still on the OCC books.
Groups involved in the original decision told commissioners on Wednesday they should not take any action. One by one, the groups’ attorneys and representatives informed Commissioners Kim David, Bob Anthony and Todd Hiett it was too soon following the November Supreme Court ruling to consider such a move.
It was in August 2022 when Commissioner Todd Hiett was joined by then-commissioner Dana Murphy in supporting the franchise fee decision that was opposed by Commissioner Bob Anthony. The order stated that the utilities which used the 2021 Winter Storm Securitization bonds were not authorized to bill customers for franchise fees, something supported at the time by the commission’s Public Utilities Division.
Had the franchise fees been collected, the bond costs put upon customers of ONG, OG&E and PSO would have resulted in even higher monthly bills for the ratepayers. The decision was made and municipalities all across the state were not consulted.
Commissioner Anthony opposed it, saying it would lead to a Supreme Court loss for the regulators.
“I look forward to the day the Supreme Court takes up, considers and rules upon the questions of retroactive ratemaking, violation of tariffs, the Filed Rate Doctrine and utility customers ‘ contractual rights under the Oklahoma and U.S. Constitutions. And some of it may come sooner than later.”
In his dissenting opinion, he added, “If it happens, it will be a vicarious, if hollow, victory for the ratepayers that is long overdue.”
Oklahoma City and the Oklahoma Municipal League challenged and took the act to the Supreme Court where the justices proved Anthony right and ruled Nov. 6 of this year the commission’s move was “not sustained by law and must be reversed.”
When asked for their opinions about whether to dismiss the case, each of the groups spoke up.
A spokesman for Summit Utilities felt there was not a great urgency to make a decision.
“We are evaluating the franchise agreements.”
Bill Humes, senior attorney for OG&E questioned whether the corporation commission had jurisdiction in regards to the franche fees and explained his utility was relying on a State Tax Commission letter that the fee collections were not subject to a sales tax.
Deputy Attorney General Chase Snodgrass told commissioners, “It’s too early to discuss this case” and “there’s no rush or need to dismiss this case.”
A Public Utilities Division spokesman wondered whether such a possible dismissal might go against the Supreme Court ruling.
Jim Roth, the former Corporation Commissioner and now an attorney representing Oklahoma City in the matter the city was “adamant neutral–it’s your decision.”
The Public Service Company attorney was “not prepared to address the issue at this time” but admitted it was an issue involving perhaps $60 million to $100 million “owed to Oklahoma towns and cities.”
Thomas Schroedter, attorney and President of the Oklahoma Industrial Energy Consumers was against any dismissal.
“I urge you to not take action today.”
He was supported by a representative for the AARP, who stated, “I don’t think there’s a reason to dismiss this case—it would be prudent to stop.”
Commissioner Bob Anthony, who raised the possible dismissal for discussion, commented, “I’d think people in this room would want to close the case—it’s like kicking the can down the road.”
To which Commissioner Hiett replied, “There’s no can to kick down the road.”
The discussion eventually led to the parties agreeing to meet and discuss what to do, something supported by Chairman David.
“It’s a fantastic idea for the parties to get together—I don’t think we’re ready to do anything in this case today.”