Add Oklahoma Corporation Commissioner Todd Hiett among those regulators who suggests a bill that was allowed to become law without the signature of Gov. Kevin Stitt is unconstitutional.
As OK Energy Today reported, the subject of the constitutionality of SB998 by Sen. Grant Green (R-Wellston) and Rep. Trey Caldwell (R-Faxon) was raised at a recent meeting. It occurred as commissioners were discussing the changes required of them in the bill that will become law effective August 29.
Attorney Thomas Schroedter of the Oklahoma Industrial Energy Consumers suggested the bill was unconstitutional “because it usurps your authority” and is “legally deficient.” He raised questions about the reduced time that Commissioners must take action on utility requests.
SB 998 directs the Corporation Commission to enter an order on an application filed by an electric utility to build an electric generation facility using natural gas within 180 days, and that such facilities are eligible for a separate rate adjustment mechanism to recover costs.
If an electric generation facility uses natural gas as its primary fuel source, then the Corporation Commission “shall enter an order on an application filed” pursuant to the new law “within 180 days of the filing of the application, following notice and hearing and after consideration of reasonable alternatives.” Otherwise, the commission’s deadline is 240 days.
Bids received by the utility through a competitive bidding process within the 12 months following the final bid due date of the competitive bidding process “shall be considered substantial evidence to satisfy the consideration of reasonable alternatives.”
For any new natural-gas-fired electric generation facility constructed pursuant to the new statute, an electric utility “shall secure a firm contract to transport natural gas to the generating facility.” That contract “shall be secured pursuant to a competitive solicitation process conducted in accordance with applicable Corporation Commission rules.”
Costs incurred for the contract “shall be presumed recoverable by the electric utility through its applicable fuel adjustment clause.” Costs assessed upon the electric utility by the Commission for non-compliance with this section shall not be recoverable from the customers of the electric utility.
If the electric utility does not receive a bid for firm transportation as a result of its competitive solicitation, the electric utility “shall be considered compliant with the requirements of this section provided that the Commission determines that the competitive solicitation is for a firm contract for transport of natural gas which could be reasonably provided by an available pipeline.”
Hiett and other individuals who are potentially affected by SB 998 predict that the constitutionality of the new law – which he confirmed is so-called “model legislation” written by public utilities – will be challenged in the Oklahoma Supreme Court.
In an interview with Mike Ray of the Southwest Ledger, Hiett pointed out the Corporation Commission’s authority is “constitutional, not statutory.” Other courts “have no jurisdiction” in public utility regulation cases, the Constitution states.
Article IX, Section 18, of the Constitution of the State of Oklahoma, decrees that the Corporation Commission “shall have the power and authority and be charged with the duty of supervising, regulating and controlling all … transmission companies doing business in this state, in all matters relating to the performance of their public duties and their charges…”
The Constitution further provides that, “All rates, charges, classifications, rules and regulations adopted or acted upon” by any transmission company that are “inconsistent with those prescribed by the commission, within the scope of its authority, shall be unlawful and void.”
The state Constitution cannot be amended by the Legislature – only by a vote of the people, Article XXIV stipulates.
