A flurry of filings was made this week by the state of Oklahoma, the Oklahoma Corporation Commission and Oklahoma Natural Gas Co. in response to the lawsuit filed challenging ONG’s rate hike approved in July by state regulators.
The challenges to the rate increase came after Corporation Commissioners voted 3-0 supporting a Performance Base Rate Change totaling $41,078,183, a change that will have an impact of $1.69 more a month on residential customers. Rep. Tom Gann (R-Inola) and Rep. Kevin West (R-Moore) filed the challenge in August claiming the case was “tainted by the alleged criminal conduct of Commissioner Todd Hiett – cases in which Hiett is actively participating despite the fact that they are obviously matters in which Hiett’s impartiality might reasonably be questioned” and he should have disqualified himself.
Reps. Gann and West also raised the issue of whether a proper and legal audit had been conducted by the Corporation Commission. It was the same issue raised by Bob Anthony when he was a long-serving Corporation Commissioner but his calls for a more involved and detailed audit of utility expenses in the 2021 Winter Storm Uri, rather than the one-page audit presented by the agency, did not result in a detailed examination.
Taking a cue from Anthony’s audit argument, Gann and West contended the lawful interpretation of the word “audit” was essential to proper implementation of “74 O.S. § 9070 et seq., a law by which some $3 billion of 2021 Winter Storm Uri fuel and purchased power costs were securitized into ratepayer-backed bonds at a total cost of some $5 billion to more than a million Oklahoma customers of OG&E, ONG, PSO and Summit.”
In recent Supreme Court challenges, the legislators focused more on the audit aspect of their filings, rather than the alleged sexual misconduct by Commissioner Hiett. That’s because, in the words of one observer, if the Supreme Court rules in support of the challenges, “all hell’s gonna break loose.” It could mean problems and challenges for the bond holders and the state authority that issued them. It also raises the question whether the sale of the bonds to cover the utility storm cases were “fatally flawed.”
Reps. Gann and West argued that ” 74 O.S. § 9078 requires “an audit” of those bonds to “be part of any general rate case” filed by these utilities for the duration of their bonds — at least 12-25 years.”
“The widespread implications of this are obvious,” stated the two in their August appeal filed with the Supreme Court.
The responses filed by the Attorney General, ONG and the Corporation Commission made no reference or defense of the audit as raised in the legislators’ challenge.
Oklahoma Natural Gas recited the history of the Commission’s approval on a 3-0 vote to accept the recommendation of an Administrative Law Judge who found the terms of a settlement in the case were “in the public interest, fair, just, and reasonable.”
The utility pointed to a joint stipulation reached by the Attorney General and other parties involved, including the Commission’s Public Utilities Division.
The Corporation Commission responded by stating the sixth appeal by the legislators was “based entirely on issues that were not raised or contested by the parties to the case and outside the scope of the Commission order.”
It further argued the “appellants have not been aggrieved by the participation of one of three Commissioners.” The Commission’s filing made no reference to the challenge over an audit of winter storm bonds.
The state’s Solicitor General, filing for the Attorney General and the state of Oklahoma, also relied on the history of the rate decision, the joint stipulation and pointed to the conclusion that the terms of the rate hike were “in the public interest and the provisions are fair, just, and reasonable.”
At least nine attorneys made “entry of appearance” filings in the case. One was filed by Garry M. Gaskins II, Solicitor General for the state and another filing was made by Ellen Carr, Assistant Solicitor General for the state of Oklahoma.
Three filings were made by the Attorney General’s office including Justin Cullen, Assistant Attorney General, Ashley N. Youngblood, Assistant Attorney General and Thomas Grossnicklaus, Deputy Attorney General.
For the Corporation Commission, filings were made by Daniel P. Boyle, Deputy General Counsel at the commission and the Patricia L. Franz, General Counsel to the commission.
Attorneys for Oklahoma Natural Gas also filed appearances including Deborah R. Thompson and Kenneth A. Tilltson.