The Oklahoma Supreme Court struck down Rep. Tom Gann’s legal challenges of the Oklahoma Corporation Commission’s approval of rate hikes for Public Service Company of Oklahoma in 2024.
In one of several legal challenges made by the Inola Republican legislator, he challenged the actions of the Corporation Commission, including participation of Commissioner Todd Hiett based on claims stemming from public drunkenness and alleged sexual groping of another man by the commissioner.
But the Supreme Court in its decision handed down Tuesday, ruled, “We conclude that the issues Gann raises in this appeal were not raised and exhausted before the Corporation Commission. The Final order of the Corporation Commission is affirmed.”
Rep. Gann told OK Energy Today he was reading the ruling and would respond soon.
The court explained that Gann had asked for the relief of rates approved by the commission for PSO “based on issues that were not presented to and decided by the Commission.” The Justices said that during the commission proceedings, “neither Gann nor any of the participants at the Corporation Commission argued that the evidence regarding an audit required by 74 O.S. 9078 was insufficient.”
The ruling explained that no one moved to disqualify Commissioner Hiett from participating in the matter at the Commission. The Court also said Gann’s collateral attack on three unappealed orders two years ago also failed because “no party collaterally attacked the previous final orders in the proceedings before the Commission. This fact alone precludes Gann’s collateral attack.”
The PSO rate case followed the 2021 Regulated Utility Consumer Protection Act adopted by the Oklahoma legislature after the historic high natural gas rates experienced by utilities during Winter Storm Uri. PSO followed the adoption of the law by filing a move in April of 2021 to securitize its storm costs, a move which allowed the Oklahoma Development Finance Authority to issue ratepayer-backed bonds. PSO ratepayers are still paying the costs and will for years to come.
PSO moved in November 2023 to initiate ratemaking proceedings. In January 2024, the utility introduced 16,000 pages of supportive documentation but as the court stated in its ruling, “Appellant Gann proffered no responsive testimony or documentary evidence.”
In October of 2024, an Administrative Law Judge at the Corporation Commission issued a report and recommendation about a settlement agreement in the PSO case.
“Rather than participating in the Commission’s objection and evidentiary process, Appellant Gann chose to submit comments after the October 3rd settlement and rate hearing concluded, the record in the proceeding closed, and the objection period to the report and recommendation expired.” The court pointed out that none of the legislator’s comments addressed PSO’s compliance with the law and instead “all five comments were targeted at Commissioner Hiett’s participation in the proceeding in light of sexual misconduct allegations made against the commissioner. Neither Gann or any other party took the affirmative step of moving to disqualify Hiett.”
The justices went on to explain that Rep. Gann was not a party to the Corporation Commission proceeding but confirmed he is a person aggrieved by the ratemaking order. They also explained that “generally, a litigant may not raise an issue for the first time on appeal. The justices also pointed to previous rulings that “matters which could have been presented before the Commission…and which were not presented…are precluded from review by this court on appeal by a party who is adversary thereto.”
“The requirement that an issue be exhausted prevents an adversary from sitting quietly by until a proceeding is closed to lodge its complaint, which could have been addressed if timely presented to the Commission,” wrote the justices.
“—Mr. Gann raises issues on appeal that could have been squarely presented to the Corporation Commission but were not. This is fatal to the appeal in this case.”
The justices further determined that two other topics, the challenge of Hiett and the validity of the Winter Storm Cost charge, were not appealed or raised by Gann or anyone else, as required by the law in question.
The decision by the Court applied to PUD2023-000086 and two other cases, PUD2021-000076 and PUD2022-000093.
Justices who ruled were C.J. Rowe, Winchester, Edmondson, Combs, Gurich, Darby, Kane and Jett.
Justice Kuehn did not participate.