OKLAHOMA CITY – The Oklahoma Corporation Commission (OCC) Public Utility Division (PUD) has compiled the final costs to issue the securitization bonds to pay for Winter Storm Uri. The totals came in $1.4 million under the approved estimates.
The 2021 extreme weather event left ratepayers facing exceedingly high utility costs when the natural gas spot market price jumped from around $3 per thousand cubic feet to a record high of more than $1,200 per thousand cubic feet.
“Publishing this data is not any entity's statutorily mandated role,” PUD Director Mark Argenbright said. “Regardless, we have worked with all parties, the utility companies and the Oklahoma Development Finance Authority (ODFA), to keep ratepayers abreast of the actual costs related to the sale of these bonds.”
PUD began compiling preliminary cost estimates based on a range authorized by the Commission, the calculated impact created by the Supreme Court protests and now, the final numbers (here). This information has been posted on the OCC webpage.
“I believe it’s important for the public to understand the negative impact of the unsuccessful protests and constitutional challenge supported by one Commissioner and the increased bond costs for ratepayers,” said OCC Director of Administration Brandy Wreath. “It looks like the delay in selling the securitization bonds, caused by these protests, cost ratepayers, conservatively, $277,349,544 due to the 75-basis point interest rate increase by the Federal Reserve during the protests’ timeframe at the Supreme Court. We will never know exactly what might have been. We do know ratepayers will pay more because of the protests.”
There were two parts to the OCC’s role in the securitization process. Part One consisted of the origination cases where parties reviewed, and heavily litigated, storm expenses for prudency and recommended alternatives for long-term treatment leading up to the Commission approved financing orders utilizing securitization. Numerous projected costs were reviewed by all parties with ranges recommended for long-term interest charges and line-item expenses. These expenses, itemized in the linked reports, cover expenses such as legal work, financial firms who service the bonds, and other related activities.
Part Two is the ongoing statutory audit of utility collections from ratepayers for debt repayment to the bond servicing agent. PUD prepares a summary of its audit of utility company collection and payment compliance to be provided to the Governor, Speaker of the House, and Senate President Pro-Tempore. The statutorily required “one-page” compliance report has been maligned and mischaracterized in multiple case filings and news releases as the totality of the work, rather than the summary thereof.
“The numbers now posted to the web page are the final costs to issue the bonds that were originally litigated in Part One,” Argenbright said. “The Commission initially received estimates as to what various elements would cost. The actual costs – now final because all invoices have been processed – show that, in total, all four utilities came in $1.4 million below approved estimates.”
This is important to note as previous media coverage included inaccurate allegations of a billion-dollar overrun in securitization costs.
“These expenses came in below estimates even with the increased issuance costs due to litigating the protests at the Supreme Court,” Wreath said.
In addition to posting the final numbers, PUD included links to the recently received Report of Independent Accountants from each of the utility’s independent third-party accounting firms. Visitors to the website can scroll down the page to see each third-party review under the a utility’s tab.
The extreme conditions produced by Uri and the life-threatening greed alleged of market-manipulating marketers, currently being investigated by Attorney General Drummond, left Oklahoma ratepayers with a monthly payment stretching out for up to 25 years. This long-term repayment method created by legislation was supported and recommended by most parties to the original cases, and a majority of the Commission, to reduce the financial impact on a monthly basis to Oklahoman’s already struggling to make ends meet.
Despite the potential profiteering by some marketers, at remorseless risk to Oklahomans sheltering from their ice-covered world, the utility companies, who did not profit from the increased commodity costs, kept the gas flowing and the lights on. More importantly, unlike the situation in neighboring states, nobody in Oklahoma died because of a lack of utility services, as supported by the Commission’s Order to prioritize life, health, and safety.
“I am beyond proud of the work done by PUD, the supportive Commissioners, ODFA, the Office of the Attorney General, and numerous other stakeholders that worked together to turn this potentially deadly storm into a manageable outcome,” Wreath said. “In Oklahoma, the public utilities preserved life and provided safe and reliable service in the face of intractable fuel prices.”
