| Pre-storm Charge | FUEL CHARGE-NO SECURITIZATION (month 1) | FUEL CHARGE-NO SECURITIZATION (months 2-8) | FUEL CHARGE W/SECURITIZATION (10-YR. PAYBACK) |
|---|---|---|---|
$104.84/mo. |
$1,967.23 |
$1,230.83/mo. |
$158.39/mo. |
Securitization Process
Step #1: Legislation
The Legislature Adopted Senate Bill 1050 providing the framework for the Corporation Commission to authorize a utility to collect an irrevocable Securitization charge and issue Bonds backed by the Securitization charge to finance the fuel costs experienced due to the extreme cold in February of 2021.
Step #2: Regulatory Approval
Regulated utilities may file for a financing order from the Corporation Commission. The Commission evaluates the filing and determines whether Securitization is the best solution for ratepayers to finance the costs incurred due to the extreme cold.
Step #3: Bond Issuance
Once the OCC approves storm charges, those charges are placed into a security bond. That bond is then sold through the ODFA. Once the OCC audits and approves the fuel charges from the storm, those charges are marketed to private investors through a security bond process that ODFA oversees.
What is “Securitization” and how will it help with costs from the winter storm?
Simply put, the Securitization measure approved by the legislature and signed by the Governor will allow utilities covered by the legislation to spread the fuel costs from the storm over a much longer time period, reducing the monthly impact of the charge on their customers.
Normally any extension of recovery of fuel costs would result in extra credit-related charges to the utility that could be passed on to the utility customer. The Securitization measure creates bonds for fuel costs, decreasing the monthly fuel cost charge by allowing for much greater time to recover the costs. Securitization also saves customers millions of dollars by reducing those credit-related charges that would normally be passed on to the customer.
Participating Agencies Contact Information
Oklahoma Corporation Commission
Corporation Commission Consumer Services
Further Info: Consumer Services
Email: CS@occ.ok.gov
Phone: 405-521-2331
State Treasurer
Deputy State Treasurer for Debt Management
Further Info: Council of Bond Oversight
Email: andrew.messer@treasurer.ok.gov
Phone: 405-521-4504
Oklahoma Secretary of Energy & Environment
Further Info: ee.ok.gov
Email: ee@ee.ok.gov
Phone: 405-522-7099
Oklahoma Development Finance Authority
Further Info: okutilitybonds.com
Email: mdavis@okfinance.com
Phone: 405-842-1145
Essential Features of Legislation
Consumer Cost Protection There must be a demonstration of cost savings for ratepayers through securitization.
True‐Up Mechanism
Order must contain a mechanism to periodically adjust the charge to ensure timely payment of debt service.
Financing Order
The order must remain in effect for the life of the bonds.
Property Right
Statute must create a valid and binding property right in the Securitization Property.
Irrevocable
The Commission may not revise the Financing Order once issued. (Except for True‐Ups)
TRUE Sale
Any sale, assignment, or transfer of the Securitization property must be absolute.
Non-Bypassable
The Securitization charge cannot be avoided by any existing or future customers.
Bankruptcy of Utility
Holder of securitization property has right to receive revenues from the securitization charge even if the utility declares bankruptcy.
Example: Regulated Utility Customer Fuel Charge With or Without Securitization**
**Illustration purposes only based on average residential bill. Your costs may be higher or lower depending on usage.
Last Modified on
Oct 26, 2021
