Home Pay off Protests have been filed against the Oklahoma Corporation Commission’s plan to reimburse winter storm fuel costs OG&E

Protests have been filed against the Oklahoma Corporation Commission’s plan to reimburse winter storm fuel costs OG&E

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OKLAHOMA CITY (KFOR) — More than a week of freezing temperatures last February, Oklahoma’s utility companies bought fuel at sometimes 1,000 times the normal cost to keep up with demand. Last spring, the state legislature passed laws that would allow utility companies to use bonds to spread excess costs.

In December 2021, the Corporation Commission and OG&E agreed to a plan for taxpayers to repay the estimated $760 million the company had lost. Opponents of the plan say the companies are not transparent and customers are footing the bill too much.

“I don’t think the taxpayers should be responsible for the incompetence of officials who don’t have the foresight to properly manage their affairs,” said Mike Reynolds, a former state representative turned concerned customer.

Multiple lawsuits and protests have been filed against the current plan developed by the Oklahoma State Legislature and Corporation Commission for OG&E and to pay for last February’s winter storm.

Through bills passed last April, the state has essentially helped support bonds that will allow customers to pay smaller amounts over a longer period of time.

“It’s just nonsense,” Reynolds said.

OG&E says $760 million was paid out during the storm to keep the power going.

According to figures from the Corporation Commission, if this sum were divided among customers, the average household would pay a one-time fee of more than $450.

But with the securitization bond plan, the average customer pays just over $2/month over 28 years.

Courtesy of the Oklahoma Corporation Commission

In that process, if the bonds keep interest rates as low as possible, Oklahomans would pay at least $307 million in interest.

“The only people we know for sure benefit from it are power companies and bond advisers,” Reynolds said.

One of the protests filed cites Minnesota’s plan to pay the amount over 27 months, not 28 years.

Using this plan, every household in Oklahoma would pay nearly $17 more per bill for 2.25 years, but with very little interest expense.

“They’re going to guarantee bonds for a private company,” Reynolds said.

Reynolds argues in his protests and lawsuits that the bills passed by the state legislature are unconstitutional.

“The state can’t spout without a vote of the people,” he said.

Reynolds and others also question whether the $760 million spent by OG&E was done prudently, saying the companies knew ahead of time the cold was coming and should have purchased fuel ahead of time at the regular prices of the Marlet.

They say company expense records that remain confidential under the law are hiding the truth.

“We really don’t know exactly how much was paid. I think that’s one of the problems with what’s going on right now. The provisions don’t let us know who gets the huge profits from it,” Reynolds said.

We contacted the power company and they released this statement:

“OG&E’s general practice is not to comment on pending litigation.

Although fuel costs are normally passed directly to customers shortly after they are incurred, OG&E customers have yet to receive an invoice containing fuel costs associated with the February 2021 winter weather event. Once that the Oklahoma Development Finance Authority (ODFA) has issued bonds in accordance with securitization legislation passed by the Oklahoma Legislature in 2021, customers will then see a new line of charges on their bill. The average residential customer would see an increase of $2.12 over 28 years, as approved by the Oklahoma Corporation Commission. OG&E makes no profit on fuel costs and will only recover the direct cost of fuel for the February 2021 winter weather event.

Loss of electrical service in severe winter weather can have a significant impact and we are committed to providing reliable service to our customers. By purchasing natural gas to keep power plants online and running through the February 2021 winter weather event, OG&E kept homes and businesses warm and lights on, helping to keep people healthy and customer safety.

Christi Woodworth, OG&E Vice President of Corporate Communications, Brand and Marketing

Reynolds says the activation of the bonds stops any investigation into energy purchases made by OG&E.

“Responsibility is completely hidden. The law says that once it has been determined that this idea is approved, it can never again be questioned that this in itself is unconstitutional language, ”said Reynolds.

We have contacted the Companies Commission for comment. They tell us that the utility company’s purchase information will be released after the bond plan is enacted. As for Supreme Court actions, they tell us they cannot comment on ongoing litigation.

We called the attorney general’s office to see how they were doing on the investigation promised last spring into price gouging and market manipulation. They say it’s in progress and can’t comment.

The protests are to be heard in the state Supreme Court on Wednesday, January 25 at 10:30 a.m.