OK Corporation commissioner issues strong dissent on OG&E securitization plan

OKLAHOMA CITY (KFOR) – Oklahoma Corporation Board Vice Chairman Bob Anthony again dissents on approval of the Oklahoma Gas and Electric Company’s plan for fuel cost recovery after the winter storm of February 2021.

In December 2021, the OCC approved a plan that would raise customer rates by about $2 per month over the next 28 years so that OG&E could repay the $760 million owed to providers.

This is not the first time Anthony has issued a dissenting opinion on the matter. In March 2022, he expressed his reluctance for the plan in a separate opinion.

Anthony didn’t mince words in his most recent dissent.

“In short, the results of OG&E’s winter storm bond offering are nothing short of horrifying,” Anthony says in the filing.

He lists three main points in his opinion.

• The average monthly impact on customer bills will actually be 57% higher than the $2.12 misleadingly advertised by the two commissioners who approved the bond financing.
• The much-vaunted “low” 2.58% bond yield actually hit 5.087% near the end of the bonds’ ridiculously long, decades-long term.
• Securitization’s bogus “savings” claims visibly disintegrate in the face of about $600 million in interest charges – some $300 million more than so optimistically predicted

You can read the full dissent below.

OG&E sent KFOR the following statement:

Oklahoma lawmakers created and approved the Securitization Act, the Oklahoma Corporation Commission issued an order approving the sale of the bonds after the administrative law judge ruled that OG&E costs were prudent, and the Oklahoma Supreme Court ultimately ruled that the entire process was constitutional and could proceed. We appreciate the efforts of Oklahoma lawmakers to minimize the immediate and ongoing costs to customers related to the winter storm.

Commissioner Anthony is correct that the impact on the average residential customer has gone from about $2.12 per month to about $3.34 per month. This change is solely attributable to the rise in interest rates that has occurred since the Commission issued its decision in December 2021.

Unfortunately, after the Commission issued its order in December 2021, the Supreme Court process was prolonged for several months due to protests encouraged and supported by opponents of securitization. During the time the protests were being considered by the Supreme Court, interest rates rose dramatically due to market forces beyond anyone’s control.

Because OG&E was able to secure fuel for our power plants during the storm, we kept the heat and lights on for our customers, helped deliver power to the SPP grid, and avoided the fate of other states that experienced prolonged power outages and significant loss of life. .

Aaron Cooper, Corporate Communications Manager

OG&E’s Vice President of Public and Regulatory Affairs also released the following statement:

“While legislation allowing the securitization of Uri’s debt has not been sought by OGE, we believe it is helpful in mitigating the impact on customers. It is unfortunate that the motives of commissioners, legislators and the governor continue to be challenged for the development and implementation of a solution designed to ease the burden on Oklahomans.Uri’s debt securitization is established law, upheld by the Supreme Court of Oklahoma Continued attempts to cast the issue in a negative light appear to serve no public purpose.

Ken Miller