NOTE: This story has been updated to include a statement from Oklahoma Natural Gas.
OKLAHOMA CITY (KFOR) – The Oklahoma Corporation Commission approved a plan for Oklahoma Natural Gas to recoup costs incurred during the February 2021 winter storm, but voted down imposing a fee on ONG customers who switch from their natural gas service to a different fuel source.
Both OCC decisions followed an extensive review of evidence, testimony and proposals, according to OCC Chairman Dana Murphy.
“While the law and the record support the Order’s provisions to lower customers’ bills from what they’d otherwise be billed for the February 2021 storm and to extend out the repayment time frame, we weren’t persuaded to impose a termination fee,” Murphy said.
OCC approved the Winter Storm 2021 debt package with a 2-1 vote. Commissioner Bob Anthony dissented.
Anthony said the debt package will be worth well over $1 billion to Oklahoma ratepayers.
“In my opinion, these stipulated Ratepayer-Backed Bond proposals are ill-conceived, unconstitutional, and bad for residential ratepayers,” Anthony said. “Worse, they also appear to be an attempt to prevent thorough and open examination of questionable, possibly negligent utility management decisions and imprudent fuel/service purchases made during the storm, as well as an excuse to line the pockets of special interests on Wall Street and their local counterparts.”
OCC approved a plan in December that would raise customer rates by about $2 per month over the next 28 years so OG&E can pay back the $760 million owed to suppliers.
ONG personnel released the following statement in response to the plan’s approval:
“Oklahoma Natural Gas is pleased by the order issued by the OCC today that includes the removal of a termination fee that had been proposed in a previous stipulation. The OCC’s approval of this order allows customers to participate in the securitization mechanism over an extended period and in a manageable manner. The termination fee was not originally proposed by ONG and we want to reiterate the intent was never to restrict the choice of ONG customers’ access to energy sources. Now that the decision has been made to approve the securitization mechanism and to remove this termination fee, we look forward to working with the OCC and the ODFA throughout the remainder of the process.”OKLAHOMA NATURAL GAS
AARP Oklahoma State Director Sean Voskuhl criticized the OCC approval of the plan, saying utility companies are spared any of the burden, and that the additional fees will be a hardship for older residents.
Voskuhl’s statement is as follows:
“While the removal of the exit fee is a positive step AARP Oklahoma is disappointed in yet another ruling by a majority of the Corporation Commissioners that does not include any shared sacrifice from the utility companies. While the assessed annual fees represent only a fraction of utility companies’ profits, it can be a substantial burden to older Oklahomans, especially those with fixed incomes.
We are urging action by the Attorney General’s office to bring those who bilked Oklahomans out of more than $6 billion to justice. In light of the pending corporation commission orders, Oklahoma’s seniors and small businesses need relief from the harm brought about by illegal price gouging. As an intervenor, AARP looks forward to getting facts about the February 2021 winter costs in next week’s case.”SEAN VOSKUHL, AARP OKLAHOMA STATE DIRECTOR
The natural gas price increase from the winter storm was beyond OCC control, according to Murphy.
“The Federal Energy Regulatory Commission and the Oklahoma Attorney General are investigating what happened to the market, and if something is found that could lower costs to ratepayers, that will be instituted,” Murphy said. “Today’s decision also orders the company to credit to customers any proceeds, government grants or other funding sources the company receives for the costs of the February 2021 winter weather event.”
Additional costs will be securitized by a law passed by the legislature following the winter storm.
“This means that the monthly impact to ratepayers will be far less than it otherwise would have been,” Murphy said. “It’s estimated that the natural gas costs owed would have cost an average residential consumer $15.32 per month without securitization. Securitization allows the cost to be spread out over up to 25 years, dropping the monthly payment to an estimated $7.82 for the majority of ONG customers.”
The fuel costs in question were carefully scrutinized, according to Commissioner Todd Hiett.
“At the core of this case is the fuel cost recovery by the utility as allowed by law,” Hiett said. “All parties to the case had access to all documentation concerning those costs, including the Commission’s Public Utility Division which conducted a full audit on those costs to determine that ONG did not make a profit on the fuel costs to be recovered and that other requirements were met.”
The high fuel costs brought on by the storm were the result of an exhaustive effort to keep lights on and furnaces working during the winter storm’s extreme conditions, Hiett said.
OCC’s present concern is a future reoccurrence.
“Without the securitization law, the costs would be even higher for ratepayer. Of key concern now is what is being done to reduce the chances of this happening again,” Hiett said. “The Commission has held a number of hearings on this since the storm, and it’s an ongoing effort.”
Anthony’s full dissent is as follows: