OKLAHOMA CITY (KFOR) – Over a week of frigid temperatures last February had Oklahoma utility companies buying fuel at sometimes 1,000-times normal cost to meet demand. Last spring, the state legislature passed laws that would allow utility companies to use bonds to spread out the overage costs.
In December 2021, the Corporation Commission and OG&E settled on a plan for rate payers to pay back the estimated $760 million the company was out. Opponents of the plan say the companies are not being transparent and customers are footing too much of the bill.
“I don’t think the rate payers should be on the hook for the incompetence of officials that don’t have the foresight to handle their business properly,” said Mike Reynolds, former state representative turned concerned customer.
Multiple lawsuits and protests have been filed against the current plan worked out by the Oklahoma State Legislature and Corporation Commission for OG&E and its to pay for last February’s winter storm.
Thanks to bills passed last April, the state essentially has helped back bonds that will allow customers to pay smaller amounts over a longer span of time.
“It’s simply absurd,” said Reynolds.
OG&E says $760 million was paid out during the storm to keep the power on.
According to Corporation Commission numbers, if that sum was spread out to customers, the average house hold would pay a one-time charge of more than $450 dollars.
But with the securitization bond plan, the average customer pays just over $2/a month over 28 years.
In that process, if the bonds maintain the lowest possible interest rates, Oklahomans would be paying at least $307 million dollars in interest.
“The only people that we know for sure are benefiting are the power companies and the bond advisors,” said Reynolds.
One of the protests filed cites Minnesota’s plan to pay out the amount over 27 months not 28 years.
Using that plan, each Oklahoma household would pay close to $17 more per bill for 2.25 years, but with very little interest costs.
“They are going to be guaranteeing bonds for a private company,” said Reynolds.
Reynolds argues in his protests and lawsuits that the bills passed by the state legislature are unconstitutional.
“The state cannot go into debit without a vote of the people,” he said.
Reynolds and others also wonder if the $760 million spent by OG&E was done prudently, saying the companies knew ahead of time the cold was coming and should have bought fuel ahead at regular market prices.
They say that company spending records remaining confidential under law hides the truth.
“We really don’t know exactly how much was paid. I think that’s one of the problems of what’s going on right now. The provisions don’t allow us to know who is making the massive profits off of this,” said Reynolds.
We reached out to power company, and they issued this statement:
“OG&E’s general practice is to not comment on pending litigation.
While fuel costs are normally passed directly to customers soon after they are incurred, OG&E customers have not yet received any bill containing fuel costs associated with the February 2021 Winter Weather Event. Once the Oklahoma Development Finance Authority (ODFA) issues bonds as provided in securitization legislation passed by the Oklahoma legislature in 2021, customers would then see a new line-item charge 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 electric service during 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 operating throughout the course of the February 2021 Winter Weather Event, OG&E kept the heat and lights on in homes and business, helping preserve customer health and safety.”Christi Woodworth, OG&E Vice President of Corporate Communications, Brand & Marketing
Reynolds says activating the bonds stops any investigation into the energy buys made by OG&E.
“The accountability is completely hidden. The statute says that once its determined that this idea is approved then it can’t ever be questioned that in itself is unconstitutional language,” said Reynolds.
We reached out to the Corporation Commission for comment. As far as Supreme Court actions are concerned, they tell us they cannot comment on pending litigation.
We called the Attorney General’s office to see where they were on the investigation promised last spring into price gouging and market manipulation. They say it is ongoing and cannot comment.
The protests are scheduled to be heard at the state supreme court Wednesday, Jan. 25 at 10:30 a.m.