HomeMy WebLinkAboutRevised Continuation of Dissenting Opinion by Commissioner Bob Anthony BEFORE THE CORPORATION COMMISSION OF OKLAHOMA
IN THE MATTER OF THE APPLICATION OF )
OKLAHOMA GAS AND ELECTRIC COMPANY FOR ) CAUSE NO. PUD 202100072
A FINANCING ORDER PURSUANT TO THE )
FEBRUARY 2021 REGULATED UTILITY )
CONSUMER PROTECTION ACT APPROVING )
SECURITIZATION OF COSTS ARISING FROM THE
WINTER WEATHER EVENT OF FEBRUARY 2021 ) F I L E
JUL 2 9 2022
COURT CLERK'S OFFICE - OKC
CORPORATION COMMISSION
OF OKLAHOMA
Revised Continuation of Dissenting Opinion by Commissioner Bob Anthonv
They Gambled, You Lost—$330 Million and counting! As of July 29, 2022
Deceitfully named, the "Regulated Utility Consumer Protection Act"with its resulting$5 BILLION in
bonded indebtedness is the worst special-interest and insider rip-off of Oklahoma ratepayers I've seen in
the last 30 years.
Just weeks after the February 2021 winter storm,the so-called "Consumer Protection Act"was signed
into law. Its authors said the cost of the electricity and natural gas used to stay warm during the "100-
year" cold snap would bankrupt customers. Instead, they claimed this new law would actually"save"
customers money by allowing the Corporation Commission to spread out those costs over time using
"securitization"and billions in ratepayer-backed bonds.
BUT the Corporation Commission already had the ability to spread out those costs over time without
tacking on hundreds of millions of dollars in extra fees and interest expenses required to use bonds—and
that's exactly what was done for the lucky Oklahomans served by co-ops and other customer-owned
utilities.
One example: With OCC approval, Canadian Valley Electric Cooperative spread out its storm expenses
over 10 years at a fixed rate of just 2.465%. Compare that to OG&E customers who,thanks to the
"Consumer Protection Act"bonds, will be paying an average of 4.947%over 28 years! Not only will
OG&E customers be paying twice the interest rate for three times as long as Canadian Valley Coop
customers, in total OG&E customers will be paying almost twice the $739 million in"extreme purchase
costs"the utility says its customers actually "owe"—now costing them more than $1.4 BILLION.
The true impact on OG&E customers of using ratepayer-backed bonds to spread out the February 2021
winter storm costs was grossly misrepresented, and the results are horrifying.
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FACTS:
• The average monthly impact on customer bills will actually be 57%higher than the $2.12
deceitfully announced by the two commissioners who approved the bond financing, and could get
even larger.
• The much-touted"low"2.58%bond interest rate actually topped out at 5.087%near the end of the
bonds' ridiculously-long, multi-decade term.
• The bogus claims of bond"savings"conspicuously evaporated in the face of$639 million in
interest expenses—some $330 million more than was so optimistically forecast.
No wonder 13 of the 15 states impacted by the 2021 winter storm rejected the costly Texas/Oklahoma
securitization bond approach for their largest electric utilities.
How did this happen? Besides bonds being a more expensive way to spread out the costs, the Corporation
Commission's open-ended bond financing orders protected bond buyers and utility shareholders instead
of customers and left all the risk for rising interest rates on ratepayers.
In short, Commissioners Todd Hiett and Dana Murphy used the authority given to them in the anything-
but-"Consumer Protection Act"and wrote the utilities blank checks for ratepayers to pay. They gambled
with ratepayers' money and lost—$330 million and counting.
What would motivate politicians to jeopardize Oklahoma household and small business budgets so
recklessly?
In a July 5 Oklahoman article,the OCC's new Acting Director of Administration admitted that the OCC
had "bailed out"the utilities. Did the facts that OCC Commissioners Hiett and Murphy both illegally
took thousands in campaign contributions from attorneys, lobbyists and PACs involved in these cases, or
that Commissioner Hiett has an unconstitutional conflict of interest, influence their votes? (See
bobanthony.com/facts.)
The insiders and special interests have had their way, and the ratepayers are left holding the bag—
literally for generations! Worse,the National Oceanic and Atmospheric Administration(NOAA) says
the so-called "100-year" storm in February 2021 was actually the third such event in the last 40 years
(after the December cold snaps of 1983 and 1989). You can be sure those who "never let a good crisis
go to waste"will try to take similar advantage of the next one,pancaking layer upon layer of debt
payments on ratepayers.
The detrimental financial consequences for ratepayers are all the more heartbreaking as Oklahomans
struggle with runaway inflation in so many other areas of their household budgets. History will show all
of this was unconstitutional,but when elected officials freely ignore their oath to"support,obey and
defend the Constitution,"these are the appalling results.
Corporation Commissioner Bob Anthony
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