BY BOB ANTHONY
When Corporation Commissioners Todd Hiett and Dana Murphy voted to approve the multi-decade 2021 Winter Storm bond deals for OG&E, ONG, PSO and Summit, each time, the Oklahoma Corporation Commission [OCC] issued a public press release giving target estimates for the bonds’ costs and glowing quotes from Hiett and Murphy about “hundreds of millions of dollars” in “savings” for utility customers that would result from this creative financing mechanism called “securitization.” Having voted against the bond deals, I filed warnings instead.
In September 2022, I filed a 74-page “Report Card on Securitization” calling the public’s attention to the fact that the actual cost of the 2021 Winter Storm bonds had come in more than $1 billion over the Oklahoma Corporation Commission’s original target estimates ― $4.840 billion vs. the estimated $3.708 billion. I pointed out numerous potential causes for this disaster, some of them unlawful, and called for an investigation. My agency not only balked; some began actively obstructing my inquiry.
On May 29, 2024, almost two years after the 2021 Winter Storm bonds were issued, the Oklahoma Corporation Commission put out a news release headlined, “OCC Reports Finalized Uri Securitization Costs.” It was riddled with inaccuracies and totally unsubstantiated assertions. It also called my “billion-dollar cost overrun” assessment an “inaccurate allegation.” When I pointed out some of the agency’s errors and falsehoods in public filings on May 30 and June 25, including 90 pages of supporting evidence documenting my “billion-dollar cost overrun vs. the OCC’s estimates” declaration, the commission responded by playing word games and redefining the target.
In fact, on June 28, the Oklahoma Corporation Commission issued another news release, this one headlined, “OCC Affirms No Cost Overruns Occurred With Issuance of Uri Securitization Bonds.” In it, the commission claimed that because “the interest for the bonds at issuance still came in well below the commission’s ordered cap of 6%,” this means that “No cost overruns occurred.” Let’s examine this claim more closely.
For starters, in the three years since 2021’s Winter Storm Uri, the Oklahoma Corporation Commission has never once issued any public calculation of the total cost of the bonds at the “6% [interest rate] cap.” [In all its press releases, the target “expected” interest rates were estimated at between 2.08% and 2.58%. These turned out to be less than half of the actual 4.523% to 5.269% range.] The reason is obvious: For commissioners and an agency anxious to assure the public that “securitizing these fuel costs will save ratepayers hundreds of millions of dollars” [Hiett in the OCC’s 12.16.21 release], it is not good salesmanship to admit that the bonds might actually cost more than double their advertised estimates.
Those low, “expected weighted average interest rates” and their associated total bond cost estimates from the original commission press releases were explicitly cited by the Oklahoma Supreme Court in its published opinions validating the bond deals. The full court, required to make sure the commission had considered customer savings before approving the financing orders, made no mention of the worst-case-scenario “6% cap” limit.
So why is the commission now using the 6% interest cap boundary limit as its comparison for declaring bond-sale victory, failing even to acknowledge its original total bond cost target estimates [$3.708 billion] so proudly touted to the public and the Oklahoma Supreme Court when the bonds were originally approved? Easy. The 6% cap is a boundary that literally cannot be crossed.
It was legally impossible for the bonds to “overrun” their commission-ordered 6% cap! It was a self-imposed fail-safe limit that, if crossed, would have automatically canceled the bond sales before they ever happened.
Now ask yourself why the commission would issue a press release two years later bragging that something which could not legally have happened did not happen. The answer is: It is all part of the Oklahoma Corporation Commission’s ongoing whitewash and cover-up of wrongdoing surrounding the 2021 Winter Storm bond deals.
By changing the point of comparison to something impossible and denying the billion-dollar cost overrun vs. the OCC’s own estimates, the OCC apparently thinks it can fool the public into believing that nothing went wrong and there is no need for further scrutiny of the actions of the OCC and others during and after the 2021 Winter Storm.
Oklahoma utility customers are smarter than some at their state Corporation Commission apparently believe. Ratepayers know garbage when they smell it, and the commission’s recent “news releases” reek of it.
When ongoing bond costs are included, Oklahoma ratepayers are now paying some $5 billion for two weeks of energy usage in February 2021 – none of it properly audited, then or since. The only way to prevent what I have called “the largest fleecing of the Oklahoma ratepayer in the history of the state” from happening again is to find and honestly tell the truth about it – now.
All available evidence indicates the Corporation Commission simply does not want the whole truth to be known.
The question is, will law enforcement see through this official garbage and take action before the statutes of limitations on the wrongdoing begin to expire and the billions fleeced from ratepayers are irretrievably lost forever?
Bob Anthony is in his sixth six-year term as a member of the Oklahoma Corporation Commission.
Editor’s Note: You can read Anthony’s full 5-page filing here: https://public.occ.ok.gov/WebLink/DocView.aspx?id=16840370.
