On Jan. 25, the Oklahoma Corporation Commission approved Oklahoma Natural Gas Co.’s application to securitize its winter storm expenses by transferring the debt off the company’s books through the sale of bonds. Proceeds from the bond sales would be used to compensate ONG for its costs.
The commission authorized $1,338,906,447 in expenses for securitization.
The bond buyers would recover their expenses via a charge added to the monthly utility bills of ONG’s customers. In turn, ONG would remit those proceeds to the bondholders until the debt is retired.
For residential customers who use more than 50 dekatherms of gas per month – 75% to 80% of their customers – ONG’s extra fee has been calculated to be $7.82. That amount is to be collected every month for the next 25 years – a total of $2,346 per customer over the next two and a half decades.
Of course, each customer’s bill will depend on usage and other factors.
Without securitization, under traditional financing, the average residential bill for those residential customers would be $15.32, officials reported. And if those ONG customers were billed the full amount at one time, their April billing would total $1,363.
(The energy content of 1,000 cubic feet of natural gas measured at standard conditions is approximately equal to one dekatherm.)
Oklahoma Natural Gas Co. reported it paid $1.3 billion to keep natural gas flowing to its 895,000 residential, commercial and industrial customers during the two-week winter event in February 2021.
Although the Corporation Commission approved the ONG plan, the next step in the process is for the Oklahoma Development Finance Authority to develop a sufficiently sized bond package and present it to the Oklahoma Supreme Court for review.
ONG serves several towns and a military installation in southwest Oklahoma. Those include Fort Sill, Elgin and Fletcher; Frederick, Grandfield, Davidson, Manitou, Tipton and Walters; Anadarko, Apache, Carnegie, Cement, Cyril and Fort Cobb; Duncan, Comanche, Marlow and Rush Springs; Duke and Eldorado; Gould and Hollis; Gotebo, Hobart, Lone Wolf, Snyder, Mountain Park and Mountain View; Waurika, Hastings, Ryan and Terral.
Ft. Cobb Fuel Authority
bill to be retired
over 33 months
The Fort Cobb Fuel Authority was the first public utility in the state to reach a settlement on its 2021 winter storm expenses.
The Corporation Commission approved a final order June 24, 2021, that allows the FCFA to equalize the base rate among its residential and commercial customers, impose a stiff disconnection fee from now through 2023 and assess its residential and commercial customers a monthly fee known as a “rider” of 7⅔ cents per 100 cubic feet of natural gas consumed during a 33-month period.
Brenda Bott, a regulatory and compliance affairs associate of the Navitas companies, said an FCFA residential or commercial customer using the average cubic feet of gas each month will experience a utility bill increase of $2.33 because of the temporary rider.
The rider will be collected “only until FCFA has recovered the extraordinary cost determined by the Corporation Commission to be prudently incurred” as a result of the “winter weather event,” attorney Ron Comingdeer of Oklahoma City told the Southwest Ledger.
Fort Cobb Fuel Authority opted for the temporary rider rather than ratepayer-backed bonds to pay for its 2021 winter storm expenses.
The FCFA absorbed $550,000 in additional natural gas purchase costs last February – particularly Valentine’s Day through Feb. 19 – when Oklahoma was nearly paralyzed by unusual weather that included snow, freezing rain, and wind. A typical bill for gas buys in February is approximately $200,000 to $250,000, Comingdeer said. The company took out a loan to pay that extra $550,000, he said.
FCFA buys gas from third-party non-affiliated gas suppliers and distributes the fuel to its customers, Comingdeer said. A document filed with the Corporation Commission in a separate case says FCFA provides natural gas to approximately 4,200 rural customers at various locations throughout Oklahoma.
Fort Cobb Fuel Authority is a privately held company owned and operated by Navitas Utility Corp., which is based in California. The Navitas website says it serves 17 Oklahoma counties.
Navitas Assets acquired the Fort Cobb Fuel Authority in 2007 and LeAnn Gas Co. in 2009.
The Navitas website says it serves Alma, rural Carnegie, Eakly, rural Fort Cobb and the Fort Cobb Lake area, Gracemont, Lookeba, Sickles and Velma in southwest Oklahoma. The principal office of the Fort Cobb Fuel Authority is in Eakly, in Caddo County near Fort Cobb Lake.
Supreme Court
mulling $800M
in OG&E bonds
The ODFA has applied to the Oklahoma Supreme Court for authority to issue up to $800 million in ratepayer-backed bonds to compensate Oklahoma Gas & Electric for $760 million in February 2021 winter storm expenses.
That application has been challenged by former state Rep. Mike Reynolds, R-Oklahoma City, and others.
A Supreme Court referee listened to oral arguments for and against the bonds on Jan. 26 but apparently has not yet issued a recommendation.
The Supreme Court formally received the $800 million bond securitization case. A recent posting on the court’s website indicated the case has been assigned to the Supreme Court; no details were provided.
In another recent development, Justice Dana Kuehn, who was appointed to the Supreme Court by Gov. Kevin Stitt last July, recused herself from the case on Feb. 9. Her one-sentence letter did not elaborate on her decision.
However, financial disclosure records filed with the state Ethics Commission show Kuehn has an ownership interest in a Tulsa company identified as U.S. Payments. That company is under contract with OG&E in its paperless payment program, OK Energy Today reported.
In her financial disclosure form, Kuehn wrote, “I am a non-voting board member. I have an ownership interest. I also have a judicial ethics opinion agreeing that this appointment does not violate ethical rules.”