OKLAHOMA CITY – The state Supreme Court’s ultimate decision on whether securitization bonds are constitutional will affect more public utilities than just Oklahoma Gas and Electric Co.
The Corporation Commission has approved similar arrangements for Oklahoma Natural Gas Co., Public Service Co., and CenterPoint/Summit.
- The commission on Feb. 10 approved by a 2-0 vote a financing order that
authorized securitization of $87.67 million in winter storm expenses for CenterPoint Energy/Summit Utilities. That included $76 million in “extreme” and “extraordinary” winter storm costs; carrying costs and upfront securitization costs added about $11 million.
CenterPoint’s gas bill for the two-week period of February 7-21, 2021, “was more than three times the company’s cost of gas in all of 2020,” the Corporation Commission was told by Brett Jerasa, assistant treasurer of CenterPoint Energy Services Corp.
CenterPoint Energy, Inc., which is based in Houston, Texas, has sold its gas distribution assets in Oklahoma, Arkansas, and Texarkana, Texas, to Summit Utilities, Inc., whose corporate headquarters are in Centennial, Colorado.
The obligation to recover CenterPoint’s costs from the winter storm transferred to Summit in the sale and was included as part of the purchase price, said Lizzy Reinholt, Summit Utilities’ vice president of sustainability and corporate affairs.
If the bonds are approved, the debt will be retired over a 15-year period, during which time the average residential customer will be billed an extra $4.36 per month.
Without securitization, Summit residential customers would receive a one-time bill of $538, pay an estimated $44.61 extra each month for 12 months, or be charged $6.37 monthly for 15 years if the company carried the debt itself.
Summit customers who were enrolled in the company’s fixed-price billing plan, and low-income customers who receive financial assistance with their heating bills, won’t have to pay the additional fee.
Almost 100,000 residential, commercial, industrial and transportation customers in more than 90 communities in western and southeastern Oklahoma are now supplied with natural gas by Summit Utilities.
Southwest Oklahoma cities and towns served by Summit include Lawton, Elgin, Fletcher, Sterling, Cache, Geronimo, Altus, Apache, Blair, Burns Flat, Chickasha, Comanche, Duncan, Mangum, Marlow, Martha, Olustee and Temple.
Ÿ PSO’s bill was calculated at $675.2 million in “extreme” purchase costs of natural gas and supplemental electricity during that two-week storm last year. The company’s fuel bill for all of 2020 was $520 million, according to Region Communications Manager Wayne Greene.
Ongoing financing costs for the first year after issuance of the PSO bonds is estimated at $750,000. Issuance costs are limited to no more than $700,000, and the financial adviser estimated “non-utility issuance costs” at $6.32 million.
A PSO residential customer who typically uses 1,100 kilowatt-hours of electricity each month will pay an extra $4.06 per month for the next 20 years to retire those debts. Without securitization, the customer would receive a one-time bill for $476.53, or pay $39.73 extra each month for a year, or pay an extra $6.45 per month for 20 years if PSO financed the debt itself, officials reported.
PSO has more than 565,600 customers in 232 cities and towns in eastern and southwestern Oklahoma.
The utility serves more than three dozen communities in southwest Oklahoma, including Lawton, Altus, Duncan, Cache, Elgin, Fletcher, Porter Hill, Sterling, Temple, Hobart, Apache, Temple, Rush Springs, Carnegie, Cement, Cyril, Davidson, Duke, Elmer, Fort Cobb, Frederick, Gotebo, Gould, Grandfield, Granite, Headrick, Hollis, Lone Wolf, Manitou, Martha, Mountain Park, Mountain View, Roosevelt, Snyder, Terral, Tipton and Waurika.
Ÿ Oklahoma Natural Gas Co. submitted a whopping $1.31 billion bill for extreme purchases costs incurred between Feb. 11 and Feb. 19, 2021. The Corporation Commission tacked on financing costs, carrying costs, legal and consulting fees, which raised the company’s final tally for the 2021 winter storm to $1.357 billion.
The securitization agreement approved by the commission spreads the cost over 25 years, during which time the majority of ONG customers will pay an extra $7.82 per month, Commission Chair Dana Murphy said.
ONG serves nearly 900,000 residential, commercial and industrial customers. The utility provides natural gas to more than four dozen cities and towns in 10 southwest Oklahoma counties.
Those include Fort Sill, Elgin, Fletcher, Apache, Walters, Anadarko, Carnegie, Cement, Cyril, Fort Cobb, Marlow, Chickasha, Rush Springs, Duke, Eldorado, Davidson, Frederick, Grandfield, Manitou, Tipton, Comanche, Duncan, County Line, Loco, Velma, Gotebo, Hobart, Lone Wolf, Mountain Park, Snyder, Mountain View, Waurika, Ryan, Terral and Ringling.