Legislation filed to address price spikes in utility bills due to February winter storm

OKLAHOMA CITY – Legislation filed in the Oklahoma Senate would help manage the financial burden facing ratepayers due to extreme price spikes in utility and energy bills in the wake of the February winter storm.

Through the process of securitization, Senate Bill 1049 and Senate Bill 1050 both would allow ratepayers to lower their monthly costs associated with the weather event and lengthen the period of time the increased costs could be paid out, said Sen. James Leewright, R-Bristow, chair of the Senate’s Business, Labor and Commerce Committee, and chair of the Senate Select Committee created to study this issue.

Leewright said it’s estimated that Oklahoma utility ratepayers are obligated for approximately $4.5 billion in increased energy costs associated with the February winter storm. Without action, ratepayers would face dramatic increases in their energy bills, and those bills would be due immediately in large sums.

“Doing nothing to help ratepayers manage that debt load is not an option. If we do nothing, families and seniors on fixed incomes could be faced with choosing between paying their February energy bill or paying for food and medicine,” Leewright said.  “If we do nothing, small businesses could be forced to make layoffs or cutbacks to pay their energy bills. Securitization is the best path forward to help families manage the extreme costs related to the storm, and help small businesses manage the impact as they continue to recover from the pandemic.”

Rep. Gary Mize is chair of the House Utilities Committee.

“I believe the bills we’ve brought forth today strike a good balance between protecting the interests of Oklahomans while also ensuring utility companies receive what is due to them,” said Mize, R-Guthrie. “Our proposed legislation spreads out the costs from Oklahomans’ February bill without adding unnecessary or high financing costs. I’m glad all parties were able to work together to bring forward this solution for our citizens affected by the historic winter weather.”

Legislation Highlights:

• Securitization of debt allows ratepayers to spread repayment over a period of months and pay a smaller, monthly amount for the February energy costs rather than paying for February usage in one lump sum.
• Does not increase bond indebtedness of the state or cause any harm to the state budget.
• Provides many avenues of oversight of through timely audits, extensive vetting and analysis by several state entities, and requiring regular reporting to the executive and legislative branches.

Regulated Utility Consumer Protection Act:

• Allows increased costs related to the February 2021 winter storm to be securitized via the issuance of bonds backed by ratepayer revenues, reducing the financial impact of extreme costs related to the winter storm. 
  • Creates a property right based on the customer charges for the securitization, which guarantees the holder of the bond will be repaid.
• Allows Oklahoma Development Finance Authority to issue ratepayer-backed bonds, and requires ODFA to report regularly on the bond activity until the debt is retired.
• Requires ratepayer-backed bonds go through the Council of Bond Oversight review and get approval from the Attorney General’s Office and the Oklahoma Supreme Court.

Unregulated Consumer Protection Act

• Provides for the issuance of loans made pursuant to notes, bonds, revenue bonds, or other forms of indebtedness to reduce for unregulated utility customers the extreme financial impact of costs related to the February 2021 winter storm.
• Directs the ODFA to: 
  • Receive and review applications for the determination of utility costs related to the February winter storm;
  • Issue written approval or disapproval of an unregulated utility’s application;
  • Issue bonds necessary to fund the Unregulated Utility Customer Protection Fund from which loans are issued; and
  • Issue loans to unregulated utilities for the amount approved in the application process.
• Requires utility bonds issued to fund the loan program go through the Council of Bond Oversight review and authorizes ODFA to apply for approval of the bonds by the Oklahoma Supreme Court.
• Requires reporting to the governor and legislative leaders on the status of loan applications, when a loan is issued to an unregulated utility, and provide regular updates to those leaders until the debt is retired.

For more information, contact:

Sen. James Leewright at 405-521-5528 or email James.Leewright@oksenate.gov

Rep. Garry Mize at 405-557-7350 or email Garry.Mize@okhouse.gov