Oil & Gas News

‘Lots of Mistakes’ OCC Says Millions Worth of Discrepancies Adding To Winter Recovery Costs

By Zachary Frazier

Posted on March 29, 2023

Oklahoma Corporation Commission, Commissioner, natural gas

By: KFOR – The Oklahoma Corporation Commission (OCC) held a meeting Tuesday morning in which one Commissioner claims there are “significant and substantial discrepancies” within OG&E, Oklahoma Natural Gas, and the Public Service Company of Oklahoma’s spending for the last two years.

In a 21-page investigation by Commissioner Bob Anthony, he points out several instances in which these companies spent money that’s either unaccounted for, spent on an unknown reason, or was overspent.

To name a few:

Commissioner Anthony is claiming OG&E exceeded the utility’s cap of $500,000 reimbursed Issuance Costs. He says $500,000 of OG&E’s Issuance Costs do not appear on the Oklahoma Development Finance Authority Treasurer’s “Statement of Approval” for OG&E. He also says there was an additional $220,000 spent for “OG&E Legal Expenses” and $85,000 was paid to Ernst and Young for what was termed as “Comfort” auditing/accounting.
Commissioner Anthony is claiming there is more than $1M of PSO’s various Issuance Costs, including legal fees, advisor fees, accounting fees, and administrative fees that do not appear at all on the Oklahoma Development Finance Authority Treasurer’s “Statement of Approval” for PSO. He claims PSO’s Issuance Costs were supposed to be capped at $700,000 though.
Commissioner Anthony is claiming ONG was only approved to pay the Attorney General and the Council of Bond Oversight $140,920 each but instead paid $146,650 each. He also claims ONG spent $50,000 on “Miscellaneous Expenses,” but it doesn’t appear on the Treasurer’s “Statement of Approval” for ONG.
Commissioner Anthony also points out some $20,000 paid to an unknown party for an “Internet Roadshow” for ONG, PSO, and OG&E which is allegedly not on any of the Treasurer’s “Statements of Approval.”

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He said these inconsistencies may be adding to the securitization costs currently straining Oklahomans.

Commissioner Anthony addressed the courtroom by saying he filed his findings about a month ago and so far, no one has done anything about it.

“The clock is ticking,” said Commissioner Anthony.

PSO’s statement:

“During a dangerous and unprecedented challenge, PSO prioritized protecting the safety of our customers. Our securitization costs have been reviewed and found to be in the public interest. The securitization process includes a step for the trustee to provide final accounting. PSO will continue to inform the Commission of all updates in actual costs as directed in the final Order in this case.”

OG&E’s statement:

“OG&E’s fuel costs are always transparent to the Oklahoma Corporation Commission, to both commissioners and staff. While OG&E’s operations and costs from Winter Storm Uri were fully investigated and found to be reasonable and prudent by the Commission, we support any effort by the Attorney General to investigate any price gouging by natural gas marketers. While those costs were securitized, the law allows for funds to be clawed back from any natural gas marketers that may have exploited the situation, and those funds would be returned to customers. OG&E continues to source low-cost fuel for our customers every day; it’s our responsibility to protect our customers, to the extent we can, even though we do not profit from fuel purchases. Any questions about the bonds should be directed to the Oklahoma Department of Financial Authority (ODFA) as they are responsible for issuing the bonds and accounting for the costs of issuing the bonds.”

News 4 has reached out to the ODFA’s Deputy Treasurer whose signature is listed on the “Statement of Approval” sheets for each of the companies. We’re waiting to hear back.

Commissioner Anthony is also calling for evidence showing these utility companies made any attempt at investigating the legitimacy of the “astronomical” prices they paid for natural gas, especially the possibility that those prices were the result of price-gouging, fraud, unfair practices, inappropriate contract provisions, or market manipulation.