OKLAHOMA CITY — Oklahoma lawmakers plan to propose legislation that would help shelter consumers and utility companies from the more than $4.5 billion in energy generation costs as a result of February’s winter storm.
Under the legislative measures expected to be filed this week, state Sen. James Leewright, R-Bristow, said state leaders plan to propose securitizing the debt incurred during the two-week winter storm that sent natural gas prices skyrocketing.
Instead of requiring consumers to pay thousands of dollars at once, the legislative measure would rely on the issuance of bonds to pay off utility obligations. In return, consumers would see a tariff added to their monthly bills that could potentially last a decade. The utility would collect that charge from the consumer to repay the bond. The tariff is legally sacrosanct from bankruptcy, officials said.
The legislation would only permit the issuance of bonds to pay for the costs from February’s storm.
Leewright said the measure comes as energy bills are coming due that ratepayers and businesses must pay.
“Doing nothing will have financially devastating effects for Oklahoma families, businesses and our overall economy,” he said. “If we do nothing, this cost for families, seniors (with) with fixed incomes, single working families can be strapped with bills they struggle to pay, leaving them to choose between paying for necessities or paying the electric and gas bill.”
He said businesses still reeling from the effects of the pandemic also could be forced to make cutbacks or layoffs to pay their high utility bills.
Brandy Wreath, director of the Oklahoma Corporation Commission’s public utility division, said ahead of the winter storm the average Oklahoman paid $104.84 for their natural gas bill. Without any intervention by the state, their post-storm cost would balloon to $1,967.23 in the first month and about $1,230.83 a month for months two through eight, he said.
Under the proposed mitigation strategy, Oklahomans could pay as high as a $50 surcharge on their monthly bill to mitigate the cost over 10 years, but wouldn’t have to pay thousands a month, he said. The amount of the surcharge would likely vary depending on how much gas a consumer uses.
Kenneth Wagner, the state secretary of energy and environment, said officials have been meeting behind closed doors nearly every day for six weeks to develop a solution. He said they were searching for a way to protect municipal gas systems and others who were impacted by the soaring non-regulated gas costs.
The option would also be available to wholesale providers that power municipalities, such as the Grand River Dam Authority, the 42 Oklahoma Municipal Power Authority members, electric co-ops, nonprofit hospitals that have incurred unprecedented costs that would jeopardize their operations, as well as school districts
Mike Fina, Oklahoma Municipal League executive director, said some municipalities are in desperate need of relief.
“We’re not talking about the large cities,” he said. “We’re talking about our small municipalities that cannot afford these bills. They need a lifeline. And the state is providing that because we’re in desperate need.”
Fina said some of the bills are exceeding small communities’ annual budgets.
Janelle Stecklein covers the Oklahoma Statehouse for CNHI's newspapers and websites. Reach her at email@example.com.