Senate Signs Off On Plan To Help Gas, Electric Providers Pay Off Fuel Costs From Winter Storms
Oklahoma lawmakers are acting quickly on a plan to help utilities pay off billions of dollars in debt incurred during February’s historic winter storms.
Senate Bills 1049 and 1050 would establish bond-financed, pooled loan programs for unregulated and regulated utilities, respectively. The bills passed the Senate with overwhelming support on Thursday. Lawmakers announced the plan Monday afternoon.
Utilities hold an estimated $4.5 billion in debt from natural gas prices that shot up because of surging demand during a deep freeze covering the central U.S., and the plan is designed to keep those costs from suddenly falling on customers who can’t pay.
Sen. Nathan Dahm (R-Broken Arrow) asked Sen. James Leewright (R-Bristow) about a $100 million limit in the state constitution on bonds issued by the Oklahoma Development Finance Authority, which will manage the securitization program.
"So, I’m having a hard time figuring out how we’re going to supersede that amount and possibly do up to $4.5 billion," Dahm said.
"Those are actually for [general obligation] bonds, which would actually have to go also before a vote of the people. What we are talking about is revenue bonds, which doesn’t fall underneath that," Leewright said.
The state has not issued general obligation bonds in almost 20 years.
Leewright said the securitization plan state officials came up with is better than even the biggest utility companies chasing private loans.
"It would be the difference between — with these bonds being issued — of between around a 2% interest rate to around 10% or more that they would acquire, which would require ratepayers to pay up to an extra half a billion dollars," Leewright said.
Only Dahm and Sens. Warren Hamilton (R-McCurtain), Shane Jett (R-Shawnee) and Jake Merrick (R-Yukon) voted against the bills. Merrick was sworn in Wednesday after winning a special election earlier this month for former state Sen. Stephanie Bice's District 22 seat.
The House will take up the bills next week. Investigations into whether there was price gouging from natural gas suppliers during February’s record-breaking cold snap are ongoing.