Judges criticize State AG in decision in bond case

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Attorney General John O’Connor let Oklahoma taxpayers down by shitting his job, some members of the Oklahoma Supreme Court said in a ruling released Tuesday. (Photo by Janice Francis-Smith)

OKLAHOMA CITY — Oklahoma Attorney General John O’Connor let the state’s taxpayers down by shying away from his job, some members of the Oklahoma Supreme Court said in a ruling released Tuesday.

It was O’Connor’s duty to make sure ratepayers didn’t profit when natural gas prices soared from around $3 per unit to nearly $1,200 per unit during the historic February 2021 winter storm. , the judges wrote, but O’Connor refused to do so. every step of the way, the judges wrote.

“The consumers of public services whom the Attorney General should represent have effectively been left without representation,” wrote Justice Douglas L. Combs. “Their access to a lawyer rests with the Attorney General. Yet he disappointed them.

The court on Tuesday approved paperwork for $739 million in bonds issued by the Oklahoma Development Finance Authority to cover extraordinary fuel costs accrued by Oklahoma Gas & Electric Co. (OG&E) during the 2021 Winter Storm Uri. The court will also be asked to approve a $1.45 billion bond issue for Oklahoma Natural Gas, $725 million for Public Service Co. of Oklahoma and $95 million for Summit.

Some judges seemed reluctant to approve the bond issue, wondering why the Oklahoma legislature chose to involve them in the process. When lawmakers voted last year to allow utilities to use ODFA bonds to cover fuel costs, they stipulated that the Oklahoma Supreme Court would have to approve the bond issuance.

However, the court only has the power to rule on whether the bond was issued properly, not whether the issuance of the bond itself treats taxpayers fairly.

“Although the bonds are apparently valid, I write separately to re-emphasize that this Court is not authorized to consider the fiscal policy choices of the Legislative Assembly,” the Deputy Speaker wrote. Supreme Court Mr. John Kane.

“This is now the second time in weeks that this Court has been prompted by statute to pre-emptively ‘approve’ the issuance of hundreds of millions of dollars of government guaranteed bonds, including debt which will be borne entirely by the people of Oklahoma,” Rowe wrote. On April 5, the court approved the Oklahoma Capitol Improvement Authority’s request to borrow from the federal government to provide the Department of Transportation with energy. Oklahoma funding for rural road improvements.

“Despite the limited scope of our review, our approval of the bonds in question will permanently exclude the right of any person or entity to challenge the validity of these bonds in the future, even in the event of a meritorious claim,” Rowe wrote. “Once again, we are being asked to make a premature judgment on the compliance of bonds that have not yet been issued with the laws and the Oklahoma State Constitution.”

Although more than a dozen challengers filed with the court, the court’s limited authority in the case prevented the judges from addressing issues raised by the challengers regarding the details of the settlement. Those concerns should have been considered when the utilities made their claims to the Oklahoma Corporation Commission, the justices wrote.

Oklahoma’s attorney general generally acts as the taxpayers’ advocate in utility cases before the commission, but O’Connor declined to take a position on whether the costs incurred were justified.

“While the Attorney General did not actively support the settlement agreement between OGE and the other parties during the hearing on the merits, he again made it clear in the post-hearing briefing that the securitization bonds would save customers money,” O’Connor wrote when asked. by the Oklahoma Supreme Court for his contribution to the case.

O’Connor issued a “no action notice” in the case, saying he would have “nothing substantial to add” to the proceedings. O’Connor took no position on the settlement agreement but welcomed securitization efforts in general.

“What concerns me most, however, is the Attorney General’s abdication of his duty to OG&E consumers in this action,” Judge Combs wrote. “The Attorney General has a legal obligation” as the chief law officer of the state. . . [t]o representing and protecting the collective interests of all consumers of public utilities in this State in rate proceedings before the Corporation Commission. However, he shied away from this duty.

Combs noted that Protestants appealing the bond issue would have to file a $760 million replacement bond, which no doubt had a “chilling effect on anyone who decides to file an appeal.”

“Of all people, the Attorney General would have been the best party to file such an appeal, especially since he arguably doesn’t have to post the nearly $1 billion replacement bond that other Protestants would,” Combs wrote. “The Attorney General’s failure to file an appeal is ultimately what prevents this Court from deciding the substantive issues raised by the Protestants.”

Rachel Roberts, director of communications for the Oklahoma attorney general’s office, said the attorney general’s office supports efforts to reduce the amount of the settlement agreement. The bonds issued will save taxpayers hundreds of millions of dollars in interest, Roberts said.

“Our office always represents taxpayers vigorously and we did so in this case, despite the opinion of two judges who were unaware of the entire process,” Roberts said.

At the time the storm hit, Mike Hunter was Oklahoma’s attorney general. Noting the exorbitant fees for natural gas that rose while the state of emergency was in effect, Hunter had vowed his office would investigate to ensure that state anti-gouging laws were not violated. However, a scandal prompted Hunter to resign in May 2021, and Governor Kevin Stitt nominated O’Connor to fill the position.

Over the next year, O’Connor’s office found no instances of price hikes and dropped a lawsuit against energy companies after learning that oil is an exempt commodity. government on price gouging.

“Governor. Stitt should have made me Attorney General – I fought more for the taxpayers,” said former lawmaker Mike Reynolds, one of the protesters in the case. Reynolds said he filed three lawsuits to challenge the securitization plan and expressed frustration that the Oklahoma Supreme Court approved the bond issue before answering Reynolds’ question whether the bond issue plan is constitutional.

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