Opinion:In the Matter of Application of the Oklahoma Development Finance Authority, 2022 OK 47
Subject matter:Bonds
Date Decided:May 24, 2022
Trial Court:N/A
Route to this Court:Original Jurisdiction 
Facts:After the record cold temperatures of February 2021, Oklahoma Natural Gas had to use 50% of the gas it held in storage and had to buy gas at market price. This resulted in extreme costs being incurred by ONG. The Legislature subsequently passed the February 2021 Regulated Utility Consumer Protection Act. The Act allowed consumers to pay a much smaller sum over a longer period of time. The Act authorized the Oklahoma Corporation Commission to approve the utilities’ recovery of prudently incurred costs via securitization, which creates a property right to revenues collected by a regulated utility from customers under an irrevocable and non-bypassable mechanism. The  property right is then sold and used as security for the repayment of the ratepayer-backed bonds. 

After securitization and financing, ONG was approved to recover $1,357,300,000. By using the securitization method, ONG testified that it would save consumers $700 million. ODFA filed an application with the Oklahoma Supreme Court to approve the bonds. Three Protestants challenged the application, focusing mostly on the constitutionality of the bonds. The two questions posed are 1) whether the ratepayer-backed bonds were properly authorized under the Act and 2) whether the bonds are constitutional.
Standard of Review:In reviewing bonds, the Court’s duty  is to determine whether the bonds facially violate the law and to examine the legal authority presented by protestants. In re Application of Okla. Turnpike Auth., 2018 OK 88, ¶ 5. A heavy burden is placed on those challenging a legislative enactment, and every presumption is to be indulged in favor of the constitutionality of a statute. In re Application of Okla. Capitol Improvement Auth., 1998 OK 25, ¶ 8. When given two possible interpretations of a statute, the court is bound to choose the interpretation that will render the statute constitutional, unless constitutional infirmity is shown beyond a reasonable doubt.  Fent v. Okla. Capitol Improvement Auth., 1999 OK 64, ¶ 3.
Analysis:The authorization of the ratepayer-backed bonds properly followed the Act, and the bonds are self-liquidating and therefore constitutional.
Regarding the first question, the Court states that the Act followed the law, the process laid out by the Act was followed, and the bonds appear facially valid. Because of this, the ratepayer-backed bonds were properly authorized under the Act.

Regarding the second question, the Court determined the bonds were constitutional. The Court’s job is to protect from indebtedness, and bonds have long been excepted from this. Oklahoma Constitution Article X, § 23 and § 25. Self liquidating projects like the bonds are constitutional because they did not create a debt; the bonds issued were retired solely from revenues derived from the project itself. Further, the Act specifically provides that the ratepayer-backed bonds shall not at any time be deemed to constitute a debt of the State or ODFA. Because the bonds do not create indebtedness, they are constitutional.

Protestants raised issues regarding the filed-rate doctrine and whether ONG’s fuel costs were prudently incurred, which involves examining the Commission’s Final Financing Order. The Act provided that the Commission’s financing order is appealable. However, no party appealed the financing order. The record regarding the approval of the Final Financing Order is not before the Court, and the financing order is therefore final. 
Outcome:Proposed bond issue approved. 
Vote:6-1. Per Curiam Opinion; Darby, C.J., Kane, V.C.J., Kauger, Winchester, Edmondson, and Gurich, J.J., concur.Rowe, J. (by separate writing), concurs in result.Combs and Kuehn, J.J., recused.
Other: J. Rowe concurs in result, but expresses similar sentiments as he did in 2022 OK 41. He does not like the “statutorily-mandated pre-approval of the bonds” that forecloses the possibility of a future claim.