| Opinion: | In the Matter of Application of the Oklahoma Development Finance Authority, 2022 OK 48 |
| Subject matter: | Bonds |
| Date Decided: | May 24, 2022 |
| Trial Court: | N/A |
| Route to this Court: | Original Jurisdiction |
| Facts: | Following the record cold temperatures of February 2021, Public Service Company of Oklahoma (PSO) incurred costs amounting to $675,200,000. Many consumers would not be able to pay in a one time payment, so the Legislature created 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 (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. PSO was approved to recover costs amounting to $688,000,000. No Protestants filed a challenge. |
| Standard of Review: | Not specified. |
| 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. |
| Outcome: | Proposed bond issue approved. |
| Vote: | 8-1. Per Curiam Opinion; Darby, C.J., Kane, V.C.J., Kauger, Winchester, Edmondson, Combs, and Gurich, J.J., concur.Rowe, J. (by separate writing), concurs in result.Kuehn, J., recused. |
| Other: | J. Rowe concurs in the result, but expresses concerns similar to those in 2022 OK 41 and 2022 OK 47. He goes on to point out that the Court has approved $3,270,000,000 in bonded indebtedness to be borne by Oklahomans (for reference, the State’s budget for FY 2022 authorized approximately $9,060,000,000 in appropriations). Additionally, J. Rowe is concerned with the precedent this sets for future bond approval, along with the fact that for the next 20 years, Oklahomans are saddled with significant financial obligations. |