| Opinion: | In the Matter of Application of the Oklahoma Development Finance Authority, 2022 OK 49 |
| 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, Summit Utilities Oklahoma (SUO) incurred costs amounting to $75,678,535. 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 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. 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: | 7-1. 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, 2022 OK 47, and 2022 OK 48. |