OCC Affirms No Cost Overruns Occurred With Issuance of Uri Securitization Bonds

OKLAHOMA CITY - On May 29, 2024, the Oklahoma Corporation Commission (OCC) issued an agency news release related to the issuance costs of Winter Storm Uri Securitization Bonds. The intent of the information was to demonstrate for utility customers that no cost overruns occurred with the issuance of the Securitization Bonds, even though additional time was required to process the sales given lawful Supreme Court protests.

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The OCC Public Utility Division (PUD) and Director of Administration have since issued an additional clarification available on the agency website here.

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The original document posted in conjunction with the release contained some scrivener's errors that did not impact the accuracy of the calculations presented. PUD has revised the errors and posted a mapped document to show both the original posting errors and the corrected data.  We sincerely apologize if any confusion resulted from these errors.

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Concerns were also voiced over PUD using one-half of the change in the Federal Interest rate as a surrogate for impacts to the bond rates during the period of extreme volatility on all interest rate impacted markets. To address this concern, the Division has posted a revised calculation that shows an illustrative computation using the change in the 30-year Treasury rate which occurred during the additional time taken at the Supreme Court versus the 70-91 days anticipated in the original timelines presented by the bond working group. It is important to stress that this calculation is only illustrative as we can never truly know exactly what might have happened absent the delay and there are too many variables to offer a "one size fits all" calculation result.

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PUD has provided data showing that even with the lawful protests and increased interest rates, the interest for the bonds at issuance still came in well below the Commission's ordered cap of 6%. Further, all expense categories passed through to the ratepayers came in at or below the estimates provided to Commissioners.  

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To recap: PUD and the OCC's Director of Administration deeply regret any confusion regarding the calculation, and any misunderstanding regarding what is, in fact, our strong and unwavering support for citizens to actively take part at all levels of government on matters of deep concern. Further, the Securitization Bonds were priced and issued at interest levels below the rate caps ordered by the Commissioners and agreed to by the stipulating parties that participated in the heavily litigated, public cases before the Commissioners. No cost overruns occurred.

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OKLAHOMA CITY - On May 29, 2024, the Oklahoma Corporation Commission (OCC) issued an agency news release related to the issuance costs of Winter Storm Uri Securitization Bonds. The intent of the information was to demonstrate for utility customers that no cost overruns occurred with the issuance of the Securitization Bonds, even though additional time was required to process the sales given lawful Supreme Court protests.

The OCC Public Utility Division (PUD) and Director of Administration have since issued an additional clarification available on the agency website here.

The original document posted in conjunction with the release contained some scrivener's errors that did not impact the accuracy of the calculations presented. PUD has revised the errors and posted a mapped document to show both the original posting errors and the corrected data. We sincerely apologize if any confusion resulted from these errors.

Concerns were also voiced over PUD using one-half of the change in the Federal Interest rate as a surrogate for impacts to the bond rates during the period of extreme volatility on all interest rate impacted markets. To address this concern, the Division has posted a revised calculation that shows an illustrative computation using the change in the 30-year Treasury rate which occurred during the additional time taken at the Supreme Court versus the 70-91 days anticipated in the original timelines presented by the bond working group. It is important to stress that this calculation is only illustrative as we can never truly know exactly what might have happened absent the delay and there are too many variables to offer a "one size fits all" calculation result.

PUD has provided data showing that even with the lawful protests and increased interest rates, the interest for the bonds at issuance still came in well below the Commission's ordered cap of 6%. Further, all expense categories passed through to the ratepayers came in at or below the estimates provided to Commissioners.

To recap: PUD and the OCC's Director of Administration deeply regret any confusion regarding the calculation, and any misunderstanding regarding what is, in fact, our strong and unwavering support for citizens to actively take part at all levels of government on matters of deep concern. Further, the Securitization Bonds were priced and issued at interest levels below the rate caps ordered by the Commissioners and agreed to by the stipulating parties that participated in the heavily litigated, public cases before the Commissioners. No cost overruns occurred.

Last Modified on Jul 01, 2024