State Rep. Avery Frix, R-Muskogee, just issued the following letter addressing a spike in many families’ utility bills stemming from the February winter storm:
I’ve talked to a number of people from our district who have questions about the higher utility bills they anticipate after February’s unprecedented low temperatures and snow and ice that blanketed our state for days. The arctic storm not only hit Oklahoma but much of the country, and therein lies the problem.
Normally during a severe weather event, we could borrow power from neighboring states as part of the Southwest Power Pool (SPP). Unfortunately, since we were all in the same predicament, there was no power available to borrow, and the storm also affected the energy facilities. Many customers were hit with rolling blackouts in an effort to conserve energy and protect the grid. The storm also caused natural gas demand to rise dramatically, which, combined with the severe supply issues, caused a significant escalation in prices. In some cases around the state we saw natural gas prices rise over 30,000% per dekatherm.
The total bill Oklahoman’s are facing is estimated to be in the range of four to five billion dollars before any federal government aid, which we are expected to receive. Without legislative intervention, these costs could be directly passed on to utility customers, resulting in energy bills of thousands of dollars. To avoid this, the Legislature has been actively discussing actions to reduce the costs to customers while protecting state utilities.
First, we are conducting a thorough review of regulated utility purchasing decisions as well as market manipulation and price gouging reports. We’ve asked state Attorney General Mike Hunter to begin investigating as well.
If it is determined that utilities must pay the remaining cost after federal aid, it has been suggested costs be spread out over time with low interest rates. To do this requires legislation setting up a securitization program the state would oversee. This state entity would include expenses in bond payments from customers, and it would be limited to overseeing bonds for the 2021 arctic storm. The Oklahoma Corporation Commission would set the amount to be included in the bonds as well as complete an audit of all expenses before recovery from customers is started. The goal is to reduce immediate bill impact by delaying collection and then spreading costs over time. The investigatory proceeds could also be used to offset the cost of bonds.
We also are working on the issue of unregulated utilities, which sometimes lack the financial capability to carry debts. In order to help affected Oklahomans, the Legislature is looking to set up a loan program to help these unregulated utilities pay off storm debts over time so their customers are not hit with one large utility bill. We also are discussing potential legislation to address this issue. I and other lawmakers are working to make sure Oklahomans are not stuck with extremely high utility bills, and that we have a better plan in place moving forward.