A. The Oklahoma Corporation Commission may determine upon receiving an application or in any proceeding where the issue is properly brought before it that extreme purchase costs, extraordinary costs or both, requested for recovery by a regulated utility are subject to this act and may be mitigated through securitization in order to reduce the utility bill impact on customers. For the purposes set forth in this section, the utility shall:
1. Provide the known extreme purchase and extraordinary costs, and estimates of any extreme purchase or extraordinary costs not yet finalized that are being requested for recovery through securitization;
2. Demonstrate the utility bill impacts of securitization and the degree of savings customers would experience related to issuing ratepayer-backed bonds in comparison with traditional utility financing; and
3. Facilitate a timely audit of all costs requested for recovery prior to the utility being authorized to recover costs through the issuance of a financing order.
B. The Commission may develop forms and procedures to receive and review applications for the establishment of qualified costs; provided, the application shall require but not be limited to the amount of extreme purchase costs and extraordinary costs requested for recovery and any other information or documentation required by the Commission to effectuate this act.
C. The Commission shall consider the following factors when determining whether extreme purchase costs or extraordinary costs should be mitigated by the issuance of ratepayer-backed bonds:
1. Substantial revenue requirement savings that may be incurred to the benefit of customers by relying on lower carrying charges related to ratepayer-backed bonds rather than by conventional financing obtained by the regulated utility;
2. Customer utility bill impact that may be mitigated by mandating a longer amortization period for recovery than would otherwise be practicable or feasible for the regulated utility; and
3. The issuance of ratepayer-backed bonds that may be completed at a sufficiently low cost such that customer savings are not exhausted or offset.
D. 1. The Commission may engage financial advisors or other consultants as may be necessary to assist in the evaluation required pursuant to subsection C of this section. Expenses incurred for those purposes shall be recoverable as administrative expenses of the Oklahoma Development Finance Authority through the issuance of ratepayer-backed bonds pursuant to Section 8 of this act.
2. The provisions of the Oklahoma Central Purchasing Act, Section 85.1 et seq. of Title 74 of the Oklahoma Statutes, shall not be applicable to the engagement authorized by paragraph 1 of this subsection but shall be subject to review by the Deputy Treasurer for Policy and Debt Management.
E. In determining the amount of extreme purchase costs and extraordinary costs to be mitigated through securitization, the Commission shall determine that the amounts incurred would otherwise be recoverable from customers as fair, just and reasonable expenses and prudently incurred.
F. Extreme purchase costs and extraordinary costs determined by the Commission to be subject to this act and to be mitigated by issuing ratepayer-backed bonds shall include carrying costs at an appropriate rate determined by the Commission as set forth in a financing order. The carrying costs shall begin accruing at a time determined by the Commission in the financing order and continue until the date that ratepayer-backed bonds are issued, or the costs are otherwise recovered.
G. To the extent the regulated utility receives insurance proceeds, governmental grants or any other source of funding that compensates it for extreme purchase costs or extraordinary costs subject to securitization, or if actual amounts are determined to be lower than estimated amounts, those amounts shall be used to reduce the extreme purchase costs or extraordinary costs of the utility recoverable from customers. The Commission shall direct whether the funds shall be provided directly to the Authority to offset amounts securitized or whether they shall be held as a separate regulatory liability offsetting rate base or returned to customers through some other appropriate regulatory mechanism. The amounts so received shall accrue carrying charges at a rate equivalent to the rate determined pursuant to subsection F of this section if they are received before ratepayer-backed bonds are issued. If received after the issuance of ratepayer-backed bonds, the amounts shall accrue carrying charges at a rate determined by the Commission.
Added by Laws 2021, c. 204, § 4, emerg. eff. April 23, 2021.