IN THE MATTER OF THE APPLICATION OF OKLAHOMA DEVELOPMENT FINANCE AUTHORITY
2022 OK 47
| Okla. | 2022Background
- February 2021 winter storm caused extreme natural‑gas shortages and price spikes; Oklahoma Natural Gas Company (ONG) incurred approximately $1,284,101,405 in fuel costs.
- Oklahoma Legislature enacted the February 2021 Regulated Utility Consumer Protection Act authorizing securitization (ratepayer‑backed bonds) to spread recovery costs over time.
- Oklahoma Corporation Commission approved a Settlement Agreement and Final Financing Order allowing securitization and directing ODFA to issue bonds; no party appealed that financing order.
- ODFA applied to the Oklahoma Supreme Court under the Act for approval of ratepayer‑backed bonds (not to exceed $1.45 billion); three Protestants challenged the application, focusing on constitutionality, prudence of costs, the filed‑rate doctrine, and an Open Meetings Act claim.
- The Court assumed original jurisdiction, relied on its recent, similar OG&E decision, and reviewed whether the bonds were authorized under the Act and constitutional.
- The Court held the bonds were properly authorized and constitutional; it rejected the Open Meetings Act challenge and noted challenges to the Final Financing Order were untimely because the order was appealable but unappealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the bonds were properly authorized under the Act | Protestants: statutory process or authorization defective; securitization not valid here | ODFA/Commission: Act authorizes securitization; statutory process and Commission order complied with Act | Bonds facially authorized under the Act and valid for approval |
| Constitutionality of ratepayer‑backed bonds | Protestants: bonds unconstitutional (general challenge to validity of securitization/debt) | ODFA: bonds are traditional, self‑liquidating, historically upheld instruments; stare decisis supports validity | Bonds constitutional; Court follows prior controlling decisions |
| Challenge to prudence of ONG fuel costs / filed‑rate doctrine | Protestants: Commission erred in finding costs prudent; filed‑rate doctrine issues | ODFA/Commission: Commission made final financing order after hearings; the order was appealable but not appealed | Financing order is final and not subject to collateral attack here; filed‑rate doctrine not adopted in OK |
| Open Meetings Act challenge to January 25, 2022 Commission action | Ritze: Commission failed to post agenda for continued meeting; action invalid | Commission/ODFA: meeting was properly continued from Jan 20 with public announcement of date/time per statute | No Open Meetings Act violation; continued meeting complied with statutory notice requirements |
Key Cases Cited
- In re Application of the Oklahoma Turnpike Auth., 431 P.3d 59 (Okla. 2018) (court's bond review limited to facial legality)
- In re Application of the Oklahoma Capitol Improvement Auth., 958 P.2d 759 (Okla. 1998) (upholding self‑liquidating bonds and deference to legislative fiscal policy)
- Fent v. Oklahoma Capitol Improvement Auth., 984 P.2d 200 (Okla. 1999) (statutory interpretation favoring constitutionality when two readings exist)
- Fraternal Order of Police v. City of Norman, 489 P.3d 20 (Okla. 2021) (analysis of Open Meetings Act procedural requirements)
- Satellite Sys., Inc. v. Birch Telecom of Okla., Inc., 51 P.3d 585 (Okla. 2002) (noting Oklahoma has not adopted the filed‑rate doctrine)
- State ex rel. Comm'rs Land Office v. Corp. Comm'n, 590 P.2d 674 (Okla. 1979) (finality of administrative orders)