IOCHEM CORPORATION v. OKLAHOMA CORPORATION COMMISSION
2021 OK CIV APP 28
| Okla. Civ. App. | 2021Background:
- NWEC is a rural electric cooperative with a certified service territory that includes the Sweet well; OG&E is an investor-owned utility that had historically supplied power to IOCHEM's private distribution system under a 1987 authorization invoking the one‑megawatt exception.
- Beginning in 1997 NWEC served several of IOCHEM’s wells; the Sweet well had been served by NWEC from 2000 until May 14, 2018.
- In March 2018 IOCHEM disconnected the Sweet well from NWEC and connected it to IOCHEM’s OG&E‑fed private grid without OCC approval; NWEC then filed a complaint at the Oklahoma Corporation Commission (OCC) against OG&E for violating RESCTA.
- The OCC, en banc, found the Sweet well was an "electric‑consuming facility" previously lawfully served by NWEC and ordered OG&E to stop serving the Sweet well and refrain from furnishing or making service available to it.
- The OCC stayed enforcement pending appeal only upon filing a supersedeas bond of $212,677.11 to protect NWEC’s lost revenues; IOCHEM appealed the OCC order and bond amount.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether OCC properly barred OG&E from serving the Sweet well under RESCTA §158.25A | NWEC: OG&E invaded NWEC’s exclusive certified territory by furnishing service to a facility located in NWEC’s territory | OG&E/IOCHEM: The point of delivery/measurement (private grid/metering) controls; prior authorization (one‑megawatt exception) and IOCHEM control of connection justify service | Held: OCC decision affirmed — Sweet well is an electric‑consuming facility previously served by NWEC; OG&E prohibited from serving it absent OCC order |
| Whether any RESCTA exceptions (one‑megawatt exception) allowed OG&E to serve | NWEC: No exception applies to the Sweet well | OG&E/IOCHEM: 1987 authorization under §158.25E (one‑megawatt) covered service to IOCHEM’s private grid | Held: No applicable exception; parties did not assert Sweet well exceeded one megawatt; exception did not permit OG&E service here |
| Whether IOCHEM’s equitable defenses (waiver/estoppel) could defeat enforcement | IOCHEM: NWEC’s conduct and equities bar enforcement; IOCHEM should be allowed to assert equitable defenses | OCC/NWEC: RESCTA enforcement is a regulatory action; entertaining equitable defenses would convert matter to a private dispute outside OCC’s role | Held: OCC acted within discretion to decline to resolve those equitable defenses in this enforcement action |
| Whether OCC properly fixed the supersedeas bond amount | IOCHEM: Bond was excessive and functioned as an improper damages award | OCC/NWEC: Bond is an adjudicative protection for the nonappealing party; amount reflects NWEC’s lost revenue during appeal | Held: Bond amount supported by substantial evidence and within OCC authority under Art. IX, §21 and precedent |
| Whether OCC exceeded jurisdiction or violated due process / brine owners’ rights | IOCHEM: Order is arbitrary, imposes disproportionate burden on IOCHEM and unit owners; exceeds OCC jurisdiction | OCC/NWEC: RESCTA grants OCC power to enforce territories; brine unit management and duty to secure power rests with IOCHEM under Brine Development Act | Held: OCC did not exceed jurisdiction and no substantive due process violation; brine owners have no separate due‑process claim against OCC order |
Key Cases Cited
- Public Service Co. of Oklahoma v. State ex rel. Corporation Commission, 842 P.2d 750 (Okla. 1992) (scope of OCC authority under RESCTA and supervisory powers)
- Smith Cogeneration Management, Inc. v. The Corporation Commission, 863 P.2d 1227 (Okla. 1993) (presumption of correctness and OCC discretion)
- Southwestern Bell Telephone Co. v. Oklahoma Corporation Commission, 897 P.2d 1116 (Okla. 1994) (setting supersedeas bond is an adjudicative inquiry)
- Teleco, Inc. v. Corporation Commission, 653 P.2d 209 (Okla. 1982) (wide discretion of the Commission in performing duties)
- Turpen v. Oklahoma Corporation Commission, 769 P.2d 1309 (Okla. 1988) (standards for review of OCC findings)
- Braitsch v. City of Tulsa, 436 P.3d 14 (Okla. 2018) (substantive due process standard)