Corporation Commissioner Bob Anthony blocked from new discussion of utility rate audits

Two Oklahoma Corporation Commissioners clashed in a heated argument Tuesday with one accusing the other of being dishonest in a debate over whether state laws regarding audits were followed in the aftermath of harsh winter storms of 2021 when electricity and natural gas companies requested rate assistance.

Commissioner Bob Anthony submitted a request for a 10-minute presentation by David Greenwell, a certified accountant and member of the Oklahoma Accounting Hall of Fame. Greenwell said he wasn’t focusing on any particular case, but just looking at the Securitization Act that was passed after Winter Storm Uri gripped the state in subzero temperatures.

Greenwell's report has been filed by Anthony under a case for OG&E's proposed rate increases . OG&E plans to implement the increases before the commission hears the request, which is allowed by state law and is currently under review by an administrative law judge.

However,commission Chairman Todd Heitt did not allow the presentation, saying it would violate the commission’s rules and throw members into a quandary. He said it is common to receive comments after a case is closed, but they bear no weight in the record and can’t be used as evidence.

Attorneys from OG&E, the commission's Public Utility Division and the Office of the Attorney General agreed with Heitt, with some citing closed cases, deadlines, rules of practice requiring a motion to reopen the case and said if the presentation was allowed, it would not count as evidence.

An OG&E attorney told the commissioners he opposed hearing Greenwell's report, arguing it could taint the current rate case even though a summary of the report appeared on the commissioners' agenda. He declined further comment after the meeting.

Anthony said the comments of those opposing the presentation were “truly astonishing” and said the real issues were integrity, confidence, competence, open government, legitimacy, openness, transparency, honest audits and lawful conduct.

In March, Anthony had called for a full audit of fuel and bond costs for the storm , arguing that the one-page audit submitted at the time was insufficient.

“That one page audit is absurd, and every one of you that is involved in these cases ought to know it,” he said.

Heitt accused Anthony of dishonesty and patterns of deception. He said Anthony and Greenwell missed their opportunity to question the audit process during the June public comment hearing on the pending OG&E rate case.

“He waits until the record is closed, at which time he can no longer legally have any impact on the case, and he cries foul. Why does he do that? He does that to trick the public into believing that he's on their side,” Heitt said. After the meeting, Heitt said he had a good relationship with Anthony until recently.

Commissioner Kim David suggested setting up a session in the future to talk about Greenwell’s presentation and inviting legislators, who could offer input on the way the law was written. She said they needed to follow the rules on public comment and evidence being submitted.

Anthony countered both and said he wasn’t trying to trick anyone. He said he planned another filing, which would include communications from the state auditor and inspector in 2016 that cautioned the commission on using the word “audit.”

In the commissioner's words, the Corporation Commission has been “conducting fake audits of the billions in 2021 winter storm fuel and bond costs,” Anthony said.

“When it came to the 2021 Winter Storm – and some of the most expensive cases this Commission has ever considered – this agency chose not to follow the law. Even when the cost of the 2021 Winter Storm bonds came in a billion dollars higher than the OCC had estimated,” he said.

What Greenwell’s report said

In his report , Greenwell said his research found the audit activities overseen by the Corporation Commission did not appear to comply with the auditing requirements specified in the law that established the 2021 Winter Storm bond program.

Using the internal audits from utility companies (even if from licensed CPAs) does not meet the Oklahoma Accountancy Act’s definition of an audit , Greenwell’s opinion said. Generally accepted auditing standards require the auditors to be independent, he added.

Greenwell said the documents that the Commission refers to as “audits” would not be considered sufficient according to the guidelines by the Oklahoma Accountancy Board and the American Institute of Certified Public Accountants. Hiett responded that most parties in rate cases hire their own auditors and submit their findings to the commission as part of their arguments.

2021 Winter Storm Uri caused havoc on utilities

In 2022, the Oklahoma Development Finance Authority issued roughly $3 billion of Winter Storm Uri ratepayer-backed bonds on behalf of Oklahoma Gas and Electric Co., Oklahoma Natural Gas, Public Service Co. of Oklahoma and Summit.

On Sept.15, 2023, Hiett released a one-page audit of more than $1.3 billion of ONG’s February 2021 Winter Storm ratepayer-backed bond financing to the governor, legislative leaders and the finance authority.

Anthony said that the one-page audit of ONG was “ludicrous, pitiful, farcically inadequate and another attempt at whitewash and cover-up.” He said the audit "did not remotely meet the criteria for an audit” as defined by state statute.

In March, Anthony said he was told by both the state treasurer's office and the Oklahoma Development Finance Authority that neither agency has an audit from the storm.

This article originally appeared on Oklahoman: Corporation Commissioner Bob Anthony blocked from new discussion of utility rate audits