Rep. Gann challenges PSO’s 2021 winter storm bonds at OK Supreme Court

Gann Challenges PSO’s 2021 Winter Storm Bonds at OK Supreme Court

OKLAHOMA CITY – An appeal brief filed Thursday by Rep. Tom Gann, R-Inola, asks the Oklahoma Supreme Court to invalidate some $700 million in ratepayer-backed bonds issued to cover costs incurred by Public Service Company of Oklahoma (PSO) during February 2021’s Winter Storm Uri. Payments for those bonds have been collected on the monthly bills of PSO’s customers since the bonds were issued in September 2022. They are scheduled to continue for another 17 years.

Gann’s brief tells the court that the Oklahoma Corporation Commission (OCC) failed to provide a required audit of the bonds in PSO’s most recent rate case. He also argues PSO’s original 2021 Uri costs that were securitized into the bonds were never audited either.  Gann asserts the audit failures are fatal in both cases, making the OCC’s orders void. 

The brief says Oklahoma utilities PSO, Oklahoma Gas & Electric Co. (OG&E), Oklahoma Natural Gas (ONG) and CenterPoint/Summit paid some of the highest natural gas prices in U.S. history during two weeks in February 2021, incurring some $2.8 billion in debt. Interest and other expenses added another $2 billion, bringing the total cost of the bonds being paid by Oklahoma utility customers close to $5 billion.

Gann’s brief relies heavily on a report by former Oklahoma Accountancy Board Chairman David Greenwell filed at the OCC in July 2024. In it, Greenwell said the OCC’s audit activities with respect to the winter storm costs and bonds “do not appear to comply with state law.”  Former OCC Commissioner Bob Anthony also repeatedly criticized the one-page audits the OCC was putting forward to meet statutory requirements.

“When Oklahoma law requires an audit, the Accountancy Act says it has to be done by independent, licensed CPAs following nationally recognized standards,” said Gann, who is a former internal auditor for Tulsa International Airport. “Unbelievably, the OCC allowed the utilities to audit themselves after the winter storm. And OCC employees who are not CPAs have performed fake audits of the bonds ever since.”

Gann has asked the court to order everything that was wrongly collected from PSO’s customers to be refunded. He says that includes $130-million and $120-million rate increases approved by the OCC in November 2023 and January 2025. It also includes about $140 million of Winter Storm bond payments already collected as “Winter Storm Cost Recovery Rider” charges on PSO customer bills. 

OCC Commissioner Todd Hiett cast the deciding vote to approve each of the OCC orders Gann is challenging.  Gann’s brief argues the orders also should be overturned because Hiett violated state ethics rules by participating in the cases. Hiett has been publicly accused of alleged sexual harassment and drunk driving at a 2023 party hosted by PSO’s attorneys. Even though no charges have been filed, Gann’s brief says Hiett’s behavior has made him subject to undue influence and possible extortion by those attorneys and others, and a reasonable person would question his impartiality in PSO cases. 

In May 2025, the Ethics Commission dismissed a complaint against Hiett, finding that in this particular instance, Ethics Rule 4.7’s prohibition against conflicts of interest was not an issue. The Ethics Commission stated at the time that their decision took into account the constitutional requirements for the Corporation Commission, the legislative nature of the rate hikes and Oklahoma case law, including the well-recognized Rule of Necessity. Gann’s brief argues Commissioner Hiett should not have been held exempt from this rule and asks the Supreme Court to say so.

Similar Supreme Court appeals have also been filed in rate cases for OG&E and ONG. Gann has been joined by Reps. Kevin West, R-Moore, and Rick West, R-Heavener, in those appeals.

Gann’s full Brief in Chief can be read online here: https://www.oscn.net/dockets/GetDocument.aspx?ct=appellate&bc=1062686746&cn=CU-122861&fmt=pdf

PSO, the OCC and the Attorney General’s Office have 40 days to respond.

The progress of all the appeals can be followed on the Oklahoma Supreme Court website:

• PSO rate case: https://www.oscn.net/dockets/GetCaseInformation.aspx?db=appellate&number=122861
• ONG, PSO & OG&E CY2023 fuel cases: https://oscn.net/dockets/GetCaseInformation.aspx?db=appellate&number=122991
• OG&E rate case: https://oscn.net/dockets/GetCaseInformation.aspx?db=appellate&number=123021
• ONG rate case: https://oscn.net/dockets/GetCaseInformation.aspx?db=appellate&number=123348

Tom Gann serves District 8 in the Oklahoma House of Representatives. His district includes parts of Mayes, Rogers and Wagoner counties.