Legality of $1B+ PSO Bond Payments, Rate Increases Now in Hands of OK Supreme Court

Nov 10, 2025

OKLAHOMA CITY – In a brief filed Monday, State Rep. Tom Gann, R-Inola, reiterated his challenge to $250 million in recent rate increases and more than $1 billion of bond payments approved by the Oklahoma Corporation Commission (OCC) and currently being collected from customers of electric utility Public Service Company of Oklahoma (PSO). PSO primarily serves customers in Tulsa, McAlester, Lawton and surrounding areas.

Gann’s appeal before the Oklahoma Supreme Court argues that the OCC failed to perform legally required audits related to February 2021’s Winter Storm “Uri,” making the OCC’s orders void and requiring refunds. He also argues the OCC violated PSO customers’ due process rights by allowing Corporation Commissioner Todd Hiett to participate in cases involving witnesses of Hiett’s alleged criminal conduct.

Hiett has been publicly accused of alleged sexual harassment and drunk driving at a 2023 party hosted by PSO attorneys Thompson Tillotson PLLC. Gann says state ethics rules require Hiett to disqualify from cases in which a reasonable person might question his impartiality, including cases involving those attorneys. In October, Attorney General Gentner Drummond, the OCC, PSO and the Oklahoma Industrial Energy Consumers (OIEC) all filed briefs defending Hiett. “Parties to legislative rate cases are not entitled to due process,” the attorney general wrote.

In its brief, the OCC specifically asked the court to dismiss the appeal claims against Hiett. Gann has been joined by State Reps. Kevin West and Rick West in five similar appeals brought in cases for OG&E and ONG. On Oct. 17, the attorney general and OCC filed a joint motion asking the court to suspend the other the utility appeals. The court’s Oct. 29 response denying that request was unequivocal: “This appeal shall proceed.”

The AG, OCC and PSO also defended allowing the utility to internally audit its own $700 million of 2021 Winter Storm “Uri” costs, as well as the OCC’s subsequent one-page “audits” of the ratepayer-backed bonds issued to pay for them. Gann argues none of these audits were lawful because they were not performed by independent CPAs.

In their briefs, the AG, OCC and PSO all argued the audits were lawful because licensed CPAs were not required. Gann writes their reading of the law “would permit OCC janitors and AG security guards to give financial testimony in OCC cases.”

“To allow State Agencies to make up their own standardless definition of ‘audit’ is absurd,” Gann writes. He predicts that this misinterpretation of the law will lead to “financial chaos across state government if it is allowed to stand.”

Oklahoma utilities PSO, OG&E, 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 winter storm bonds being paid by Oklahoma utility customers close to $5 billion.

Payments for PSO’s bonds have been collected as “Winter Storm Cost Recovery Rider” charges on the monthly bills of its customers since the bonds were issued in September 2022. They are scheduled to continue for another 17 years. The securitization law required those bond charges to be audited as part of the utilities’ subsequent rate cases. Gann says that hasn’t happened.

Unless it decides to request additional briefs from the parties, Gann’s appeal is now in the hands of the Oklahoma Supreme Court. Gann writes that he “has full confidence in this court’s ability to read and offer first-impression interpretations of the plain language of unambiguous laws, and to properly determine their applicability to the OCC.”

Gann’s full Reply Brief can be read online here:

https://www.oscn.net/dockets/GetDocument.aspx?ct=appellate&bc=1063629140&cn=CU-122861&fmt=pdf