Citing a need for answers to protect the public, the Oklahoma Corporation Commission (OCC) on Wednesday questioned the sudden turnaround by officials of Oklahoma Natural Gas (ONG) and its parent company ONEOK after ONEOK Chairman David Kyle offered to turn over documents OCC has requested for months. ONEOK had stalled the request through litigation, and the Oklahoma Supreme Court now has the case before it on whether OCC has the authority to request the company’s internal documents (see Daily GPI, Sept. 6).

While saying they were “grateful,” for the offer, commissioners questioned the timing and its conditions. ONEOK’s offer, according to the OCC, is “predicated on the understanding that the company still does not recognize the commission’s authority to request the documents.” So far, ONEOK and ONG “have tried and failed twice in the Oklahoma Supreme Court to get a ruling to that effect,” and a third attempt is presently before the state’s high court. ONEOK faces state penalties of more than $200,000 for its refusal to comply with the commission order.

Before taking ONEOK up on its request, Commission Chairman Denise Bode and Vice Chair Bob Anthony said the issue of authority must finally be resolved. “It is critically important not only to this case but future matters involving the restructuring of the various utilities,” said Bode. “This commission must be allowed to carry out its constitutional authority, or there will be no way of gathering information to be sure Oklahomans are protected.”

Anthony said he could not accept Kyle’s offer without recognizing that the OCC has authority in requesting documents. “We have a burning legal question here that goes to the heart of whether the commission can fulfill its constitutional responsibility to oversee what the Oklahoma constitution defines as a ‘public service company.’ We need the (Oklahoma) Supreme Court to rule on this.”

Bode also questioned ONEOK for making the offer at such a late date. “We’re going into the winter with this case still unresolved, because you (ONEOK) have been doing all you can to delay it, refusing to comply with our orders. It appears to me you’ve been less than forthright in this entire matter. I had numerous informal meetings prior to last winter with ONEOK and ONG officials about the impact of expected higher natural gas costs, and was repeatedly assured the company was taking action to mitigate the impact on consumers. Those assurances were proven to be less than accurate. As a result, consumers were hurt.”

Bode also warned ONEOK officials that it appeared the company had shown “almost a callous disregard” for consumers. Kyle, who appeared surprised by Bode’s comments, said he was not aware she had concerns about rising gas prices and the need for storage prior to last winter. In response, Anthony offered to assist Kyle in going over the past record of the case.

“The commission’s challenge is to take the evidence of this case and weigh it in the context of the law,” said Anthony. “I think the record makes clear mismanagement and imprudence on the part of ONG when it comes to the natural gas costs of last winter.”

Anthony recommended that ONG not be allowed to pass on to its customers the estimated millions in gas costs from last winter. Commissioner Ed Apple, who did not attend Wednesday’s meeting, filed a statement of position recommending the entire matter against ONEOK and its affiliates be dismissed, noting he did not believe the evidence substantiated the allegation that ONG was imprudent in its handling of gas costs last winter. At the end of the hearing, Bode and Anthony took the ONEOK offer regarding the requested documents under advisement, and agreed that the case should be settled by Oct. 31.

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