OMPA Approves Items to Mitigate Winter Storm Financial Impacts
Mike Seals - March 14, 2021 10:30 pm
The Board of Directors for the Oklahoma Municipal Power Authority approved at its March meeting a series of items as part of a plan to mitigate the financial impacts of a February winter ice storm and prevent cost increases to the member cities.
The Authority estimates that the cost impact of the storm to OMPA was approximately $60 million, though the exact amount will not be known for several months, as Southwest Power Pool market resettlements occur.
The Board approved a plan to spread the financial impact of the storm over a period of seven years. As a result, member utilities are not expected to see any wholesale rate increases for 2021 or 2022 as a result of storm costs.
The approved plan includes using funds from the Authority’s Rate Stabilization Fund and new debt issuance that will be amortized over the course of 7 years. To offset any increase from the new debt, the Authority is going to refinance existing bonds, taking advantage of current low interest rates providing a savings. The exact amount to be used from existing reserve funds and new debt will be determined over the next 2 months as costs become more certain.
All items were approved unanimously without dissent. “I am very pleased with the outcome of the plan developed by staff and our financial advisors. To be able to cover the extraordinary cost of the winter storm event and protect our members from cost increases is a win,” David Osburn, OMPA General Manager.
OMPA is governed by an 11-person Board of Directors that is made up of representatives from the cities and towns across Oklahoma that is serves. These Board members are seated by electors, and every member city or town has an elector. The Authority currently supplies power to 42 members.