The Corporation Commission was established in 1907 by Article 9 of the Oklahoma Constitution, and the First Legislature gave the Commission authority to regulate public service corporations, those businesses whose services are considered essential to the public welfare.
The legal principle for such regulation had been established in 1877 when the United States Supreme Court upheld a lower court ruling, Munn v. Illinois, that when a private company’s business affects the community at large, it becomes a public entity subject to state regulation.
Initially, the Corporation Commission regulated transportation and transmission companies, mostly railroads and telephone and telegraph companies. The Commission also was directed to collect and maintain records of the stockholders, officers and directors of all corporations chartered or licensed to do business in Oklahoma (about 12,500 at statehood).
As the state grew, the records collection task became larger than one agency could handle. The Commission kept authority for public service companies, and responsibility for other corporations was allocated to the Secretary of State and other state commissions and agencies according to business type.
The Second Legislature put oil pipelines under regulation. The Commission began regulating the prices of telephone calls in 1908 and telegrams in April 1912. Regulation of water, heat, light and power rates began in 1913.
The Commission began regulating oil and gas in 1914 when it restricted oil drilling and production in the Cushing and Healdton fields to prevent waste when production exceeded pipeline transport capacity. In 1915, the Legislature passed the Oil and Gas Conservation act. This expanded oil and gas regulation to include the protection of the rights of all parties entitled to share in the benefits of oil and gas production. Also in 1915, the Legislature declared cotton gins to be public utilities and extended Corporation Commission authority over utility companies to include practices as well as rates.
While the basic regulatory responsibility of the Corporation Commission has remained intact, many changes in state and federal laws have changed what is regulated. The Commission presently regulates public utilities, except those under municipal or federal jurisdiction or exempt from regulation; oil and gas drilling, production and environmental protection; the safety aspects of motor carrier, rail and pipeline transportation and the environmental integrity of petroleum storage tank systems.
The federal Motor Carrier Act of 1995 ended state authority for economic regulation (rates and routes) of intrastate transport of most commodities, but the Corporation Commission continues to enforce requirements for operating authority and insurance.
The Corporation Commission also enforces federal regulations for underground injection of water and chemicals, underground disposal of certain oil and gas waste fluids and remediation of soil and groundwater pollution caused by leaking petroleum products storage tanks.
The Corporation Commission has judicial, legislative and administrative authority. Three commissioners elected by statewide vote rule on all regulatory matters within Corporation Commission jurisdiction. Commission orders are appealable only to the Oklahoma Supreme Court.
The Corporation Commission comprises three commissioners who are elected by statewide vote to serve six-year terms. The terms are staggered so one commissioner vacancy occurs every two years. The election pattern was established when the Commission was created by the state constitution. The first three elected commissioners drew lots for two-year, four-year and six-year terms.
In-term vacancies are filled by gubernatorial appointment. Appointed commissioners serve until the next regular election. Thirteen commissioners have been seated by appointment.
The average tenure for a Commission panel (three commissioners sitting together) is about 4 years. The panel with the longest tenure was the 20th, when Harold Freeman, Wilburn Cartwright and Ray C. Jones sat together for more than 13 years (1955-1968). Jones has the longest individual tenure, serving nearly 30 years before retiring in January, 1976 for health reasons.
Through the end of Fiscal Year 2002, 35 persons had filled 38 commissioner vacancies. E.R. Hughes is the only commissioner to serve two non-successive terms. He was elected in 1920, lost a bid for reelection in 1926, then won another term in 1928.
Until the election of Bob Anthony in 1988, Hughes had been the only Republican elected or appointed to the Commission. The election of J.C. Watts in 1990 gave Republicans their first majority. The Republican majority continued with the appointment of Ed Apple to succeed Watts in 1995. The appointment of Denise Bode in 1997 to replace Cody L. Graves, a Democrat, who resigned, gave Republicans all three Commission seats. Jeff Cloud, Republican, was elected to the Oklahoma Corporation Commission on November 5, 2002, to fill the seat being vacated by the retirement of Commissioner Ed Apple. Commissioner Cloud’s term concludes January 11, 2009.
Denise Bode resigned her Commission post in June of 2007. Governor Brad Henry appointed Jim Roth, a Democrat, to take her place until January 11, 2009, when the winner of the November’s general election will take the seat to serve the remainder of the term. The term concludes January 11, 2011.