Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Significant Accounting Policies

Organization

The Company is an energy and energy services provider offering physical delivery and related services for both electricity and natural gas primarily in the south central United States. The Company conducts these activities through four business segments:  (i) electric utility, (ii) natural gas transportation and storage, (iii) natural gas gathering and processing and (iv) natural gas marketing.  All significant intercompany transactions have been eliminated in consolidation.

The electric utility segmentgenerates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas.  Its operations are conducted through OG&E and are subject to regulation by the OCC, the APSC and the FERC.OG&E was incorporated in 1902 under the laws of the Oklahoma Territory.  OG&E is the largest electric utility in Oklahoma and its franchised service territory includes the Fort Smith, Arkansas area.  OG&E sold its retail natural gas business in 1928 and is no longer engaged in the natural gas distribution business.

Enogex is a provider of integrated natural gas midstream services.  Enogex is engaged in the business of gathering, processing, transporting, storing and marketing natural gas.  Most of Enogex's natural gas gathering, processing, transportation and storage assets are strategically located in the Arkoma and Anadarko basins of Oklahoma and the Texas Panhandle.  Enogex's operations are organized into three business segments: (i) natural gas transportation and storage, (ii) natural gas gathering and processing and (iii) natural gas marketing.AtDecember 31, 2011, the Company indirectly owns an81.3 percentmembership interest in Enogex Holdings, which in turn owns all of the membership interests in Enogex LLC, a Delaware single-member limited liability company (see Note 4).  The Company continues to consolidate Enogex Holdings in its Consolidated Financial Statements as OGE Energy has a controlling financial interest over the operations of Enogex Holdings.  Also, Enogex LLC holds a 50 percent ownership interest in Atoka.  The Company consolidates Atoka in its Consolidated Financial Statements as Enogex acts as the managing member of Atoka and has control over the operations of Atoka.

OGE Energy charges operating costs to its subsidiaries based on several factors. Operating costs directly related to specific subsidiaries are assigned to those subsidiaries.  Where more than one subsidiary benefits from certain expenditures, the costs are shared between those subsidiaries receiving the benefits.  Operating costs incurred for the benefit of all subsidiaries are allocated among the subsidiaries, either as overhead based primarily on labor costs or using the "Distrigas" method.  The Distrigas method is a three-factor formula that uses an equal weighting of payroll, net operating revenues and gross property, plant and equipment.  OGE Energy adopted the Distrigas method in January 1996 as a result of a recommendation by the OCC Staff.  OGE Energy believes this method provides a reasonable basis for allocating common expenses.

Basis of Presentation

In the opinion of management, all adjustments necessary to fairly present the consolidated financial position of the Company atDecember 31, 2011and2010and the results of its operations and cash flows for the years ended December 31, 2011, 2010 and 2009, have been included and are of a normal recurring nature except as otherwise disclosed.

Accounting Records

The accounting records of OG&E are maintained in accordance with the Uniform System of Accounts prescribed by the FERC and adopted by the OCC and the APSC.  Additionally,OG&E, as a regulated utility, is subject to accounting principles for certain types of rate-regulated activities, which provide that certain actual or anticipated costs that would otherwise be charged to expense can be deferred as regulatory assets, based on the expected recovery from customers in future rates.  Likewise, certain actual or anticipated credits that would otherwise reduce expense can be deferred as regulatory liabilities, based on the expected flowback to customers in future rates.  Management's expected recovery of deferred costs and flowback of deferred credits generally results from specific decisions by regulators granting such ratemaking treatment.

OG&E records certain actual or anticipated costs and obligations as regulatory assets or liabilities if it is probable, based on regulatory orders or other available evidence, that the cost or obligation will be included in amounts allowable for recovery or refund in future rates.

The following table is a summary of OG&E's regulatory assets and liabilities at:

December 31 (In millions)	2011		2010
Regulatory Assets
Current
Fuel clause under recoveries	$	1.8	$	1.0
Other (A)	14.2		4.9
Total Current Regulatory Assets	$	16.0	$	5.9
Non-Current
Benefit obligations regulatory asset	$	359.2	$	365.5
Income taxes recoverable from customers, net	54.0		43.3
Smart Grid	37.2		14.2
Deferred storm expenses	23.8		28.6
Unamortized loss on reacquired debt	14.2		15.3
Deferred Pension expenses	9.1		13.5
Other	10.4		9.0
Total Non-Current Regulatory Assets	$	507.9	$	489.4
Regulatory Liabilities
Current
Smart Grid rider over collections (B)	$	24.3	$	10.4
Fuel clause over recoveries	7.7		29.9
Other (B)	13.7		10.5
Total Current Regulatory Liabilities	$	45.7	$	50.8
Non-Current
Accrued removal obligations, net	$	208.2	$	184.9
Pension tracker	22.5		8.2
Total Non-Current Regulatory Liabilities	$	230.7	$	193.1

(A) Included in Other Current Assets on the Consolidated Balance Sheets.

(B) Included in Other Current Liabilities on the Consolidated Balance Sheets.

Fuel clause under recoveries are generated from under recoveries from OG&E's customers when OG&E's cost of fuel exceeds the amount billed to its customers.  Fuel clause over recoveries are generated from over recoveries from OG&E's customers when the amount billed to its customers exceeds OG&E's cost of fuel.OG&E's fuel recovery clauses are designed to smooth the impact of fuel price volatility on customers' bills.As a result, OG&E under recovers fuel costs in periods of rising fuel prices above the baseline charge for fuel and over recovers fuel costs when prices decline below the baseline charge for fuel. Provisions in the fuel clauses are intended to allow OG&E to amortize under and over recovery balances.

The benefit obligations regulatory asset is comprised of expenses recorded which are probable of future recovery and that have not yet been recognized as components of net periodic benefit cost, including net loss, prior service cost and net transition obligation.These expenses were allowed to be recorded as a regulatory asset as OG&E had historically recovered and currently recovers pension and postretirement benefit plan expense in its electric rates and there was no negative evidence that the existing regulatory treatment would change. If, in the future, the regulatory bodies indicate a change in policy related to the recovery of pension and postretirement benefit plan expenses, this could cause the benefit obligations regulatory asset balance to be reclassified to Accumulated Other Comprehensive Income.

The following table is a summary of the components of the benefit obligations regulatory asset at:

December 31 (In millions)	2011			2010
Pension Plan and Restoration of Retirement Income Plan:
Net loss	$	266.3		$	215.0
Prior service cost	7.0			9.7
Postretirement plans:
Net loss	144.2			135.7
Prior service cost	(60.8		)	—
Net transition obligation	2.5			5.1
Total	$	359.2		$	365.5

The following amounts in the benefit obligations regulatory asset atDecember 31, 2011are expected to be recognized as components of net periodic benefit cost in2012: 

(In millions)
Pension Plan and Restoration of Retirement Income Plan:
Net loss	$	18.8
Prior service cost	2.5
Postretirement plans:
Net loss	17.3
Prior service cost	(13.7		)
Net transition obligation	2.5
Total	$	27.4

Income taxes recoverable from customers, which represents income tax benefits previously used to reduce OG&E's revenues, are treated as regulatory assets and liabilities and are being amortized over the estimated remaining life of the assets to which they relate.  These amounts are being recovered in rates as the temporary differences that generated the income tax benefit turn around.  The income tax related regulatory assets and liabilities are netted in Income Taxes Recoverable from Customers, Net in the regulatory assets and liabilities table above.

In accordance with the OCC order received by OG&E in July 2010 related to its Smart Grid project, OG&E established a regulatory asset which includes the cost of system-wide deployment of smart grid technology and implementing the smart grid pilot program, the incremental costs for web portal access, education and providing home energy reports and stranded costs associated with OG&E's existing meters. The costs recoverable from Oklahoma customers for system-wide deployment of smart grid technology and implementing the smart grid pilot program are capped at$366.4 million(inclusive of the U.S. Department of Energy grant award amount) subject to an offset for any recovery of those costs from Arkansas customers and are currently being recovered through a rider which will remain in effect until the Smart Grid project costs are included in base rates beginning in 2014. The incremental costs for web portal access, education and home energy reports are capped at$6.9 millionand will be recovered in base rates beginning in 2014. The stranded costs associated with OG&E's existing meters which are being replaced by smart meters will accumulate during the Smart Grid deployment and recovery of the stranded costs will be included in future rate cases. OG&E received an order from the APSC in August 2011 related to its Arkansas Smart Grid project. OG&E will recover estimated capital costs of$14 millionand associated operation and maintenance costs for deployment of smart grid technology, along with incremental costs for web portal access and education of$0.8 million, through a rider. The rider will become effective when the smart meters are fully deployed in Arkansas, which is expected during the second quarter of 2012, and will remain in effect until new base rates are implemented subsequent to OG&E's next rate case. The APSC also authorized OG&E to record a regulatory asset for stranded costs associated with OG&E's existing meters and to recover the stranded meter regulatory asset in base rates subsequent to OG&E's next rate case.

In accordance with the September 2008 OCC rate order, OG&E was allowed to defer the Oklahoma storm-related operation and maintenance expenses in excess of$2.7 millionand will reserve for any Oklahoma storm-related operation and maintenance expenses less than$2.7 million. OG&E will recover the deferred amounts over afive-year period ending in August 2013.

Unamortized loss on reacquired debt is comprised of unamortized debt issuance costs related to the early retirement of OG&E's long-term debt.  These amounts are being amortized over the term of the long-term debt which replaced the previous long-term debt.  The unamortized loss on reacquired debt is not included in OG&E's rate base and does not otherwise earn a rate of return.

In accordance with the OCC order received by OG&E in December 2005 in its Oklahoma rate case, OG&E was allowed to recover a certain amount of pension plan expenses.  These deferred amounts have been recorded as a regulatory asset as OG&E received an order in July 2009 allowing it to begin recovery of$16.8 millionof these costs over afour-year period.  In accordance with the APSC order received by OG&E in May 2009 in its Arkansas rate case, OG&E was allowed recovery of its 2006 and 2007 pension settlement costs.  During the second quarter of 2009, OG&E reduced its pension expense and recorded a regulatory asset for$3.2 million, which is being amortized over a10-year period, as allowed in the Arkansas rate order.  Both the Oklahoma and Arkansas pension plan expenses are reflected in Deferred Pension expenses asset in the regulatory assets and liabilities table above.  Also, in accordance with the OCC order received by OG&E in August 2009 in its Oklahoma rate case, OG&E was allowed to recover a certain amount of pension plan expenses. In accordance with the OCC order received by OG&E in September 2011 in its pension tracker modification filing, OG&E was allowed to include postretirement medical expense in its pension tracker.AtDecember 31, 2011, OG&E had$22.5 millionof expenses under this level, which have been recorded as Pension tracker regulatory liability in the regulatory assets and liabilities table above.

Accrued removal obligations represent asset retirement costs previously recovered from ratepayers for other than legal obligations.

Management continuously monitors the future recoverability of regulatory assets.When in management's judgment future recovery becomes impaired, the amount of the regulatory asset is adjusted, as appropriate.If the Company were required to discontinue the application of accounting principles for certain types of rate-regulated activities for some or all of its operations, it could result in writing off the related regulatory assets, which could have significant financial effects.

Use of Estimates

In preparing theConsolidatedFinancial Statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of theConsolidatedFinancial Statements and the reported amounts of revenues and expenses during the reporting period.  Changes to these assumptions and estimates could have a material effect onthe Company's ConsolidatedFinancial Statements.  However,the Companybelieves it has taken reasonable, but conservative, positions where assumptions and estimates are used in order to minimize the negative financial impact tothe Companythat could result if actual results vary from the assumptions and estimates.  In management's opinion, the areas ofthe Companywhere the most significant judgment is exercisedfor all Company segmentsincludes the valuation of Pension Plan assumptions,impairment estimates of long-lived assets (including intangible assets) and goodwill, income taxes, contingency reserves, asset retirement obligations, fair value and cash flow hedgesandthe allowance for uncollectible accounts receivable. For the electric utility segment, the most significant judgment is also exercised inthe valuation of regulatory assets and liabilities and unbilled revenues. For the natural gas transportation and storage, gathering and processing and marketing segments, the most significant judgment is also exercised in the valuation of operating revenues, natural gas purchases, purchase and sale contracts, assets and depreciable lives of property, plant and equipment and amortization methodologies related to intangible assets.

Cash and Cash Equivalents

For purposes of the Consolidated Financial Statements, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.  These investments are carried at cost, which approximates fair value.

Allowance for Uncollectible Accounts Receivable

For OG&E, customer balances are generally written off if not collected within six months after the final billing date. The allowance for uncollectible accounts receivable for OG&E is calculated by multiplying the last six months of electric revenue by the provision rate.  The provision rate is based on a 12-month historical average of actual balances written off.  To the extent the historical collection rates are not representative of future collections, there could be an effect on the amount of uncollectible expense recognized.  Beginning in August 2009 and going forward, there was a change in the provision calculation as a result of the Oklahoma rate case whereby the portion of the uncollectible provision related to fuel is being recovered through the fuel adjustment clause.Due to the extremely hot weather in OG&E's service territory in 2011, OG&E recorded an additional amount of uncollectible expense anticipating higher customer defaults.The allowance for uncollectible accounts receivable for Enogex is calculated based on outstanding accounts receivable balances over 180 days old.  In addition, other outstanding accounts receivable balances less than 180 days old are reserved on a case-by-case basis when Enogex believes the collection of specific amounts owed is unlikely to occur.The allowance for uncollectible accounts receivable was$3.8 millionand$1.9 millionatDecember 31, 2011and2010, respectively.

For OG&E, new business customers are required to provide a security deposit in the form of cash, bond or irrevocable letter of credit that is refunded when the account is closed.  New residential customers, whose outside credit scores indicate risk, are required to provide a security deposit that is refunded based on customer protection rules defined by the OCC and the APSC.  The payment behavior of all existing customers is continuously monitored and, if the payment behavior indicates sufficient risk within the meaning of the applicable utility regulation, customers will be required to provide a security deposit.

For Enogex, credit risk is the risk of financial loss to Enogex if counterparties fail to perform their contractual obligations.  Enogex maintains credit policies with regard to its counterparties that management believes minimize overall credit risk.  These policies include the evaluation of a potential counterparty's financial position (including credit rating, if available), collateral requirements under certain circumstances, the use of standardized agreements which provide for the netting of cash flows associated with a single counterparty and the monitoring of the financial position of existing counterparties on an ongoing basis.

Fuel Inventories

OG&E

Fuel inventories for the generation of electricity consist of coal, natural gas and oil.  OG&E uses the weighted-average cost method of accounting for inventory that is physically added to or withdrawn from storage or stockpiles.  The amount of fuel inventory was$76.9 millionand$134.9 millionatDecember 31, 2011and2010, respectively.

Enogex

Natural gas inventory is held by Enogex, through its transportation and storage business to provide operational support for its pipeline deliveries and through its marketing business to manage its leased storage capacity. In an effort to mitigate market price exposures, Enogex may enter into contracts or hedging instruments to protect the cash flows associated with its inventory. All natural gas inventory held by Enogex is valued using moving average cost and is recorded at the lower of cost or market. As part of its recurring marketing activity, OER injects and withdraws natural gas into and out of inventory under the terms of its storage capacity contracts.During the years ended December 31, 2011, 2010and2009, Enogex recorded write-downs to market value related to natural gas storage inventory of$4.8 million, $0.3 millionand$6.1 million, respectively.The amount of Enogex's natural gas inventory was$23.7 millionand$23.9 millionatDecember 31, 2011and2010, respectively. The cost of gas associated with sales of natural gas storage inventory is presented in Cost of Goods Sold on the Consolidated Statements of Income.

Gas Imbalances

Gas imbalances occur when the actual amounts of natural gas delivered from or received by Enogex's pipeline system differ from the amounts scheduled to be delivered or received.  Imbalances are due to or due from shippers and operators and can be settled in cash or made up in-kind depending on contractual terms.  Enogex values all imbalances at an average of current market indices applicable to Enogex's operations, not to exceed net realizable value.

Property, Plant and Equipment

OG&E

All property, plant and equipment is recorded at cost.  Newly constructed plant is added to plant balances at cost which includes contracted services, direct labor, materials, overhead, transportation costs and the allowance for funds used during construction.  Replacements of units of property are capitalized as plant.  For assets that belong to a common plant account, the replaced plant is removed from plant balances and the cost of such property is charged to Accumulated Depreciation.  For assets that do not belong to a common plant account, the replaced plant is removed from plant balances with the related accumulated depreciation and the remaining balance net of any salvage proceeds is recorded as a loss in the Consolidated Statements of Income as Other Expense.  Repair and replacement of minor items of property are included in the Consolidated Statements of Income as Other Operation and Maintenance Expense.

The table below presents OG&E's ownership interest in the jointly-owned McClain Plant and the jointly-owned Redbud Plant, and, as disclosed below, only OG&E's ownership interest is reflected in the property, plant and equipment and accumulated depreciation balances in these tables.  The owners of the remaining interests in the McClain Plant and the Redbud Plant are responsible for providing their own financing of capital expenditures.  Also, only OG&E's proportionate interests of any direct expenses of the McClain Plant and the Redbud Plant such as fuel, maintenance expense and other operating expenses are included in the applicable financial statement captions in the Consolidated Statement of Income.

December 31, 2011 (In millions)	Percentage Ownership		Total Property, Plant and Equipment			Accumulated Depreciation			Net Property, Plant and Equipment
McClain Plant	77	%	$	207.2		$	73.7		$	133.5
Redbud Plant	51	%	$	461.1	(A)	$	54.3	(B)	$	406.8

(A) This amount includes a plant acquisition adjustment of $148.3 million.

(B) This amount includes accumulated amortization of the plant acquisition adjustment of $17.9 million.

Enogex

All property, plant and equipment is recorded at cost.  Newly constructed plant is added to plant balances at cost which includes contracted services, direct labor, materials, overhead, transportation costs and capitalized interest.  Replacements of units of property are capitalized as plant. For assets that belong to a common plant account, the replaced plant is removed from plant balances and charged to Accumulated Depreciation.  For assets that do not belong to a common plant account, the replaced plant is removed from plant balances with the related accumulated depreciation and the remaining balance net of any salvage proceeds is recorded as a loss in the Consolidated Statements of Income as Other Expense.  Repair and removal costs are included in the Consolidated Statements of Income as Other Operation and Maintenance Expense.

On December 8, 2010, a fire occurred at Enogex's Cox City natural gas processing plant destroying major components of one of the four processing trains, representing 120 MMcf/d of the total 180 MMcf/d of capacity, at that facility. Gas volumes normally processed at the Cox City plant were diverted to other facilities or bypassed around Enogex's system to accommodate production and all of the impacted gathered volumes were back online in December 2010.  The damaged train was replaced and the facility was returned to full service in September 2011.The total cost necessary to return the facility back to full service was$29.6 million. While Enogex believes that the costs in excess of the$10 milliondeductible should be reimbursed by insurance, the matter is currently being negotiated with the insurance company and Enogex cannot predict the precise outcome of these negotiations or the timing associated with the recovery. In the fourth quarter of 2011, Enogex received a partial insurance reimbursement of$7.4 millionand recognized a gain of$3.0 millionon insurance proceeds. Enogex expects to receive additional reimbursement of portions of the costs in 2012.  Enogex will recognize insurance recoveries in earnings as the insurance claims are resolved.

OGE Energy Consolidated

The Company's property, plant and equipment and related accumulated depreciation are divided into the following major classes at:

December 31, 2011 (In millions)	Total Property, Plant and Equipment		Accumulated Depreciation		Net Property, Plant and Equipment
OGE Energy (holding company)
Property, plant and equipment	$	124.6	$	90.6	$	34.0
OGE Energy property, plant and equipment	124.6		90.6		34.0
OG&E
Distribution assets	2,981.3		920.3		2,061.0
Electric generation assets	3,360.6		1,215.8		2,144.8
Transmission assets	1,464.2		339.6		1,124.6
Intangible plant	43.2		20.3		22.9
Other property and equipment	293.9		96.3		197.6
OG&E property, plant and equipment	8,143.2		2,592.3		5,550.9
Enogex
Transportation and storage assets	956.9		271.0		685.9
Gathering and processing assets	1,580.1		381.0		1,199.1
Marketing assets	10.1		6.0		4.1
Enogex property, plant and equipment	2,547.1		658.0		1,889.1
Total property, plant and equipment	$	10,814.9	$	3,340.9	$	7,474.0

December 31, 2010 (In millions)	Total Property, Plant and Equipment		Accumulated Depreciation		Net Property, Plant and Equipment
OGE Energy (holding company)
Property, plant and equipment	$	111.1	$	77.5	$	33.6
OGE Energy property, plant and equipment	111.1		77.5		33.6
OG&E
Distribution assets	2,833.4		897.4		1,936.0
Electric generation assets	3,047.1		1,164.6		1,882.5
Transmission assets	1,221.3		325.6		895.7
Intangible plant	26.5		20.7		5.8
Other property and equipment	243.4		86.1		157.3
OG&E property, plant and equipment	7,371.7		2,494.4		4,877.3
Enogex
Transportation and storage assets	924.7		250.0		674.7
Gathering and processing assets	1,230.8		354.6		876.2
Marketing assets	9.7		7.1		2.6
Enogex property, plant and equipment	2,165.2		611.7		1,553.5
Total property, plant and equipment	$	9,648.0	$	3,183.6	$	6,464.4

Depreciation and Amortization

OG&E

The provision for depreciation, which was2.9 percentand3.0 percent, respectively, of the average depreciable utility plant for 2011 and 2010, is provided on a straight-line method over the estimated service life of the utility assets.  Depreciation is provided at the unit level for production plant and at the account or sub-account level for all other plant, and is based on the average life group method.  In 2012, the provision for depreciation is projected to be2.9 percentof the average depreciable utility plant.  Amortization of intangible assets is computed using the straight-line method. Of the remaining amortizable intangible plant balance at December 31, 2011, 48.3 percentwill be amortized overthreeyears with51.7 percentof the remaining amortizable intangible plant balance at December 31, 2011 being amortized over their respective lives ranging fromfourto25years.Amortization of plant acquisition adjustments is provided on a straight-line basis over the estimated remaining service life of the acquired asset.  Plant acquisition adjustments include$148.3 millionfor the Redbud Plant, which are being amortized over a27-yearlife and$3.3 millionfor certain substation facilities in OG&E's service territory, which are being amortized over a26to59-yearperiod.

Enogex

For Enogex, depreciation is computed principally on the straight-line method using estimated useful lives of three to 83 years for transportation and storage assets, three to 30 years for gathering and processing assets and three to 10 years for general plant assets. Amortization of intangible assets other than debt costs is computed using the straight-line method over the respective lives of the intangible assets ranging up to 20 years.

The computation of depreciation expense requires judgment regarding the estimated useful lives and salvage value of assets at the time the assets are placed in service. As circumstances warrant, useful lives are adjusted when changes in planned use, changes in estimated production lives of affiliated natural gas basins or other factors indicate that a different life would be more appropriate. Such changes could materially impact future depreciation expense. Changes in useful lives that do not result in the impairment of an asset are recognized prospectively.The computation of amortization expense on intangible assets requires judgment regarding the amortization method used. The intangible asset should be amortized over its useful life using a method of amortization that reflects the pattern in which the economic benefits of the intangible asset are consumed.

Asset Retirement Obligations

The Companyhas previously recorded asset retirement obligations that are being amortized over their respective lives ranging from20to99years.In the fourth quarter of 2011, OG&E recorded an asset retirement obligation for$13.0 millionrelated to its Crossroads wind farm. Beginning December 1, 2011, OG&E began to amortize the value of the related asset retirement obligation asset over the estimated remaining life of50years.The Company also has certain asset retirement obligations that have not been recorded becausethe Companydetermined that these assets, primarily related toEnogex's processing plants and compression sites andOG&E's power plant sites, have indefinite lives.

Impairment of Long-Lived Assets (Including Intangible Assets) and Goodwill

The Company assesses its long-lived assets, including intangible assets with finite useful lives, for impairment when there is evidence that events or changes in circumstances require an analysis of the recoverability of an asset's carrying amount.  Estimates of future cash flows used to test the recoverability of long-lived assets and intangible assets shall include only the future cash flows (cash inflows less associated cash outflows) that are directly associated with and that are expected to arise as a direct result of the use and eventual disposition of the asset.  The fair value of these assets is based on third-party evaluations, prices for similar assets, historical data and projected cash flows.  An impairment loss is recognized when the sum of the expected future net cash flows is less than the carrying amount of the asset.  The amount of any recognized impairment is based on the estimated fair value of the asset subject to impairment compared to the carrying amount of such asset. In 2011, the Company recorded a pre-tax impairment loss of$5.0 million, of which$2.5 millionwas the noncontrolling interest portion (see Note 5), related to the Atoka processing plant. The Company recordednoother material impairments in 2011, 2010 and 2009.

As a result of the gas gathering acquisitions on November 1, 2011 discussed in Note 3, Enogex recorded goodwill of$39.4 millionand intangible assets of$136.3 million. Enogex will assess its goodwill for impairment at least annually as of October 1 and will assess the intangible assets for impairment as discussed above.

Allowance for Funds Used During Construction

For OG&E, allowance for funds used during construction is calculated according to the FERC pronouncements for the imputed cost of equity and borrowed funds.  Allowance for funds used during construction, a non-cash item, is reflected as a reduction to interest expense in the Consolidated Statements of Income and as an increase to Construction Work in Progress in the Consolidated Balance Sheets.Allowance for funds used during construction rates, compounded semi-annually, were8.71 percent, 8.89 percentand7.99 percentfor the years endedDecember 31, 2011, 2010and2009, respectively.The decrease in the allowance for funds used during construction rates in 2011 was primarily due to the issuance of long-term debt which changed the cost of capital weighting to shift towards debt which has a lower effective rate than equity.

Collection of Sales Tax

In the course of its operations, OG&E collects sales tax from its customers.  OG&E records a current liability for sales taxes when it bills its customers and eliminates this liability when the taxes are remitted to the appropriate governmental authorities.  OG&E excludes the sales tax collected from its operating revenues.

Revenue Recognition

OG&E

General

OG&E reads its customers' meters and sends bills to its customers throughout each month.  As a result, there is a significant amount of customers' electricity consumption that has not been billed at the end of each month.  Unbilled revenue is presented in Accrued Unbilled Revenues on theConsolidatedBalance Sheets and in Operating Revenues on theConsolidatedStatements of Income based on estimates of usage and prices during the period.The estimates that management uses in this calculation could vary from the actual amounts to be paid by customers.

SPP Purchases and Sales

OG&E participates in the SPP energy imbalance service market in a dual role as a load serving entity and as a generation owner.  The energy imbalance service market requires cash settlements for over or under schedules of generation and load. Market participants, including OG&E, are required to submit resource plans and can submit offer curves for each resource available for dispatch.  A function of interchange accounting is to match participants' MWH entitlements (generation plus scheduled bilateral purchases) against their MWH obligations (load plus scheduled bilateral sales) during every hour of every day. If the net result during any given hour is an entitlement, the participant is credited with a spot-market sale to the SPP at the respective market price for that hour; if the net result is an obligation, the participant is charged with a spot-market purchase from the SPP at the respective market price for that hour. The SPP purchases and sales are not allocated to individual customers.  OG&E records the hourly sales to the SPP at market rates in Operating Revenues and the hourly purchases from the SPP at market rates in Cost of Goods Sold in its Consolidated Financial Statements.

Enogex

Operating revenues for gathering, processing, transportation, storage and marketing services for Enogex are recorded each month based on the current month's estimated volumes, contracted prices (considering current commodity prices), historical seasonal fluctuations and any known adjustments.  The estimates are reversed in the following month and customers are billed on actual volumes and contracted prices.  Gas sales are calculated on current-month nominations and contracted prices. Operating revenues associated with the production of NGLs are estimated based on current-month estimated production and contracted prices.  These amounts are reversed in the following month and the customers are billed on actual production and contracted prices.  Estimated operating revenues are reflected in Accounts Receivable on the Consolidated Balance Sheets and in Operating Revenues on the Consolidated Statements of Income. Enogex's key natural gas producer customers in 2011 includedChesapeake Energy Marketing Inc., Apache Corporation, Devon Energy Production Company, L.P., BP America Production Company and Kaiser Francis Oil Co.In2011, thesefivecustomers accounted for19.9 percent, 15.0 percent, 12.5 percent, 4.1 percentand3.9 percent, respectively, of Enogex's gathering and processing volumes.In2011, Enogex's top10natural gas producer customers accounted for69.4 percentof Enogex's gathering and processing volumes.

Enogex recognizes revenue from natural gas gathering, processing, transportation, storage and marketing services to third parties as services are provided.  Revenue associated with NGLs is recognized when the production is sold.  Enogex depends on third-party facilities to transport and fractionate NGLs that it delivers to the third party at the tailgates of its processing plants. Additionally, the third party purchases 50 percent of the NGLs delivered to its system, which accounted for $285.4 million (38.8 percent, $279.8 million (46.0 percent) and $170.0 million (49.5 percent), respectively, of Enogex's total NGLs sales for the years ended December 31, 2011, 2010 and 2009. If this third-party's pipeline or other facilities become partially or fully unavailable, Enogex's revenues and cash flows could be adversely affected. 

Enogex records deferred revenue when it receives consideration from a third party before achieving certain criteria that must be met for revenue to be recognized in accordance with GAAP.

Enogex, through OER, engages in energy marketing, trading, risk management and hedging activities related to the purchase and sale of natural gas as well as hedging activity related to the sale of natural gas and NGLs on behalf of the Company.  Contracts utilized in these activities generally include purchases and sales for physical delivery of natural gas, over-the-counter forward swap and option contracts and exchange traded futures and options.  OER's transactions that qualify as derivatives are reflected at fair value with the resulting unrealized gains and losses recorded as PRM Assets or Liabilities in the Consolidated Balance Sheets, classified as current or long-term based on their anticipated settlement, or against the brokerage deposits in Other Current Assets.  The offsetting unrealized gains and losses from changes in the market value of open contracts are included in Operating Revenues in the Consolidated Statements of Income or in Other Comprehensive Income for derivatives designated and qualifying as cash flow hedges.  Contracts resulting in delivery of a commodity are included as sales or purchases in the Consolidated Statements of Income as Operating Revenues or Cost of Goods Sold depending on whether the contract relates to the sale or purchase of the commodity.

Estimates for gas purchases are based on estimated volumes and contracted purchase prices.  Estimated gas purchases are included in Accounts Payable on the Consolidated Balance Sheets and in Cost of Goods Sold on the Consolidated Statements of Income.

Normal purchases and normal sales contracts are not recorded in PRM Assets or Liabilities in theConsolidatedBalance Sheets and earnings recognition is recorded in the period in which physical delivery of the commodity occurs.Management applies normal purchases and normal sales treatment to: (i) commodity contracts for the purchase and sale of natural gas used in or produced by Enogex's operations and (ii) commodity contracts for the sale of NGLs produced by Enogex's gathering and processing business.

Fuel Adjustment Clauses

Variances in the actual cost of fuel used in electric generation and certain purchased power costs, as compared to the fuel component in the cost-of-service for ratemaking, are passed through to OG&E's customers through fuel adjustment clauses, which are subject to periodic review by the OCC, the APSC and the FERC.

Income Taxes

The Company files consolidated income tax returns in the U.S. Federal jurisdiction and various state jurisdictions.  Income taxes are generally allocated to each company in the affiliated group based on its stand-alone taxable income or loss.  Federal investment tax credits previously claimed on electric utility property have been deferred and are being amortized to income over the life of the related property.  The Companyuses the asset and liability method of accounting for income taxes. Under this method, a deferred tax asset or liability is recognized for the estimated future tax effects attributable to temporary differences between the financial statement basis and the tax basis of assets and liabilities as well as tax credit carry forwards and net operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period of the change. The Company recognizes interest related to unrecognized tax benefits in interest expense and recognizes penalties in other expense.

Accrued Vacation

The Company accrues vacation pay monthly by establishing a liability for vacation earned. Vacation may be taken as earned and is charged against the liability. At the end of each year, the liability represents the amount of vacation earned, but not taken.

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the components of accumulated other comprehensive loss at December 31, 2011 and 2010 attributable to OGE Energy.  At both December 31, 2011 and 2010, there was no accumulated other comprehensive loss related to Enogex's noncontrolling interest in Atoka. 

December 31 (In millions)	2011			2010
Pension Plan and Restoration of Retirement Income Plan:
Net loss	$	(42.1	)	$	(31.1	)
Prior service cost	(0.1		)	(0.5		)
Postretirement plans:
Net loss	(15.4		)	(13.6		)
Prior service cost	9.0			—
Net transition obligation	(0.1		)	(0.3		)
Deferred commodity contracts hedging losses	3.3			(19.5		)
Deferred interest rate swaps hedging losses	(0.7		)	(1.0		)
Total accumulated other comprehensive loss	(46.1		)	(66.0		)
Less:  Accumulated other comprehensive loss attributable to noncontrolling interests	(5.5		)	(5.8		)
Accumulated other comprehensive loss, net of tax	$	(40.6	)	$	(60.2	)

Of the deferred hedging losses at December 31, 2011, $4.9 million are expected to be recognized into earnings during 2012.

Pension Plan, Restoration of Retirement Income Plan and Postretirement Plans

The amounts in accumulated other comprehensive loss at December 31, 2011 that are expected to be recognized as components of net periodic benefit cost in 2012 are as follows: 

(In millions)
Pension Plan and Restoration of Retirement Income Plan:
Net loss	$	2.7
Prior service cost	0.3
Postretirement plans:
Net loss	1.9
Prior service cost	(1.8		)
Net transition obligation	0.1
Total, net of tax	$	3.2

Environmental Costs

Accruals for environmental costs are recognized when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated.  Costs are charged to expense or deferred as a regulatory asset based on expected recovery from customers in future rates, if they relate to the remediation of conditions caused by past operations or if they are not expected to mitigate or prevent contamination from future operations.  Where environmental expenditures relate to facilities currently in use, such as pollution control equipment, the costs may be capitalized and depreciated over the future service periods.  Estimated remediation costs are recorded at undiscounted amounts, independent of any insurance or rate recovery, based on prior experience, assessments and current technology.  Accrued obligations are regularly adjusted as environmental assessments and estimates are revised, and remediation efforts proceed.For sites where OG&E or Enogex have been designated as one of several potentially responsible parties, the amount accrued represents OG&E's or Enogex's estimated share of the cost.  The Company has less than$0.1 millionin accrued environmental liabilities atbothDecember 31, 2011and2010.

Reclassifications

Certain prior year amounts have been reclassified on theConsolidatedStatements of Income for impairment of assetsand on the Consolidated Balance Sheet for intangible assetsto conform to the 2011 presentation.