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Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Summary of Significant Accounting Policies
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 two business segments:  (i) electric utility and (ii) natural gas midstream operations. For a discussion of change in business segments, see Note 12. For periods prior to May 1, 2013, the Company consolidated Enogex Holdings in its Condensed Consolidated Financial Statements. All significant intercompany transactions have been eliminated in consolidation.

Effective May 1, 2013, OGE Energy, the ArcLight group and CenterPoint Energy, Inc., formed Enable Midstream Partners, L.P. to own and operate the midstream businesses of OGE Energy and CenterPoint. In the formation transaction, OGE Energy and ArcLight contributed Enogex LLC to Enable and the Company deconsolidated its previously held investment in Enogex Holdings and acquired an equity interest in Enable. The Company determined that its contribution of Enogex LLC to Enable met the requirements of being in substance real estate and was recorded at historical cost. The general partner of Enable is equally controlled by CenterPoint and OGE Energy, who each have 50 percent of the management rights. Based on the 50/50 management ownership, with neither company having control, effective May 1, 2013, OGE Energy began accounting for its interest in Enable using the equity method of accounting. At March 31, 2014, OGE Energy, through its wholly owned subsidiary OGE Holdings, held 28.5 percent of the limited partner interests in Enable. OGE Energy also owns a 60 percent interest in any incentive distribution rights in Enable. Incentive distribution rights entitle the holder to increasing percentages, up to a maximum of 50 percent, of the cash distributed by Enable in excess of the target quarterly distributions established in connection with Enable’s initial public offering as described below. On April 16, 2014, Enable completed an initial public offering of 28,750,000 common units resulting in Enable becoming a publicly traded Master Limited Partnership. The offering represented approximately 6.9 percent of the limited partner interests and raised approximately $466 million in net proceeds for Enable. As a result of the offering, OGE Holding's ownership was reduced from 28.5 percent to 26.7 percent.

In connection with Enable’s initial public offering, approximately 61.4 percent of OGE Holdings and CenterPoint’s common units were converted into subordinated units. As a result, following the initial public offering, OGE Holdings owned 42,832,291 common units and 68,150,514 subordinated units of Enable. Holders of subordinated units are not entitled to receive any distribution of available cash until the common units have received the minimum quarterly distribution plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. The subordinated units will convert into common units when Enable has paid at least the minimum quarterly distribution for three years or paid at least 150 percent of the minimum quarterly distribution for one year.

Enable is expected to pay a minimum quarterly distribution of $0.2875 per unit on its outstanding units to the extent it has sufficient cash from operations after establishment of cash reserves and payment of fees and expenses, including payments to its general partner and its affiliates, within 45 days after the end of each quarter. Enable will adjust the amount of this distribution for the period from April 16, 2014, the completion of its initial public offering, through June 30, 2014 based on the actual length of the period. If cash distributions to Enable’s unitholders exceed $0.330625 per unit in any quarter, the general partner will receive increasing percentages, up to 50 percent, of the cash Enable distributes in excess of that amount. As indicated above, OGE Holdings is entitled to 60 percent of those “incentive distributions.” In certain circumstances, the general partner, will have the right to reset the minimum quarterly distribution and the target distribution levels at which the incentive distributions receive increasing percentages to higher levels based on Enable’s cash distributions at the time of the exercise of this reset election.

The electric utility segment generates, 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.

The natural gas midstream operations segment consists of the Company's investment in Enable. Enable is engaged in the business of gathering, processing, transporting and storing natural gas. Enable's natural gas gathering and processing assets are strategically located in four states and serve natural gas production from shale developments in the Anadarko, Arkoma and Ark-La-Tex basins. Enable also owns an emerging crude oil gathering business in the Bakken shale formation that commenced initial operations in November 2013. Enable is continuing to construct additional crude oil gathering capacity in this area. Enable's natural gas transportation and storage assets extend from western Oklahoma and the Texas Panhandle to Alabama and from Louisiana to Illinois.

As discussed below, the Company completed a 2-for-1 stock split of the Company's common stock effective July 1, 2013. All share and per share amounts within this Form 10-Q reflect the effects of the stock split.

Basis of Presentation

The Condensed Consolidated Financial Statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to prevent the information presented from being misleading.
In the opinion of management, all adjustments necessary to fairly present the consolidated financial position of the Company at March 31, 2014 and December 31, 2013, the results of its operations for the three months ended March 31, 2014 and 2013 and the results of its cash flows for the three months ended March 31, 2014 and 2013, have been included and are of a normal recurring nature except as otherwise disclosed.

Due to seasonal fluctuations and other factors, the Company's operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014 or for any future period. The Condensed Consolidated Financial Statements and Notes thereto should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in the Company's 2013 Form 10-K.

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:
(In millions)
March 31, 2014
December 31, 2013
Regulatory Assets
 
 
Current
 
 
Fuel clause under recoveries
$
62.0

$
26.2

Oklahoma demand program rider under recovery (A)
8.8

10.6

Crossroads wind farm rider under recovery (A)
—

4.7

Other (A)
9.2

7.3

Total Current Regulatory Assets
$
80.0

$
48.8

Non-Current
 

 

Benefit obligations regulatory asset
$
224.8

$
227.4

Income taxes recoverable from customers, net
56.4

56.5

Smart Grid
44.1

44.2

Deferred storm expenses
21.5

21.6

Unamortized loss on reacquired debt
11.5

11.8

Pension tracker
—

1.4

Other
16.1

16.2

Total Non-Current Regulatory Assets
$
374.4

$
379.1

Regulatory Liabilities
 

 

Current
 

 

Smart Grid rider over recovery (B)
$
15.7

$
16.7

Fuel clause over recoveries
—

0.4

Other (B)
2.6

3.1

Total Current Regulatory Liabilities
$
18.3

$
20.2

Non-Current
 

 

Accrued removal obligations, net
$
230.8

$
227.7

Deferred pension credits
3.7

6.5

Pension tracker
3.1

—

Total Non-Current Regulatory Liabilities
$
237.6

$
234.2

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

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 OG&E 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.
Investment in Unconsolidated Affiliate

OGE Energy's investment in Enable is considered to be a variable interest entity because the owners of the equity at risk in this entity have disproportionate voting rights in relation to their obligations to absorb the entity's expected losses or to receive its expected residual returns. However, OGE Energy is not considered the primary beneficiary of Enable since it does not have the power to direct the activities of Enable that are considered most significant to the economic performance of Enable. As discussed above, OGE Energy accounts for the investment in Enable using the equity method of accounting. Under the equity method, the investment will be adjusted each period for contributions made, distributions received and the Company's share of the investee's comprehensive income. OGE Energy's maximum exposure to loss related to Enable is limited to OGE Energy's equity investment in Enable as presented on the Company's Condensed Consolidated Balance Sheet at March 31, 2014. The Company evaluates its equity method investment for impairment when events or changes in circumstances indicate there is a loss in value of the investment that is other than a temporary decline.

The Company considers distributions received from Enable which do not exceed cumulative equity in earnings subsequent to the date of investment to be a return on investment which are classified as operating activities in the Condensed Consolidated Statements of Cash Flows. The Company considers distributions received from Enable in excess of cumulative equity in earnings subsequent to the date of investment to be a return of investment which are classified as investing activities in the Condensed Consolidated Statements of Cash Flows.

Asset Retirement Obligation

The following table summarizes changes to the Company's asset retirement obligations during the three months ended March 31, 2014 and 2013.
 
Three Months Ended
 
March 31,
(In millions)
2014
2013
Balance at January 1
$
55.2

$
54.0

Liabilities settled
—

(0.1
)
Accretion expense
0.6

0.6

Balance at March 31
$
55.8

$
54.5



Accumulated Other Comprehensive Income (Loss)
The following table summarizes changes in the components of accumulated other comprehensive loss attributable to OGE Energy during the three months ended March 31, 2014. All amounts below are presented net of tax and noncontrolling interest.
 
Pension Plan and Restoration of Retirement Income Plan
 
Postretirement Benefit Plans
 
 
 
Net loss
Prior service cost
 
Net loss
Prior service cost
Deferred interest rate swap hedging losses
Total
Balance at December 31, 2013
$
(27.4
)
$
0.1

 
$
(5.8
)
$
5.1

$
(0.2
)
$
(28.2
)
Amounts reclassified from accumulated other comprehensive income (loss)
0.4

—

 
0.2

(0.4
)
0.1

0.3

Net current period other comprehensive income (loss)
0.4

—

 
0.2

(0.4
)
0.1

0.3

Balance at March 31, 2014
$
(27.0
)
$
0.1

 
$
(5.6
)
$
4.7

$
(0.1
)
$
(27.9
)


The following table summarizes significant amounts reclassified out of accumulated other comprehensive loss by the respective line items in net income during the three months ended March 31, 2014.
Details about Accumulated Other Comprehensive Loss Components
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
Affected Line Item in the Statement Where Net Income is Presented
 
Three Months Ended
 
 
March 31, 2014
 
Losses on cash flow hedges
 
 
Interest rate swap
$
(0.2
)
Interest expense
 
(0.2
)
Total before tax
 
(0.1
)
Tax benefit
 
$
(0.1
)
Net of tax
 
 
 
Amortization of defined benefit pension items
 
 
Actuarial losses
$
(0.7
)
(A)
 
(0.7
)
Total before tax
 
(0.3
)
Tax benefit
 
$
(0.4
)
Net of tax
 
 
 
Amortization of postretirement benefit plan items
 
 
Actuarial losses
$
(0.3
)
(A)
Prior service credit
0.7

(A)
 
0.4

Total before tax
 
0.2

Tax expense
 
$
0.2

Net of tax
 
 
 
Total reclassifications for the period
$
(0.3
)
Net of tax
(A)
These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (see Note 11 for additional information).

Forward Stock Split

On May 16, 2013, the Company's Board of Directors approved a 2-for-1 forward stock split of the Company's common stock, effective July 1, 2013, which entitled each shareholder of record to receive two shares for every one share of Company stock owned by the shareholder.  In connection with the stock split, an amendment to the Company's Articles of Incorporation was approved on May 16, 2013 which increased the number of authorized shares of common stock from 225 million to 450 million. All share and per share amounts within this Form 10-Q reflect the effects of the stock split.
Reclassifications

Prior to May 1, 2013, the Company reported the results of Enogex Holdings in two separate segments: the natural gas transportation and storage segment, and the natural gas gathering and processing segment. After the deconsolidation, these segments were combined into the natural gas midstream operations segment. The presentation of results for the three months ended March 31, 2013 have been revised to reflect this change. Effective May 1, 2013, the Company deconsolidated its previously held investment in Enogex Holdings and acquired an equity interest in Enable.