Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Significant Accounting Policies [Text Block]

Summary of Significant Accounting Policies

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 incurred 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 incurred costs and obligations as regulatory assets or liabilities if, based on regulatory orders or other available evidence, it is probable that the costs or obligations will be included in amounts allowable for recovery or refund in future rates.

The following table presents a summary of OG&E's regulatory assets and liabilities.

	September 30,		December 31,
(In millions)	2021		2020
REGULATORY ASSETS
Current:
Fuel clause under recoveries	$	98.2	$	—
SPP cost tracker under recoveries (A)	7.7		7.0
Generation Capacity Replacement rider under recoveries (A)	1.7		4.4
Other (A)	7.7		8.4
Total current regulatory assets	$	115.3	$	19.8
Non-current:
Oklahoma Winter Storm Uri costs	$	756.3	$	—
Oklahoma deferred storm expenses	173.8		158.8
Benefit obligations regulatory asset	130.6		164.9
Arkansas Winter Storm Uri costs	91.0		—
Pension tracker	41.6		18.1
Sooner Dry Scrubbers	19.1		19.7
Arkansas deferred pension expenses	11.8		9.3
Unamortized loss on reacquired debt	9.1		9.7
COVID-19 impacts	8.0		6.4
Frontier Plant deferred expenses	7.1		6.4
Smart Grid	5.9		11.2
Other	10.6		11.1
Total non-current regulatory assets	$	1,264.9	$	415.6
REGULATORY LIABILITIES
Current:
Oklahoma energy efficiency rider over recoveries (B)	$	4.7	$	1.5
Fuel clause over recoveries	—		28.6
Other (B)	1.6		5.0
Total current regulatory liabilities	$	6.3	$	35.1
Non-current:
Income taxes refundable to customers, net	$	938.8	$	867.4
Accrued removal obligations, net	305.1		316.8
Other	3.8		4.7
Total non-current regulatory liabilities	$	1,247.7	$	1,188.9

(A)Included in Other Current Assets in the balance sheets.

(B)Included in Other Current Liabilities in the balance sheets.    

In February 2021, Winter Storm Uri resulted in record winter peak demand for electricity and extremely high natural gas and purchased power prices in OG&E's service territory. OG&E's natural gas costs for the month of February 2021 exceeded the total cost for all of 2020. The OCC allowed OG&E to create a regulatory asset for the Oklahoma portion of all deferred costs with an initial carrying charge based on the effective cost of the related debt financing for an amortization period to be determined at a later date. The APSC allowed OG&E to create a regulatory asset for the Arkansas portion of all deferred costs with an initial carrying charge equal to the current customer deposit interest rate to be recovered over a period of 10 years beginning in May 2021. For additional information, see Note 15.

The Oklahoma deferred storm expenses regulatory asset is recovered through the Storm Cost Recovery Rider. Operation and maintenance expenses resulting from storm damage exceeding the amounts included in OG&E's base rates are deferred and typically amortized over a five-year period. To mitigate customer impact, OG&E has agreed to recover the portion related to 2020 excess storm costs through the Storm Cost Recovery Rider over a ten-year period.

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 or liabilities, which could have significant financial effects.

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Organization

OGE Energy is a holding company with investments in energy and energy services providers offering physical delivery and related services for both electricity and natural gas primarily in the south-central U.S. OGE Energy conducts these activities through two business segments: (i) electric utility and (ii) natural gas midstream operations. The accounts of OGE Energy and its wholly-owned subsidiaries, including OG&E, are included in OGE Energy's condensed consolidated financial statements. All intercompany transactions and balances are eliminated in such consolidation. OGE Energy generally uses the equity method of accounting for investments where its ownership interest is between 20 percent and 50 percent and it lacks the power to direct activities that most significantly impact economic performance.

OG&E. OGE Energy's electric utility operations are conducted through OG&E, which generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas. OG&E's rates 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 and is a wholly-owned subsidiary of OGE Energy. OG&E is the largest electric utility in Oklahoma, and its franchised service territory includes Fort Smith, Arkansas and the surrounding communities. OG&E sold its retail natural gas business in 1928 and is no longer engaged in the natural gas distribution business.

Enable. OGE Energy's natural gas midstream operations segment represents OGE Energy's investment in Enable. The investment in Enable is held through wholly-owned subsidiaries and ultimately OGE Holdings. Formed in 2013, Enable is primarily 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 in the Anadarko, Arkoma and Ark-La-Tex Basins. Enable also owns crude oil gathering assets in the Anadarko and Williston Basins. Enable has intrastate natural gas transportation and storage assets that are located in Oklahoma as well as interstate assets that extend from western Oklahoma and the Texas Panhandle to Louisiana, from Louisiana to Illinois and from Louisiana to Alabama. Enable's general partner is equally controlled by OGE Energy and CenterPoint, who each have 50 percent management ownership. Based on the 50/50 management ownership, with neither company having control, OGE Energy accounts for its interest in Enable using the

equity method of accounting. In February 2021, Enable entered into a definitive merger agreement with Energy Transfer. For further discussion, see Note 4.

Basis of Accounting [Text Block]

Basis of Presentation

The condensed financial statements included herein have been prepared by the Registrants, 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 Registrants believe 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 financial position of the Registrants at September 30, 2021 and December 31, 2020, the results of the Registrants' operations for the three and nine months ended September 30, 2021 and 2020 and the Registrants' cash flows for the nine months ended September 30, 2021 and 2020 have been included and are of a normal, recurring nature except as otherwise disclosed. Management also has evaluated the impact of events occurring after September 30, 2021 up to the date of issuance of these condensed financial statements, and these statements contain all necessary adjustments and disclosures resulting from that evaluation.

Due to seasonal fluctuations and other factors, the Registrants' operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or for any future period. The condensed financial statements and notes thereto should be read in conjunction with the audited financial statements and notes thereto included in the Registrants' 2020 Form 10-K.

Schedule of Regulatory Assets and Liabilities

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 or liabilities, which could have significant financial effects.

Comprehensive Income (Loss) Note [Text Block]

Accumulated Other Comprehensive Income (Loss)

The following tables present changes in the components of accumulated other comprehensive income (loss) attributable to OGE Energy during the nine months ended September 30, 2021 and 2020. All amounts below are presented net of tax.

(In millions)	Pension Plan and Restoration of Retirement Income Plan		Postretirement Benefit Plans		Other Comprehensive Gain (Loss) from Unconsolidated Affiliates		Total
Balance at December 31, 2020	$	(34.1)	$	3.3	$	(1.3)	$	(32.1)
Other comprehensive income before reclassifications	—		—		0.6		0.6
Amounts reclassified from accumulated other comprehensive income (loss)	1.3		(0.9)		—		0.4
Settlement cost	4.8		—		—		4.8
Balance at September 30, 2021	$	(28.0)	$	2.4	$	(0.7)	$	(26.3)

(In millions)	Pension Plan and Restoration of Retirement Income Plan		Postretirement Benefit Plans		Other Comprehensive Loss from Unconsolidated Affiliates		Total
Balance at December 31, 2019	$	(35.1)	$	7.8	$	(0.6)	$	(27.9)
Other comprehensive loss before reclassifications	—		—		(0.9)		(0.9)
Amounts reclassified from accumulated other comprehensive income (loss)	2.9		(1.3)		—		1.6
Settlement cost	1.5		—		—		1.5
Balance at September 30, 2020	$	(30.7)	$	6.5	$	(1.5)	$	(25.7)

The following table presents significant amounts reclassified out of accumulated other comprehensive income (loss) attributable to OGE Energy by the respective line items in net income (loss) during the three and nine months ended September 30, 2021 and 2020.

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)								Affected Line Item in OGE Energy's Statements of Income
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2021		2020		2021		2020
Amortization of Pension Plan and Restoration of Retirement Income Plan items:
Actuarial losses	$	(0.6)	$	(1.2)	$	(1.8)	$	(3.8)	(A)
Prior service cost	(0.1)		—		(0.1)		—		(A)
Settlement cost	(1.4)		(1.8)		(6.7)		(2.1)		(A)
	(2.1)		(3.0)		(8.6)		(5.9)		Income (Loss) Before Taxes
	(0.5)		(0.8)		(2.5)		(1.5)		Income Tax Expense (Benefit)
	$	(1.6)	$	(2.2)	$	(6.1)	$	(4.4)	Net Income (Loss)
Amortization of postretirement benefit plans items:
Prior service credit	$	0.4	$	0.6	$	1.3	$	1.7	(A)
Actuarial gains (losses)	—		—		(0.1)		0.1		(A)
	0.4		0.6		1.2		1.8		Income (Loss) Before Taxes
	0.1		0.2		0.3		0.5		Income Tax Expense (Benefit)
	$	0.3	$	0.4	$	0.9	$	1.3	Net Income (Loss)
Total reclassifications for the period, net of tax	$	(1.3)	$	(1.8)	$	(5.2)	$	(3.1)	Net Income (Loss)

(A)These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (see Note 12 for additional information).

Allowance for Credit Losses

Allowance for Uncollectible Accounts Receivable

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 generally calculated by multiplying the last six months of electric revenue by the provision rate, which is based on a 12-month historical average of actual balances written off and is adjusted for current conditions and supportable forecasts as necessary. To the extent the historical collection rates, when incorporating forecasted conditions, are not representative of future collections, there could be an effect on the amount of uncollectible expense recognized, such as in response to COVID-19 impacts. Also, a portion of the uncollectible provision related to fuel within the Oklahoma jurisdiction is being recovered through the fuel adjustment clause. The allowance for uncollectible accounts receivable is a reduction to Accounts Receivable in the condensed balance sheets and is included in Other Operation and Maintenance Expense in the condensed statements of income.

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 an elevated 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.