Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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

Summary of Significant Accounting Policies

Organization

OG&Egenerates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas.  Its operations aresubject 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.OG&E is a wholly-owned subsidiary of OGE Energy, 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.

Basis of Presentation

The CondensedFinancial Statements included herein have been prepared by OG&E, 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, OG&E 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 thefinancial position of OG&E atMarch 31, 2013andDecember 31, 2012and the results of its operations and cash flows for the threemonths endedMarch 31, 2013and2012, have been included and are of a normal recurring nature except as otherwise disclosed.

Due to seasonal fluctuations and other factors, OG&E'soperating results for the threemonths endedMarch 31, 2013are not necessarily indicative of the results that may be expected for the year endingDecember 31, 2013or for any future period.The CondensedFinancial Statements and Notes thereto should be read in conjunction with the auditedFinancial Statements and Notes thereto included in OG&E's 2012Form 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, 2013		December 31, 2012
Regulatory Assets
Current
Crossroads wind farm rider under recovery (A)	$	13.4	$	14.9
Oklahoma demand program rider under recovery (A)	9.4		9.2
Fuel clause under recoveries	0.4		—
Other (A)	7.6		2.9
Total Current Regulatory Assets	$	30.8	$	27.0
Non-Current
Benefit obligations regulatory asset	$	364.1	$	370.6
Income taxes recoverable from customers, net	54.9		54.7
Smart Grid	42.9		42.8
Unamortized loss on reacquired debt	12.7		13.0
Deferred storm expenses	12.3		12.7
Deferred pension expenses	3.4		4.5
Other	12.3		12.3
Total Non-Current Regulatory Assets	$	502.6	$	510.6
Regulatory Liabilities
Current
Fuel clause over recoveries	$	81.6	$	109.2
Smart Grid rider over recovery (B)	21.6		24.1
Other (B)	6.5		7.8
Total Current Regulatory Liabilities	$	109.7	$	141.1
Non-Current
Accrued removal obligations, net	$	219.4	$	218.2
Deferred pension credits	14.9		17.7
Pension tracker	11.2		9.2
Total Non-Current Regulatory Liabilities	$	245.5	$	245.1

(A) Included in Other Current Assets on theCondensedBalance Sheets.

(B) Included in Other Current Liabilities on theCondensedBalance 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.

Asset Retirement Obligation

The following table summarizes changes to OG&E's asset retirement obligations during thethreemonths endedMarch 31, 2013and2012.

	Three Months Ended
	March 31,
(In millions)	2013			2012
Balance at January 1	$	53.6		$	24.8
Liabilities settled	(0.1		)	—
Accretion expense	0.6			0.4
Revisions in estimated cash flows (A)	—			26.7
Balance at March 31	$	54.1		$	51.9

(A) Due to changes to OG&E's asset retirement obligations related to its wind farms due to a change in the assumption related to the timing of removal used in the valuation of the asset retirement obligations.

Accumulated Other Comprehensive Loss

In February 2013, the Financial Accounting Standards Board issued "Comprehensive Income: Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." The new standard requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, the new standard requires an entity to present significant amounts reclassified out of accumulated other comprehensive income by the respective line items in net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under GAAP that provide additional detail about those amounts. OG&E adopted the new standard effective January 1, 2013 and these disclosures have been included below.

The following table summarizes changes in the components of accumulated other comprehensive loss during thethreemonths endedMarch 31, 2013. All amounts below are presented net of tax.

	Deferred commodity contract hedging losses
Balance at December 31, 2012	$	(1.3	)
Other comprehensive loss before reclassifications	0.2
Amounts reclassified from accumulated other comprehensive loss	0.3
Net current period other comprehensive income (loss)	0.5
Balance at March 31, 2013	$	(0.8	)

The following table summarizes significant amounts reclassified out of accumulated other comprehensive loss by the respective line itemin net income during thethreemonths endedMarch 31, 2013.

Details about Accumulated Other Comprehensive Loss Components	Amount Reclassified from Accumulated Other Comprehensive Loss			Affected Line Item in the Statement Where Net Income is Presented
Gains (losses) on cash flow hedges
Commodity contracts	$	(0.5	)	Cost of goods sold
	(0.5		)	Total before tax
	(0.2		)	Tax benefit
	$	(0.3	)	Net of tax

Related Party Transactions

Related Party Transactions

OGE Energy charged operating costs to OG&E of $30.4 million and $32.7 million during the threemonths endedMarch 31, 2013 and 2012, respectively. 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.

During each of the threemonths endedMarch 31, 2013 and 2012, OG&E recorded an expense from its affiliate, Enogex, of $8.7 millionfor transporting gas to OG&E's natural gas-fired generating facilities.  During each of the threemonths endedMarch 31, 2013 and 2012, OG&E recorded an expense from Enogex of $3.2 million for natural gas storage services.  During the threemonths endedMarch 31, 2013 and 2012, OG&E also recorded natural gas purchases from Enogex of$5.5 million and $3.6 million, respectively. There are $2.3 million and $1.0 million of natural gas purchases recorded at March 31, 2013 and December 31, 2012, respectively, which are included in Accounts Payable – Affiliates in the Condensed Balance Sheets for these activities. During each of thethreemonths endedMarch 31, 2013 and 2012, OG&E recorded revenues from Enogex of $1.8 million and $2.8 million, respectively, for electricity used at Enogex's compression sites.

On July 1, 2009, OG&E and Enogex entered intohedging transactions to offset natural gas long positions at Enogex with short natural gas exposures at OG&E resulting from the cost of generationassociated with a wholesale power sales contractwith the Oklahoma Municipal Power Authority.These transactions are for50,000MMBtu per month from August 2009 to December 2013 (see Note 3).