2.4.0.82113100 - Disclosure - Commitments and Contingenciestruefalsefalse1falsefalsefalseD2013Q2YTDhttp://www.sec.gov/CIK0000074145duration2013-01-01T00:00:002013-06-30T00:00:001true1us-gaap_CommitmentsAndContingenciesDisclosureAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2us-gaap_CommitmentsAndContingenciesDisclosureTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseverboseLabel1falsefalsefalse00<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:bold;text-decoration:none;">Commitments and Contingencies</font><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-left:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">Except as set forth below and in Note</font><font style="font-family:inherit;font-size:10pt;"> 11, </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">the circumstances set forth in Notes</font><font style="font-family:inherit;font-size:10pt;"> 12 </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">and</font><font style="font-family:inherit;font-size:10pt;"> 13 </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">to</font><font style="font-family:inherit;font-size:10pt;"> OG&E's </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">Financial Statements included in</font><font style="font-family:inherit;font-size:10pt;"> OG&E's </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">2012</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">Form 10-K appropriately represent, in all material respects, the current status of</font><font style="font-family:inherit;font-size:10pt;"> OG&E's </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">material commitments and contingent liabilities.</font><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#000000;font-style:italic;font-weight:bold;text-decoration:none;">Minimum Fuel Purchase Commitments</font><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;"> </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">OG&E has coal contracts for purchases from January 2012 through December 2016. Also, as previously reported, OG&E had entered into multiple month term natural gas contracts for</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">26.1 percent</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">of its 2013 annual forecasted natural gas requirements. In February 2013, through a request for proposal, OG&E entered into various multiple month term natural gas contracts for</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">55.8 percent</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">of its remaining forecasted 2013 natural gas requirements.</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">Additional gas supplies to fulfill OG&E's remaining 2013 natural gas requirements will be acquired through monthly and daily purchases which are expected to be made at market prices.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#000000;font-style:italic;font-weight:bold;text-decoration:none;">Long-Term Service Agreement Commitments</font><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">OG&E has a long-term parts and service maintenance contract for the upkeep of the McClain Plant.  The existing contract will expire on January 1, 2015. In May 2013, a new contract was signed that is expected to run for the earlier of</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">128,000</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">factored-fired hours or</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">3,600</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">factored-fired starts. Based on historical usage and current expectations for future usage, this contract is expected to run until 2030. The contract requires payments based on both a fixed and variable cost component, depending on how much the McClain Plant is used.</font><font style="font-family:inherit;font-size:10pt;"> </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">OG&E has a long-term parts and service maintenance contract for the upkeep of the Redbud Plant. In March 2013, the contract was amended to extend the contract coverage for an additional</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">24,000</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">factored-fired hours. Based on historical usage and current expectations for future usage, this contract is expected to run until 2027. The contract requires payments based on both a fixed and variable cost component, depending on how much the Redbud Plant is used.</font><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:16px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#000000;font-style:italic;font-weight:bold;text-decoration:none;">Environmental Laws and Regulations</font></div><div style="line-height:120%;padding-bottom:16px;text-align:justify;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:normal;font-weight:bold;text-decoration:none;">United States v. OG&E (Federal Clean Air Act New Source Review Litigation)</font><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:16px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">As previously reported, in July 2008, OG&E received a request for information from the EPA regarding Federal Clean Air Act compliance at OG&E's Muskogee and Sooner generating plants. In recent years, the EPA has issued similar requests to numerous other electric utilities seeking to determine whether various maintenance, repair and replacement projects should have required permits under the Federal Clean Air Act's new source review process. In January 2012, OG&E received a supplemental request for an update of the previously provided information and for some additional information not previously requested. On May 1, 2012, OG&E responded to the EPA's supplemental request for information. On April 26, 2011, the EPA issued a notice of violation alleging that 13 projects occurred at OG&E's Muskogee and Sooner generating plants between 1993 and 2006 without the required new source review permits. The notice of violation also alleges that OG&E's visible emissions at its Muskogee and Sooner generating plants are not in accordance with applicable new source performance standards.</font><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">In March 2013, the DOJ informed OG&E that it was prepared to initiate enforcement litigation concerning the matters identified in the notice of violation. OG&E subsequently met with the EPA and DOJ representatives regarding the notice of violation and proposals for resolving the matter without litigation. On July 8, 2013, the United States, at the request of the EPA, filed a complaint for declaratory relief against OG&E in United States District Court for the Western District of Oklahoma (Case No. CIV-13-690-D) alleging that OG&E did not follow the Federal Clean Air Act procedures for projecting emission increases attributable to eight projects that occurred between 2003 and 2006. This complaint seeks to have OG&E submit a new assessment of whether the projects were likely to result in a significant emissions increase. OG&E expects to vigorously defend against these claims, but OG&E cannot predict the outcome of such litigation. The Sierra Club, an environmental organization, also has threatened to file a citizen suit under the Federal Clean Air Act alleging similar violations against OG&E, and OG&E expects that the Sierra Club will seek to intervene in the litigation initiated by the EPA. At this time, OG&E continues to believe that it has acted in compliance with the Federal Clean Air Act.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">If OG&E does not prevail and if a new assessment of the projects were to conclude that they caused a significant emissions increase, the EPA and the Sierra Club could seek to require OG&E to install additional pollution control equipment, including Dry Scrubbers and selective catalytic reduction systems with capital costs in excess of</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$1.0 billion</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">and pay fines and significant penalties as a result of the allegations in the notice of violation. Section 113 of the Federal Clean Air Act (along with the Federal Civil Penalties Inflation Adjustment Act of 1996) provides for civil penalties as much as</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">$37,500</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">per day for each violation. The cost of any required pollution control equipment could also be significant. OG&E cannot predict at this time whether it will be legally required to incur any of these costs.</font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#000000;font-style:italic;font-weight:bold;text-decoration:none;">Other</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">In the normal course of business,</font><font style="font-family:inherit;font-size:10pt;"> OG&E </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">is confronted with issues or events that may result in a contingent liability.</font><font style="font-family:inherit;font-size:10pt;">  </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">These generally relate to lawsuits or claims made by third parties, including governmental agencies.</font><font style="font-family:inherit;font-size:10pt;">  </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">When appropriate, management consults with legal counsel and other appropriate experts to assess the claim.</font><font style="font-family:inherit;font-size:10pt;">  </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">If, in management's opinion,</font><font style="font-family:inherit;font-size:10pt;"> OG&E </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">has incurred a probable loss as set forth by GAAP, an estimate is made of the loss and the appropriate accounting entries are reflected in</font><font style="font-family:inherit;font-size:10pt;"> OG&E's </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">Condensed</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">Financial Statements.</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">At the present time, based on currently available information, except as otherwise stated above, in Note</font><font style="font-family:inherit;font-size:10pt;"> 11 </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">below, under "Environmental Laws and Regulations" in Item 2 of Part 1 and in Item 1 of Part II of this Form 10-Q, in Notes</font><font style="font-family:inherit;font-size:10pt;"> 12 </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">and</font><font style="font-family:inherit;font-size:10pt;"> 13 </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">of Notes to</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">Financial Statements and Item 3 of Part I of</font><font style="font-family:inherit;font-size:10pt;"> OG&E's </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">2012</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">Form 10-K,</font><font style="font-family:inherit;font-size:10pt;"> OG&E </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">believes that any reasonably possible losses in excess of accrued amounts arising out of pending or threatened lawsuits or claims would not be quantitatively material to its financial statements and would not have a material adverse effect on</font><font style="font-family:inherit;font-size:10pt;"> OG&E's </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;text-decoration:none;">financial position, results of operations or cash flows.</font><font style="font-family:inherit;font-size:10pt;"> </font></div><div style="line-height:120%;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></div>falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for commitments and contingencies.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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