Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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

Organization

OG&Egenerates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas. Its operationsare 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. 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

In the opinion of management, all adjustments necessary to fairly present thefinancial position of OG&E atDecember 31, 2014and2013and the results of its operations and cash flows for the years endedDecember 31, 2014, 2013and2012, 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 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 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)	2014		2013
Regulatory Assets
Current
Fuel clause under recoveries	$	68.3	$	26.2
Oklahoma demand program rider under recovery (A)	19.7		10.6
Crossroads wind farm rider under recovery (A)	—		4.7
Other (A)	9.1		7.3
Total Current Regulatory Assets	$	97.1	$	48.8
Non-Current
Benefit obligations regulatory asset	$	261.1	$	227.4
Income taxes recoverable from customers, net	56.1		56.5
Smart Grid	43.9		44.2
Deferred storm expenses	17.5		21.6
Unamortized loss on reacquired debt	16.1		11.8
Pension tracker	—		1.4
Other	16.8		16.2
Total Non-Current Regulatory Assets	$	411.5	$	379.1
Regulatory Liabilities
Current
Smart Grid rider over recovery (B)	$	12.5	$	16.7
Crossroads wind farm rider over recovery (B)	10.3		—
Other (B)	1.6		3.5
Total Current Regulatory Liabilities	$	24.4	$	20.2
Non-Current
Accrued removal obligations, net	$	248.1	$	227.7
Pension tracker	14.9		—
Deferred pension credits	—		6.5
Total Non-Current Regulatory Liabilities	$	263.0	$	234.2

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

(B) Included in Other Current Liabilities on theBalance 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.

OG&E recovers program costs related to the Demand and Energy Efficiency Program. An extension of the demand program rider was approved in December 2012, which allows for the recovery of demand program costs, lost revenues associated with certain achieved energy, demand savings and performance based incentives and the recovery of costs associated with research and development investments through December 2015.

OG&E recovers a return on the capital expenditures along with operation and maintenance expense and depreciation expense related to the Crossroads wind farm through riders established by the OCC and APSC. OG&E began recovery in the fourth quarter of 2011 in Oklahoma and June of 2013 in Arkansas, and believes the rider will continue until new rates are implemented in OG&E's next general rate case in each jurisdiction.

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 and prior service cost.These expenses are recorded as a regulatory asset as OG&E had historically recovered and currently recovers pension and postretirement benefit plan expense in its electric rates. 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)	2014			2013
Pension Plan and Restoration of Retirement Income Plan
Net loss	$	196.7		$	178.4
Prior service cost	0.6			2.5
Postretirement Benefit Plans
Net loss	83.6			79.9
Prior service cost	(19.8		)	(33.4		)
Total	$	261.1		$	227.4

The following amounts in the benefit obligations regulatory asset atDecember 31, 2014are expected to be recognized as components of net periodic benefit cost in2015: 

(In millions)
Pension Plan and Restoration of Retirement Income Plan
Net loss	$	12.7
Prior service cost	0.5
Postretirement Benefit Plans
Net loss	11.8
Prior service cost	(13.7		)
Total	$	11.3

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.

OG&E recovers 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.These amounts are currently being recovered through a rider which will remain in effect until the smart grid project costs are included in base rates in OG&E's next general rate case. Costs not included in the rider arethe incremental costs for web portal access, education and home energy reports, which are capped at$6.9 million, and the stranded costs associated with OG&E's analog electric meters, which have been replaced by smart meters, which were accumulated during the smart grid deployment and have been included in the Smart Grid asset in the Regulatory Assets/Liabilities table above. These costs are expected to be recovered in base rates in OG&E's next general rate case.

OG&E defers annual Oklahoma storm-related operation and maintenance expenses in excess of$2.7 millionand includes in expense any Oklahoma storm-related operation and maintenance expenses up to$2.7 million. OG&E will recover the amounts deferred each year, over afive-year period.

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 recorded in interest expenses and 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.

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

OG&E recovers specific amounts of pension and postretirement medical costs in rates approved in its Oklahoma rate cases. In accordance with approved orders, OG&E defers the difference between actual pension and postretirement medical expenses and the amount approved in its last Oklahoma rate case as a regulatory asset or regulatory liability. These amounts have been recorded in the Pension tracker in the regulatory assets and liabilities table above.

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.IfOG&Ewere 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 theFinancial 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 theFinancial Statements and the reported amounts of revenues and expenses during the reporting period.  Changes to these assumptions and estimates could have a material effect onOG&E'sFinancial Statements.  However,OG&Ebelieves it has taken reasonable positions where assumptions and estimates are used in order to minimize the negative financial impact toOG&Ethat could result if actual results vary from the assumptions and estimates.  In management's opinion, the areas ofOG&Ewhere the most significant judgment is exercisedincludes the determination of Pension Plan assumptions,income taxes,contingency reserves, asset retirement obligations, and depreciable lives of property, plant and equipment, the existence of regulatory assets and liabilities and unbilled revenues.

Cash and Cash Equivalents

For purposes of theFinancial Statements, OG&E 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

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.  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 was$1.6 millionand$1.9 millionatDecember 31, 2014 and 2013, respectively.

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.

Fuel Inventories

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$66.7 millionand$74.4 millionatDecember 31, 2014and2013, respectively. Effective May 1, 2014, the gas storage services agreement with Enable was terminated. As a result of this contract termination, approximately 5.3 BCF of cushion gas owned by OG&E on the Enable system is being directed to OG&E's power plants over a five year period during peak time of June 1 to August 31 at a rate of 11,500 MMBtu/day for a total of 1.06 Bcf per year. Therefore, approximately$11.0 millionof cushion gas was reclassified from Plant-in-Service to Deferred Charges and Other Assets and an additional$2.7 millionwas reclassified to current Fuel Inventories on the Balance Sheets. As of December 31, 2014, the balance of cushion gas in Other Assets is approximately$8.2 million.

Property, Plant and Equipment

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 theStatements of Income as Other Expense.  Repair and replacement of minor items of property are included in theStatements 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 theStatement of Income.

December 31, 2014 (In millions)	Percentage Ownership		Total Property, Plant and Equipment		Accumulated Depreciation		Net Property, Plant and Equipment
McClain Plant (A)	77	%	$	207.7	$	46.6	$	161.1
Redbud Plant (A)(B)	51	%	$	484.1	$	81.8	$	402.3

(A) Construction work in progress was$0.5 millionand$0.4 millionfor the McClain and Redbud Plants, respectively.

(B) This amount includes a plant acquisition adjustment of$148.3 millionand accumulated amortization of$34.3 million.

December 31, 2013 (In millions)	Percentage Ownership		Total Property, Plant and Equipment		Accumulated Depreciation		Net Property, Plant and Equipment
McClain Plant (A)	77	%	$	183.2	$	62.8	$	120.4
Redbud Plant (A)(B)	51	%	$	498.9	$	89.7	$	409.2

(A) Construction work in progress was$0.1 millionand$39.5 millionfor the McClain and Redbud Plants, respectively.

(B) This amount includes a plant acquisition adjustment of$148.3 millionand accumulated amortization of$28.8 million.

OG&E's property, plant and equipment and related accumulated depreciation are divided into the following major classes at:

December 31, 2014 (In millions)	Total Property, Plant and Equipment		Accumulated Depreciation		Net Property, Plant and Equipment
Distribution assets	$	3,559.5	$	1,086.7	$	2,472.8
Electric generation assets (A)	3,620.1		1,345.1		2,275.0
Transmission assets (B)	2,370.0		417.8		1,952.2
Intangible plant	67.6		31.1		36.5
Other property and equipment	330.0		125.0		205.0
Total property, plant and equipment	$	9,947.2	$	3,005.7	$	6,941.5

(A) This amount includes a plant acquisition adjustment of$148.3 millionand accumulated amortization of$34.3 million.

(B) This amount includes a plant acquisition adjustment of$3.3 millionand accumulated amortization of$0.4 million.

December 31, 2013 (In millions)	Total Property, Plant and Equipment		Accumulated Depreciation		Net Property, Plant and Equipment
Distribution assets	$	3,403.8	$	1,028.2	$	2,375.6
Electric generation assets (A)	3,551.0		1,306.1		2,244.9
Transmission assets (B)	2,163.7		385.0		1,778.7
Intangible plant	50.5		27.1		23.4
Other property and equipment	330.2		118.2		212.0
Total property, plant and equipment	$	9,499.2	$	2,864.6	$	6,634.6

(A) This amount includes a plant acquisition adjustment of$148.3 millionand accumulated amortization of$28.8 million.

(B) This amount includes a plant acquisition adjustment of$3.3 millionand accumulated amortization of$0.3 million.

The unamortized computer software costs were$33.6 millionand$16.8 millionatDecember 31, 2014and2013, respectively. In2014, 2013and2012, amortization expense for computer software costs was$5.2 million, $4.0 millionand$4.2 million, respectively.

Depreciation and Amortization

The provision for depreciation, which was2.8 percentof the average depreciable utility plant for both2014and2013, 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. In2015, the provision for depreciation is projected to be2.8 percentof the average depreciable utility plant. Amortization of intangible assets is computed using the straight-line method. Of the remaining amortizable intangible plant balance atDecember 31, 2014, 96.0 percentwill be amortized over9years with4.0 percentof the remaining amortizable intangible plant balance atDecember 31, 2014being amortized over26years.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 a37to59-yearperiod.

Asset Retirement Obligations

OG&Ehas previously recorded asset retirement obligations that are being amortized over their respective lives ranging from4to74years.

The following table summarizes changes to OG&E's asset retirement obligations during theyears endedDecember 31, 2014and2013.

(In millions)	2014			2013
Balance at January 1	$	55.2		$	53.6
Liabilities settled	(0.8		)	—
Accretion expense	2.5			2.3
Revisions in estimated cash flows	1.7			(0.7		)
Balance at December 31	$	58.6		$	55.2

Allowance for Funds Used During Construction

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 an increase to net other income and a reduction to interest expense in theStatements of Income and as an increase to Construction Work in Progress in theBalance Sheets.Allowance for funds used during construction rates, compounded semi-annually, were6.92 percent, 8.33 percentand8.93 percentfor the years endedDecember 31, 2014, 2013and2012, respectively.Thedecreasein the allowance for funds used during construction rates in 2014 was primarily due to two factors. First, an increase in the average daily balance of short-term debt resulted in less equity being required to finance construction projects, which caused the equity portion of allowance for funds using during construction to decrease. Second, that same increase in the average daily balance of short-term debt allowed the interest and fixed commercial paper fees to be lower per dollar of short term debt, resulting in a lower short term debt rate which caused the debt portion of allowance for funds used during construction to decrease.

Collection of Sales Tax

In the normal 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

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 theBalance Sheets and in Operating Revenues on theStatements 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 currently owns and operates transmission and generation facilities as part of a vertically integrated utility. OG&E is a member of the SPP regional transmission organization and has transferred operational authority, but not ownership, of OG&E's transmission facilities to the SPP. On March 1, 2014, the SPP implemented FERC approved regional day ahead and real-time markets for energy and operating services, as well as associated transmission congestion rights. Collectively the three markets operate together under the global name, SPP Integrated Marketplace. OG&E represents owned and contracted generation assets, and customer load in the SPP Integrated Marketplace for the sole benefit of its customers. OG&E has not participated in the SPP Integrated Marketplace for any speculative trading activities. OG&E records SPP Integrated Marketplace transactions as sales or purchases per FERC Order 668, which requires that purchases and sales be recorded on a net basis for each settlement period of the SPP Integrated Marketplace. These results are reported as Operating Revenues or Cost of Goods Sold in itsFinancial Statements. OG&E revenues, expenses, assets and liabilities may be adversely affected by changes in the organization, operating and regulation by the FERC or the SPP.

Fuel Adjustment Clauses

The actual cost of fuel used in electric generation and certain purchased power costs are passed through to OG&E's customers through fuel adjustment clauses. The fuel adjustment clauses are subject to periodic review by the OCC, the APSC and the FERC. The OCC, the APSC and the FERC have authority to review the appropriateness of gas transportation charges or other fees OG&E pays to its affiliate, Enable.

Income Taxes

OG&E isa member of an affiliated group thatfilesconsolidated income tax returns in the U.S. Federal jurisdiction and various state jurisdictions. Income taxesaregenerally 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.  OG&E uses 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. OG&E recognizes interest related to unrecognized tax benefits in interest expense and recognizes penalties in other expense.

Accrued Vacation

OG&E 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.

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 expenseor 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 insuranceor raterecovery, 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 whereOG&E has been designated as one of several potentially responsible parties, the amount accrued representsOG&E'sestimated share of the cost.  OG&E had$7.5 millionand$6.2 millioninaccrued environmental liabilities atDecember 31, 2014and2013, respectively, which are included in the asset retirement obligations table.