Oklahoma | 73-0382390 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
Large accelerated filer o | Accelerated filer o |
Non-accelerated filer þ | Smaller reporting company o |
Emerging growth company o |
Page | |
Part I - FINANCIAL INFORMATION | |
Part II - OTHER INFORMATION | |
Abbreviation | Definition |
2017 Form 10-K | Annual Report on Form 10-K for the year ended December 31, 2017 |
2017 Tax Act | Tax Cuts and Jobs Act of 2017 |
AES | AES-Shady Point, Inc. |
APSC | Arkansas Public Service Commission |
ASC | FASB Accounting Standards Codification |
ASU | FASB Accounting Standards Update |
CO2 | Carbon dioxide |
CSAPR | Cross-State Air Pollution Rule |
Dry Scrubber | Dry flue gas desulfurization unit with spray dryer absorber |
ECP | Environmental Compliance Plan |
Enable | Enable Midstream Partners, LP, a midstream partnership formed between OGE Energy and CenterPoint Energy, Inc. |
EPA | U.S. Environmental Protection Agency |
FASB | Financial Accounting Standards Board |
Federal Clean Water Act | Federal Water Pollution Control Act of 1972, as amended |
FERC | Federal Energy Regulatory Commission |
FIP | Federal Implementation Plan |
GAAP | Accounting principles generally accepted in the U.S. |
IRP | Integrated Resource Plan |
MATS | Mercury and Air Toxics Standards |
Mustang Modernization Plan | The construction of seven new, efficient combustion turbines with generating capability of 462 megawatts |
MWh | Megawatt-hour |
NAAQS | National Ambient Air Quality Standards |
NOX | Nitrogen oxide |
OCC | Oklahoma Corporation Commission |
OG&E | Oklahoma Gas and Electric Company, wholly-owned subsidiary of OGE Energy |
OGE Energy | OGE Energy Corp., parent company of OG&E |
Pension Plan | Qualified defined benefit retirement plan |
Ppb | Parts per billion |
QF | Qualified cogeneration facilities |
Regional Haze Rule | The EPA's Regional Haze Rule |
Restoration of Retirement Income Plan | Supplemental retirement plan to the Pension Plan |
SIP | State Implementation Plan |
SO2 | Sulfur dioxide |
SPP | Southwest Power Pool |
System sales | Sales to OG&E's customers |
U.S. | United States of America |
• | general economic conditions, including the availability of credit, access to existing lines of credit, access to the commercial paper markets, actions of rating agencies and their impact on capital expenditures; |
• | the ability of OG&E and OGE Energy to access the capital markets and obtain financing on favorable terms as well as inflation rates and monetary fluctuations; |
• | the ability to obtain timely and sufficient rate relief to allow for recovery of items such as capital expenditures, fuel costs, operating costs, transmission costs and deferred expenditures; |
• | prices and availability of electricity, coal and natural gas; |
• | business conditions in the energy industry; |
• | competitive factors, including the extent and timing of the entry of additional competition in the markets served by OG&E; |
• | the impact on demand for our services resulting from cost-competitive advances in technology, such as distributed electricity generation and customer energy efficiency programs; |
• | technological developments, changing markets and other factors that result in competitive disadvantages and create the potential for impairment of existing assets; |
• | factors affecting utility operations such as unusual weather conditions; catastrophic weather-related damage; unscheduled generation outages, unusual maintenance or repairs; unanticipated changes to fossil fuel, natural gas or coal supply costs or availability due to higher demand, shortages, transportation problems or other developments; environmental incidents; or electric transmission or gas pipeline system constraints; |
• | availability and prices of raw materials for current and future construction projects; |
• | the effect of retroactive pricing of transactions in the SPP markets or adjustments in market pricing mechanisms by the SPP; |
• | federal or state legislation and regulatory decisions and initiatives that affect cost and investment recovery, have an impact on rate structures or affect the speed and degree to which competition enters OG&E's markets; |
• | environmental laws, safety laws or other regulations that may impact the cost of operations or restrict or change the way OG&E operates its facilities; |
• | changes in accounting standards, rules or guidelines; |
• | the discontinuance of accounting principles for certain types of rate-regulated activities; |
• | the cost of protecting assets against, or damage due to, terrorism or cyberattacks and other catastrophic events; |
• | creditworthiness of suppliers, customers and other contractual parties; |
• | social attitudes regarding the utility industry; |
• | identification of suitable investment opportunities to enhance shareholder returns and achieve long-term financial objectives through business acquisitions and divestitures; |
• | increased pension and healthcare costs; |
• | costs and other effects of legal and administrative proceedings, settlements, investigations, claims and matters, including, but not limited to, those described in this Form 10-Q; and |
• | other risk factors listed in the reports filed by OG&E with the Securities and Exchange Commission, including those listed in "Item 1A. Risk Factors" in OG&E's 2017 Form 10-K. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | ||||||||
OPERATING REVENUES | ||||||||||||
Revenues from contracts with customers | $ | 684.5 | $ | — | $ | 1,710.1 | $ | — | ||||
Other revenues | 14.3 | — | 48.4 | — | ||||||||
Operating revenues | 698.8 | 716.8 | 1,758.5 | 1,759.2 | ||||||||
COST OF SALES | 244.4 | 255.7 | 663.6 | 696.5 | ||||||||
OPERATING EXPENSES | ||||||||||||
Other operation and maintenance | 121.1 | 115.0 | 352.2 | 348.8 | ||||||||
Depreciation and amortization | 81.1 | 76.2 | 240.8 | 204.6 | ||||||||
Taxes other than income | 21.9 | 21.7 | 66.2 | 64.2 | ||||||||
Operating expenses | 224.1 | 212.9 | 659.2 | 617.6 | ||||||||
OPERATING INCOME | 230.3 | 248.2 | 435.7 | 445.1 | ||||||||
OTHER INCOME (EXPENSE) | ||||||||||||
Allowance for equity funds used during construction | 6.7 | 11.8 | 20.0 | 27.2 | ||||||||
Other net periodic benefit income (expense) | 0.5 | (5.2 | ) | (9.5 | ) | (14.0 | ) | |||||
Other income | 3.6 | 13.4 | 10.2 | 27.5 | ||||||||
Other expense | (0.6 | ) | (0.5 | ) | (2.0 | ) | (1.5 | ) | ||||
Net other income | 10.2 | 19.5 | 18.7 | 39.2 | ||||||||
INTEREST EXPENSE | ||||||||||||
Interest on long-term debt | 40.2 | 38.3 | 119.5 | 112.4 | ||||||||
Allowance for borrowed funds used during construction | (3.3 | ) | (5.2 | ) | (9.8 | ) | (12.6 | ) | ||||
Interest on short-term debt and other interest charges | 0.9 | 1.4 | 4.6 | 3.9 | ||||||||
Interest expense | 37.8 | 34.5 | 114.3 | 103.7 | ||||||||
INCOME BEFORE TAXES | 202.7 | 233.2 | 340.1 | 380.6 | ||||||||
INCOME TAX EXPENSE | 18.8 | 71.7 | 32.9 | 116.7 | ||||||||
NET INCOME | $ | 183.9 | $ | 161.5 | $ | 307.2 | $ | 263.9 | ||||
Other comprehensive income (loss), net of tax | — | — | — | — | ||||||||
COMPREHENSIVE INCOME | $ | 183.9 | $ | 161.5 | $ | 307.2 | $ | 263.9 |
Nine Months Ended September 30, | ||||||
(In millions) | 2018 | 2017 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net income | $ | 307.2 | $ | 263.9 | ||
Adjustments to reconcile net income to net cash provided from operating activities: | ||||||
Depreciation and amortization | 240.8 | 204.6 | ||||
Deferred income taxes and investment tax credits, net | 57.2 | 120.5 | ||||
Allowance for equity funds used during construction | (20.0 | ) | (27.2 | ) | ||
Stock-based compensation expense | 3.4 | 1.9 | ||||
Regulatory assets | (4.8 | ) | 10.9 | |||
Regulatory liabilities | (3.7 | ) | (0.6 | ) | ||
Other assets | 2.0 | 1.6 | ||||
Other liabilities | (0.3 | ) | (58.1 | ) | ||
Change in certain current assets and liabilities: | ||||||
Accounts receivable and accrued unbilled revenues, net | (56.8 | ) | (98.6 | ) | ||
Fuel, materials and supplies inventories | 14.9 | 4.0 | ||||
Fuel recoveries | 37.5 | 15.8 | ||||
Other current assets | 25.3 | 24.8 | ||||
Accounts payable | (37.9 | ) | (29.7 | ) | ||
Income taxes payable - parent | (22.5 | ) | 1.7 | |||
Other current liabilities | 75.2 | (51.1 | ) | |||
Net cash provided from operating activities | 617.5 | 384.4 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
Capital expenditures (less allowance for equity funds used during construction) | (413.8 | ) | (662.8 | ) | ||
Proceeds from sale of assets | — | 0.4 | ||||
Net cash used in investing activities | (413.8 | ) | (662.4 | ) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
Dividends paid on common stock | — | (65.0 | ) | |||
Proceeds from long-term debt | 396.0 | 592.3 | ||||
Payment of long-term debt | (250.0 | ) | (125.1 | ) | ||
Changes in advances with parent | (349.7 | ) | (124.2 | ) | ||
Net cash (used in) provided from financing activities | (203.7 | ) | 278.0 | |||
NET CHANGE IN CASH AND CASH EQUIVALENTS | — | — | ||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | — | — | ||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | — | $ | — |
September 30, | December 31, | |||||
(In millions) | 2018 | 2017 | ||||
ASSETS | ||||||
CURRENT ASSETS | ||||||
Accounts receivable, less reserve of $1.6 and $1.5, respectively | $ | 243.5 | $ | 188.5 | ||
Accrued unbilled revenues | 68.3 | 66.5 | ||||
Advances to parent | 299.7 | 112.5 | ||||
Fuel inventories | 64.5 | 84.3 | ||||
Materials and supplies, at average cost | 132.2 | 80.8 | ||||
Other | 23.3 | 48.6 | ||||
Total current assets | 831.5 | 581.2 | ||||
OTHER PROPERTY AND INVESTMENTS | 5.6 | 5.9 | ||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
In service | 11,598.6 | 11,035.1 | ||||
Construction work in progress | 632.9 | 867.5 | ||||
Total property, plant and equipment | 12,231.5 | 11,902.6 | ||||
Less accumulated depreciation | 3,680.6 | 3,568.8 | ||||
Net property, plant and equipment | 8,550.9 | 8,333.8 | ||||
DEFERRED CHARGES AND OTHER ASSETS | ||||||
Regulatory assets | 256.2 | 283.0 | ||||
Other | 7.8 | 51.7 | ||||
Total deferred charges and other assets | 264.0 | 334.7 | ||||
TOTAL ASSETS | $ | 9,652.0 | $ | 9,255.6 |
September 30, | December 31, | |||||
(In millions) | 2018 | 2017 | ||||
LIABILITIES AND STOCKHOLDER'S EQUITY | ||||||
CURRENT LIABILITIES | ||||||
Accounts payable | $ | 154.4 | $ | 216.8 | ||
Customer deposits | 83.1 | 80.7 | ||||
Accrued taxes | 62.6 | 41.5 | ||||
Accrued interest | 39.5 | 44.0 | ||||
Accrued compensation | 28.2 | 25.6 | ||||
Long-term debt due within one year | 249.9 | 249.8 | ||||
Fuel clause over recoveries | 39.2 | 1.7 | ||||
Other | 82.1 | 28.5 | ||||
Total current liabilities | 739.0 | 688.6 | ||||
LONG-TERM DEBT | 2,896.8 | 2,749.6 | ||||
DEFERRED CREDITS AND OTHER LIABILITIES | ||||||
Accrued benefit obligations | 99.5 | 110.3 | ||||
Deferred income taxes | 887.9 | 832.2 | ||||
Regulatory liabilities | 1,291.0 | 1,283.4 | ||||
Other | 156.5 | 135.8 | ||||
Total deferred credits and other liabilities | 2,434.9 | 2,361.7 | ||||
Total liabilities | 6,070.7 | 5,799.9 | ||||
COMMITMENTS AND CONTINGENCIES (NOTE 11) | ||||||
STOCKHOLDER'S EQUITY | ||||||
Common stockholder's equity | 1,030.6 | 1,027.2 | ||||
Retained earnings | 2,550.7 | 2,428.5 | ||||
Total stockholder's equity | 3,581.3 | 3,455.7 | ||||
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | $ | 9,652.0 | $ | 9,255.6 |
(In millions) | Shares Outstanding | Common Stock | Premium on Common Stock | Retained Earnings | Total | |||||||||
Balance at December 31, 2017 | 40.4 | $ | 100.9 | $ | 926.3 | $ | 2,428.5 | $ | 3,455.7 | |||||
Net income | — | — | — | 307.2 | 307.2 | |||||||||
Dividends declared on common stock | — | — | — | (185.0 | ) | (185.0 | ) | |||||||
Stock-based compensation | — | — | 3.4 | — | 3.4 | |||||||||
Balance at September 30, 2018 | 40.4 | $ | 100.9 | $ | 929.7 | $ | 2,550.7 | $ | 3,581.3 | |||||
Balance at December 31, 2016 | 40.4 | $ | 100.9 | $ | 923.2 | $ | 2,228.0 | $ | 3,252.1 | |||||
Net income | — | — | — | 263.9 | 263.9 | |||||||||
Dividends declared on common stock | — | — | — | (105.0 | ) | (105.0 | ) | |||||||
Stock-based compensation | — | — | 1.9 | — | 1.9 | |||||||||
Balance at September 30, 2017 | 40.4 | $ | 100.9 | $ | 925.1 | $ | 2,386.9 | $ | 3,412.9 |
1. | Summary of Significant Accounting Policies |
September 30, | December 31, | |||||
(In millions) | 2018 | 2017 | ||||
REGULATORY ASSETS | ||||||
Current: | ||||||
Oklahoma demand program rider under recovery (A) | $ | 10.7 | $ | 31.6 | ||
Production tax credit rider under recovery (A) | 6.1 | — | ||||
SPP cost tracker under recovery (A) | — | 7.7 | ||||
Other (A) | 1.6 | 1.5 | ||||
Total current regulatory assets | $ | 18.4 | $ | 40.8 | ||
Non-current: | ||||||
Benefit obligations regulatory asset | $ | 160.8 | $ | 177.2 | ||
Deferred storm expenses | 37.4 | 42.2 | ||||
Smart Grid | 27.5 | 32.8 | ||||
Unamortized loss on reacquired debt | 11.6 | 12.3 | ||||
Other | 18.9 | 18.5 | ||||
Total non-current regulatory assets | $ | 256.2 | $ | 283.0 | ||
REGULATORY LIABILITIES | ||||||
Current: | ||||||
Fuel clause over recoveries | $ | 39.2 | $ | 1.7 | ||
SPP cost tracker over recovery (B) | 9.4 | — | ||||
Other (B) | 3.5 | 2.2 | ||||
Total current regulatory liabilities | $ | 52.1 | $ | 3.9 | ||
Non-current: | ||||||
Income taxes refundable to customers, net | $ | 943.9 | $ | 955.5 | ||
Accrued removal obligations, net | 308.2 | 288.4 | ||||
Pension tracker | 32.0 | 32.3 | ||||
Other | 6.9 | 7.2 | ||||
Total non-current regulatory liabilities | $ | 1,291.0 | $ | 1,283.4 |
(A) | Included in Other Current Assets on the Condensed Balance Sheets. |
(B) | Included in Other Current Liabilities on the Condensed Balance Sheets. |
2. | Accounting Pronouncements |
3. | Revenue Recognition |
September 30, 2018 | ||||||
(In millions) | Three Months Ended | Nine Months Ended | ||||
Residential | $ | 281.0 | $ | 694.6 | ||
Commercial | 174.7 | 444.9 | ||||
Industrial | 56.2 | 145.5 | ||||
Oilfield | 39.5 | 110.9 | ||||
Public authorities and street light | 58.7 | 151.5 | ||||
System sales revenues | 610.1 | 1,547.4 | ||||
Provision for rate refund | 13.5 | (6.2 | ) | |||
Integrated market | 16.9 | 38.7 | ||||
Transmission | 33.2 | 109.2 | ||||
Other | 10.8 | 21.0 | ||||
Revenues from contracts with customers | $ | 684.5 | $ | 1,710.1 |
4. | Related Party Transactions |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | ||||||||
Operating revenues: | ||||||||||||
Electricity to power electric compression assets | $ | 4.7 | $ | 4.5 | $ | 12.2 | $ | 10.0 | ||||
Cost of sales: | ||||||||||||
Natural gas transportation services | $ | 8.8 | $ | 8.8 | $ | 26.3 | $ | 26.3 | ||||
Natural gas purchases (sales) | $ | 0.1 | $ | 0.4 | $ | 2.6 | $ | (0.4 | ) |
5. | Fair Value Measurements |
September 30, 2018 | December 31, 2017 | |||||||||||
(In millions) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||
Long-term Debt (including Long-term Debt due within one year): | ||||||||||||
Senior Notes | $ | 3,001.6 | $ | 3,125.9 | $ | 2,854.3 | $ | 3,242.8 | ||||
OG&E Industrial Authority Bonds | $ | 135.4 | $ | 135.4 | $ | 135.4 | $ | 135.4 | ||||
Tinker Debt | $ | 9.7 | $ | 8.7 | $ | 9.7 | $ | 9.8 |
6. | Stock-Based Compensation |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | ||||||||
Performance units: | ||||||||||||
Total shareholder return | $ | 0.6 | $ | 0.7 | $ | 2.1 | $ | 2.0 | ||||
Earnings per share | 0.7 | (0.6 | ) | 1.3 | (0.1 | ) | ||||||
Total performance units | 1.3 | 0.1 | 3.4 | 1.9 | ||||||||
Restricted stock | — | — | — | — | ||||||||
Total compensation expense | $ | 1.3 | $ | 0.1 | $ | 3.4 | $ | 1.9 | ||||
Income tax benefit | $ | 0.4 | $ | — | $ | 0.9 | $ | 0.7 |
7. | Income Taxes |
8. | Long-Term Debt |
SERIES | DATE DUE | AMOUNT | ||||
(In millions) | ||||||
1.01% | - | 2.00% | Garfield Industrial Authority, January 1, 2025 | $ | 47.0 | |
1.01% | - | 1.83% | Muskogee Industrial Authority, January 1, 2025 | 32.4 | ||
1.03% | - | 1.86% | Muskogee Industrial Authority, June 1, 2027 | 56.0 | ||
Total (redeemable during next 12 months) | $ | 135.4 |
9. | Short-Term Debt and Credit Facility |
10. | Retirement Plans and Postretirement Benefit Plans |
Pension Plan | Restoration of Retirement Income Plan | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||||
(In millions) | 2018 (A) | 2017 (A) | 2018 (B) | 2017 (B) | 2018 (A) | 2017 (A) | 2018 (B) | 2017 (B) | |||||||||||||||||
Service cost | $ | 2.4 | $ | 2.5 | $ | 7.4 | $ | 7.6 | $ | — | $ | 0.1 | $ | 0.1 | $ | 0.1 | |||||||||
Interest cost | 4.5 | 4.9 | 13.2 | 14.6 | 0.1 | — | 0.2 | 0.1 | |||||||||||||||||
Expected return on plan assets | (8.0 | ) | (8.2 | ) | (24.9 | ) | (24.6 | ) | — | — | — | — | |||||||||||||
Amortization of net loss | 3.0 | 3.2 | 9.1 | 9.7 | 0.1 | 0.1 | 0.4 | 0.3 | |||||||||||||||||
Settlement cost | 8.6 | — | 8.6 | — | — | — | — | — | |||||||||||||||||
Total net periodic benefit cost | 10.5 | 2.4 | 13.4 | 7.3 | 0.2 | 0.2 | 0.7 | 0.5 | |||||||||||||||||
Plus: Amount allocated from OGE Energy | 2.7 | — | 3.7 | — | 0.7 | — | 1.0 | — | |||||||||||||||||
Net periodic benefit cost | $ | 13.2 | $ | 2.4 | $ | 17.1 | $ | 7.3 | $ | 0.9 | $ | 0.2 | $ | 1.7 | $ | 0.5 |
(A) | In addition to the $14.1 million and $2.6 million of net periodic benefit cost recognized during the three months ended September 30, 2018 and 2017, respectively, OG&E recognized the following: |
• | a deferral of pension expense during the three months ended September 30, 2018 of $7.8 million, which includes a portion of OGE Energy's pension settlement charge, related to the pension settlement charge of $8.6 million in accordance with the Oklahoma Pension tracker regulatory liability (see Note 1); |
• | a deferral of pension expense during the three months ended September 30, 2018 of $0.7 million related to the Arkansas jurisdictional portion of the pension settlement charge of $8.6 million; and |
• | an increase in pension expense during the three months ended September 30, 2017 of $2.7 million to maintain the allowable amount to be recovered for pension expense in the Oklahoma jurisdiction, which is included in the Pension tracker regulatory liability (see Note 1). |
• | an increase in pension expense during the nine months ended September 30, 2018 and 2017 of $7.8 million and $8.5 million, respectively, to maintain the allowable amount to be recovered for pension expense in the Oklahoma jurisdiction, which are included in the Pension tracker regulatory liability (see Note 1); |
• | a deferral of pension expense during the nine months ended September 30, 2018 of $7.8 million, which includes a portion of OGE Energy's pension settlement charge, related to the pension settlement charge of $8.6 million in accordance with the Oklahoma Pension tracker regulatory liability (see Note 1); |
• | a deferral of pension expense during the nine months ended September 30, 2018 of $0.7 million related to the Arkansas jurisdictional portion of the pension settlement charge of $8.6 million; and |
• | a deferral of pension expense during the nine months ended September 30, 2017 of $2.3 million related to the Arkansas jurisdictional portion of the pension settlement charge of $22.4 million in 2013. |
Postretirement Benefit Plans | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(In millions) | 2018 (B) | 2017 (B) | 2018 (C) | 2017 (C) | ||||||||
Service cost | $ | 0.1 | $ | 0.1 | $ | 0.2 | $ | 0.3 | ||||
Interest cost | 1.0 | 1.2 | 3.1 | 4.5 | ||||||||
Expected return on plan assets | (0.5 | ) | (0.5 | ) | (1.4 | ) | (1.5 | ) | ||||
Amortization of net loss | 1.0 | 0.5 | 2.9 | 1.3 | ||||||||
Amortization of unrecognized prior service cost (A) | (1.5 | ) | (1.0 | ) | (4.6 | ) | (1.0 | ) | ||||
Settlement cost | — | 0.4 | — | 0.4 | ||||||||
Total net periodic benefit cost | 0.1 | 0.7 | 0.2 | 4.0 | ||||||||
Plus: Amount allocated from OGE Energy | (0.2 | ) | — | (0.5 | ) | — | ||||||
Net periodic benefit cost | $ | (0.1 | ) | $ | 0.7 | $ | (0.3 | ) | $ | 4.0 |
(A) | Unamortized prior service cost is amortized on a straight-line basis over the average remaining service period to the first eligibility age of participants who are expected to receive a benefit and are active at the date of the plan amendment. |
(B) | In addition to the $0.1 million of net periodic benefit income and $0.7 million of net periodic benefit cost recognized during the three months ended September 30, 2018 and 2017, respectively, OG&E recognized an increase in postretirement medical expense in the three months ended September 30, 2018 and 2017 of $0.1 million and $1.9 million, respectively, to maintain the allowable amount to be recovered for postretirement medical expense in the Oklahoma jurisdiction which are included in the Pension tracker regulatory liability (see Note 1). |
(C) | In addition to the $0.3 million of net periodic benefit income and $4.0 million of net periodic benefit cost recognized during the nine months ended September 30, 2018 and 2017, respectively, OG&E recognized an increase in postretirement medical expense in the nine months ended September 30, 2018 and 2017 of $4.3 million and $3.9 million, respectively, to maintain the allowable amount to be recovered for postretirement medical expense in the Oklahoma jurisdiction which are included in the Pension tracker regulatory liability (see Note 1). |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | ||||||||
Capitalized portion of net periodic pension benefit cost | $ | 0.8 | $ | 0.8 | $ | 2.4 | $ | 2.6 | ||||
Capitalized portion of net periodic postretirement benefit cost | $ | — | $ | 0.1 | $ | 0.1 | $ | 1.2 |
11. | Commitments and Contingencies |
12. | Rate Matters and Regulation |
• | an annual net decrease of $64.0 million in OG&E's rates to its Oklahoma retail customers, which reflects recovery of the Mustang Modernization Plan, offset by reductions for the impact of the lower corporate income taxes resulting from the 2017 Tax Act; |
• | for purposes of calculating the Allowance for Funds Used During Construction and OG&E's various recovery riders that include a full return component, use of the most-recently approved return on equity of 9.5 percent and a capital structure of 47 percent debt/53 percent equity; |
• | depreciation rates remain unchanged from the current depreciation rates approved in the March 2017 OCC rate order; |
• | regulatory asset treatment for the Dry Scrubbers at Sooner Units 1 and 2 that will defer the non-fuel operation and maintenance expenses, depreciation, debt cost associated with the capital investment and related ad valorem taxes, subject to a prudence review in a future general rate review and a determination as to whether the project is used and useful; |
• | production tax credits will be removed from base rates and placed into a separate rider; |
• | a federal tax credit rider will be established to refund to customers the amount of excess taxes received from January to June 2018, as discussed above, and the ongoing annual true up of excess accumulated deferred income taxes resulting from the reduction in corporate income tax rates as part of the 2017 Tax Act (further discussed in Note 7); and |
• | the demand program rider tariff will be revised to allow for concurrent recovery of lost revenues from foregone sales due to certain achieved energy efficiency and demand savings. |
• | operating expenses of approximately $892 million to $895 million with operation and maintenance expenses comprising approximately 54 percent of the total; |
• | interest expense of approximately $152 million which assumes an $11 million allowance for borrowed funds used during construction reduction to interest expense; |
• | other income of approximately $24 million including approximately $23 million of allowance for equity funds used during construction; and |
(In millions) | Twelve Months Ended December 31, 2018 (A) | ||
Operating revenues | $ | 2,157 | |
Cost of sales | 781 | ||
Gross margin | $ | 1,376 |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(Dollars in millions) | 2018 | 2017 | 2018 | 2017 | ||||||||
Operating revenues | $ | 698.8 | $ | 716.8 | $ | 1,758.5 | $ | 1,759.2 | ||||
Cost of sales | 244.4 | 255.7 | 663.6 | 696.5 | ||||||||
Other operation and maintenance | 121.1 | 115.0 | 352.2 | 348.8 | ||||||||
Depreciation and amortization | 81.1 | 76.2 | 240.8 | 204.6 | ||||||||
Taxes other than income | 21.9 | 21.7 | 66.2 | 64.2 | ||||||||
Operating income | 230.3 | 248.2 | 435.7 | 445.1 | ||||||||
Allowance for equity funds used during construction | 6.7 | 11.8 | 20.0 | 27.2 | ||||||||
Other net periodic benefit income (expense) | 0.5 | (5.2 | ) | (9.5 | ) | (14.0 | ) | |||||
Other income | 3.6 | 13.4 | 10.2 | 27.5 | ||||||||
Other expense | 0.6 | 0.5 | 2.0 | 1.5 | ||||||||
Interest expense | 37.8 | 34.5 | 114.3 | 103.7 | ||||||||
Income tax expense | 18.8 | 71.7 | 32.9 | 116.7 | ||||||||
Net income | $ | 183.9 | $ | 161.5 | $ | 307.2 | $ | 263.9 | ||||
Operating revenues by classification: | ||||||||||||
Residential | $ | 286.4 | $ | 295.1 | $ | 714.7 | $ | 700.0 | ||||
Commercial | 180.0 | 174.2 | 460.9 | 450.6 | ||||||||
Industrial | 57.5 | 58.0 | 149.9 | 156.3 | ||||||||
Oilfield | 40.1 | 43.4 | 113.3 | 124.6 | ||||||||
Public authorities and street light | 60.4 | 60.6 | 156.9 | 159.4 | ||||||||
Sales for resale | — | — | 0.1 | 0.1 | ||||||||
System sales revenues | 624.4 | 631.3 | 1,595.8 | 1,591.0 | ||||||||
Provision for rate refund | 13.5 | 29.2 | (6.2 | ) | 25.0 | |||||||
Integrated market | 16.9 | 14.0 | 38.7 | 16.8 | ||||||||
Transmission | 33.2 | 37.7 | 109.2 | 113.1 | ||||||||
Other | 10.8 | 4.6 | 21.0 | 13.3 | ||||||||
Total operating revenues | $ | 698.8 | $ | 716.8 | $ | 1,758.5 | $ | 1,759.2 | ||||
Reconciliation of gross margin to revenue: | ||||||||||||
Operating revenues | $ | 698.8 | $ | 716.8 | $ | 1,758.5 | $ | 1,759.2 | ||||
Cost of sales | 244.4 | 255.7 | 663.6 | 696.5 | ||||||||
Gross margin | $ | 454.4 | $ | 461.1 | $ | 1,094.9 | $ | 1,062.7 | ||||
MWh sales by classification (In millions) | ||||||||||||
Residential | 2.9 | 2.9 | 7.6 | 6.9 | ||||||||
Commercial | 2.3 | 2.1 | 6.2 | 5.7 | ||||||||
Industrial | 1.0 | 0.9 | 2.9 | 2.7 | ||||||||
Oilfield | 0.9 | 0.8 | 2.5 | 2.4 | ||||||||
Public authorities and street light | 0.9 | 0.8 | 2.4 | 2.3 | ||||||||
System sales | 8.0 | 7.5 | 21.6 | 20.0 | ||||||||
Integrated market | 0.5 | 0.6 | 1.1 | 1.4 | ||||||||
Total sales | 8.5 | 8.1 | 22.7 | 21.4 | ||||||||
Number of customers | 846,817 | 840,519 | 846,817 | 840,519 | ||||||||
Weighted-average cost of energy per kilowatt-hour (In cents) | ||||||||||||
Natural gas | 2.158 | 2.747 | 2.328 | 2.795 | ||||||||
Coal | 2.046 | 2.049 | 2.035 | 2.100 | ||||||||
Total fuel | 2.029 | 2.253 | 2.046 | 2.231 | ||||||||
Total fuel and purchased power | 2.730 | 2.966 | 2.791 | 3.093 | ||||||||
Degree days (A) | ||||||||||||
Heating - Actual | 12 | 4 | 2,220 | 1,574 | ||||||||
Heating - Normal | 19 | 19 | 2,020 | 2,021 | ||||||||
Cooling - Actual | 1,265 | 1,223 | 2,051 | 1,847 | ||||||||
Cooling - Normal | 1,380 | 1,380 | 2,018 | 2,018 |
(A) | Degree days are calculated as follows: The high and low degrees of a particular day are added together and then averaged. If the calculated average is above 65 degrees, then the difference between the calculated average and 65 is expressed as cooling degree days, with each degree of difference equaling one cooling degree day. If the calculated average is below 65 degrees, then the difference between the calculated average and 65 is expressed as heating degree days, with each degree of difference equaling one heating degree day. The daily calculations are then totaled for the particular reporting period. |
Change for | ||||||
September 30, 2018 | ||||||
(In millions) | Three Months Ended | Nine Months Ended | ||||
Price variance (A) | $ | (33.9 | ) | $ | (13.2 | ) |
Wholesale transmission revenue (B) | (2.8 | ) | 0.9 | |||
Reserve for tax refund (C) | 10.0 | (22.8 | ) | |||
Other | 6.6 | 8.8 | ||||
Weather (price and quantity) (D) | 4.6 | 40.4 | ||||
Non-residential demand and related revenue | 3.5 | 6.8 | ||||
New customer growth | 3.3 | 6.3 | ||||
Industrial and oilfield sales | 2.0 | 5.0 | ||||
Change in gross margin | $ | (6.7 | ) | $ | 32.2 |
(A) | Decreased during the three and nine months ended September 30, 2018 primarily due to the Oklahoma tax refund to customers during the July 2018 billing cycle and new Oklahoma rates being implemented on July 1, 2018, which reflected the lower corporate federal tax rate as a result of the 2017 Tax Act. |
(B) | The three and nine months ended September 30, 2018 include the lower corporate federal tax rate, as a result of the 2017 Tax Act, which was reflected in billings beginning with the July 2018 invoice, as discussed in Note 12 in "Item 1. Financial Statements." |
(C) | The three and nine months ended September 30, 2018 include the $18.9 million refunded to Oklahoma customers during the July 2018 billing cycle that was previously reserved. Further discussion of OG&E's reserve for tax refund in response to OCC, APSC and FERC proceedings can be found in Notes 7 and 12 in "Item 1. Financial Statements." |
(D) | Cooling degree days increased three percent and 11 percent during the three and nine months ended September 30, 2018, respectively, and heating degree days increased 41 percent during the nine months ended September 30, 2018, as compared to the same periods in 2017. |
Change for | ||||||
September 30, 2018 | ||||||
(In millions) | Three Months Ended | Nine Months Ended | ||||
Fuel expense (A) | $ | (14.2 | ) | $ | (24.7 | ) |
Purchased power costs: | ||||||
Purchases from SPP (B) | 2.3 | (11.4 | ) | |||
Wind | 0.5 | 2.2 | ||||
Cogeneration | (1.3 | ) | (3.4 | ) | ||
Other | 0.6 | 0.7 | ||||
Transmission expense (C) | 0.8 | 3.7 | ||||
Change in cost of sales | $ | (11.3 | ) | $ | (32.9 | ) |
(A) | Decrease in fuel expense during the three and nine months ended September 30, 2018 was primarily due to decreased utilization of company-owned generation. |
(B) | Increase in the cost of purchases from the SPP for the three months ended September 30, 2018 was due to a 21.2 percent increase in MWhs purchased offset by a 22.0 percent decrease in cost per MWh purchased. The decrease in cost per MWh purchased was due to a decrease in fuel prices. Decrease in the cost of purchases from the SPP for the nine months ended September 30, 2018 was due to a 20.4 percent increase in MWhs purchased offset by a 30.2 percent decrease in cost per MWh purchased. The decrease in cost per MWh purchased was due to a decrease in fuel prices. |
(C) | Increase in transmission-related charges was primarily due to higher SPP charges for the base plan projects of other utilities. |
Change for | ||||||
September 30, 2018 | ||||||
(In millions) | Three Months Ended | Nine Months Ended | ||||
Payroll and benefits (A) | $ | 6.3 | $ | 10.4 | ||
Other | 1.9 | (1.5 | ) | |||
Contract technical and construction services (B) | 1.2 | (7.2 | ) | |||
Vegetation management | (3.3 | ) | 1.7 | |||
Change in other operation and maintenance expense | $ | 6.1 | $ | 3.4 |
(A) | Increased primarily due to annual salary increases and an increase in incentive compensation. |
(B) | Changes are primarily due to the timing of normal plant maintenance. |
Nine Months Ended | |||||||||||
September 30, | 2018 vs. 2017 | ||||||||||
(Dollars in millions) | 2018 | 2017 | $ Change | % Change | |||||||
Net cash provided from operating activities | $ | 617.5 | $ | 384.4 | $ | 233.1 | 60.6 | % | |||
Net cash used in investing activities | $ | (413.8 | ) | $ | (662.4 | ) | $ | 248.6 | (37.5 | )% | |
Net cash (used in) provided from financing activities | $ | (203.7 | ) | $ | 278.0 | $ | (481.7 | ) | * |
(Dollars in millions) | September 30, 2018 | ||
Balance of outstanding supporting letters of credit | $ | 0.3 | |
Weighted-average interest rate of outstanding supporting letters of credit | 1.05 | % | |
Balance of outstanding commercial paper borrowings | $ | — | |
Net available liquidity under revolving credit agreements | $ | 449.7 | |
Balance of outstanding intercompany borrowings with OGE Energy | $ | — |
Exhibit No. | Description |
4.01 | |
31.01 | |
32.01 | |
101.INS | XBRL Instance Document. |
101.SCH | XBRL Taxonomy Schema Document. |
101.PRE | XBRL Taxonomy Presentation Linkbase Document. |
101.LAB | XBRL Taxonomy Label Linkbase Document. |
101.CAL | XBRL Taxonomy Calculation Linkbase Document. |
101.DEF | XBRL Definition Linkbase Document. |
OKLAHOMA GAS AND ELECTRIC COMPANY | |
(Registrant) | |
By: | /s/ Sarah R. Stafford |
Sarah R. Stafford | |
Controller and Chief Accounting Officer | |
(On behalf of the Registrant and in her capacity as Chief Accounting Officer) |
/s/ Sean Trauschke | |
Sean Trauschke | |
President and Chief Executive Officer |
/s/ Stephen E. Merrill | |
Stephen E. Merrill | |
Chief Financial Officer |
/s/ Sean Trauschke | ||
Sean Trauschke | ||
President and Chief Executive Officer |
/s/ Stephen E. Merrill | ||
Stephen E. Merrill | ||
Chief Financial Officer |
Document And Entity Information |
9 Months Ended |
---|---|
Sep. 30, 2018
shares
| |
Document Information [Line Items] | |
Entity Registrant Name | OKLAHOMA GAS & ELECTRIC CO |
Entity Central Index Key | 0000074145 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Entity Emerging Growth Company | false |
Entity Small Business | false |
Entity Common Stock, Shares Outstanding | 40,378,745 |
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Income Statement [Abstract] | ||||
Revenues from contracts with customers | $ 684.5 | $ 0.0 | $ 1,710.1 | $ 0.0 |
Other revenues | 14.3 | 0.0 | 48.4 | 0.0 |
Operating revenues | 698.8 | 716.8 | 1,758.5 | 1,759.2 |
COST OF SALES | 244.4 | 255.7 | 663.6 | 696.5 |
OPERATING EXPENSES | ||||
Other operation and maintenance | 121.1 | 115.0 | 352.2 | 348.8 |
Depreciation and amortization | 81.1 | 76.2 | 240.8 | 204.6 |
Taxes other than income | 21.9 | 21.7 | 66.2 | 64.2 |
Operating expenses | 224.1 | 212.9 | 659.2 | 617.6 |
OPERATING INCOME | 230.3 | 248.2 | 435.7 | 445.1 |
OTHER INCOME (EXPENSE) | ||||
Allowance for equity funds used during construction | 6.7 | 11.8 | 20.0 | 27.2 |
Other net periodic benefit income (expense) | 0.5 | (5.2) | (9.5) | (14.0) |
Other income | 3.6 | 13.4 | 10.2 | 27.5 |
Other expense | (0.6) | (0.5) | (2.0) | (1.5) |
Net other income | 10.2 | 19.5 | 18.7 | 39.2 |
INTEREST EXPENSE | ||||
Interest on long-term debt | 40.2 | 38.3 | 119.5 | 112.4 |
Allowance for borrowed funds used during construction | (3.3) | (5.2) | (9.8) | (12.6) |
Interest on short-term debt and other interest charges | 0.9 | 1.4 | 4.6 | 3.9 |
Interest expense | 37.8 | 34.5 | 114.3 | 103.7 |
INCOME BEFORE TAXES | 202.7 | 233.2 | 340.1 | 380.6 |
INCOME TAX EXPENSE | 18.8 | 71.7 | 32.9 | 116.7 |
NET INCOME | 183.9 | 161.5 | 307.2 | 263.9 |
Other comprehensive income (loss), net of tax | 0.0 | 0.0 | 0.0 | 0.0 |
COMPREHENSIVE INCOME | $ 183.9 | $ 161.5 | $ 307.2 | $ 263.9 |
CONDENSED BALANCE SHEETS (Unaudited) Parenthetical - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Allowance for Doubtful Accounts Receivable | $ 1.6 | $ 1.5 |
Summary of Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Text Block] | Summary of Significant Accounting Policies OG&E's significant accounting policies are detailed in "Note 1. Summary of Significant Accounting Policies" in OG&E's 2017 Form 10-K. Changes to OG&E's accounting policies as a result of adopting ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," are discussed in Note 3 in this Form 10-Q. |
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Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Organization OG&E generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas. Its operations 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 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. OG&E is a wholly-owned subsidiary of OGE Energy, 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. |
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Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Basis of Presentation The Condensed Financial 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 the financial position of OG&E at September 30, 2018 and December 31, 2017, the results of its operations for the three and nine months ended September 30, 2018 and 2017 and its cash flows for the nine months ended September 30, 2018 and 2017 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, 2018 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, OG&E's operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 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 OG&E's 2017 Form 10-K. |
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Schedule of Regulatory Assets and Liabilities [Text Block] | 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 is a summary of OG&E's regulatory assets and liabilities.
As discussed in Note 12 under "Oklahoma Rate Review Filing - 2018," as a result of the settlement agreement reached in the most recent Oklahoma rate review, OG&E removed production tax credits from base rates and now utilizes a separate rider to credit customers the differential between estimated and actual production tax credits, which can either result in a regulatory asset or regulatory liability based on that differential. 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. |
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Reclassifications [Text Block] | Reclassifications Certain prior-year amounts have been reclassified to conform to the current year presentation. Amounts for the three and nine months ended September 30, 2017 have been adjusted for the reclassification of net periodic benefit cost components and the regulatory Pension tracker mechanism between Other Operation and Maintenance and Other Net Periodic Benefit Income (Expense) on OG&E's Condensed Statements of Income to be consistent with the 2018 presentation due to OG&E's adoption of ASU 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." Further discussion can be found in Note 10. |
Accounting Pronouncements |
9 Months Ended |
---|---|
Sep. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | Accounting Pronouncements Recently Adopted Accounting Standards Revenue from Contracts with Customers. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." OG&E adopted this standard in the first quarter of 2018 utilizing the modified retrospective transition method and applied the new standard only to contracts that were not completed at the date of initial application. OG&E determined it was not necessary to change the timing or amounts of revenue recognized based on the adoption of Topic 606. Therefore, financial statement amounts in the period of adoption have not changed under Topic 606 as compared with the guidance that was in effect before the adoption of Topic 606. The adoption did change financial statement presentation as Operating Revenues are now separated between Revenues from Contracts with Customers and Other Revenues on the 2018 Condensed Statement of Income. In addition, gains and losses associated with OG&E's guaranteed flat bill program that were previously included in Net Other Income on the Condensed Statements of Income are now presented as Revenues from Contracts with Customers since the gains and losses are included within the transaction price in the contract under Topic 606. Operating Revenues presented on the 2017 Condensed Statement of Income did not change from prior year. Alternative revenue programs are scoped out of Topic 606, as these programs are considered agreements between an entity and a regulator, not contracts between an entity and a customer; therefore, OG&E now presents revenues from alternative revenue programs separately from revenues from contracts with customers. Further discussion regarding OG&E's revenue recognition as well as additional disclosures resulting from the adoption of Topic 606 can be found in Note 3. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. In May 2017, the FASB issued ASU 2017-07, "Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." The new guidance is designed to improve the reporting of pension and other postretirement benefit costs by bifurcating the components of net benefit cost between those that are attributed to compensation for service and those that are not. The service cost component of benefit cost continues to be presented within operating income, but entities are now required to present the other components of benefit cost as non-operating within the income statement. Additionally, the new guidance only permits the capitalization of the service cost component of net benefit cost. The accounting change is required to be applied on a retrospective basis for the presentation of components of net benefit cost and on a prospective basis for the capitalization of only the service cost component of net benefit costs. OG&E adopted the new guidance beginning in the first quarter of 2018. The presentation and recognition impacts of OG&E's adoption of ASU 2017-07 are further discussed in Note 10. Issued Accounting Standards Not Yet Adopted Leases. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The main difference between current lease accounting and Topic 842 is the recognition of right-of-use assets and lease liabilities by lessees for those leases classified as operating leases under current accounting guidance. Lessees, such as OG&E, will need to recognize a right-of-use asset and a lease liability for virtually all of their leases, other than leases that meet the definition of a short-term lease. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment for items such as initial direct costs. For income statement purposes, Topic 842 retains a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense, while finance leases will result in a front-loaded expense pattern, similar to current capital leases. Classification of operating and finance leases will be based on criteria that are largely similar to those applied in current lease guidance but without the explicit thresholds. The new guidance is effective for fiscal years beginning after December 2018. The new guidance must be adopted using a modified retrospective transition method and provides for certain practical expedients. Transition method options include application of the new guidance at the beginning of the earliest comparative period presented or at the adoption date, with a cumulative-effect adjustment to retained earnings in the period of adoption. OG&E is evaluating its current lease contracts and currently intends to take the package of practical expedients allowing entities to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases and (iii) initial direct costs for any existing leases. OG&E has not quantified the impact on its Condensed Financial Statements, but it anticipates an increase in the recognition of right-of-use assets and lease liabilities. In January 2018, the FASB issued ASU 2018-01, "Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842," which is an amendment to ASU 2016-02. Land easements (also commonly referred to as rights of way) represent the right to use, access or cross another entity's land for a specified purpose. This new guidance permits an entity to elect a transitional practical expedient, to be applied consistently, to not evaluate land easements under Topic 842 that exist or expired before the entity's adoption of Topic 842 and that were not previously accounted for as leases under ASC 840, "Leases." Once Topic 842 is adopted, an entity is required to apply Topic 842 prospectively to all new (or modified) land easements to determine whether the arrangement should be accounted for as a lease. ASU 2018-01 is effective for fiscal years beginning after December 2018. OG&E currently intends to elect this practical expedient during its adoption of Topic 842 and does not plan to evaluate existing easement contracts under Topic 842, if these contracts have not previously been accounted for under Topic 840. In July 2018, the FASB issued ASU 2018-11, "Leases (Topic 842): Targeted Improvements," which provides the following additional amendments to ASU 2016-02: (i) entities can elect to initially apply ASU 2016-02 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption and (ii) lessors can elect a practical expedient, by class of underlying asset, to account for nonlease components and the associated lease component as a single component, if the nonlease component otherwise would be accounted for under Topic 606 and certain conditions, as described in ASU 2018-11, are met. If an entity elects the additional (and optional) transition method, the entity will provide the required Topic 840 disclosures for all periods that continue to be reported under Topic 840. ASU 2018-11 is effective for fiscal years beginning after December 2018. OG&E is reviewing potential impacts of ASU 2018-11 and currently intends to elect the transition method provided by the guidance allowing for initial application at the adoption date. Fair Value Measurement Disclosure Framework. In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." The new guidance removes, adds or modifies disclosure requirements that impact all levels of the fair value hierarchy, as well as investments measured using the net asset value practical expedient. ASU 2018-13 is effective for fiscal years beginning after December 2019 and is required to be applied both retrospectively and prospectively, depending on the specific disclosure change. Early adoption is permitted. OG&E does not believe this ASU will have a significant impact on its financial statement disclosures. Defined Benefit Plans Disclosure Framework. In August 2018, the FASB issued ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." The new guidance removes, adds or clarifies disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. ASU 2018-14 is effective for fiscal years ending after December 2020 and is required to be applied on a retrospective basis. Early adoption is permitted. OG&E does not believe this ASU will have a significant impact on its financial statement disclosures. Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The new guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for fiscal years beginning after December 2019 and can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Early adoption is permitted. OG&E is currently evaluating the impact of this ASU on its Condensed Financial Statements. |
Revenues from Contracts with Customers (Notes) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Text Block] | Revenue Recognition Revenue from Contracts with Customers General OG&E recognizes revenue from electric sales when power is delivered to customers. The performance obligation to deliver electricity is generally created and satisfied simultaneously, and the provisions of the regulatory-approved tariff determine the charges OG&E may bill the customer, payment due date and other pertinent rights and obligations of both parties. 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. OG&E accrues an estimate of the revenues for electric sales delivered since the latest billings. Unbilled revenue is presented in Accrued Unbilled Revenues on the Condensed Balance Sheets and in Revenues from Contracts with Customers on the Condensed Statements 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. Integrated Market and Transmission 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. The SPP has 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 the 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. Purchases and sales are based on the fixed transaction price determined by the market at the time of the purchase or sale and the MWh quantity purchased or sold. These results are reported as Revenues from Contracts with Customers or Cost of Sales in the Condensed Financial 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. OG&E's transmission revenues are generated by the use of OG&E's transmission network by the SPP, which operates the network, on behalf of other transmission owners. OG&E recognizes revenue on the sale of transmission service to its customers over time as the service is provided in the amount OG&E has a right to invoice. Transmission service to the SPP is billed monthly based on a fixed transaction price determined by OG&E's FERC-approved formula transmission rates along with other SPP-specific charges and the megawatt quantity reserved. Disaggregated Revenue The following table disaggregates OG&E's revenues from contracts with customers by customer classification. OG&E's operating revenues disaggregated by customer classification can be found in "Results of Operations" in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations."
Other Revenues Revenues from Alternative Revenue Programs Other Revenues on the Condensed Statements of Income is comprised of certain rider revenue that includes alternative revenue measures as defined in ASC 980, "Regulated Operations," which details two types of alternative revenue programs. The first type adjusts billings for the effects of weather abnormalities or broad external factors or to compensate OG&E for demand-side management initiatives (i.e., no-growth plans and similar conservation efforts). The second type provides for additional billings (i.e., incentive awards) for the achievement of certain objectives, such as reducing costs, reaching specified milestones or demonstratively improving customer service. Once the specific events permitting billing of the additional revenues under either program type have been completed, OG&E recognizes the additional revenues if (i) the program is established by an order from OG&E's regulatory commission that allows for automatic adjustment of future rates; (ii) the amount of additional revenues for the period is objectively determinable and is probable of recovery; and (iii) the additional revenues will be collected within 24 months following the end of the annual period in which they are recognized. |
Related Party Transactions |
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Related Party Transactions Disclosure [Text Block] | Related Party Transactions OGE Energy charged operating costs to OG&E of $35.1 million and $30.2 million during the three months ended September 30, 2018 and 2017, respectively, and $102.6 million and $97.9 million during the nine months ended September 30, 2018 and 2017, respectively. OGE Energy charges operating costs to OG&E based on several factors, and operating costs directly related to OG&E are assigned as such. Operating costs incurred for the benefit of OG&E are allocated either as overhead based primarily on labor costs or using the "Distrigas" method, which is a three-factor formula that uses an equal weighting of payroll, net operating revenues and gross property, plant and equipment. During the nine months ended September 30, 2018, OG&E declared $185.0 million dividends to OGE Energy as compared to $105.0 million during the same period in 2017. Enable provides gas transportation services to OG&E pursuant to an agreement that expires in April 2019, if either party does not provide notice of termination to the other party at least 180 days prior to the expiration date in April 2019. In October 2018, OG&E and Enable agreed to waive the 180 days written notice and allow a 30 day extension so that the parties can negotiate the terms of a new agreement. This transportation agreement grants Enable the responsibility of delivering natural gas to OG&E's generating facilities and performing an imbalance service. With this imbalance service, in accordance with the cash-out provision of the contract, OG&E purchases gas from Enable when Enable's deliveries exceed OG&E's pipeline receipts. Enable purchases gas from OG&E when OG&E's pipeline receipts exceed Enable's deliveries. The following table summarizes related party transactions between OG&E and Enable during the three and nine months ended September 30, 2018 and 2017.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement [Text Block] | Fair Value Measurements The classification of OG&E's fair value measurements requires judgment regarding the degree to which market data is observable or corroborated by observable market data. GAAP establishes a fair value hierarchy that prioritizes the inputs used to measure fair value based on observable and unobservable data. The hierarchy categorizes the inputs into three levels, with the highest priority given to quoted prices in active markets for identical unrestricted assets or liabilities (Level 1), and the lowest priority given to unobservable inputs (Level 3). Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The three levels defined in the fair value hierarchy are as follows: Level 1 inputs are quoted prices in active markets for identical unrestricted assets or liabilities that are accessible at the measurement date. Level 2 inputs are inputs other than quoted prices in active markets included within Level 1 that are either directly or indirectly observable at the reporting date for the asset or liability for substantially the full term of the asset or liability. Level 2 inputs include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 inputs are prices or valuation techniques for the asset or liability that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Unobservable inputs reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). OG&E had no financial instruments measured at fair value on a recurring basis at September 30, 2018 and December 31, 2017. The fair value of OG&E's long-term debt is based on quoted market prices and estimates of current rates available for similar issues with similar maturities and is classified as Level 2 in the fair value hierarchy, with the exception of the Tinker Debt which is classified as Level 3 in the fair value hierarchy as its fair value is based on calculating the net present value of the monthly payments discounted by OG&E's current borrowing rate. The following table summarizes the fair value and carrying amount of OG&E's financial instruments at September 30, 2018 and December 31, 2017.
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Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Stock-Based Compensation The following table summarizes OG&E's pre-tax compensation expense and related income tax benefit during the three and nine months ended September 30, 2018 and 2017 related to OGE Energy's performance units and restricted stock for OG&E employees.
During the three and nine months ended September 30, 2018, OGE Energy issued an immaterial number of shares of new common stock to OG&E employees pursuant to OGE Energy's Stock Incentive Plan to satisfy restricted stock grants and payouts of earned performance units. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes As previously discussed in OG&E's 2017 Form 10-K, the 2017 Tax Act was signed into law in December 2017, reducing the corporate federal tax rate from 35 percent to 21 percent for tax years beginning in 2018. ASC 740, "Income Taxes," requires deferred tax assets and liabilities to be measured at the enacted tax rate expected to apply when temporary differences are to be realized and settled. Entities subject to ASC 980, "Accounting for Regulated Entities," such as OG&E, are required to recognize a regulatory liability for the decrease in taxes payable for the change in tax rates that are expected to be returned to customers through future rates and to recognize a regulatory asset for the increase in taxes receivable for the change in tax rates that are expected to be recovered from customers through future rates. At December 31, 2017, as a result of remeasuring existing deferred taxes at the lower 21 percent tax rate, OG&E reduced net deferred income tax liabilities and increased regulatory liabilities. As of September 30, 2018, OG&E's regulatory liability for income taxes refundable to customers, net was $1.028 billion, as a result of the change in the corporate federal tax rate. Staff Accounting Bulletin No. 118 addresses the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act. OG&E recognized the provisional tax impacts related to the revaluation of deferred tax assets and liabilities as of December 31, 2017. The ultimate impact may differ from those provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions OG&E has made, additional regulatory guidance that may be issued and the actions OG&E may take as a result of the 2017 Tax Act. OG&E continues to evaluate its computations, and any subsequent adjustments to the amounts recognized as of December 31, 2017 will be recorded in the quarter when the analysis is complete. As a result of the 2017 Tax Act, in early January 2018: (i) the OCC ordered OG&E to record a reserve, including accrued interest, to reflect the reduced federal corporate tax rate, among other tax implications, on an interim basis, subject to refund until utility rates were adjusted to reflect the federal tax savings; (ii) the APSC ordered OG&E to book regulatory liabilities to record the current and deferred impacts of the 2017 Tax Act until the resulting benefits, including carrying charges, are returned to customers; and (iii) through a Section 206 filing with the FERC, modifications were requested to be made to OG&E's transmission formula rates to reflect the impacts of the 2017 Tax Act. Further discussion regarding OG&E's response to OCC, APSC and FERC proceedings, including reserves recorded for each jurisdictional revenue, can be found in Note 12 under "Oklahoma Rate Review Filing - 2018," "APSC Order - 2017 Tax Act," "FERC - Request for Waiver" and "FERC - Section 2016 Filing." As of September 30, 2018, the total recorded reserve was $22.8 million, which is included in Other Current Liabilities on OG&E's Condensed Balance Sheets. OG&E is a member of an affiliated group that files consolidated income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, OG&E is no longer subject to U.S. federal tax examinations by tax authorities for years prior to 2015 or state and local tax examinations by tax authorities for years prior to 2014. Income taxes are generally 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 earns both federal and Oklahoma state tax credits associated with production from its wind farms and earns Oklahoma state tax credits associated with its investments in electric generating facilities which further reduce OG&E's effective tax rate. |
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Long-Term Debt [Text Block] | Long-Term Debt At September 30, 2018, OG&E was in compliance with all of its debt agreements. Industrial Authority Bonds OG&E has tax-exempt pollution control bonds with optional redemption provisions that allow the holders to request repayment of the bonds on any business day. The bonds, which can be tendered at the option of the holder during the next 12 months, are included in the following table.
All of these bonds are subject to an optional tender at the request of the holders, at 100 percent of the principal amount, together with accrued and unpaid interest to the date of purchase. The bond holders, on any business day, can request repayment of the bond by delivering an irrevocable notice to the tender agent stating the principal amount of the bond, payment instructions for the purchase price and the business day the bond is to be purchased. The repayment option may only be exercised by the holder of a bond for the principal amount. When a tender notice has been received by the trustee, a third-party remarketing agent for the bonds will attempt to remarket any bonds tendered for purchase. This process occurs once per week. Since the original issuance of these series of bonds in 1995 and 1997, the remarketing agent has successfully remarketed all tendered bonds. If the remarketing agent is unable to remarket any such bonds, OG&E is obligated to repurchase such unremarketed bonds. As OG&E has both the intent and ability to refinance the bonds on a long-term basis and such ability is supported by an ability to consummate the refinancing, the bonds are classified as Long-term Debt in OG&E's Condensed Financial Statements. OG&E believes that it has sufficient liquidity to meet these obligations. Issuance of New Long-Term Debt In August 2018, OG&E issued $400.0 million of 3.80 percent senior notes due August 15, 2028. The proceeds from the issuance were added to OG&E's general funds to be used for general corporate purposes, including to fund the payment of OG&E's $250.0 million of 6.35 percent senior notes that matured on September 1, 2018, to repay short-term debt and to fund ongoing capital expenditures and working capital. |
Short-Term Debt and Credit Facility |
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Short-term Debt [Abstract] | |
Short-Term Debt and Credit Facility [Text Block] | Short-Term Debt and Credit Facility At September 30, 2018, there was $299.7 million in advances to OGE Energy compared to $112.5 million at December 31, 2017. OG&E has an intercompany borrowing agreement with OGE Energy whereby OG&E has access to up to $350.0 million of OGE Energy's revolving credit amount. At September 30, 2018, there were no intercompany borrowings under this agreement. At September 30, 2018, there were $0.3 million supporting letters of credit at a weighted-average interest rate of 1.05 percent. There were no outstanding commercial paper borrowings at September 30, 2018. In March 2017, OG&E entered into an unsecured five-year $450.0 million revolving credit agreement. The facility contained an option, which could be exercised up to two times, to extend the term of the facility for an additional year. Effective March 9, 2018, OG&E utilized one of those extensions to extend the maturity of its credit facility from March 8, 2022 to March 8, 2023. OGE Energy's and OG&E's ability to access the commercial paper market could be adversely impacted by a credit ratings downgrade or major market disruptions. Pricing grids associated with OGE Energy's and OG&E's credit facilities could cause annual fees and borrowing rates to increase if an adverse rating impact occurs. The impact of any future downgrade could include an increase in the costs of OGE Energy's and OG&E's short-term borrowings, but a reduction in OGE Energy's and OG&E's credit ratings would not result in any defaults or accelerations. Any future downgrade of OG&E could also lead to higher long-term borrowing costs and, if below investment grade, would require OG&E to post collateral or letters of credit. OG&E must obtain regulatory approval from the FERC in order to borrow on a short-term basis. OG&E has the necessary regulatory approvals to incur up to $800.0 million in short-term borrowings at any one time for a two-year period beginning January 1, 2017 and ending December 31, 2018. OG&E has requested renewal of this authority for an additional two-year period and expects to receive approval prior to the expiration of its current authority. |
Retirement Plans and Postretirement Benefit Plans |
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Pension and Other Postretirement Benefits Disclosure [Text Block] | Retirement Plans and Postretirement Benefit Plans In accordance with ASC Topic 715, "Compensation - Retirement Benefits," a one-time settlement charge is required to be recorded by an organization when lump sum payments or other settlements that relieve the organization from the responsibility for the pension benefit obligation during the plan year exceed the service cost and interest cost components of the organization's net periodic pension cost. During the first nine months of 2018, OG&E experienced an increase in both the number of employees electing to retire and the amount of lump sum payments paid to such employees upon retirement. As a result, OG&E recorded pension settlement charges of $8.6 million in the third quarter of 2018. The pension settlement charge did not require a cash outlay by OG&E and did not increase OG&E's total pension expense over time, as the charge was an acceleration of costs that otherwise would be recognized as pension expense in future periods. Net Periodic Benefit Cost OG&E adopted ASU 2017-07 in the first quarter of 2018 and, as a result, presents the service cost component of net benefit cost in operating income and the other components of net benefit cost as non-operating within its Condensed Statements of Income. Further, as required by ASU 2017-07, OG&E adjusted prior year income statement presentation of the net benefit cost components, which were previously presented in total within Other Operation and Maintenance on OG&E's Condensed Statements of Income. OG&E elected the practical expedient allowed by ASU 2017-07 to utilize amounts disclosed in OG&E's retirement plans and postretirement benefit plans note for the prior comparative period as the estimation basis for applying the retrospective presentation requirements. The following tables present the net periodic benefit cost components, before consideration of capitalized amounts, of OG&E's portion of OGE Energy's Pension Plan, Restoration of Retirement Income Plan and postretirement benefit plans that are included in the Condensed Financial Statements. Service cost is presented within Other Operation and Maintenance, and interest cost, expected return on plan assets, amortization of net loss, amortization of unrecognized prior service cost and settlement cost are presented within Other Net Periodic Benefit Income (Expense) on OG&E's Condensed Statements of Income. OG&E recovers specific amounts of pension and postretirement medical costs in rates approved in its Oklahoma rate reviews. 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 review as a regulatory asset or regulatory liability. These amounts have been recorded in the Pension tracker in the regulatory assets and liabilities table in Note 1 and within Other Net Periodic Benefit Income (Expense) on OG&E's Condensed Statements of Income.
(B) In addition to the $18.8 million and $7.8 million of net periodic benefit cost recognized during the nine months ended September 30, 2018 and 2017, respectively, OG&E recognized the following:
As required by ASU 2017-07, OG&E only capitalizes the service cost component of net benefit cost, beginning in the first quarter of 2018. Prior year capitalized amounts were not adjusted, as this change was implemented on a prospective basis.
Pension Plan Funding In August 2018, OGE Energy contributed $15.0 million to its Pension Plan, of which $5.0 million was attributed to OG&E. No additional contributions are expected in 2018. |
Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies [Text Block] | Commitments and Contingencies Except as set forth below, in Note 12 and under "Environmental Laws and Regulations" in Item 2 of Part I and in Item 1 of Part II of this Form 10-Q, the circumstances set forth in Notes 12 and 13 to OG&E's Financial Statements included in OG&E's 2017 Form 10-K appropriately represent, in all material respects, the current status of OG&E's material commitments and contingent liabilities. Public Utility Regulatory Policy Act of 1978 As previously disclosed in OG&E's 2017 Form 10-K, OG&E has a QF contract with AES whereby OG&E purchases 100 percent of the electricity generated from AES's 320 MW facility. The QF contract expires on January 15, 2023; however, OG&E had the option beginning in July 2017 to provide notice to AES to terminate the contract in January 2018. On July 17, 2017, OG&E and AES amended the agreement to allow OG&E the option, through July 17, 2018, to provide AES a termination notice that would terminate the agreement on January 15, 2019. On July 17, 2018, OG&E and AES extended the option to provide notice, and on August 24, 2018, OG&E notified AES that OG&E was exercising its option to terminate the contract, effective January 15, 2019. OG&E has issued a request for proposals to fill the capacity need created by the upcoming termination of this QF contract, as further discussed in Note 12. Environmental Laws and Regulations The activities of OG&E are subject to numerous stringent and complex federal, state and local laws and regulations governing environmental protection. These laws and regulations can change, restrict or otherwise impact OG&E's business activities in many ways, including the handling or disposal of waste material, future construction activities to avoid or mitigate harm to threatened or endangered species and requiring the installation and operation of emissions pollution control equipment. Failure to comply with these laws and regulations could result in the assessment of administrative, civil and criminal penalties, the imposition of remedial requirements and the issuance of orders enjoining future operations. Management believes that all of its operations are in substantial compliance with current federal, state and local environmental standards. Environmental regulation can increase the cost of planning, design, initial installation and operation of OG&E's facilities. OG&E is managing several potentially material uncertainties about the scope and timing for the acquisition, installation and operation of additional pollution control equipment and compliance costs for a variety of the EPA rules that are being challenged in court. OG&E is unable to predict the financial impact of these matters with certainty at this time. Management continues to evaluate its compliance with existing and proposed environmental legislation and regulations and implement appropriate environmental programs in a competitive market. Air Quality Control System On September 10, 2014, OG&E executed a contract for the design, engineering and fabrication of two circulating Dry Scrubber systems to be installed at Sooner Units 1 and 2. OG&E entered into an agreement on February 9, 2015 to install the Dry Scrubber systems. The Dry Scrubber system on Sooner Unit 1 completed certain emission testing in October 2018 and was placed into service. The Dry Scrubber system on Sooner Unit 2 is expected to be completed in late 2018 to early 2019. More detail regarding the ECP can be found in Note 12 under "Pending Regulatory Matters." Other In the normal course of business, OG&E is confronted with issues or events that may result in a contingent liability. These generally relate to lawsuits or claims made by third parties, including governmental agencies. When appropriate, management consults with legal counsel and other experts to assess the claim. If, in management's opinion, OG&E 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 OG&E's Condensed Financial Statements. At the present time, based on currently available information, OG&E 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 OG&E's financial position, results of operations or cash flows. |
Rate Matters and Regulation |
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Regulated Operations [Abstract] | |||||||||||||||||||||||||||||
Rate Matters and Regulation [Text Block] | Rate Matters and Regulation Except as set forth below, the circumstances set forth in Note 13 to OG&E's Financial Statements included in OG&E's 2017 Form 10-K appropriately represent, in all material respects, the current status of OG&E's regulatory matters. References to "March 2017 OCC rate order" below and in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" indicate the general rate review order OG&E received from the OCC on March 20, 2017, as detailed further in "Note 13. Rate Matters and Regulation" in OG&E's 2017 Form 10-K. Completed Regulatory Matters Oklahoma Rate Review Filing - 2018 On January 16, 2018, OG&E filed a general rate review in Oklahoma, requesting a rate increase of $1.9 million per year, assuming a 9.9 percent return on equity. The filing sought recovery of the seven combustion turbines that are part of the Mustang Modernization Plan, an increase in depreciation rates to levels similar with rates in existence prior to the March 2017 OCC rate order and credit to customers for the impacts of the 2017 Tax Act, which was enacted on December 22, 2017. On December 22, 2017, the Attorney General of Oklahoma requested that the OCC reduce the rates and charges for electric service and provide for an immediate refund due to the customers of OG&E resulting from the 2017 Tax Act. In response, on January 4, 2018, the OCC ordered OG&E to record a reserve, beginning on January 4, 2018, to reflect the reduced federal corporate tax rate of 21 percent and the amortization of excess accumulated deferred income tax and any other tax implications of the 2017 Tax Act on an interim basis, subject to refund until utility rates are adjusted to reflect the federal tax savings and a final order is issued in the rate review. Further, the OCC ordered the amounts of any refunds of such reserves owed to customers should accrue interest at a rate equivalent to OG&E's cost of capital as previously recognized in the March 2017 OCC rate order. OG&E reserved the excess income taxes collected in current rates and any amortization of excess accumulated deferred income taxes associated with the 2017 Tax Act, plus interest, from January 2018 through June 2018. On June 19, 2018, the OCC approved a Joint Stipulation and Settlement Agreement. Key terms of the settlement include the following:
As a result of the settlement, new rates were implemented on July 1, 2018, reflecting the impacts of the order, and the tax reserve balance estimated for January 2018 through June 2018 of $18.9 million was returned to Oklahoma customers during the July billing cycle. As reserved amounts were estimated through June 2018, a true-up mechanism exists for the difference between the estimate and actuals to be calculated after the determination of year-end financial results. Demand Program Rider - Energy Efficiency Lost Net Revenues During the May 2017 implementation of new rates from the March 2017 OCC rate order, OG&E reserved $5.6 million, pending resolution of a dispute with the OCC's Public Utility Division staff regarding recovery of certain lost revenues associated with energy efficiency programs incurred prior to the March 2017 OCC rate order. These lost revenues are included within the total Demand Program Rider regulatory asset balance of $10.7 million as disclosed in Note 1. This dispute was resolved through the June 19, 2018 OCC settlement; as a result, the reserve was reversed at June 30, 2018, and an adjustment was recorded to the Demand Program Rider regulatory asset balance. Fuel Adjustment Clause Review for Calendar Year 2016 On August 3, 2017, the OCC staff filed an application to review OG&E's fuel adjustment clause for calendar year 2016, including the prudence of OG&E's electric generation, purchased power and fuel procurement costs. On February 7, 2018, an intervenor filed a recommendation to disallow the Oklahoma jurisdictional portion of $3.3 million related to wind sales in the SPP. On April 4, 2018, a Joint Stipulation and Settlement Agreement was filed with the OCC. As part of the agreement, the stipulating parties settled all claims regarding the issue of wind energy settlement costs for the period September 2016 through May 2017, and OG&E agreed to refund $2.4 million to customers related to wind sales in the SPP. On April 25, 2018, the OCC approved the Joint Stipulation and Settlement Agreement, and in May 2018, OG&E refunded this settlement amount to customers. FERC - Request for Waiver On May 22, 2018, OG&E submitted a request for waiver of applicable formula rate provisions in OG&E's Open Access Transmission Tariff and SPP, Inc.'s Open Access Transmission Tariff. OG&E requested a waiver, effective January 1, 2018, to revise its 2018 projected net revenue requirement to reflect the federal corporate income tax rate reduction from 35 percent to 21 percent as a result of the 2017 Tax Act. On June 29, 2018, the FERC granted OG&E's request for waiver, effective January 1, 2018, which will allow OG&E to lower its current year projected net revenue requirement and provide benefits to customers through lower rates more promptly than if OG&E were to wait until the current year true-up adjustment to recognize the reduced federal corporate income tax rate. Based on the order received from the FERC, OG&E reserved the excess income taxes collected in current rates from January 2018 through June 2018, as the new tax rate was reflected in billings beginning with the July 2018 invoice. As the SPP adjusts the rates billed to OG&E's customers, OG&E will begin reversing the reserve as the previous months in 2018 are resettled based on the lower tax rate. APSC Order - 2017 Tax Act On January 12, 2018, as a result of the 2017 Tax Act, the APSC ordered OG&E to prepare and file an analysis of the ratemaking effects of the 2017 Tax Act on OG&E's revenue requirement and begin, effective January 1, 2018, to book regulatory liabilities to record the current and deferred impacts of the 2017 Tax Act. On July 26, 2018, the APSC ordered OG&E to file a separate rider that includes the reduction in tax expense due to the 2017 Tax Act and amortization of the applicable excess accumulated deferred income taxes as a reduction in revenue requirement. On August 27, 2018, OG&E filed the request for a new Tax Adjustment Rider as well as filed updates to all riders with tax implications, which were then approved by the APSC on September 24, 2018. All rider changes were implemented on October 1, 2018. In October 2018, OG&E refunded the excess income taxes collected from January 1, 2018 through September 30, 2018 and also began refunding the amortization of excess accumulated deferred income taxes associated with the 2017 Tax Act, plus carrying charges, from January 2018 through September 2018, which was approximately $7.7 million. As reserved amounts were estimated through September 2018, a true-up mechanism exists for the difference between the estimate and actuals to be calculated after the determination of year-end financial results. Integrated Resource Plans In September 2018, OG&E submitted its final 2018 IRP to the OCC and the APSC. The 2018 IRP identified a need for capacity, and OG&E has issued a request for proposals to identify options to fill that capacity need. OG&E anticipates filing pre-approval cases in the fourth quarter of 2018 in Oklahoma and Arkansas for the outcome of the request for proposal process. Pending Regulatory Matters Set forth below is a list of various proceedings pending before state or federal regulatory agencies. Unless stated otherwise, OG&E cannot predict when the regulatory agency will act or what action the regulatory agency will take. OG&E's financial results are dependent in part on timely and adequate decisions by the regulatory agencies that set OG&E's rates. Environmental Compliance Plan On August 6, 2014, OG&E filed an application under Oklahoma Statute Title 17, Section 286 (B) with the OCC for approval of its plan to comply with the EPA's MATS and Regional Haze Rule FIP while serving the best long-term interests of customers in light of future environmental uncertainties. The application sought approval of the ECP and for a recovery mechanism for the associated costs. The ECP includes installing Dry Scrubbers at Sooner Units 1 and 2 and the conversion of Muskogee Units 4 and 5 to natural gas. The application also asked the OCC to predetermine the prudence of its Mustang Modernization Plan and approval for a recovery mechanism for the associated costs. On December 2, 2015, OG&E received an order from the OCC denying its plan to comply with the environmental mandates of the Federal Clean Air Act, Regional Haze Rule and MATS. The OCC also denied OG&E's request for pre-approval of its Mustang Modernization Plan, revised depreciation rates for both the retirement of the Mustang units and the replacement combustion turbines and pre-approval of early retirement and replacement of generating units at its Mustang site, including cost recovery through a rider. On December 11, 2015, OG&E filed a motion requesting modification of the OCC order for the purposes of approving only the ECP under Oklahoma Statute Title 17, Section 286 (B), and on December 23, 2015, the OCC rejected OG&E's motion. On February 12, 2016, OG&E filed an application under Oklahoma Statute Title 17, Section 151, et seq. requesting the OCC to issue an order approving its decision to install Dry Scrubbers at the Sooner facility. OG&E's application did not seek approval of the costs of the Dry Scrubber project. Instead, the reasonableness of the costs would be considered after the project is completed, and OG&E seeks recovery in a general rate review. On April 28, 2016, the OCC approved the Dry Scrubber project. Two parties appealed the OCC's decision to the Oklahoma Supreme Court. On April 24, 2018, the Oklahoma Supreme Court ruled that the OCC did not have the authority to grant pre-approval of OG&E's Dry Scrubber project outside the authority of Oklahoma Statute Title 17, Section 286 (B). OG&E intends to seek recovery of the Dry Scrubber total cost in a general rate review after the project is completed. OG&E anticipates the total cost of Dry Scrubbers will be $532.0 million, including allowance for funds used during construction and capitalized ad valorem taxes. The Dry Scrubber system on Sooner Unit 1 completed certain emission testing in October 2018 and was placed into service. The Dry Scrubber system on Sooner Unit 2 is expected to be completed in late 2018 to early 2019. As of September 30, 2018, OG&E has invested $483.5 million in the Dry Scrubbers. FERC - Section 206 Filing In January 2018, the Oklahoma Municipal Power Authority filed a complaint at the FERC stating that the base return on common equity used by OG&E in calculating formula transmission rates under the SPP Open Access Transmission Tariff is unjust and unreasonable and should be reduced from 10.60 percent to 7.85 percent, effective upon the date of the complaint. OG&E has reserved an amount within this range. OG&E estimates that if the FERC ultimately orders a reduction, each 25 basis point reduction in the requested return on equity would reduce OG&E's SPP Open Access Transmission Tariff transmission revenues by approximately $1.5 million annually. OG&E contested the reduction of its base return on equity. While OG&E is unable to predict what final action the FERC will take in response to the Oklahoma Municipal Power Authority's complaint or the timing of such action, if the FERC orders revenue reductions as a result of the complaint, including refunds from the date of the complaint filing, it could have a material adverse effect on OG&E's financial position, results of operations and cash flows. In addition to the request to reduce the return on equity, the Oklahoma Municipal Power Authority's complaint also requests that modifications be made to OG&E's transmission formula rates to reflect the impacts of the 2017 Tax Act, including the 2017 Tax Act's impact on accumulated deferred income tax balances. Based on an order received from the FERC, OG&E reserved the excess income taxes collected in current rates from January 2018 through June 2018, as the new tax rate was reflected in billings beginning with the July 2018 invoice, as discussed under "FERC - Request for Waiver" above. Further, OG&E is also reserving any amortization of excess accumulated deferred income taxes associated with the 2017 Tax Act. Fuel Adjustment Clause Review for Calendar Year 2017 On July 9, 2018, the OCC staff filed an application to review OG&E's fuel adjustment clause for the calendar year 2017, including the prudence of OG&E's electric generation, purchased power and fuel procurement costs. A hearing on the merits is currently scheduled for December 6, 2018. Arkansas Formula Rate Plan Filing Per OG&E's settlement in its last general rate review, OG&E filed an evaluation report under its Formula Rate Plan on October 1, 2018, requesting a $6.4 million revenue increase. A final order is expected from the APSC in March 2019, and the outcome will be reflected in rates that will become effective on April 1, 2019. Demand Program Portfolio Filing Pursuant to OCC rules, OG&E is required to propose, implement and administer a portfolio of demand programs once every three years. On July 1, 2018, OG&E filed its proposed Demand Program Three Year Portfolio for the 2019-2021 program cycle. A hearing on the merits is currently scheduled for November 15, 2018. |
Summary of Significant Accounting Policies (Policies) |
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Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Significant Accounting Policies [Text Block] | Summary of Significant Accounting Policies OG&E's significant accounting policies are detailed in "Note 1. Summary of Significant Accounting Policies" in OG&E's 2017 Form 10-K. Changes to OG&E's accounting policies as a result of adopting ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," are discussed in Note 3 in this Form 10-Q. |
Basis of Accounting [Text Block] | Basis of Presentation The Condensed Financial 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 the financial position of OG&E at September 30, 2018 and December 31, 2017, the results of its operations for the three and nine months ended September 30, 2018 and 2017 and its cash flows for the nine months ended September 30, 2018 and 2017 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, 2018 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, OG&E's operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 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 OG&E's 2017 Form 10-K. |
Public Utilities, Policy [Policy Text Block] | 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. 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. |
Revenue Recognition, Policy [Policy Text Block] | OG&E recognizes revenue from electric sales when power is delivered to customers. The performance obligation to deliver electricity is generally created and satisfied simultaneously, and the provisions of the regulatory-approved tariff determine the charges OG&E may bill the customer, payment due date and other pertinent rights and obligations of both parties. 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. OG&E accrues an estimate of the revenues for electric sales delivered since the latest billings. Unbilled revenue is presented in Accrued Unbilled Revenues on the Condensed Balance Sheets and in Revenues from Contracts with Customers on the Condensed Statements 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. |
Related Party Transactions [Policy Text Block] | OGE Energy charges operating costs to OG&E based on several factors, and operating costs directly related to OG&E are assigned as such. Operating costs incurred for the benefit of OG&E are allocated either as overhead based primarily on labor costs or using the "Distrigas" method, which is a three-factor formula that uses an equal weighting of payroll, net operating revenues and gross property, plant and equipment. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Level 1 inputs are quoted prices in active markets for identical unrestricted assets or liabilities that are accessible at the measurement date. Level 2 inputs are inputs other than quoted prices in active markets included within Level 1 that are either directly or indirectly observable at the reporting date for the asset or liability for substantially the full term of the asset or liability. Level 2 inputs include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 inputs are prices or valuation techniques for the asset or liability that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Unobservable inputs reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). The fair value of OG&E's long-term debt is based on quoted market prices and estimates of current rates available for similar issues with similar maturities and is classified as Level 2 in the fair value hierarchy, with the exception of the Tinker Debt which is classified as Level 3 in the fair value hierarchy as its fair value is based on calculating the net present value of the monthly payments discounted by OG&E's current borrowing rate. |
Income Tax, Policy [Policy Text Block] | OG&E is a member of an affiliated group that files consolidated income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Income taxes are generally 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 earns both federal and Oklahoma state tax credits associated with production from its wind farms and earns Oklahoma state tax credits associated with its investments in electric generating facilities which further reduce OG&E's effective tax rate. |
Revenues from Contracts with Customers (Policies) |
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Alternative Revenue [Abstract] | |
Revenue Recognition, Policy [Policy Text Block] | OG&E recognizes revenue from electric sales when power is delivered to customers. The performance obligation to deliver electricity is generally created and satisfied simultaneously, and the provisions of the regulatory-approved tariff determine the charges OG&E may bill the customer, payment due date and other pertinent rights and obligations of both parties. 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. OG&E accrues an estimate of the revenues for electric sales delivered since the latest billings. Unbilled revenue is presented in Accrued Unbilled Revenues on the Condensed Balance Sheets and in Revenues from Contracts with Customers on the Condensed Statements 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. |
Summary of Significant Accounting Policies (Tables) |
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Schedule of Regulatory Assets and Liabilities [Table Text Block] | The following table is a summary of OG&E's regulatory assets and liabilities.
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Revenues from Contracts with Customers (Tables) |
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Revenues from Contracts with Customers [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Table Text Block] | The following table disaggregates OG&E's revenues from contracts with customers by customer classification. OG&E's operating revenues disaggregated by customer classification can be found in "Results of Operations" in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations."
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Related Party Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions [Table Text Block] | The following table summarizes related party transactions between OG&E and Enable during the three and nine months ended September 30, 2018 and 2017.
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, by Balance Sheet Grouping [Table Text Block] | The following table summarizes the fair value and carrying amount of OG&E's financial instruments at September 30, 2018 and December 31, 2017.
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Stock-Based Compensation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | The following table summarizes OG&E's pre-tax compensation expense and related income tax benefit during the three and nine months ended September 30, 2018 and 2017 related to OGE Energy's performance units and restricted stock for OG&E employees.
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Long-Term Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Unclassified [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments [Table Text Block] | OG&E has tax-exempt pollution control bonds with optional redemption provisions that allow the holders to request repayment of the bonds on any business day. The bonds, which can be tendered at the option of the holder during the next 12 months, are included in the following table.
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Retirement Plans and Postretirement Benefit Plans (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Defined Benefit Plan [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Defined Benefit Plans Disclosures [Table Text Block] | The following tables present the net periodic benefit cost components, before consideration of capitalized amounts, of OG&E's portion of OGE Energy's Pension Plan, Restoration of Retirement Income Plan and postretirement benefit plans that are included in the Condensed Financial Statements. Service cost is presented within Other Operation and Maintenance, and interest cost, expected return on plan assets, amortization of net loss, amortization of unrecognized prior service cost and settlement cost are presented within Other Net Periodic Benefit Income (Expense) on OG&E's Condensed Statements of Income. OG&E recovers specific amounts of pension and postretirement medical costs in rates approved in its Oklahoma rate reviews. 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 review as a regulatory asset or regulatory liability. These amounts have been recorded in the Pension tracker in the regulatory assets and liabilities table in Note 1 and within Other Net Periodic Benefit Income (Expense) on OG&E's Condensed Statements of Income.
(B) In addition to the $18.8 million and $7.8 million of net periodic benefit cost recognized during the nine months ended September 30, 2018 and 2017, respectively, OG&E recognized the following:
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Schedule of Capitalized Pension and Postretirement Cost [Table Text Block] | As required by ASU 2017-07, OG&E only capitalizes the service cost component of net benefit cost, beginning in the first quarter of 2018. Prior year capitalized amounts were not adjusted, as this change was implemented on a prospective basis.
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Revenues from Contracts with Customers (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 684.5 | $ 0.0 | $ 1,710.1 | $ 0.0 |
Residential [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 281.0 | 694.6 | ||
Commercial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 174.7 | 444.9 | ||
Industrial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 56.2 | 145.5 | ||
Oilfield [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 39.5 | 110.9 | ||
Public Authority [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 58.7 | 151.5 | ||
System sales revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 610.1 | 1,547.4 | ||
Provision for Rate Refund [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 13.5 | (6.2) | ||
Integrated Market [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 16.9 | 38.7 | ||
Transmission [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 33.2 | 109.2 | ||
Other Contracts with Customers [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 10.8 | $ 21.0 |
Related Party Transactions (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Related Party Transaction [Line Items] | ||||
Dividends, Common Stock | $ 185.0 | $ 105.0 | ||
Operating Costs Charged [Member] | OG&E [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party | $ 35.1 | $ 30.2 | 102.6 | 97.9 |
OG&E [Member] | Enable Midstream Partners [Member] | ||||
Related Party Transaction [Line Items] | ||||
Electricity to power electric compression assets | 4.7 | 4.5 | 12.2 | 10.0 |
OG&E [Member] | Natural Gas Transportation [Member] | Enable Midstream Partners [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Purchases from related party | 8.8 | 8.8 | 26.3 | 26.3 |
OG&E [Member] | Natural Gas Purchases [Member] | Enable Midstream Partners [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Purchases from related party | $ 0.1 | $ 0.4 | $ 2.6 | $ (0.4) |
Fair Value Measurements (Details) - USD ($) |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
OG&E Senior Notes [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt | $ 3,001,600,000 | $ 2,854,300,000 |
Long-term Debt, Fair Value | 3,125,900,000 | 3,242,800,000 |
OG&E Industrial Authority Bonds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt | 135,400,000 | 135,400,000 |
Long-term Debt, Fair Value | 135,400,000 | 135,400,000 |
OG&E Tinker Debt [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt | 9,700,000 | 9,700,000 |
Long-term Debt, Fair Value | 8,700,000 | 9,800,000 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Assets (Liabilities), at Fair Value, Net | $ 0 | $ 0 |
Stock-Based Compensation (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Income tax benefit | $ 0.4 | $ 0.0 | $ 0.9 | $ 0.7 |
Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | 1.3 | 0.1 | 3.4 | 1.9 |
Stock Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | 1.3 | 0.1 | 3.4 | 1.9 |
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | 0.0 | 0.0 | 0.0 | 0.0 |
Total Shareholder Return [Member] | Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | 0.6 | 0.7 | 2.1 | 2.0 |
Performance Units Related to Earnings Per Share [Member] | Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 0.7 | $ (0.6) | $ 1.3 | $ (0.1) |
Income Taxes (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Non-Current Regulatory Liabilities | $ 1,291.0 | $ 1,283.4 |
Interim Rate Revenue Reserved | 22.8 | |
Income taxes refundable to customers, net [Member] | ||
Non-Current Regulatory Liabilities | 1,028.0 | |
Income taxes recoverable from customers, net | ||
Non-Current Regulatory Liabilities | $ 943.9 | $ 955.5 |
Long-Term Debt (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Debt Instrument [Line Items] | |
Percent of Principal Amount Subject to Optional Tender | 100.00% |
Garfield Industrial Authority Bond [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Maturity Date | Jan. 01, 2025 |
Muskogee Industrial Authority Bond Due 2025 [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Maturity Date | Jan. 01, 2025 |
Muskogee Industrial Authority Bond Due 2027 [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Maturity Date | Jun. 01, 2027 |
Redeemable during the next 12 months [Member] | |
Debt Instrument [Line Items] | |
Total (redeemable during next 12 months) | $ 135.4 |
OG&E [Member] | Redeemable during the next 12 months [Member] | Garfield Industrial Authority Bond [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, gross | 47.0 |
OG&E [Member] | Redeemable during the next 12 months [Member] | Muskogee Industrial Authority Bond Due 2025 [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, gross | 32.4 |
OG&E [Member] | Redeemable during the next 12 months [Member] | Muskogee Industrial Authority Bond Due 2027 [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, gross | $ 56.0 |
Minimum [Member] | Redeemable during the next 12 months [Member] | Garfield Industrial Authority Bond [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 1.01% |
Minimum [Member] | Redeemable during the next 12 months [Member] | Muskogee Industrial Authority Bond Due 2025 [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 1.01% |
Minimum [Member] | Redeemable during the next 12 months [Member] | Muskogee Industrial Authority Bond Due 2027 [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 1.03% |
Maximum [Member] | Redeemable during the next 12 months [Member] | Garfield Industrial Authority Bond [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 2.00% |
Maximum [Member] | Redeemable during the next 12 months [Member] | Muskogee Industrial Authority Bond Due 2025 [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 1.83% |
Maximum [Member] | Redeemable during the next 12 months [Member] | Muskogee Industrial Authority Bond Due 2027 [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 1.86% |
Senior Notes [Member] | OG&E [Member] | Series due August 15, 2028 [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 3.80% |
Long-term debt, gross | $ 400.0 |
Debt Instrument, Maturity Date | Aug. 15, 2028 |
Senior Notes [Member] | OG&E [Member] | Series due September 1, 2018 [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 6.35% |
Long-term debt, gross | $ 250.0 |
Debt Instrument, Maturity Date | Sep. 01, 2018 |
Short-Term Debt and Credit Facilities (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Short-term Debt [Line Items] | ||
Advances to parent | $ 299.7 | $ 112.5 |
Letters of Credit Outstanding | $ 0.3 | |
Weighted Average Interest Rate | 1.05% | |
OG&E [Member] | ||
Short-term Debt [Line Items] | ||
Line of Credit Facility, Current Borrowing Capacity | $ 450.0 | |
Intercomany Borrowings, Maximum Borrowing Capacity | 350.0 | |
Outstanding Intercompany Borrowings | 0.0 | |
Commercial Paper | 0.0 | |
Short Term Borrowing Capacity That Has Regulatory Approval | $ 800.0 | |
Period For Which Regulatory Approval Has Been Given to Acquire Short Term Debt | 2 years |
Retirement Plans and Postretirement Benefit Plans (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2013 |
||||||||||||||||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 15.0 | |||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Settlement cost | (8.6) | |||||||||||||||||||
Other Pension Plan [Member] | ||||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Service cost | $ 0.0 | [1] | $ 0.1 | [1] | 0.1 | [2] | $ 0.1 | [2] | ||||||||||||
Interest cost | 0.1 | [1] | 0.0 | [1] | 0.2 | [2] | 0.1 | [2] | ||||||||||||
Expected return on plan assets | 0.0 | [1] | 0.0 | [1] | 0.0 | [2] | 0.0 | [2] | ||||||||||||
Amortization of net loss | 0.1 | [1] | 0.1 | [1] | 0.4 | [2] | 0.3 | [2] | ||||||||||||
Settlement cost | 0.0 | [1] | 0.0 | [1] | 0.0 | [2] | 0.0 | [2] | ||||||||||||
Net periodic benefit cost | 0.2 | [1] | 0.2 | [1] | 0.7 | [2] | 0.5 | [2] | ||||||||||||
Pension Plan [Member] | ||||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Service cost | 2.4 | [1] | 2.5 | [1] | 7.4 | [2] | 7.6 | [2] | ||||||||||||
Interest cost | 4.5 | [1] | 4.9 | [1] | 13.2 | [2] | 14.6 | [2] | ||||||||||||
Expected return on plan assets | (8.0) | [1] | (8.2) | [1] | (24.9) | [2] | (24.6) | [2] | ||||||||||||
Amortization of net loss | 3.0 | [1] | 3.2 | [1] | 9.1 | [2] | 9.7 | [2] | ||||||||||||
Settlement cost | 8.6 | [1] | 0.0 | [1] | 8.6 | [2] | 0.0 | [2] | $ (22.4) | |||||||||||
Net periodic benefit cost | 10.5 | [1] | 2.4 | [1] | 13.4 | [2] | 7.3 | [2] | ||||||||||||
Capitalized Portion of Net Periodic Benefit Cost | 0.8 | 0.8 | 2.4 | 2.6 | ||||||||||||||||
Other Postretirement Benefits Plan [Member] | ||||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Service cost | 0.1 | [3] | 0.1 | [3] | 0.2 | [4] | 0.3 | [4] | ||||||||||||
Interest cost | 1.0 | [3] | 1.2 | [3] | 3.1 | [4] | 4.5 | [4] | ||||||||||||
Expected return on plan assets | (0.5) | [3] | (0.5) | [3] | (1.4) | [4] | (1.5) | [4] | ||||||||||||
Amortization of net loss | 1.0 | [3] | 0.5 | [3] | 2.9 | [4] | 1.3 | [4] | ||||||||||||
Amortization of unrecognized prior service cost | [5] | (1.5) | [3] | (1.0) | [3] | (4.6) | [4] | (1.0) | [4] | |||||||||||
Settlement cost | 0.0 | [3] | 0.4 | [3] | 0.0 | [4] | 0.4 | [4] | ||||||||||||
Net periodic benefit cost | 0.1 | [3] | 0.7 | [3] | 0.2 | [4] | 4.0 | [4] | ||||||||||||
Capitalized Portion of Net Periodic Benefit Cost | 0.0 | 0.1 | 0.1 | 1.2 | ||||||||||||||||
OKLAHOMA | ||||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Additional Pension Expense to Meet State Requirements | 2.7 | 7.8 | 8.5 | |||||||||||||||||
OKLAHOMA | Pension Plan [Member] | ||||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Settlement cost | (7.8) | (7.8) | ||||||||||||||||||
OKLAHOMA | Other Postretirement Benefits Plan [Member] | ||||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Additional Pension Expense to Meet State Requirements | 0.1 | 1.9 | 4.3 | 3.9 | ||||||||||||||||
ARKANSAS | Pension Plan [Member] | ||||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Settlement cost | (0.7) | (0.7) | (2.3) | |||||||||||||||||
OGE Energy [Member] | Other Pension Plan [Member] | ||||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Net periodic benefit cost | 0.7 | [1] | 0.0 | [1] | 1.0 | [2] | 0.0 | [2] | ||||||||||||
OGE Energy [Member] | Pension Plan [Member] | ||||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Net periodic benefit cost | 2.7 | [1] | 0.0 | [1] | 3.7 | [2] | 0.0 | [2] | ||||||||||||
OGE Energy [Member] | Other Postretirement Benefits Plan [Member] | ||||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Net periodic benefit cost | (0.2) | [3] | 0.0 | [3] | (0.5) | [4] | 0.0 | [4] | ||||||||||||
Og and E [Member] | ||||||||||||||||||||
Defined Benefit Plan, Plan Assets, Contributions by Employer | 5.0 | |||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Net periodic benefit cost | [1] | 14.1 | 2.6 | 18.8 | 7.8 | |||||||||||||||
Og and E [Member] | Other Pension Plan [Member] | ||||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Net periodic benefit cost | 0.9 | [1] | 0.2 | [1] | 1.7 | [2] | 0.5 | [2] | ||||||||||||
Og and E [Member] | Pension Plan [Member] | ||||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Net periodic benefit cost | 13.2 | [1] | 2.4 | [1] | 17.1 | [2] | 7.3 | [2] | ||||||||||||
Og and E [Member] | Other Postretirement Benefits Plan [Member] | ||||||||||||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||||||||||||||||
Net periodic benefit cost | $ (0.1) | [3] | $ 0.7 | [3] | $ (0.3) | [4] | $ 4.0 | [4] | ||||||||||||
|
Rate Matters and Regulation (Details) - USD ($) $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|||
Public Utilities, Requested Rate Increase (Decrease), Amount | $ 6.4 | |||
Public Utilities, Approved Rate Increase (Decrease), Amount | $ (64.0) | |||
Public Utilities, Approved Return on Equity, Percentage | 9.50% | |||
Public Utilities, Approved Equity Capital Structure, Percentage | 53.00% | |||
Public Utilities, Approved Debt Capital Structure, Percentage | 47.00% | |||
Current Regulatory Assets | $ 18.4 | $ 40.8 | ||
Interim Rate Revenue Reserved | 22.8 | |||
Recommended Disallowance for Fuel Adjustment | 3.3 | |||
Refund for Fuel Adjustment | 2.4 | |||
Customer Refund Liability, Current | 39.2 | 1.7 | ||
Dry Scrubber Project [Member] | ||||
Estimated Environmental Capital Costs | 532.0 | |||
Public Utilities, Property, Plant and Equipment, Construction Work in Progress | 483.5 | |||
OKLAHOMA | ||||
Interim Rate Revenue Reserved | 5.6 | |||
Customer Refund Liability, Current | 18.9 | |||
ARKANSAS | ||||
Customer Refund Liability, Current | 7.7 | |||
January 16, 2018 [Member] | OKLAHOMA | ||||
Public Utilities, Requested Rate Increase (Decrease), Amount | $ 1.9 | |||
Public Utilities, Requested Return on Equity, Percentage | 9.90% | |||
FERC [Member] | ||||
Recommended Common Equity Percentage | 7.85% | |||
Public Utilities, Approved Return on Equity, Percentage | 10.60% | |||
Revenue impact of recommended change in return on common equity | $ 1.5 | |||
Oklahoma demand program rider under recovery [Member] | ||||
Current Regulatory Assets | [1] | $ 10.7 | $ 31.6 | |
|
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