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OG&E to recover costs for federally mandated emissions compliance plan

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World Coal,

Oklahoma Gas and Electric, a subsidiary of Oklahoma City-based OGE Energy Corp., announced that it has asked the Oklahoma Corporation Commission to review the company's request to recover its approximately US$534 million investment in the Sooner power plant and its approximately US$75 million investment in the Muskogee power plant. To comply with the federal Regional Haze Rule, the company has installed emissions-reducing scrubbers on the two coal-fired units at Sooner and is converting two units from coal to natural gas at Muskogee.

"The first Sooner scrubber is online and the second is scheduled to go into service in January 2019," said OG&E spokesman Brian Alford. "It's important to note that this project is on schedule and approximately US$80 million under budget. Similarly, the Muskogee conversion is scheduled to go online in January 2019, also on time and under budget."

The company is seeking a rate increase of $77.6 million/year, or 4.4%, to recover its investment. This equates to an increase of approximately US$7.60/month for the average residential customer.

"While taking these actions at Sooner and Muskogee, we have maintained customer rates that are among the lowest in the country, at 31% below the national average, and within one-half of a percent of our 2014 rates, when these projects began," said Alford. "Due in large part to the actions we've taken at these facilities, overall plant emissions are expected to be significantly lower from 2005 levels. Beginning in 2019, sulfur dioxide emissions are expected to be lower by nearly 90%, nitrogen oxide to be lower by nearly 75% and carbon dioxide to be lower by approximately 40%."

Alford added that in addition to recovering the Sooner and Muskogee investments, the company's filing also seeks to align its return on equity (ROE) more closely to the industry average for utilities like OG&E, and to align its depreciation rates to more realistically reflect actual asset lifespans.

"OG&E consistently ranks well above the national average in terms of environmental stewardship, safety, customer satisfaction and low customer rates," said Alford. "Higher performing companies typically have ROEs aligned with, or above, the industry average."

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