OKLAHOMA CITY, Aug. 28 /PRNewswire-FirstCall/ -- In a filing today at the Oklahoma Corporation Commission, OG&E Electric Services said it supports findings by an administrative law judge that the proposed Red Rock generating unit will create significant customer savings and is the right choice for Oklahoma. The company, however, challenged a provision in the opinion that limits OG&E's ability to adequately recover the costs associated with financing construction of the plant.
"Make no mistake, we were pleased by the judge's rulings in many areas of our case," said Steve Moore, OGE Energy Corp. Chairman and CEO. "However, even though commissioners may vote to approve the plant, a failure to address the issue of inadequate cost recovery is, in effect, a vote against the plant."
Moore explained that the immediate need for investment in ongoing electric system reliability projects and environmental upgrades to its coal- and gas-fired generating units will demand large investments. He added that the company must maintain the financial flexibility to fund those projects.
"This isn't about earnings. Earnings won't increase as a result of the recovery mechanism," Moore said. "It's about maintaining the financial flexibility necessary to ensure that we are able to execute on our proposed plan to invest more than $3 billion over the next six years to enhance reliability, improve environmental technology and provide power for our state's growing economy."
He added that the pay-as-you-go option for Red Rock was preferred in a survey of OG&E's customers and will save customers millions of dollars while ensuring that bills do not increase dramatically when the plant comes on line in 2012.
"We have said all along that this project is about meeting our customers' demand for reasonably priced electricity in an environmentally responsible way," Moore said. "We hope the commission agrees."
OG&E, along with Public Service Co. of Oklahoma and the Oklahoma Municipal Power Authority, has proposed to build a state-of-the-art, coal-fired generating unit at its Sooner Power Plant, which is located near Red Rock, Okla. The $1.8 billion project is expected to be complete in 2012.
OG&E, a subsidiary of OGE Energy Corp. , serves more than 758,000 customers in a service area spanning 30,000 square miles in Oklahoma and western Arkansas. OGE Energy also is the parent company of Enogex Inc., a natural gas pipeline business with principal operations in Oklahoma.
Some of the matters discussed on this news release may contain forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements are intended to be identified in this document by the words "anticipate," "believe," "estimate," "expect," "intend," "objective," "plan," "possible," "potential," "project" and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to general economic conditions, including the availability of credit, actions of rating agencies and their impact on capital expenditures; OGE Energy Corp.'s (collectively, with its subsidiaries, the "Company") ability and the ability of its subsidiaries to obtain financing on favorable terms; prices and availability of electricity, coal, natural gas and natural gas liquids, each on a stand-alone basis and in relation to each other; business conditions in the energy industry; competitive factors including the extent and timing of the entry of additional competition in the markets served by the Company; unusual weather; availability and prices of raw materials for current and future construction projects; federal or state legislation and regulatory decisions (including the approval of regulatory filings with the Oklahoma Corporation Commission or the Arkansas Public Service Commission related to its proposed construction of a new power plant and a related lawsuit) and initiatives that affect cost and investment recovery, have an impact on rate structures or affect the speed and degree to which competition enters the Company's markets; environmental laws and regulations that may impact the Company's operations; changes in accounting standards, rules or guidelines; the discontinuance of regulated accounting principles under Financial Accounting Standards Board Statement of Financial Accounting Standard No. 71, "Accounting for the Effects of Certain Types of Regulation"; creditworthiness of suppliers, customers and other contractual parties; the higher degree of risk associated with the Company's nonregulated business compared with the Company's regulated utility business; the impact of the recently announced initial public offering of limited partner interests of OGE Enogex Partners L.P.; and other risk factors listed in the reports filed by the Company with the Securities and Exchange Commission.
