Dive Brief:
- OGE Energy Corp. reported Q2 2014 earnings of $0.50 per share, up from its $0.46 per share Q2 2013 earnings, with its Oklahoma Gas and Electric Co. regulated utility subsidiary contributing earnings of $0.38 per share for Q2 2014, down from its Q2 2013 contribution of $0.40 per share.
- OGE Energy’s projected earnings for 2014 remain unchanged at between $388 million and $411 million, $1.94 to $2.06 per share, assuming normal weather and including dilution from an IPO for Enable Midstream Partners, its natural gas division.
Dive Insight:
OG&E “is performing in line with expectations” but increased earnings came from the natural gas division, OGE Energy CEO/President/Chair Pete Delaney said, while underplaying a looming $1.1 billion expense for emissions-control devices and the replacement of its aging natural gas Mustang plant necessitated by federal pollution and emissions regulations.
OG&E has asked the Oklahoma Corporation Commission for permission to recover the $1.1 billion in environmental compliance costs from ratepayers beginning in 2015, with a possible increase of residential customers’ monthly bills of 15% by 2019.
Compliance will mean ramped expenses beginning in 2018 for scrubbers on coal units at the Sooner plant, conversion of two of the three Muskogee coal units to natural gas, and upgrading of the Mustang natural gas steam units to quick-start turbines.
