Dive Brief:
- OGE Energy Corp. doubled its net Q1 2014 income of $49 million over its Q1 2013 net income of $23 million, generating a jump in its share price to $0.25 from $0.12 per share in last year’s Q1.
- The Oklahoma Gas and Electric (OG&E) regulated electric utility unit was $0.03 per share of the gain, $0.07 to $0.10, as the result of new transmission capacity, while OGE’s natural gas midstream operations unit was $0.09 of the gain, $0.06 to $0.15, and the OGE holding company was $0.01 of the gain. "OG&E continues to execute on its transmission build out and prepares to implement its generation plan,” said President/CEO/Chair Pete Delaney.
- The strength of the natural gas unit’s earnings came from a successful IPO for the Enable Midstream MLP, which was the result of OGE’s long term effort to transform its Enogex subsidiary into “a major midstream player,” according to Delaney.
Dive Insight:
In noting OG&E’s Q1 2014 earnings increase to $21 million from Q1 2013’s $13 million, Delaney observed the unit benefited from “transmission projects, favorable weather and new customer growth,” a summary of the frigid winter that drove an increased demand for natural gas and the pipeline expansion that allowed the unit to meet that demand.
The success of the Natural Gas Midstream Operations unit, including its increase in income from Q1 2013’s $12 million to Q1 2014’s $29 million that was attributable to the Enable deal, was from increased natural gas prices and increased natural gas and natural gas liquids sales, and allowed Delaney to affirm OGE Energy’s net income projection for 2014 of $388 million to $411 million and of net income of $1.94 per share to $2.06 per share.
The Oklahoma legislature recently approved a power bill surcharge for OG&E and other utilities to recover revenues supposedly lost to new owners of distributed generation (DG) like rooftop solar and small wind turbines. Before Governor Fallin signed it she issued an executive order requiring commissioners to make certain such a bill surcharge would not violate the intent of the 2011 Oklahoma First Energy Plan written to grow distributed generation.
