Attached files
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| EX-99.01 - OGANDE8K060110EX9901 - OKLAHOMA GAS & ELECTRIC CO | ogande8k060110ex9901.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
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Date
of report (Date of earliest event reported)
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May
27, 2010
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OKLAHOMA
GAS AND ELECTRIC COMPANY
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(Exact
Name of Registrant as Specified in Its Charter)
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Oklahoma
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(State
or Other Jurisdiction of Incorporation)
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1-1097
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73-0382390
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(Commission
File Number)
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(IRS
Employer Identification No.)
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321
North Harvey, P.O. Box 321, Oklahoma City, Oklahoma
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73101-0321
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(Address
of Principal Executive Offices)
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(Zip
Code)
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405-553-3000
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(Registrant’s
Telephone Number, Including Area Code)
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(Former
Name or Former Address, if Changed Since Last Report)
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Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction A.2.
below):
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o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17
CFR 240.14d-2(b))
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o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17
CFR 240.13e-4(c))
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Item
8.01. Other Events
On May
28, 2010, OGE Energy Corp., the parent company of Oklahoma Gas and Electric
Company (the “Company”), issued a press release announcing that the Company
reached a settlement agreement on May 27, 2010 with all the parties to the
Oklahoma Corporation Commission (“OCC”)
consideration of the Company’s application for pre-approval for system-wide
deployment of smart grid technology and a recovery rider. The
settlement is subject to approval by the OCC.
As
previously disclosed, in February 2009, the American Recovery and Reinvestment
Act of 2009 was enacted into law. Several provisions of this law
relate to issues of direct interest to the Company including, in particular,
financial incentives to develop smart grid technology, transmission
infrastructure and renewable energy. The Company filed a grant request
on August 4, 2009 for $130 million with the U.S. Department of Energy (“DOE”)
to be used for the Smart Grid application in the Company’s service
territory. On October 27, 2009, the Company received notification
from the DOE that its grant had been accepted by the DOE for the full requested
amount of $130 million. On April 21, 2010, the Company and the
DOE entered into a definitive agreement with regards to the
award.
On March
15, 2010, the Company filed an application with the OCC requesting
pre-approval for system-wide deployment of smart grid technology and a recovery
rider, including a credit for the Smart Grid grant.
The
Company, the OCC Staff, the Attorney General’s Office of Oklahoma, The Oklahoma
Industrial Energy Consumers and the OG&E Shareholders Association all agreed
to ask the OCC to approve the below settlement terms:
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●
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Pre-approval
for system-wide deployment of smart grid technology and authorization for
the Company to begin recovering the costs of the system-wide deployment of
smart grid technology through a rider mechanism that will become effective
in accordance with the order approving the settlement
agreement;
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●
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The
Company’s total project costs eligible for recovery (those costs expended
or accrued by the Company prior to the termination of the period
authorized by the DOE as eligible for grant funds) shall be capped at
$366.4 million (“Smart Grid Cost”), inclusive of the DOE grant award
amount. The Smart Grid Cost includes the cost of implementing the Norman,
Oklahoma smart grid pilot program previously authorized by the
OCC. Under the terms of the settlement, the Smart Grid Cost
would be deemed to represent an investment that is fair, just and
reasonable and in the public interest and to be prudent and will be
recognized in the Company’s 2013 general rate
case;
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●
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To
the extent that the Company’s total expenditure for system-wide deployment
of smart grid technology during the eligible period exceeds the Smart Grid
Cost, the Company shall be entitled to offer evidence and seek to
establish that the excess above the Smart Grid Cost was prudently incurred
and any such contention may be addressed in the Company’s 2013 rate
case;
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●
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Implementation
of the recovery rider would commence with the first billing cycle in July
2010;
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●
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Continued
utilization of a return on equity previously approved by the OCC for other
various recovery riders;
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●
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The
recovery rider shall be designed to collect, on a levelized basis, the
revenue requirement associated with the estimated project cost of $357.4
million and shall be subject to a true-up in 2014 after the recovery rider
expires, including a true-up for project costs, if any, in excess of
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$357.4
million but less than the Smart Grid Cost. Any over/under recovery
remaining will be passed or credited through the Company’s fuel adjustment
clause;
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●
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The
Company guarantees that customers will receive the benefit of
certain operations and maintenance cost reductions resulting
from the smart grid deployment as a credit to the recovery
rider;
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●
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Beginning
January 1, 2011, the Company shall make available the smart grid web
portal to all customers having a smart meter. The Company shall expend
funds to educate customers regarding the best use of the information
available on the portal. In addition, the Company shall make available to
all customers who do not have internet access the opportunity to receive a
monthly home energy report. This report shall be made available, free of
charge, to customers eligible for the Company’s Low Income Home Energy
Assistance Program and/or Senior Citizen program who are without internet
service. The incremental costs for web portal access, education and the
providing of home energy reports free of charge are to be accumulated as a
regulatory asset in an amount up to $6.9 million and recovered in base
rates beginning in 2014; and
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●
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The
stranded costs associated with the Company’s existing meters which are
being replaced by smart meters will be accumulated in a regulatory asset
and recovered in base rates beginning in
2014.
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A copy of
the Company’s press release announcing the settlement agreement is attached as
Exhibit 99.01 and incorporated herein by reference. The Settlement
Agreement is incorporated herein by reference as Exhibit 99.02
hereto.
Item
9.01. Financial Statements and Exhibits
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(d) Exhibits
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Exhibit
Number
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Description
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99.01
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Press
release dated May 28, 2010, announcing OG&E Announces Smart Grid
Agreements.
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99.02
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Copy
of Settlement Agreement dated May 27, 2010. (Filed as Exhibit 99.02 to OGE
Energy’s Form 8-K filed June 1, 2010 (File No. 1-12579) and incorporated
by reference herein)
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SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
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OKLAHOMA
GAS AND ELECTRIC COMPANY
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(Registrant)
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By:
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/s/
Scott Forbes
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Scott
Forbes
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Controller
and Chief Accounting Officer
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June 1,
2010