OG&E has 170 megawatts (MW) of wind energy capacity in production today at its Centennial and Sooner wind farms, both near Woodward. The new 100 MW "OU Spirit" wind farm, now under construction near Woodward, is expected to be in production by year-end.
The agreements announced today result from a competitive bid process conducted by OG&E earlier this year. CPV Keenan submitted a proposal based on a 150 MW wind farm in Woodward County and Edison Mission Energy a 130 MW facility in Dewey County near Taloga. The agreements with CPV Keenan and Edison Mission are both 20-year power-purchase agreements, under which the developers will build, own and operate the wind generating facilities and OG&E will purchase their electric output.
The two new facilities, "OU Spirit" and the company’s existing wind generation would combine to give OG&E a total of 550 MW of wind-generation capacity – enough to power 125,000 homes on a typical day.
"We are pleased to take the next major step toward our goal to significantly increase our renewable generating capacity," said OG&E spokesman Brian Alford. "Our request for proposals attracted quality bids and our successful negotiation of these projects will deliver the best-available value to our customers, who have supported our efforts to increase our generation from renewable sources."
OG&E received more than 50 responses from a variety of developers and sites after it issued its request for proposals from wind power developers. Negotiations continue with Chermac Energy, the third bidder on OG&E’s short list announced in June, for an additional 150 MW of wind energy from Texas County. The company also expects to solicit additional proposals from wind developers in the next several months with an eye toward adding more wind generation in 2011 or 2012..
OG&E, which serves more than 773,000 customers in a service territory spanning 30,000 square miles in Oklahoma and western Arkansas, is a subsidiary of Oklahoma City-based OGE Energy Corp. (NYSE: OGE), which also is the parent company of Enogex LLC, a midstream natural gas pipeline business with principal operations in Oklahoma.
OGE Energy Corp. Achieves Solid 2nd Quarter Results
Earnings up compared to same period last year
OGE Energy Corp. (NYSE: OGE), the parent company of Oklahoma Gas and Electric Company (OG&E) and Enogex LLC, announced second-quarter earnings of $0.72 per diluted share, compared with $0.62 per share in the second quarter of 2008. The 10-cent increase was due primarily to improved second-quarter results for OG&E.
OG&E, a regulated electric utility, contributed second-quarter net income of $0.58 per diluted share, compared with $0.33 per share in the same period last year. Enogex, a midstream natural gas pipeline business, recorded net income of $0.16 per diluted share, compared with $0.33 per share in the year-ago quarter. The holding company, including results from the OGE Energy Resources marketing business, posted a loss of $0.02 per diluted share in the second quarter this year, compared with a loss of $0.04 per share in the second quarter a year ago.
"We are pleased to report that we are successfully managing our business in a challenging economy," said Pete Delaney, OGE Energy chairman, president and CEO. "We have achieved positive regulatory outcomes, including the rate relief we need to continue investing in our system and to begin implementing our smart grid program. We also are looking forward to future opportunities to add new transmission and renewable generation."
Discussion of Second Quarter 2009
OGE Energy reported consolidated gross margin on revenues of $320 million in the second quarter of 2009, compared with $314 million in the same period a year ago. Operating income was $126 million in the second quarter, compared with $123 million in the year-earlier quarter.
OG&E reported gross margin on revenues of $237 million in the second quarter of 2009, compared with $208 million in the second quarter of 2008, primarily due to regulatory recovery for the Redbud power plant, warmer weather in the OG&E service area and higher electric rates in Arkansas. Improved results for OG&E in the second quarter of 2009 also reflect the absence of two one-time write-downs in 2008. Net income at OG&E was $56 million in the second quarter, compared with $31 million in the same period a year ago.
Enogex reported gross margin on revenues of $84 million in the second quarter of 2009, compared with $112 million in the comparable quarter last year. The decrease was due primarily to lower commodity prices. Net income at Enogex was $16 million in the second quarter this year, compared with $31 million in the second quarter of 2008.
OGE Energy has reaffirmed its 2009 consolidated earnings guidance at $2.30 – $2.60 per diluted share. The guidance assumes approximately 96 million to 97 million average diluted shares outstanding and normal weather for the remainder of the year.
The 2009 guidance includes:
— OG&E: $1.83 to $1.98 per share on net income of $177 million to $191 million.
— Enogex: $0.53 to $0.70 per share on net income of $51 million to $68 million.
— Holding company (including the marketing business): a loss of $0.05 to $0.10 per share on a net loss of $5 million to $10 million.
More information regarding the Company’s 2009 earnings guidance and second-quarter financial results is contained in the Company’s Form 10-Q filed today with the Securities and Exchange Commission.
Conference Call Webcast
OGE Energy will host a conference call for discussion of the results and 2009 outlook on Wednesday, Aug. 5, at 8 a.m. CDT. The conference will be available through www.oge.com.
OGE Energy is the parent company of Oklahoma Gas and Electric Company (OG&E), which serves approximately 773,000 customers in a service territory spanning 30,000 square miles in Oklahoma and western Arkansas, and of Enogex LLC, a midstream natural gas pipeline business with principal operations in Oklahoma.
Some of the matters discussed in 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 include, but are not limited to: general economic conditions, including the availability of credit, access to existing lines of credit, actions of rating agencies and their impact on capital expenditures; the Company’s ability and the ability of its subsidiaries to access capital markets and 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 and natural gas midstream industries; 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 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 SFAS No. 71; 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; and other risk factors listed in the reports filed by the Company with the Securities and Exchange Commission including Risk Factors and Exhibit 99.01 to the Company’s Form 10-K for the year ended December 31, 2008.