September 24, 2008
OCC Approves OG&E Recovery of Redbud Plant Costs
OKLAHOMA CITY, Sept. 24 /PRNewswire-FirstCall/ -- OG&E today announced Oklahoma Corporation Commission approval of the company's proposal to recover the costs of acquiring and operating the Redbud power plant near Luther. OG&E expects to complete its acquisition of the plant by October 1.
OG&E will acquire a 51 percent interest in the 1,230-megawatt Redbud plant for a purchase price of about $434.5 million and will operate the plant on behalf of its co-owners, the Grand River Dam Authority (acquiring a 36 percent stake) and the Oklahoma Municipal Power Authority (13 percent).
"We are pleased to have the Commission's approval as well as the support of the Commission staff, our customers and the Attorney General's office," said Howard Motley, vice president of regulatory affairs for OG&E. "This plant will help us continue delivering a reliable supply of power and also provides long-term cost savings to our customers."
OG&E's growing need for base load electric generation will be met through the most cost-effective means available to the company, Motley said, noting Redbud's fuel-efficient operation and a purchase price at least 25 percent less than the cost of constructing a new gas-fired facility with similar capabilities.
With OG&E operating the plant, the average residential customer's bill is expected to increase by about $3.34 per month. But, if natural gas prices were to climb back to levels seen earlier this year, fuel savings from the plant could more than offset the increase.
Redbud, a combined-cycle plant in service since 2002, operates more efficiently than some of the older units in the OG&E generating fleet. The newer Redbud plant is also capable of ramping its production quickly up and down, an important characteristic which allows OG&E to maximize the benefits from inexpensive, but less predictable wind generation.
OG&E, a subsidiary of Oklahoma City-based OGE Energy Corp. serves more than 765,000 retail customers in a service area spanning 30,000 square miles in Oklahoma and western Arkansas, plus a number of wholesale customers throughout the region. With Redbud, OG&E will have more than 6,800 megawatts of generating capacity from nine power plants, fueled by natural gas and western coal. OG&E has 170 megawatts of capacity from wind generation. With recent OCC approval of the company's renewable energy plan, OG&E is working to increase its wind power capability to 770 megawatts in the next four to five years.
OGE Energy Corp.
CONTACT: Media, Brian Alford, +1-405-553-3187, or Financial, ToddTidwell, +1-405-553-3966, both of OGE Energy Corp.
Web site: http://www.oge.com/