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).
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/