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Derivative Instruments and Hedging Activities | 12 Months Ended
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Dec. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company is exposed to certain risks relating to its ongoing business operations. The primary risk managed using derivatives instruments is interest rate risk. The Company is also exposed to credit risk in its business operations. Interest Rate Risk The Company's exposure to changes in interest rates primarily relates to short-term variable-rate debt and commercial paper. The Company manages its interest rate exposure by monitoring and limiting the effects of market changes in interest rates. The Company may utilize interest rate derivatives to alter interest rate exposure in an attempt to reduce the effects of these changes. Interest rate derivatives are used solely to modify interest rate exposure and not to modify the overall leverage of the debt portfolio. Credit Risk The Company is exposed to certain credit risks relating to its ongoing business operations. Credit risk includes the risk that counterparties that owe the Company money or energy will breach their obligations. If the counterparties to these arrangements fail to perform, the Company may be forced to enter into alternative arrangements. In that event, the Company's financial results could be adversely affected and the Company could incur losses. Cash Flow Hedges For derivatives that are designated and qualify as a cash flow hedge, the effective portion of the change in fair value of the derivative instrument is reported as a component of Accumulated Other Comprehensive Income (Loss) and recognized into earnings in the same period during which the hedged transaction affects earnings. The ineffective portion of a derivative's change in fair value or hedge components excluded from the assessment of effectiveness is recognized currently in earnings. The Company measures the ineffectiveness of commodity cash flow hedges using the change in fair value method whereby the change in the expected future cash flows designated as the hedge transaction are compared to the change in fair value of the hedging instrument. Forecasted transactions, which are designated as the hedged transaction in a cash flow hedge, are regularly evaluated to assess whether they continue to be probable of occurring. If the forecasted transactions are no longer probable of occurring, hedge accounting will cease on a prospective basis and all future changes in the fair value of the derivative will be recognized directly in earnings. The Company previously designated as cash flow hedges derivatives used to manage commodity price risk exposure for OGE Holdings's NGLs volumes and corresponding keep-whole natural gas resulting from its natural gas processing contracts (processing hedges) and natural gas positions resulting from its natural gas gathering and processing operations and natural gas transportation and storage operations (operational gas hedges). The Company also previously designated as cash flow hedges certain derivatives used to manage natural gas commodity exposure for certain natural gas storage inventory positions. Due to the deconsolidation effective May 1, 2013, the Company had no instruments designated as cash flow hedges at December 31, 2013. Fair Value Hedges For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedge risk are recognized currently in earnings. The Company includes the gain or loss on the hedged items in Operating Revenues as the offsetting loss or gain on the related hedging derivative. At December 31, 2013 and 2012, the Company had no derivative instruments that were designated as fair value hedges. Derivatives Not Designated As Hedging Instruments Derivative instruments not designated as hedging instruments were utilized in OGE Holdings' asset management activities and were reflected in consolidated results prior to the deconsolidation of Enogex on May 1, 2013. For derivative instruments not designated as hedging instruments, the gain or loss on the derivative is recognized in the period in which it occurred. Quantitative Disclosures Related to Derivative Instruments At December 31, 2013, the Company has no derivative instruments that were designated as cash flow hedges. At December 31, 2012, the Company had the following derivative instruments that were designated as cash flow hedges.
(In millions) | 2012 Gross Notional Volume (A)
Enogex hedges |
Natural gas sales | 3.7 |
(A) | Natural gas in MMBtu's.
At December 31, 2012, the Company had the following derivative instruments that were not designated as hedging instruments.
(In millions) | Gross Notional Volume (A)
| Purchases | Sales
Natural gas (B) |  |
Physical (C)(D) | 7.0 |  | 30.1 |
Fixed Swaps/Futures | 16.2 |  | 17.9 |
Basis Swaps | 7.3 |  | 6.7 |
(A) | Natural gas in MMBtu's.
(B) | 95.1 percent of the natural gas contracts have durations of one year or less, 2.9 percent have durations of more than one year and less than two years and 2.0 percent have durations of more than two years.
(C) | Of the natural gas physical purchases and sales volumes not designated as hedges, the majority are priced based on a monthly or daily index and the fair value is subject to little or no market price risk.
(D) | Natural gas physical sales volumes exceed natural gas physical purchase volumes due to the marketing of natural gas volumes purchased via Enogex's processing contracts, which are not derivative instruments and are excluded from the table above.
Balance Sheet Presentation Related to Derivative Instruments The Company had no derivative instruments included in its Consolidated Balance Sheet at December 31, 2013. The fair value of the derivative instruments that are presented in the Company's Consolidated Balance Sheet at December 31, 2012 are as follows:
|  | Fair Value
Instrument | Balance Sheet Location | Assets | Liabilities
|  | (In millions)
Derivatives Designated as Hedging Instruments |  |  |
Natural Gas |  |  |
Financial Futures/Swaps | Other Current Assets | $ | — |  | $ | 0.5 |
Total | $ | — |  | $ | 0.5 |
Derivatives Not Designated as Hedging Instruments |  |  |
Natural Gas |  |  |
Financial Futures/Swaps | Current PRM | $ | 0.1 |  | $ | — |
| Other Current Assets | 5.0 |  | 4.7 |
Physical Purchases/Sales | Current PRM | 0.4 |  | 0.3 |
Total | $ | 5.5 |  | $ | 5.0 |
Total Gross Derivatives (A) | $ | 5.5 |  | $ | 5.5 |
(A) | See Note 5 for a reconciliation of the Company's total derivatives fair value to the Company's Consolidated Balance Sheet at December 31, 2012.
Income Statement Presentation Related to Derivative Instruments The following tables present the effect of derivative instruments on the Company's Consolidated Statement of Income in 2013. Derivatives in Cash Flow Hedging Relationships
(In millions) | Amount Recognized in Other Comprehensive Income | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Amount Recognized in Income
Natural Gas Financial Futures/Swaps | $ | (0.2 | ) | $ | 5.2 |  | $ | — |
Interest Rate Swap | — |  | (0.2 | ) | — |
Total | $ | (0.2 | ) | $ | 5.0 |  | $ | — |
Derivatives Not Designated as Hedging Instruments
(In millions) | Amount Recognized in Income
Natural Gas Physical Purchases/Sales | $ | (6.1 | )
Natural Gas Financial Futures/Swaps | 1.0 |
Total | $ | (5.1 | )
The following tables present the effect of derivative instruments on the Company's Consolidated Statement of Income in 2012. Derivatives in Cash Flow Hedging Relationships
(In millions) | Amount Recognized in Other Comprehensive Income | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Amount Recognized in Income
Natural Gas Financial Futures/Swaps | 0.5 |  | 5.2 |  | — |
Interest Rate Swap | — |  | (0.4 | ) | — |
Total | $ | 0.5 |  | $ | 4.8 |  | $ | — |
Derivatives Not Designated as Hedging Instruments
(In millions) | Amount Recognized in Income
Natural Gas Physical Purchases/Sales | $ | (11.7 | )
Natural Gas Financial Futures/Swaps | 1.1 |
Total | $ | (10.6 | )
The following tables present the effect of derivative instruments on the Company's Consolidated Statement of Income in 2011. Derivatives in Cash Flow Hedging Relationships
(In millions) | Amount Recognized in Other Comprehensive Income | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Amount Recognized in Income
NGLs Financial Options | $ | (8.4 | ) | $ | (9.8 | ) | $ | — |
Natural Gas Financial Futures/Swaps | 2.9 |  | (30.4 | ) | — |
Interest Rate Swap | — |  | (0.4 | ) | — |
Total | $ | (5.5 | ) | $ | (40.6 | ) | $ | — |
Derivatives Not Designated as Hedging Instruments
(In millions) | Amount Recognized in Income
Natural Gas Physical Purchases/Sales | $ | (10.0 | )
Natural Gas Financial Futures/Swaps | 0.4 |
Total | $ | (9.6 | )
For derivatives designated as cash flow hedges in the tables above, amounts reclassified from Accumulated Other Comprehensive Income (Loss) into income (effective portion) and amounts recognized in income (ineffective portion) for the years ended December 31, 2012 and 2011, if any, are reported in Operating Revenues. For derivatives not designated as hedges in the tables above, amounts recognized in income for the years ended December 31, 2012 and 2011, if any, are reported in Operating Revenues. Credit-Risk Related Contingent Features in Derivative Instruments At December 31, 2013, the Company had no derivative instruments that contain credit-risk related contingent features. In the event Moody's Investors Services or Standard & Poor's Ratings Services were to lower the Company's senior unsecured debt rating to a below investment grade rating, at December 31, 2012, the Company would have been required to post $0.2 million of cash collateral to satisfy its obligation under its financial and physical contracts relating to derivative instruments that were in a net liability position at December 31, 2012.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708775-113959 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624163-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708773-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41635-113959 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624258-113959 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5618551-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80748-113994 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624181-113959 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80784-113994 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41620-113959 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4D -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624177-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579245-113959 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5580258-113959 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579240-113959 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41641-113959 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41638-113959 Reference 20: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959 + Details
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