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Summary of Significant Accounting Policies | 6 Months Ended
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Jun. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Organization The Company is an energy and energy services provider offering physical delivery and related services for both electricity and natural gas primarily in the south central United States. The Company conducts these activities through two business segments: (i) electric utility and (ii) natural gas midstream operations. The electric utility segment generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas. Its operations are conducted through OG&E and are subject to regulation by the OCC, the APSC and the FERC. OG&E was incorporated in 1902 under the laws of the Oklahoma Territory. OG&E is the largest electric utility in Oklahoma and its franchised service territory includes the Fort Smith, Arkansas area. OG&E sold its retail natural gas business in 1928 and is no longer engaged in the natural gas distribution business. The natural gas midstream operations segment currently represents the Company's investment in Enable, through its wholly owned subsidiary OGE Holdings. Enable is engaged in the business of gathering, processing, transporting and storing natural gas. Enable's natural gas gathering and processing assets are strategically located in four states and serve natural gas production from shale developments in the Anadarko, Arkoma and Ark-La-Tex basins. Enable also owns an emerging crude oil gathering business in the Bakken shale formation that commenced initial operations in November 2013. Enable is continuing to construct additional crude oil gathering capacity in this area. Enable's natural gas transportation and storage assets extend from western Oklahoma and the Texas Panhandle to Alabama and from Louisiana to Illinois. For periods prior to the formation of Enable, the natural gas midstream operations segment reflected the consolidated results of Enogex Holdings. All significant intercompany transactions have been eliminated in consolidation. Enable was formed effective May 1, 2013 by OGE Energy, the ArcLight group and CenterPoint Energy, Inc. to own and operate the midstream businesses of OGE Energy and CenterPoint. In the formation transaction, OGE Energy and ArcLight contributed Enogex LLC to Enable and the Company deconsolidated its previously held investment in Enogex Holdings and acquired an equity interest in Enable. The Company determined that its contribution of Enogex LLC to Enable met the requirements of being in substance real estate and was recorded at historical cost. The general partner of Enable is equally controlled by CenterPoint and OGE Energy, who each have 50 percent of the management rights. Based on the 50/50 management ownership, with neither company having control, effective May 1, 2013, OGE Energy began accounting for its interest in Enable using the equity method of accounting. On April 16, 2014, Enable completed an initial public offering of 25,000,000 common units resulting in Enable becoming a publicly traded Master Limited Partnership. In connection with Enable’s initial public offering, approximately 61.4 percent of OGE Holdings and CenterPoint’s common units were converted into subordinated units. As a result, following the initial public offering, OGE Holdings owned 42,832,291 common units and 68,150,514 subordinated units of Enable. Holders of subordinated units are not entitled to receive any distribution of available cash until the common units have received the minimum quarterly distribution plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. The subordinated units will convert into common units when Enable has paid at least the minimum quarterly distribution for three years or paid at least 150 percent of the minimum quarterly distribution for one year. Enable is expected to pay a minimum quarterly distribution of $0.2875 per unit on its outstanding units to the extent it has sufficient cash from operations after establishment of cash reserves and payment of fees and expenses, including payments to its general partner and its affiliates, within 45 days after the end of each quarter. Enable will adjust the amount of this distribution for the period from April 16, 2014, the completion of its initial public offering, through June 30, 2014 based on the actual length of the period. If cash distributions to Enable’s unitholders exceed $0.330625 per unit in any quarter, the general partner will receive increasing percentages, up to 50 percent, of the cash Enable distributes in excess of that amount. OGE Holdings is entitled to 60 percent of those “incentive distributions.” In certain circumstances, the general partner, will have the right to reset the minimum quarterly distribution and the target distribution levels at which the incentive distributions receive increasing percentages to higher levels based on Enable’s cash distributions at the time of the exercise of this reset election. At June 30, 2014, OGE Energy held 26.3 percent of the limited partner interests in Enable. Basis of Presentation The Condensed Consolidated Financial Statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments necessary to fairly present the consolidated financial position of the Company at June 30, 2014 and December 31, 2013, the results of its operations for the three and six months ended June 30, 2014 and 2013 and the results of its cash flows for the six months ended June 30, 2014 and 2013, have been included and are of a normal recurring nature except as otherwise disclosed. Due to seasonal fluctuations and other factors, the Company's operating results for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014 or for any future period. The Condensed Consolidated Financial Statements and Notes thereto should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in the Company's 2013 Form 10-K. Accounting Records The accounting records of OG&E are maintained in accordance with the Uniform System of Accounts prescribed by the FERC and adopted by the OCC and the APSC. Additionally, OG&E, as a regulated utility, is subject to accounting principles for certain types of rate-regulated activities, which provide that certain actual or anticipated costs that would otherwise be charged to expense can be deferred as regulatory assets, based on the expected recovery from customers in future rates. Likewise, certain actual or anticipated credits that would otherwise reduce expense can be deferred as regulatory liabilities, based on the expected flowback to customers in future rates. Management's expected recovery of deferred costs and flowback of deferred credits generally results from specific decisions by regulators granting such ratemaking treatment. OG&E records certain actual or anticipated costs and obligations as regulatory assets or liabilities if it is probable, based on regulatory orders or other available evidence, that the cost or obligation will be included in amounts allowable for recovery or refund in future rates. The following table is a summary of OG&E's regulatory assets and liabilities at:
(In millions) | June 30, 2014 | December 31, 2013
Regulatory Assets |  |
Current |  |
Fuel clause under recoveries | $ | 82.1 |  | $ | 26.2 |
Oklahoma demand program rider under recovery (A) | 12.8 |  | 10.6 |
Crossroads wind farm rider under recovery (A) | — |  | 4.7 |
Other (A) | 11.2 |  | 7.3 |
Total Current Regulatory Assets | $ | 106.1 |  | $ | 48.8 |
Non-Current |  |  |  |
Benefit obligations regulatory asset | $ | 222.1 |  | $ | 227.4 |
Income taxes recoverable from customers, net | 56.2 |  | 56.5 |
Smart Grid | 44.1 |  | 44.2 |
Deferred storm expenses | 20.7 |  | 21.6 |
Unamortized loss on reacquired debt | 15.7 |  | 11.8 |
Pension tracker | — |  | 1.4 |
Other | 17.7 |  | 16.2 |
Total Non-Current Regulatory Assets | $ | 376.5 |  | $ | 379.1 |
Regulatory Liabilities |  |  |  |
Current |  |  |  |
Smart Grid rider over recovery (B) | $ | 13.7 |  | $ | 16.7 |
Fuel clause over recoveries | — |  | 0.4 |
Other (B) | 6.3 |  | 3.1 |
Total Current Regulatory Liabilities | $ | 20.0 |  | $ | 20.2 |
Non-Current |  |  |  |
Accrued removal obligations, net | $ | 232.0 |  | $ | 227.7 |
Deferred pension credits | 0.9 |  | 6.5 |
Pension tracker | 6.8 |  | — |
Total Non-Current Regulatory Liabilities | $ | 239.7 |  | $ | 234.2 |
(A) | Included in Other Current Assets on the Condensed Consolidated Balance Sheets.
(B) | Included in Other Current Liabilities on the Condensed Consolidated Balance Sheets.
Management continuously monitors the future recoverability of regulatory assets. When in management's judgment future recovery becomes impaired, the amount of the regulatory asset is adjusted, as appropriate. If OG&E were required to discontinue the application of accounting principles for certain types of rate-regulated activities for some or all of its operations, it could result in writing off the related regulatory assets, which could have significant financial effects. Investment in Unconsolidated Affiliate OGE Energy's investment in Enable is considered to be a variable interest entity because the owners of the equity at risk in this entity have disproportionate voting rights in relation to their obligations to absorb the entity's expected losses or to receive its expected residual returns. However, OGE Energy is not considered the primary beneficiary of Enable since it does not have the power to direct the activities of Enable that are considered most significant to the economic performance of Enable. As discussed above, OGE Energy accounts for the investment in Enable using the equity method of accounting. Under the equity method, the investment will be adjusted each period for contributions made, distributions received and the Company's share of the investee's comprehensive income. OGE Energy's maximum exposure to loss related to Enable is limited to OGE Energy's equity investment in Enable as presented on the Company's Condensed Consolidated Balance Sheet at June 30, 2014. The Company evaluates its equity method investment for impairment when events or changes in circumstances indicate there is a loss in value of the investment that is other than a temporary decline. The Company considers distributions received from Enable which do not exceed cumulative equity in earnings subsequent to the date of investment to be a return on investment which are classified as operating activities in the Condensed Consolidated Statements of Cash Flows. The Company considers distributions received from Enable in excess of cumulative equity in earnings subsequent to the date of investment to be a return of investment which are classified as investing activities in the Condensed Consolidated Statements of Cash Flows. Asset Retirement Obligation The following table summarizes changes to the Company's asset retirement obligations during the six months ended June 30, 2014 and 2013.
| Six Months Ended
| June 30,
(In millions) | 2014 | 2013
Balance at January 1 | $ | 55.2 |  | $ | 54.0 |
Liabilities settled | — |  | (0.4 | )
Accretion expense | 1.3 |  | 1.1 |
Balance at June 30 | $ | 56.5 |  | $ | 54.7 |
Accumulated Other Comprehensive Income (Loss) The following table summarizes changes in the components of accumulated other comprehensive loss attributable to OGE Energy during the six months ended June 30, 2014. All amounts below are presented net of tax and noncontrolling interest.
| Pension Plan and Restoration of Retirement Income Plan |  | Postretirement Benefit Plans |  |
| Net loss | Prior service cost |  | Net loss | Prior service cost | Deferred interest rate swap hedging losses | Total
Balance at December 31, 2013 | $ | (27.4 | ) | $ | 0.1 |  |  | $ | (5.8 | ) | $ | 5.1 |  | $ | (0.2 | ) | $ | (28.2 | )
Amounts reclassified from accumulated other comprehensive income (loss) | 0.9 |  | — |  |  | 0.5 |  | (0.9 | ) | 0.1 |  | 0.6 |
Net current period other comprehensive income (loss) | 0.9 |  | — |  |  | 0.5 |  | (0.9 | ) | 0.1 |  | 0.6 |
Balance at June 30, 2014 | $ | (26.5 | ) | $ | 0.1 |  |  | $ | (5.3 | ) | $ | 4.2 |  | $ | (0.1 | ) | $ | (27.6 | )
The following table summarizes significant amounts reclassified out of accumulated other comprehensive loss by the respective line items in net income during the three and six months ended June 30, 2014.
Details about Accumulated Other Comprehensive Loss Components | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Affected Line Item in the Statement Where Net Income is Presented
| Three Months Ended | Six Months Ended |
| June 30, 2014 | June 30, 2014 |
Losses on cash flow hedges |  |  |
Interest rate swap | $ | — |  | $ | (0.2 | ) | Interest expense
| — |  | (0.2 | ) | Total before tax
| — |  | (0.1 | ) | Tax benefit
| $ | — |  | $ | (0.1 | ) | Net of tax
Amortization of defined benefit pension items |  |  |
Actuarial losses | $ | (0.8 | ) | $ | (1.5 | ) | (A)
| (0.8 | ) | (1.5 | ) | Total before tax
| (0.3 | ) | (0.6 | ) | Tax benefit
| $ | (0.5 | ) | $ | (0.9 | ) | Net of tax
Amortization of postretirement benefit plan items |  |  |
Actuarial losses | $ | (0.5 | ) | $ | (0.8 | ) | (A)
Prior service credit | 0.8 |  | 1.5 |  | (A)
| 0.3 |  | 0.7 |  | Total before tax
| 0.1 |  | 0.3 |  | Tax expense
| $ | 0.2 |  | $ | 0.4 |  | Net of tax
Total reclassifications for the period | $ | (0.3 | ) | $ | (0.6 | ) | Net of tax
(A) | These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (see Note 10 for additional information).

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