XML 24 R9.htm IDEA: XBRL DOCUMENT
v3.2.0.727

Summary of Significant Accounting Policies | 6 Months Ended
--- | ---
Jun. 30, 2015
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 accounts of OGE Energy and its wholly owned and majority owned subsidiaries are included in the consolidated financial statements. All intercompany transactions and balances are eliminated in consolidation. OGE Energy generally uses the equity method of accounting for investments where its ownership interest is between 20 percent and 50 percent and has the ability to exercise significant influence. 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, and is a wholly owned subsidiary of the Company. 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, principally located in the Williston basin. Enable's natural gas transportation and storage assets extend from western Oklahoma and the Texas Panhandle to Alabama and from Louisiana to Illinois. 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 management ownership. Based on the 50/50 management ownership, with neither company having control, OGE Energy accounts for its interest in Enable using the equity method of accounting. 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, 2015 and December 31, 2014, the results of its operations and cash flows for the three and six months ended June 30, 2015 and 2014, 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, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015 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 2014 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 refunded in future rates. The following table is a summary of OG&E's regulatory assets and liabilities at:
(In millions) | June 30, 2015 | December 31, 2014
Regulatory Assets |  |
Current |  |
Oklahoma demand program rider under recovery (A) | $ | 26.6 |  | $ | 19.7 |
Fuel clause under recoveries | 3.7 |  | 68.3 |
Other (A) | 12.4 |  | 9.1 |
Total Current Regulatory Assets | $ | 42.7 |  | $ | 97.1 |
Non-Current |  |  |  |
Benefit obligations regulatory asset | $ | 254.2 |  | $ | 261.1 |
Income taxes recoverable from customers, net | 56.3 |  | 56.1 |
Smart Grid | 43.8 |  | 43.9 |
Deferred storm expenses | 17.0 |  | 17.5 |
Unamortized loss on reacquired debt | 15.5 |  | 16.1 |
Other | 18.0 |  | 16.8 |
Total Non-Current Regulatory Assets | $ | 404.8 |  | $ | 411.5 |
Regulatory Liabilities |  |  |  |
Current |  |  |  |
Crossroads wind farm rider over recovery (B) | $ | 8.6 |  | $ | 10.3 |
Smart Grid rider over recovery (B) | 8.0 |  | 12.5 |
Fuel clause over recoveries | 1.6 |  | — |
Other (B) | 3.2 |  | 1.6 |
Total Current Regulatory Liabilities | $ | 21.4 |  | $ | 24.4 |
Non-Current |  |  |  |
Accrued removal obligations, net | $ | 256.4 |  | $ | 248.1 |
Pension tracker | 23.2 |  | 14.9 |
Total Non-Current Regulatory Liabilities | $ | 279.6 |  | $ | 263.0 |
(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, 2015. 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, 2015 and 2014.
| Six Months Ended June 30,
(In millions) | 2015 | 2014
Balance at January 1 | $ | 58.6 |  | $ | 55.2 |
Liabilities settled (A) | (0.5 | ) | — |
Accretion expense | 1.3 |  | 1.3 |
Balance at June 30 | $ | 59.4 |  | $ | 56.5 |
(A) In 2015, asset retirement obligations were settled for the asbestos abatement at one of OGE's generating facilities. Accumulated Other Comprehensive Income (Loss) The following table summarizes changes in the components of accumulated other comprehensive income (loss) attributable to OGE Energy during the six months ended June 30, 2015. All amounts below are presented net of tax.
| Pension Plan and Restoration of Retirement Income Plan |  | Postretirement Benefit Plans |
(In millions) | Net loss | Prior service cost |  | Net loss | Prior service cost | Total
Balance at December 31, 2014 | $ | (36.8 | ) | $ | 0.1 |  |  | $ | (8.0 | ) | $ | 3.3 |  | $ | (41.4 | )
Amounts reclassified from accumulated other comprehensive income (loss) | 1.2 |  | — |  |  | 0.6 |  | (0.9 | ) | 0.9 |
Net current period other comprehensive income (loss) | 1.2 |  | — |  |  | 0.6 |  | (0.9 | ) | 0.9 |
Balance at June 30, 2015 | $ | (35.6 | ) | $ | 0.1 |  |  | $ | (7.4 | ) | $ | 2.4 |  | $ | (40.5 | )
The following table summarizes significant amounts reclassified out of accumulated other comprehensive income (loss) by the respective line items in net income during the three and six months ended June 30, 2015 and 2014.
Details about Accumulated Other Comprehensive Income (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 |
(In millions) | June 30, 2015 | June 30, 2014 | June 30, 2015 | 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 and restoration of retirement income plan items |  |  |  |  |
Actuarial losses | $ | (1.4 | ) | $ | (0.8 | ) | $ | (2.6 | ) | $ | (1.5 | ) | (A)
| (1.4 | ) | (0.8 | ) | (2.6 | ) | (1.5 | ) | Total before tax
| (0.6 | ) | (0.3 | ) | (1.4 | ) | (0.6 | ) | Tax benefit
| $ | (0.8 | ) | $ | (0.5 | ) | $ | (1.2 | ) | $ | (0.9 | ) | Net of tax
Amortization of postretirement benefit plan items |  |  |  |  |
Actuarial losses | $ | (0.6 | ) | $ | (0.5 | ) | $ | (1.0 | ) | $ | (0.8 | ) | (A)
Prior service credit | 0.7 |  | 0.8 |  | 1.4 |  | 1.5 |  | (A)
| 0.1 |  | 0.3 |  | 0.4 |  | 0.7 |  | Total before tax
| — |  | 0.1 |  | 0.1 |  | 0.3 |  | Tax (benefit) expense
| $ | 0.1 |  | $ | 0.2 |  | $ | 0.3 |  | $ | 0.4 |  | Net of tax
Total reclassifications for the period | $ | (0.7 | ) | $ | (0.3 | ) | $ | (0.9 | ) | $ | (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).

X
- References No definition available. + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35735333&loc=d3e288-107754 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51655414&loc=d3e18780-107790 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 272 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6373374&loc=d3e70478-108055 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=18733093&loc=d3e5614-111684 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6359566&loc=d3e326-107755 + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration