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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | 1 3. Commitments and Contingencies Purchase Obligations and Commitments The following table presents the Registrants' future purchase obligations and commitments estimated for the next five years.
(In millions) |  | 2024 |  |  | 2025 |  |  | 2026 |  |  | 2027 |  |  | 2028 |  |  | Total |
Purchase obligations and commitments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Minimum purchase commitments |  | $ | 118.4 |  |  | $ | 100.5 |  |  | $ | 69.7 |  |  | $ | 56.9 |  |  | $ | 46.6 |  |  | $ | 392.1 |
Estimated wind power purchase commitments |  |  | 56.6 |  |  |  | 56.9 |  |  |  | 57.3 |  |  |  | 57.8 |  |  |  | 58.4 |  |  |  | 287.0 |
Capacity commitments |  |  | 32.4 |  |  |  | 33.0 |  |  |  | 40.2 |  |  |  | 41.4 |  |  |  | — |  |  |  | 147.0 |
Long-term service agreement commitments |  |  | 14.8 |  |  |  | 16.6 |  |  |  | 16.6 |  |  |  | 9.9 |  |  |  | 3.0 |  |  |  | 60.9 |
Generation capacity construction commitments |  |  | 126.5 |  |  |  | 137.8 |  |  |  | 38.3 |  |  |  | — |  |  |  | — |  |  |  | 302.6 |
Total purchase obligations and commitments |  | $ | 348.7 |  |  | $ | 344.8 |  |  | $ | 222.1 |  |  | $ | 166.0 |  |  | $ | 108.0 |  |  | $ | 1,189.6 |
OG&E Minimum Purchase Commitments OG&E has coal contracts for purchases through December 31, 2025. OG&E may also purchase coal through spot purchases on an as-needed basis. As a participant in the SPP Integrated Marketplace, OG&E purchases its natural gas supply through short-term agreements. OG&E relies on a combination of natural gas base load agreements and call agreements, whereby OG&E has the right but not the obligation to purchase a defined quantity of natural gas, combined with day and intra-day purchases to meet the demands of the SPP Integrated Marketplace. OG&E has natural gas transportation service contracts with Energy Transfer, ONEOK, Inc. and Southern Star, which grant these companies the responsibility of delivering natural gas to OG&E's generating facilities. The contracts with Energy Transfer end in December 2024 and December 2038; the contracts with ONEOK, Inc. end in December 2024 and August 2037; and the contract with Southern Star ends in December 2024. OG&E Estimated Wind Power Purchase Commitments The following table presents OG&E's wind purchased power contracts.
Company | Location | Original Term of Contract | Expiration of Contract | MWs |
CPV Keenan | Woodward County, OK | 20 years | 2030 |  | 152.0 |
Edison Mission Energy | Dewey County, OK | 20 years | 2031 |  | 130.0 |
NextEra Energy | Blackwell, OK | 20 years | 2032 |  | 60.0 |
The following table presents a summary of OG&E's wind power purchases for the years ended December 31, 2023, 2022 and 2021.
Year Ended December 31 (In millions) |  | 2023 |  |  | 2022 |  |  | 2021 |
CPV Keenan |  | $ | 23.0 |  |  | $ | 25.8 |  |  | $ | 27.3 |
Edison Mission Energy |  |  | 20.5 |  |  |  | 24.9 |  |  |  | 21.7 |
NextEra Energy |  |  | 5.3 |  |  |  | 7.3 |  |  |  | 6.8 |
Total wind power purchased |  | $ | 48.8 |  |  | $ | 58.0 |  |  | $ | 55.8 |
OG&E Capacity Commitments In 2022, the SPP approved an increase in the planning reserve margin from 12 percent to 15 percent. Due to near-term generation requirements, in 2023, OG&E entered into short-term power purchase agreements to meet the additional capacity needs in each of the years between 2024 and 2027. OG&E Long-Term Service Agreement Commitments OG&E has a long-term parts and service maintenance contract for the upkeep of the McClain Plant. In May 2013, a new contract was signed that is expected to run for the earlier of 128,000 factored-fired hours or 4,800 factored-fired starts. Based on historical usage and current expectations for future usage, this contract is expected to run until 2035. The contract requires payments based on both a fixed and variable cost component, depending on how much the McClain Plant is used. OG&E has a long-term parts and service maintenance contract for the upkeep of the Redbud Plant. In March 2013, the contract was amended to extend the contract coverage for an additional 24,000 factored-fired hours resulting in a maximum of the earlier of 144,000 factored-fired hours or 4,500 factored-fired starts. Based on historical usage and current expectations for future usage, this contract is expected to run until 2032. The contract requires payments based on both a fixed and variable cost component, depending on how much the Redbud Plant is used. OG&E Generation Capacity Construction Commitments OG&E has various generation capacity construction projects, such as plans to install two combustion turbines totaling 448 megawatts at its existing Horseshoe Lake generating facility. The new generating units are expected to be placed into service in late 2026. Environmental Laws and Regulations The activities of OG&E are subject to numerous stringent and complex federal, state and local laws and regulations governing environmental protection. These laws and regulations can change, restrict or otherwise impact the Registrants' business activities in many ways, including the handling or disposal of waste material, planning for future construction activities to avoid or mitigate harm to threatened or endangered species and requiring the installation and operation of emissions or pollution control equipment. Failure to comply with these laws and regulations could result in the assessment of administrative, civil and criminal penalties, the imposition of remedial requirements and the issuance of orders enjoining future operations. Management believes that all of the Registrants' operations are in substantial compliance with current federal, state and local environmental standards. Environmental regulation can increase the cost of planning, design, initial installation and operation of OG&E's facilities. Management continues to evaluate its compliance with existing and proposed environmental legislation and regulations and implement appropriate environmental programs in a competitive market. Other In the normal course of business, the Registrants are confronted with issues or events that may result in a contingent liability. These generally relate to lawsuits or claims made by third parties, including governmental agencies. When appropriate, management consults with legal counsel and other experts to assess the claim. If, in management's opinion, the Registrants have incurred a probable loss as set forth by GAAP, an estimate is made of the loss, and the appropriate accounting entries are reflected in the financial statements. If the assessment indicates that a potential loss is not probable but reasonably possible, the nature of the contingent matter, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. At the present time, based on currently available information, the Registrants believe that any reasonably possible losses in excess of accrued amounts arising out of pending or threatened lawsuits or claims would not be quantitatively material to their financial statements and would not have a material adverse effect on their financial position, results of operations or cash flows. In July 2023, OG&E was named, along with its contractor, as a defendant in a lawsuit filed by an apartment owner and its insurance companies seeking in excess of $60.0 million in damages related to a fire at an apartment building under construction in Oklahoma City. Several additional defendants have also been named. OG&E disputes the claims in the lawsuit and intends to vigorously defend this action. If OG&E was ultimately deemed liable for damages in connection with this incident, OG&E believes its existing insurance policies will cover its costs, in excess of a required retention (the amount of which is not material), to satisfy any liability it may have. Due to the uncertain and preliminary nature of this litigation, the outcome cannot be predicted, and OG&E is unable to provide a range of possible loss in this matter.

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