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Summary of Significant Accounting Policies | 9 Months Ended
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Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Organization OGE Energy is a holding company whose primary investment provides electricity in Oklahoma and western Arkansas. OGE Energy's electric company operations are conducted through its wholly-owned subsidiary, OG&E, which generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas and are reported through OGE Energy's electric company business segment. OG&E's rates 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 the largest electric company in Oklahoma, with a franchised service territory that includes Fort Smith, Arkansas and the surrounding communities. OG&E sold its retail natural gas business in 1928 and is no longer engaged in the natural gas distribution business. The accounts of OGE Energy and its wholly-owned subsidiaries, including OG&E, are included in OGE Energy's condensed consolidated financial statements. All intercompany transactions and balances are eliminated in such consolidation. Basis of Presentation The condensed financial statements included herein have been prepared by the Registrants, 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 Registrants believe 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 financial position of the Registrants at September 30, 2024 and December 31, 2023, the results of the Registrants' operations for the three and nine months ended September 30, 2024 and 2023 and the Registrants' cash flows for the nine months ended September 30, 2024 and 2023 have been included and are of a normal, recurring nature except as otherwise disclosed. Management also has evaluated the impact of events occurring after September 30, 2024 up to the date of issuance of these condensed financial statements, and these statements contain all necessary adjustments and disclosures resulting from that evaluation. Due to seasonal fluctuations and other factors, the Registrants' operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or for any future period. The condensed financial statements and notes thereto should be read in conjunction with the audited financial statements and notes thereto included in the Registrants' 2023 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 electric company, is subject to accounting principles for certain types of rate-regulated activities, which provide that certain incurred 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 incurred costs and obligations as regulatory assets or liabilities if, based on regulatory orders or other available evidence, it is probable that the costs or obligations will be included in amounts allowable for recovery or refund in future rates. The following table presents a summary of OG&E's regulatory assets and liabilities.
|  | September 30, |  |  | December 31, |
(In millions) |  | 2024 |  |  | 2023 |
REGULATORY ASSETS |  |  |  |  |  |
Current: |  |  |  |  |  |
Oklahoma fuel clause under recoveries |  | $ | 43.3 |  |  | $ | — |
Oklahoma Energy Efficiency Rider under recoveries (A) |  |  | 5.0 |  |  |  | 3.8 |
Other (A) |  |  | 4.7 |  |  |  | 2.7 |
Total current regulatory assets |  | $ | 53.0 |  |  | $ | 6.5 |
Non-current: |  |  |  |  |  |
Oklahoma deferred storm expenses |  | $ | 247.1 |  |  | $ | 261.1 |
Pension tracker |  |  | 102.0 |  |  |  | 91.9 |
Benefit obligations regulatory asset |  |  | 89.8 |  |  |  | 89.4 |
Arkansas Winter Storm Uri costs |  |  | 64.8 |  |  |  | 71.0 |
Sooner Dry Scrubbers |  |  | 16.6 |  |  |  | 17.2 |
Oklahoma SAP S/4 HANA deferred expenses |  |  | 13.1 |  |  |  | 6.0 |
Arkansas deferred pension expenses |  |  | 11.4 |  |  |  | 12.7 |
Unamortized loss on reacquired debt |  |  | 6.6 |  |  |  | 7.2 |
COVID-19 impacts |  |  | 5.7 |  |  |  | 6.8 |
Frontier Plant deferred expenses |  |  | 2.5 |  |  |  | 3.6 |
Other |  |  | 13.1 |  |  |  | 10.7 |
Total non-current regulatory assets |  | $ | 572.7 |  |  | $ | 577.6 |
REGULATORY LIABILITIES |  |  |  |  |  |
Current: |  |  |  |  |  |
Arkansas fuel clause over recoveries |  | $ | 16.4 |  |  | $ | 4.9 |
SPP cost tracker over recoveries (B) |  |  | 7.9 |  |  |  | 10.4 |
Oklahoma fuel clause over recoveries |  |  | — |  |  |  | 15.6 |
Other (B) |  |  | 3.9 |  |  |  | 2.3 |
Total current regulatory liabilities |  | $ | 28.2 |  |  | $ | 33.2 |
Non-current: |  |  |  |  |  |
Income taxes refundable to customers, net |  | $ | 796.1 |  |  | $ | 838.0 |
Accrued removal obligations, net |  |  | 216.6 |  |  |  | 222.0 |
Other |  |  | 1.9 |  |  |  | 1.6 |
Total non-current regulatory liabilities |  | $ | 1,014.6 |  |  | $ | 1,061.6 |
(A) Included in Other Current Assets in the condensed balance sheets. (B) Included in Other Current Liabilities in the condensed 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 or liabilities, which could have significant financial effects. Allowance for Uncollectible Accounts Receivable Customer balances are generally written off if not collected within six months after the final billing date. The allowance for uncollectible accounts receivable for OG&E is generally calculated by multiplying the last six months of electric revenue by the provision rate, which is based on a historical average of actual balances written off and is adjusted for current conditions and supportable forecasts as necessary. To the extent the historical collection rates, when incorporating forecasted conditions, are not representative of future collections, there could be an effect on the amount of uncollectible expense recognized. Also, a portion of the uncollectible provision related to fuel within the Oklahoma jurisdiction is being recovered through the fuel adjustment clause. The allowance for uncollectible accounts receivable is a reduction to Accounts Receivable in the condensed balance sheets and is included in Other Operation and Maintenance Expense in the condensed statements of income. New business customers are required to provide a security deposit in the form of cash, bond or irrevocable letter of credit that is refunded when the account is closed or when certain requirements are met. New residential customers whose outside credit scores indicate an elevated risk are required to provide a security deposit that is refunded based on customer protection rules defined by the OCC and the APSC. The payment behavior of all existing customers is continuously monitored, and, if the payment behavior indicates sufficient risk within the meaning of the applicable utility regulation, customers will be required to provide a security deposit. Related Party Transactions OGE Energy charges operating costs to OG&E based on several factors, and operating costs directly related to OG&E are assigned as such. Operating costs incurred for the benefit of OG&E are allocated either as overhead based primarily on labor costs or using the "Distrigas" method, which is a three-factor formula that uses an equal weighting of payroll, net operating revenues and gross property, plant and equipment. OGE Energy adopted this method as a result of a recommendation by the OCC Staff and believes this method provides a reasonable basis for allocating common expenses. OGE Energy charged operating costs to OG&E of $35.6 million and $109.0 million during the three and nine months ended September 30, 2023, respectively. As a result of OGE Energy's exit of its former midstream business and becoming primarily an electric company, all employees are directly employed by OG&E beginning in 2024. Accumulated Other Comprehensive Income (Loss) The following tables present changes in the components of accumulated other comprehensive income (loss) attributable to OGE Energy during the nine months ended September 30, 2024 and 2023. All amounts below are presented net of tax.
(In millions) | Pension Plan and Restoration of Retirement Income Plan |  | Postretirement Benefit Plans |  | Total |
Balance at December 31, 2023 | $ | (12.9 | ) | $ | 5.7 |  | $ | (7.2 | )
Amounts reclassified from accumulated other comprehensive income (loss) |  | 0.3 |  |  | (0.1 | ) |  | 0.2 |
Regulatory classification of certain pension costs |  | 3.9 |  |  | — |  |  | 3.9 |
Balance at September 30, 2024 | $ | (8.7 | ) | $ | 5.6 |  | $ | (3.1 | )
(In millions) | Pension Plan and Restoration of Retirement Income Plan |  | Postretirement Benefit Plans |  | Total |
Balance at December 31, 2022 | $ | (18.5 | ) | $ | 6.6 |  | $ | (11.9 | )
Amounts reclassified from accumulated other comprehensive income (loss) |  | 0.8 |  |  | (0.1 | ) |  | 0.7 |
Settlement cost |  | 1.1 |  |  | — |  |  | 1.1 |
Balance at September 30, 2023 | $ | (16.6 | ) | $ | 6.5 |  | $ | (10.1 | )
The following table presents significant amounts reclassified out of accumulated other comprehensive income (loss) attributable to OGE Energy by the respective line items in net income during the three and nine months ended September 30, 2024 and 2023.
Details about Accumulated Other Comprehensive Income (Loss) Components |  | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) |  |  | Affected Line Item in OGE Energy's Statements of Income
|  | Three Months Ended |  |  | Nine Months Ended |  |  |
|  | September 30, |  |  | September 30, |  |  |
(In millions) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |  |  |
Amortization of Pension Plan and Restoration of Retirement Income Plan items: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Actuarial losses |  | $ | — |  |  | $ | (0.2 | ) |  | $ | (0.2 | ) |  | $ | (0.8 | ) |  | (A)
Prior service cost |  |  | (0.1 | ) |  |  | (0.1 | ) |  |  | (0.2 | ) |  |  | (0.2 | ) |  | (A)
Settlement cost |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1.4 | ) |  | (A)
|  |  | (0.1 | ) |  |  | (0.3 | ) |  |  | (0.4 | ) |  |  | (2.4 | ) |  | Income Before Taxes
|  |  | — |  |  |  | (0.1 | ) |  |  | (0.1 | ) |  |  | (0.5 | ) |  | Income Tax Expense
|  | $ | (0.1 | ) |  | $ | (0.2 | ) |  | $ | (0.3 | ) |  | $ | (1.9 | ) |  | Net Income
Amortization of postretirement benefit plans items: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Actuarial gains |  | $ | — |  |  | $ | 0.1 |  |  | $ | 0.1 |  |  | $ | 0.2 |  |  | (A)
|  |  | — |  |  |  | 0.1 |  |  |  | 0.1 |  |  |  | 0.2 |  |  | Income Before Taxes
|  |  | — |  |  |  | 0.1 |  |  |  | — |  |  |  | 0.1 |  |  | Income Tax Expense
|  | $ | — |  |  | $ | — |  |  | $ | 0.1 |  |  | $ | 0.1 |  |  | Net Income
Total reclassifications for the period, net of tax |  | $ | (0.1 | ) |  | $ | (0.2 | ) |  | $ | (0.2 | ) |  | $ | (1.8 | ) |  | Net Income
(A) These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (see Note 10 for additional information). Reclassifications Certain prior year amounts have been reclassified to conform to current year presentation. The Registrants updated the September 30, 2023 presentation of removal costs related to long-lived assets within the condensed statements of cash flows to reflect the classification in the Registrants' 2023 Form 10-K.

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