OKLAHOMA CITY, June 13, 2018 /PRNewswire/ -- OG&E, a subsidiary of Oklahoma City-based OGE Energy Corp. (NYSE: OGE), reached an agreement today with the Oklahoma Corporation Commission staff and other parties to settle its pending review before the Commission. The agreement provides for recovery of the company's investment in its new Mustang Energy Center, a state-of-the-art complex that includes seven ultra-modern, highly efficient and environmentally compatible natural gas turbines.
While the company invested nearly $400 million in the modernization project, customers will see a net rate reduction of approximate $64 million, or $4.44 per month for the average Oklahoma residential customer. New rates will take effect July 1, 2018, pending regulatory approval. The lower amount comes on the heels of an average $13.34 per month fuel cost reduction in March 2018.
"We're pleased the various parties led by the Oklahoma Corporation Commission staff recognize through this agreement the real value and strategic importance of the Mustang Energy Center to our customers, communities and state in the decades ahead," said OG&E spokesman Brian Alford. "It is important to note the agreement also supports regional energy grid reliability and resiliency while ensuring Oklahoma customers receive the benefit of tax savings that resulted from the Tax Cuts and Jobs Act of 2017."
Alford added that both the Southwest Power Pool, which oversees the bulk electric grid and wholesale power market in the central United States, and the Arkansas Public Service Commission deemed the Mustang project to be in the public interest.
The Mustang Energy Center replaces 1950s-era power generating units with modern natural gas turbines capable of moving electricity to the grid in minutes versus hours in the past.
"The decision to install the modern facilities at our existing Mustang Power Plant site was by far the best economic option for our customers. At Mustang, we have an experienced power plant workforce and the necessary infrastructure, ensuring the reliable delivery of energy at critical times," Alford said.
He also noted the ancillary benefits of the new facility include further reducing OG&E's carbon footprint, enhancing grid reliability and offering an improved ability to support intermittent energy resources such as wind and solar.
"In the short time the plant has been operational, its units have been called upon more than 700 times to support regional grid reliability, producing more energy than the old plant did in its last full year of operation," Alford said.
In connection with its environmental projects, the company added that the installation of dry scrubbers at its Sooner Power Plant, located near Red Rock, OK, and the conversion of two of three coal-fired units to natural gas at its Muskogee plant are on track to meet EPA Regional Haze Rule requirements.
"We're making great progress with these necessary environmental projects. Both the Sooner and Muskogee projects are on time and under budget," Alford said. "We'll be bringing a rate review for these investments to the OCC later this year. Today's settlement agreement will help mitigate the effects of the cost increases associated with these environmental projects."
The company also today reaffirmed its 2018 earnings guidance of between approximately $380 million and $410 million of net income, or $1.90 to $2.05 per average diluted share.
Oklahoma Gas & Electric Company, a subsidiary of OGE Energy Corp. (NYSE: OGE), is Oklahoma's largest electric utility. For more than a century, we have provided customers in Oklahoma and western Arkansas the safe, reliable electricity needed to power their businesses and homes at rates below the national average. Our employees are committed to generating and delivering electricity, protecting the environment and providing excellent service to our more than 840,000 customers. OG&E has 6,700 MW of electric generation capacity fueled by low-sulfur coal, natural gas, wind and solar. OG&E is recognized as a leader in smart grid technology, leveraging this platform to provide customers with the award-winning SmartHours® program and setting the stage for an electric vehicle program that will include some level of public charging infrastructure, and advanced LED street and security lighting. OG&E employees live, work and volunteer in the communities we serve. For more information about OG&E, visit us on the Internet at http://www.oge.com or follow us on Facebook: www.facebook.com/ogepower and Twitter: @OGandE.
SOURCE OGE Energy Corp.