- -------------------------------------------------------------------------------- FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: July 16, 1999 Commission file number 1-12579 OGE ENERGY CORP. (Exact name of registrant as specified in its charter) Oklahoma 73-1481638 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 321 North Harvey P. O. Box 321 Oklahoma City, Oklahoma 73101-0321 (Address of principal executive offices) (Zip Code) 405-553-3000 (Registrant's telephone number, including area code) - --------------------------------------------------------------------------------
Item 5. Other Events OKLAHOMA GAS & ELECTRIC COMPANY FILES FOR PERFORMANCE-BASED RATEMAKING PLAN ----------------------------------------------------------- OGE Energy Corp. announced, July 15, 1999, that its subsidiary, Oklahoma Gas and Electric Company ("OG&E") filed for a performance-based ratemaking plan with the Oklahoma Corporation Commission ("OCC"). The performance-based ratemaking plan would lower OG&E's rates by $83 million and is discussed in the press releases attached hereto as Exhibits 99.01 and 99.02. Some of the matters discussed in this Form 8-K may contain forward-looking statements of OGE Energy that are subject to certain risks, uncertainties, and assumptions. Actual results may vary materially. Factors that could cause actual results to differ materially include, but are not limited to: general economic conditions, including their impact on capital expenditures; business conditions in the energy industry; competitive factors; unusual weather; regulatory decisions and other risk factors listed in OGE Energy's Form 10-K for the year ended December 31, 1998 and other factors described from time to time in OGE Energy's reports to the Securities and Exchange Commission. Item 7. (c) Exhibits EXHIBIT NUMBER DESCRIPTION -------------- ----------- 99.01 OGE Energy's press release dated July 15, 1999 announcing Oklahoma Gas & Electric Company files for approval of performance-based ratemaking plan with the Oklahoma Corporation Commission. 99.02 OGE Energy's press release dated July 15, 1999 announcing Oklahoma Gas & Electric Company files plan for transition to deregulation with the Oklahoma Corporation Commission.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OGE ENERGY CORP. (Registrant) By /s/ Donald R. Rowlett ------------------------------------------------ Donald R. Rowlett Controller Corporate Accounting (On behalf of the registrant and in his capacity as Controller Corporate Accounting) July 16, 1999
EXHIBIT INDEX EXHIBIT INDEX DESCRIPTION - ------------- ----------- 99.01 OG&E Proposes Performance-Based Rate Plan 99.02 OGE's OG&E Files Plan For Transition To Deregulation
EXHIBIT 99.01
OG&E PROPOSES PERFORMANCE-BASED RATE PLAN
ELECTRIC COMPANY WILLING TO PUT ITS RECORD ON THE LINE
OKLAHOMA CITY - OGE Energy Corp. (NYSE: OGE) announced today that its
largest subsidiary, OG&E Electric Services, is the first utility company in
Oklahoma - and among the first in the nation - to seek approval of a
performance-based ratemaking plan. In a filing today with the Oklahoma
Corporation Commission, OG&E proposes $83 million in lower rates during the
transition to deregulated customer choice in mid-2002.
The lower rates would be fixed, and are proposed in tandem with financial
incentives for OG&E to maintain or improve its already-high levels of service,
satisfaction, and safety. OG&E believes its proposal, known as a Performance
Based Incentive Plan, will benefit customers, shareowners and the state of
Oklahoma as the state continues its preparations for electric utility
deregulation on July 1, 2002.
"We are confident we can maintain the course we have been on for several
years - lowering electric rates and providing excellent service as we
continually improve our operating performance," said Steven E. Moore, chairman,
president, and CEO of OGE Energy.
The Performance Based Incentive Plan increases consumer savings by $59
million over what was foreseen in earlier regulatory agreements. The rates will
then be frozen until Oklahomans are free to choose their electricity supplier.
Since 1993, OG&E has reduced base electric rates by $88 million in Oklahoma
and cut fuel costs by an additional $101 million. OG&E's new proposal would
lower rates by $29 million a year compared to June 1999 rates, resulting in $83
million in savings for customers during the 30-month period ending July 1, 2002.
The fixed rates called for in the plan would be achieved, in part, through
removal of a provision in the current rate structure known as the Fuel
Adjustment Clause. The risk of higher prices for the coal and natural gas used
in making electricity would shift from the consumer to OG&E.
Moore said a performance-based approach to utility regulation is an
important step in the transition to customer choice. It helps to prepare an
Oklahoma-based company for competition in the regional and national energy
markets while insulating its customers from rate increases and fluctuations in
service during the transition process.
"A key part of the plan is a service quality incentive mechanism," he
added. "We are willing to put our record on the line. We are proposing that we
continue to be held to rigorous standards of service quality."
Under OG&E's proposal, the company's performance would be measured against
the company's own high benchmarks and recognized utility industry standards.
Those independent measurements would be used in a financial reward/penalty
program to ensure continued reliability in OG&E's electric system, high levels
of customer satisfaction, and employee safety.
If approved by the Oklahoma Corporation Commission, the key provisions of
the Performance Based Incentive Plan would go into effect on Jan. 1, 2000.
OG&E Electric Services is a regulated electric utility with nearly 700,000
customers in Oklahoma and western Arkansas.
EXHIBIT 99.02
OG+E
(Logo)
July 15, 1999
TO: MEMBERS OF THE FINANCIAL COMMUNITY
SUBJECT: OGE ENERGY CORP. (NYSE: OGE) SUBSIDIARY OKLAHOMA GAS AND ELECTRIC
COMPANY FILES PLAN FOR TRANSITION TO DEREGULATION
In a filing today with the Oklahoma Corporation Commission, OGE Energy
Corp. submitted testimony to support an innovative new rate proposal to carry
its largest subsidiary, Oklahoma Gas and Electric Company, through to
deregulation of the electric utility industry. This Performance Based Incentive
Plan is designed to balance the interests of customers, investors, and the state
of Oklahoma during the transition to customer choice in the electricity market
to begin in 2002. Importantly, it addresses many of the financial community's
questions about OG&E's regulation and rates.
PERFORMANCE BASED INCENTIVE PLAN HIGHLIGHTS:
o NATURAL GAS TRANSPORTATION: Lower electric rates would be made possible in
part by a reduction in the cost of transporting natural gas to OG&E's power
plants. OGE Energy Corp. subsidiary Enogex Inc. would remain the OG&E
natural gas transporter at an annual rate of $25 million, down from the
current $41 million rate.
o TERMINATION OF THE GENERATION EFFICIENCY PERFORMANCE RIDER: Ending this
regulatory provision, which enables OG&E to retain a portion of the savings
achieved through efficiencies, would result in a $12 million annual
decrease in revenues. It's a key component
in the company's offer to reduce rates by $83 million and freeze them there
through June 2002.
o ELIMINATION OF FUEL ADJUSTMENT CLAUSE: In the current rate structure,
consumers bear the risk of increases in the cost of fuel used to produce
electricity. Under the Performance Based Incentive Plan, rates would be
fixed as the fuel-cost risk shifts to the company and its shareowners.
o FUEL COST RECOVERY: OG&E proposes one increase in its Performance Based
Incentive Plan proposal, a $14 million upward adjustment in base rates to
more accurately reflect the company's anticipated cost of fuel. Even with
this increase, OG&E's fuel costs remain extremely favorable compared to
regional and national fuel cost averages.
o TERMINATION OF RIDER FOR OFF-SYSTEM ELECTRICITY SALES: Historically in
Oklahoma, profits from off-system sales have been shared equally between
customers and shareowners. Termination of this provision is consistent with
providing customers fixed rates, and would allow the company to benefit
from effectively managing its business.
o A LOGICAL STEP TOWARD DEREGULATION: Oklahoma is on track, under its 1997
law, to deregulate the electric utility industry and open its market to
customer choice in 2002. OG&E proposes this plan as a logical part of that
process, which specifically calls for the state to encourage the
development of a competitive market.
IF YOU HAVE ANY QUESTIONS ABOUT THIS PROPOSAL OR OTHER MATTERS, PLEASE CALL:
JIM HATFIELD, VICE PRESIDENT AND TREASURER (405) 553-3984