OG&E 2009 Annual Report Download - page 7

Ÿ in November and December 2009, the individual turbines were placed in service related to the OU Spirit wind
project in western Oklahoma (“OU Spirit”), which added 101 MWs of wind capacity to the Company’s wind
portfolio; and
Ÿ the Company’s construction initiative from 2010 to 2015 includes approximately $2.6 billion in major projects
designed to expand capacity, enhance reliability and improve environmental performance. This construction
initiative also includes strengthening and expanding the electric transmission, distribution and substation systems
and replacing aging infrastructure.
The Company continues to pursue additional renewable energy and the construction of associated transmission facilities
required to support this renewable expansion. The Company also is promoting Demand Side Management programs to encourage
more efficient use of electricity. See “Recent Regulatory Matters – Conservation and Energy Efficiency Programs” for a further
discussion. If these initiatives are successful, the Company believes it may be able to defer the construction of any incremental fossil
fuel generation capacity until 2020.
Increases in generation and the building of transmission lines are subject to numerous regulatory and other approvals,
including appropriate regulatory treatment from the OCC and, in the case of transmission lines, the Southwest Power Pool
(“SPP”). Other projects involve installing new emission-control and monitoring equipment at the Company’s existing power plants to
help meet the Company’s commitment to comply with current and future environmental requirements. For additional information
regarding the above items and other regulatory matters, see “Item 7. Management’s Discussion and Analysis of Financial Condition
and Results of Operations – Environmental Laws and Regulations” and Note 13 of Notes to Financial Statements.
General
The Company furnishes retail electric service in 269 communities and their contiguous rural and suburban areas. At
December 31, 2009, four other communities and two rural electric cooperatives in Oklahoma and western Arkansas purchased
electricity from the Company for resale. The service area covers approximately 30,000 square miles in Oklahoma and western
Arkansas, including Oklahoma City, the largest city in Oklahoma, and Fort Smith, Arkansas, the second largest city in that state. Of
the 269 communities that the Company serves, 243 are located in Oklahoma and 26 in Arkansas. The Company derived approximately
90 percent of its total electric operating revenues for the year ended December 31, 2009 from sales in Oklahoma and the remainder
from sales in Arkansas.
The Company’s system control area peak demand during 2009 was approximately 6,418 MWs on July 13, 2009. The
Company’s load responsibility peak demand was approximately 5,969 MWs on July 13, 2009. As reflected in the table below and in
the operating statistics that follow, there were approximately 25.9 million megawatt-hour (“MWH”) sales to the Company’s customers
(“system sales”) in 2009, 26.8 million MWH system sales in 2008 and 26.4 million MWH system sales in 2007. Variations in system
sales for the three years are reflected in the following table:
2009 vs. 2008 2008 vs. 2007
Year ended December 31 (In millions) 2009 Decrease 2008 Increase 2007
System Sales (A) 25.9 (3.4)% 26.8 1.5% 26.4
(A)
Sales are in millions of MWHs.
The Company is subject to competition in various degrees from government-owned electric systems, municipally-owned
electric systems, rural electric cooperatives and, in certain respects, from other private utilities, power marketers and
cogenerators. Oklahoma law forbids the granting of an exclusive franchise to a utility for providing electricity.
Besides competition from other suppliers or marketers of electricity, the Company competes with suppliers of other forms of
energy. The degree of competition between suppliers may vary depending on relative costs and supplies of other forms of energy.
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