OG&E 2009 Annual Report Download - page 70

Property, Plant and Equipment
All property, plant and equipment is recorded at cost. Newly constructed plant is added to plant balances at cost which
includes contracted services, direct labor, materials, overhead, transportation costs and the allowance for funds used during
construction (“AFUDC”). Replacements of units of property are capitalized as plant. For assets that belong to a common plant
account, the replaced plant is removed from plant balances and the cost of such property is charged to Accumulated Depreciation. For
assets that do not belong to a common plant account, the replaced plant is removed from plant balances with the related accumulated
depreciation and the remaining balance is recorded as a loss in the Statements of Income as Other Expense. Repair and replacement
of minor items of property are included in the Statements of Income as Other Operation and Maintenance Expense.
The below tables present the Company’s ownership interest in the jointly-owned 520 megawatt (“MW”) natural gas-fired
combined cycle NRG McClain Station (“McClain Plant”) and the jointly-owned 1,230 MW natural gas-fired, combined-cycle power
generation facility in Luther, Oklahoma (“Redbud Facility”), and, as disclosed below, only the Company’s ownership interest is
reflected in the property, plant and equipment and accumulated depreciation balances in these tables. The owners of the remaining
interests in the McClain Plant and the Redbud Facility are responsible for providing their own financing of capital expenditures. Also,
only the Company’s proportionate interests of any direct expenses of the McClain Plant and the Redbud Facility such as fuel,
maintenance expense and other operating expenses are included in the applicable financial statements captions in the Statements of
Income.
Percentage Total Property, Plant Accumulated Net Property, Plant
December 31, 2009 (In millions) Ownership and Equipment Depreciation and Equipment
McClain Plant 77 $ 197.7 $ 55.3 $ 142.4
Redbud Facility 51 $ 523.3 (A) $ 80.3 (B) $ 443.0
(A) This amount includes a plant acquisition adjustment of approximately $148.3 million.
(B) This amount includes accumulated amortization of the plant acquisition adjustment of approximately $6.9 million.
Percentage Total Property, Plant Accumulated Net Property, Plant
December 31, 2008 (In millions) Ownership and Equipment Depreciation and Equipment
McClain Plant 77 $ 181.0 $ 44.6 $ 136.4
Redbud Facility 51 $ 496.6 (C) $ 63.9 (D) $ 432.7
(C) This amount includes a plant acquisition adjustment of approximately $153.7 million.
(D) This amount includes accumulated amortization of the plant acquisition adjustment of approximately $1.5 million.
The Company’s property, plant and equipment and related accumulated depreciation are divided into the following major
classes at:
Total Property, Net Property,
Plant and Accumulated Plant and
December 31, 2009 (In millions) Equipment Depreciation Equipment
Distribution assets $ 2,676.2 $ 861.1 $ 1,815.1
Electric generation assets 2,878.2 1,141.5 1,736.7
Transmission assets 1,071.6 310.1 761.5
Intangible plant 29.7 22.6 7.1
Other property and equipment 227.9 80.7 147.2
Total property, plant and equipment $ 6,883.6 $ 2,416.0 $ 4,467.6
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