OG&E 2010 Annual Report Download - page 43

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Future Capital Requirements and Financing Activities
The Company’s primary needs for capital are related to acquiring or constructing new facilities and replacing or expanding
existing facilities in its electric utility business. Other working capital requirements are expected to be primarily related to maturing
debt, operating lease obligations, hedging activities, fuel clause under and over recoveries and other general corporate purposes. The
Company generally meets its cash needs through a combination of cash generated from operations, short-term borrowings (through a
combination of bank borrowings, commercial paper and borrowings from OGE Energy) and permanent financings.
Capital Expenditures
The Company’s estimates of capital expenditures for the years 2011 through 2016 are shown in the following table. These
capital expenditures represent the base maintenance capital expenditures (i.e., capital expenditures to maintain and operate the
Company’s businesses) plus capital expenditures for known and committed projects.
(In millions) 2011 2012 2013 2014 2015 2016
Base Transmission $ 50 $ 30 $ 20 $ 20 $ 20 $ 20
Base Distribution 240 200 200 200 200 200
Base Generation 95 80 70 70 70 70
Other 45 30 30 30 30 30
Total Base Transmission, Distribution,
Generation and Other 430 340 320 320 320 320
Known and Committed Projects:
Transmission Projects:
Sunnyside-Hugo (345 kV) 150 20 --- --- --- ---
Sooner-Rose Hill (345 kV) 35 15 --- --- --- ---
Balanced Portfolio 3E Projects 50 170 140 30 --- ---
SPP Priority Projects (A) 10 60 155 90 --- ---
Total Transmission Projects 245 265 295 120 --- ---
Other Projects:
Smart Grid Program (B) 70 70 25 30 10 10
Crossroads 250 30 --- --- --- ---
System Hardening 20 --- --- --- --- ---
Total Other Projects 340 100 25 30 10 10
Total Known and Committed Projects 585 365 320 150 10 10
Total capital expenditures (C) $ 1,015 $ 705 $ 640 $ 470 $ 330 $ 330
(A) On February 4, 2011, the Company responded to the SPP that the Company will construct the revised Priority Project as discussed
in Note 13 of Notes to Financial Statements.
(B) These capital expenditures are net of the Smart Grid $130 million grant approved by the DOE.
(C) The capital expenditures above exclude any environmental expenditures associated with BART requirements due to the
uncertainty regarding BART costs. As discussed in “– Environmental Laws and Regulations” below, pursuant to a proposed regional
haze agreement the Company has agreed to install low NOX burners and related equipment at the three affected generating
stations. Preliminary estimates indicate the cost will be $100 million (plus or minus 30 percent). For further information, see “–
Environmental Laws and Regulations” below.
Additional capital expenditures beyond those identified in the table above, including additional incremental growth
opportunities in electric transmission assets, will be evaluated based upon their impact upon achieving the Company’s financial
objectives.
Contractual Obligations
The following table summarizes the Company’s contractual obligations at December 31, 2010. See additional information in the
Company’s Statements of Capitalization and Note 12 of Notes to Financial Statements.
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