OG&E 2013 Annual Report Download - page 27

OGE Energy Corp. 21
(In millions) 2014 2015 2016 2017 2018
OG&E base transmission $««30 $««30 $÷30 $÷30 $÷30
OG&E base distribution 175 175 175 175 175
OG&E base generation 140 75 75 75 75
OG&E other 15 15 15 15 15
Total OG&E base transmission, distribution, generation and other 360 295 295 295 295
OG&E known and committed projects:
Transmission projects:
Regionally allocated base projects(A) 55 20 20 20 20
Balanced Portfolio 3E Projects(B)(C)
15––––
SPP Priority Projects(B)(C)
75––––
SPP Integrated Transmission Projects(B)(C) 15 25 30 25 10
Total transmission projects 160 45 50 45 30
Other projects:
Smart Grid Program 25 10 10 – –
Environmental – low NOX burners 35 20 15 10 –
Environmental – activated carbon injection
5105––
Total other projects 65 40 30 10 –
Total OG&E known and committed projects 225 85 80 55 30
Total OG&E(D) 585 380 375 350 325
OGE Energy 15 10 10 10 10
Total capital expenditures $600 $390 $385 $360 $335
(A) Approximately 30% of revenue requirement allocated to SPP members other than OG&E.
(B) Approximately 85% of revenue requirement allocated to SPP members other than OG&E.
Estimated Cost Projected
(C) Project Type Project Description (In millions) In-Service Date
Balance Portfolio 3E 96 miles of transmission line from OG&E’s Woodward District Extra High Voltage substation $110 Mid-2014
to the Oklahoma/Texas Stateline to a companion transmission line to its Tuco substation
Priority Project 99 miles of transmission line from OG&E’s Woodward District Extra High Voltage substation $165 Mid-2014
to the western Beaver County line to a companion transmission line to its Hitchland substation
Priority Project 77 miles of transmission line from OG&E’s Woodward District Extra High Voltage substation $140 Late 2014
to a companion transmission line at the Kansas border
Integrated Transmission Project 47 miles of transmission line from OG&E’s Gracemont substation to an AEP companion $45 Early 2018
transmission line to its Elk City substation
Integrated Transmission Project 126 miles of transmission line from OG&E’s Woodward District Extra High Voltage substation $180 Early 2021
to OG&E’s Cimarron substation; construction of the Mathewson substation on this transmission line
(D) The capital expenditures above exclude any environmental expenditures associated with:
• Pollution control equipment related to controlling SO2 emissions under the regional haze requirements due to the uncertainty regarding the approach and timing for such pollution control equipment.
The SO2 emissions standards in the EPA’s FIP could require the installation of Dry Scrubbers or fuel switching. OG&E estimates that installing such Dry Scrubbers could cost more than $1.0 billion. The
FIP is being challenged by OG&E and the state of Oklahoma. On June 22, 2012, OG&E was granted a stay of the FIP by the U.S. Court of Appeals for the Tenth Circuit. On July 19, 2013, the U.S. Court
of Appeals for the Tenth Circuit by a 2 to 1 vote denied the petition for review and affirmed the EPA’s issuance of the FIP. On January 2, 2014, the Tenth Circuit confirmed that the stay of the FIP has
remained in place and continues until the Tenth Circuit issues the mandate. A Petition for Certiorari was filed by the State of Oklahoma, the Industrial Consumers and OG&E with the United States
Supreme Court on January 29, 2014. The mandate from the Tenth Circuit has been stayed until the Supreme Court acts on the petition. If the Supreme Court elects not to hear the case, OG&E will have
approximately 55 months from the effective date of the lifting of the stay to achieve compliance with the FIP.
• Installation of control equipment (other than activated carbon injection) for compliance with MATS by a deadline of April 16, 2016, which includes a one-year extension which was granted by the
Oklahoma Department of Environmental Quality. As noted above, OG&E is currently planning to utilize activated carbon injection for the removal of mercury at each of its five coal-fired units, the capital
costs of which are estimated to be approximately $20 million over a three year period and are included in the table above. OG&E continues to review whether additional controls such as dry sorbent
injection are needed for compliance with MATS. Current capital costs for installing the necessary control equipment for dry sorbent injection are estimated to be approximately $45 million over a three
year period, but due to the uncertainty as to whether or not dry sorbent injection is necessary, such costs are not included in the capital expenditures table above.
OG&E is currently evaluating options to comply with environmental requirements. 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.
Capital Expenditures
The Company’s consolidated estimates of capital expenditures for the
years 2014 through 2018 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. The Company
believes that Enable has, or will have, access to adequate liquidity and,
therefore, no contributions are expected to be necessary to fund the
capital expenditures of Enable from the general partners. Accordingly,
capital expenditures for Enable are not included in the table below.