OGE ENERGY CORP. SEC 10-K Report

OGE Energy Corp., a leading energy company primarily operating through its subsidiary OG&E, has released its 2024 Form 10-K report. The report highlights the company's robust financial performance, significant business achievements, strategic initiatives, and the challenges it faces in a highly regulated and competitive environment.

Financial Highlights

OGE Energy Corp. reported strong financial results for 2024, showcasing significant growth across key metrics:

• Operating Revenues: $2,985.3 million, reflecting an increase driven by higher operating revenues primarily due to load growth and recovery of capital investments.
• Operating Income: $745.3 million, an increase from the previous year, attributed to higher operating revenues and effective cost management.
• Net Income: $441.5 million, an increase of $24.7 million compared to 2023, primarily due to higher operating revenues and load growth.
• Diluted Earnings Per Average Common Share: $2.19, up from $2.07 in 2023, reflecting improved profitability and operational efficiency.

Business Highlights

OGE Energy Corp. achieved notable business milestones in 2024, enhancing its operational footprint and service capabilities:

• Revenue Segments: OG&E derived 92% of its total electric operating revenues in 2024 from sales in Oklahoma, with the remainder from sales in Arkansas.
• Geographical Performance: OG&E provides retail electric service to approximately 907,000 customers in Oklahoma and western Arkansas, covering a service area of 30,000 square miles, including major cities like Oklahoma City and Fort Smith.
• Sales Units: In 2024, OG&E's system sales were 32.0 million MWh, a 7.7% increase from 2023. The peak demand was 7,435 MWs on August 18, 2024.
• New Production Launches: OG&E continues to evaluate the need to add additional solar sites to its generation portfolio based on customer demand, utility-scale component supply, cost, and reliability.
• Future Outlook: OGE Energy projects earnings for 2025 to be between $447 million to $471 million, with a midpoint of $459 million. The company expects total retail load growth of approximately 7.5% to 9.5% and plans to issue $300 million to $350 million in long-term debt to support general operating needs.
• Environmental Compliance: OG&E is evaluating various control strategies to reduce emissions at its generating units due to the EPA's Good Neighbor FIP, with preliminary compliance costs estimated between $2.4 billion to $2.8 billion.
• Human Capital Management: OGE Energy emphasizes attracting, retaining, and developing a high-quality workforce, with a focus on diversity and inclusion. The company was included on Forbes Best Employers in Oklahoma list in 2024.
• Safety Performance: OGE Energy has seen a sustained decline in its injury rate, with a 67% reduction in OSHA recordable injuries since 2011, and ranked first in safety performance among its peer utility group in 2024.

Strategic Initiatives

OGE Energy Corp. is committed to maintaining and enhancing the safety, resiliency, and reliability of its distribution and transmission grid and generation fleet. Key strategic initiatives include:

• Capital Investments: The company plans significant capital investments in transmission, distribution, technology, and generation projects over the next five years.
• Capital Management: In 2024, OGE Energy's primary sources of capital were cash generated from operations and proceeds from the issuance of long- and short-term debt. The company issued $350 million of 5.45% senior notes due May 2029 and $350 million of 5.60% senior notes due April 2053. OGE Energy also plans to issue between $15 million to $25 million of common stock from its Automatic Dividend Reinvestment and Stock Purchase Plan in 2025.
• Future Outlook: OGE Energy projects earnings of approximately $447 million to $471 million in 2025, with a focus on achieving total retail load growth of 7.5% to 9.5%. The company plans to continue its capital expenditure program with an estimated $6.25 billion investment from 2025 to 2029, targeting transmission, distribution, and generation capacity projects. OGE Energy is also evaluating proposals for additional generation capacity investments and intends to update its capital plan based on regulatory approvals.

Challenges and Risks

OGE Energy Corp. faces several challenges and risks inherent to its industry and regulatory environment:

• Regulatory Risks: OG&E's profitability is heavily dependent on its ability to recover costs from customers, which is subject to regulation by federal and state agencies. Changes in the regulatory environment could impair cost recovery, affecting financial results. Environmental compliance costs are significant, and future regulations could increase these costs, impacting financial performance.
• Operational Risks: OG&E's operations are subject to risks such as fuel supply disruptions, severe weather events, and operational failures, which could lead to outages and increased costs. The transition to a lower carbon economy presents financial risks, including potential regulation and litigation related to greenhouse gas emissions.
• Financial Risks: Market performance and changes in retirement plan regulations could impact the company's financial position. OGE Energy's ability to pay dividends and service debt is dependent on OG&E's performance and regulatory constraints.
• General Risks: Economic conditions, including inflation and supply chain disruptions, could negatively impact operations. Cybersecurity threats pose a risk to operational reliability and data security.

Management is focused on strengthening the energy grid, maintaining low customer rates, and expanding renewable energy resources to address these challenges. The company is also investing in technology to enhance operational efficiency and customer experience.

SEC Filing: OGE ENERGY CORP. [ OGE ] - 10-K - Feb. 18, 2025