Oklahoma Gas And Electric

Risks

• The Registrants' profitability depends to a large extent on the ability of OG&E to fully recover its costs, including its cost of capital, from its customers in a timely manner, and there may be changes in the regulatory environment that impair its ability to recover costs from its customers.
• OG&E's rates are subject to rate regulation by the states of Oklahoma and Arkansas, as well as by a federal agency, whose regulatory paradigms and goals may not be consistent.
• Costs of compliance with environmental laws and regulations are significant, and the cost of compliance with future environmental laws and regulations may adversely affect our results of operations, financial position or liquidity.
• We are subject to financial risks associated with climate change and the transition to a lower carbon economy.
• We may not be able to recover the costs of our substantial investments in capital improvements and additions.
• The regional power market in which OG&E operates has changing transmission regulatory structures, which may affect the transmission assets and related revenues and expenses.
• Increased competition resulting from efforts to restructure utility and energy markets could have a significant financial impact on us and consequently impact our revenue.
• We are subject to substantial utility and energy regulation by governmental agencies. Compliance with current and future utility and energy regulatory requirements and procurement of necessary approvals, permits and certifications may result in significant costs to us.
• Our results of operations may be impacted by disruptions to fuel supply or the electric grid that are beyond our control.
• OG&E's electric generation, transmission and distribution assets are subject to operational risks that could result in unscheduled plant outages, unanticipated operation and maintenance expenses, increased purchased power costs, accidents and third-party liability.
• Weather conditions such as tornadoes, thunderstorms, ice storms, wind storms, flooding, earthquakes, prolonged droughts and the occurrence of wildfires, as well as seasonal temperature variations may adversely affect our financial position, results of operations and cash flows.
• Market performance, increased retirements, changes in retirement plan regulations and increasing costs associated with our Pension Plan, health care plans and other employee-related benefits may adversely affect our financial position, results of operations or cash flows.
• OGE Energy is a holding company with its primary assets being investments in its subsidiary, OG&E, and in its ownership of a portion of the equity securities of Energy Transfer.
• OGE Energy does not control Energy Transfer and therefore is not able to cause or prevent actions by Energy Transfer.
• Changes in Energy Transfer's fair value could adversely affect OGE Energy's net income.
• OGE Energy's operating cash flow is derived partially from cash distributions it receives from Energy Transfer.
• Income from Energy Transfer's midstream, transportation, terminalling and storage operations is exposed to risks due to fluctuations in the demand for and price of natural gas, NGLs, crude oil and refined products that are beyond Energy Transfer's control.
• Economic conditions could negatively impact our business and our results of operations.
• We are subject to cybersecurity risks and increased reliance on processes dependent on technology.
• The failure of our technology infrastructure, or the failure to enhance existing technology infrastructure and implement new technology, could adversely affect our business.
• Terrorist attacks, and the threat of terrorist attacks, have resulted in increased costs to our business and could impact our ability to operate critical infrastructure. Continued hostilities or sustained military campaigns may adversely impact our financial position, results of operations and cash flows.
• We face certain human resource risks associated with the availability of trained and qualified labor to meet our future staffing requirements.
• Certain provisions in our charter documents have anti-takeover effects.
• We may be able to incur substantially more indebtedness, which may increase the risks created by our indebtedness.
• Our debt levels may limit our flexibility in obtaining additional financing and in pursuing other business opportunities.
• We are exposed to the credit risk of our key customers and counterparties, and any material nonpayment or nonperformance by our key customers and counterparties could adversely affect our financial position, results of operations and cash flows.