Oklahoma City, OK, June 20, 2006 — The Federal Energy Regulatory Commission (FERC) has issued an order declaring that OG&E Electric Services has fully satisfied all of the mitigation requirements associated with the company’s 2004 acquisition of the McClain power plant near Newcastle, OK, OG&E said. The FERC ruling effectively ends the final challenge to OG&E’s acquisition of the McClain facility.
To gain FERC approval of its purchase of McClain, OG&E agreed to expand its electric transmission system, including upgrades at three substations totaling approximately $35 million to improve the local power grid. Recently, Redbud Energy LP, owner and operator of a power plant near Luther, OK, protested certain portions of OG&E mitigation associated with the additional generating capacity provided by McClain. In its order, FERC rejected the protests and found that OG&E had satisfied its mitigation obligations.
The acquisition of the McClain facility was the result of a 2002 rate settlement agreement approved by the Oklahoma Corporation Commission in which OG&E agreed to acquire 400 megawatts of generating capacity. The agreement also required OG&E to deliver customer savings of at least $75 million over a three-year period year from the new generation. Savings from the fuel efficient McClain plant and expiring power purchase agreements are expected to exceed $75 million.
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