OGE Energy Corp. (NYSE:OGE) Q2 2017 Earnings Conference Call - Preliminary Transcript

Aug 03, 2017 • 09:00 am ET

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OGE Energy Corp. (NYSE:OGE) Q2 2017 Earnings Conference Call - Preliminary Transcript

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Executive
Sean Trauschke

at 4.3%, which is on par with the national average. And looking further at our two largest load centers, Oklahoma City's unemployment rate is 3.6% and Fort Smith is 4%. On the operations front, our generation fleet continue to perform well, highlighting the benefits customers realized due to a diverse generation portfolio. On the expense side, our O&M cost for customer is virtually the same it was in 2012, and we continue to make sure every dollar counts.

For many years, we have talked about our environmental compliance and Mustang modernization plan. And when we started, the task before us was with seven (ph) Lonax burners, five ACI systems, seven combustion turbines, two scrubbers, and two coal to gas conversions to install across the system. I'm proud to say that by the end of this year, with the exception of the scrubbers and conversions, all the projects be completed and in service on time and on budget. In fact, the overnight cost of the 462 megawatt Mustang project is now down to down to $355 million. I'm also particularly proud of the safety performance of the Mustang project.

With over 800,000 work hours on the project, we've had no incidents or injuries. This is truly outstanding. The sooner scrubbers will be in service, in early 2019, and we'll be on time and on budget as well. As I mentioned earlier, we were pleased to announce a $20 million investment in a 10 megawatt universal solar farm that will be built in Covington, Oklahoma. This project is a continuation of our successful pilot initiative which we launched in 2015 with the installation of two universal solar farms at our Mustang site. Just as we took a leadership role in brining the first wind farm to our state, we've continued by offering our customers the state's first community solar farms.

Our solar program gives customers that want solar power a more economical choice versus personally investing in a rooftop or private solar system. Construction is expected to begin this month with the farm operational early in 2018. The general rate case for recovery of our Mustang CTs will be filed in the fourth quarter, and I believe this case has the potential to be a positive turning point in Oklahoma's regulatory environment, and all parties are committed to making this happen.

Turning to Arkansas, we will file this month requesting a declaratory order that our new Mustang facility is in the public interest. And we expect that decision in the fourth quarter of this year. We will address cost recovery in our annual filing in October of 2018 under the new formula rate plan, and new rates would be effective in April of 2019. Continuing in Arkansas, we received a final order for our rate case on May 18th, and the new rates were implemented on June 1st. This was our first rate case in Arkansas in six years.

Our rates there remain the lowest in the state and among the lowest