OGE Energy Corporation (OGE) stated that its unit OG&E has filed for a $73 million rate increase, with the Oklahoma Corporation Commission, to recover investments made by the company over the last two and half years. If approved, the new rates will come into effect from the first quarter of 2012.
Over the last couple of years and a half the company has invested around $500 million for system expansion and improvement in the quality of services including the dissemination of information to consumers, which enabled them to efficiently manage their energy utilization. The rate hike aims to recover these expenditures and continue to provide reliable services to consumers round the clock.
The new rate, if approved by the commission, will result in a $6.50 hike per month for average residential consumers. The higher rates will also impact large commercial and industrial consumers, with marginal or no impact on the monthly bills of schools and small businesses.
The previous rate hike for Oklahoma consumers was approved in August 2009, which had resulted in a $6.50 per month increase in the average residential bill, but this was totally offset by lower natural gas prices compelling OG&E to reduce the fuel costs it passes along to its customers.
In July 2011 OG&E implemented the new electric rate for its Arkansas residential customers. With the new rates, an Arkansas residential customer using 1,000 kilowatt-hours per month will experience a $2.32 rise in his/her monthly bill. Even with the enforced rate hike, the residential electricity rates for OG&E in Arkansas are 35% below the national average and 13% short of the regional average.
OGE Energy Corporation is scheduled to release its second quarter earnings results on August 4, 2011. The company expects earnings per share in 2011 to be in the range of $3.00 – $3.20 per share. The Zacks Consensus estimates for second quarter 2011 and fiscal 2011 are 90 cents and $3.17 per share, respectively.
OGE Energy Corporation currently retains a Zacks #4 Rank (short-term Sell rating). The company competes with Entergy Corporation (ETR) and ONEOK Inc. (OKE).
Based in Oklahoma City, Oklahoma, OGE Energy Corporation distributes natural gas and electricity through its subsidiaries (Oklahoma Gas and Electric Company or OG&E, and Enogex) primarily in the south central United States.
