Environmental compliance and renewable energy policies at Oklahoma Gas and Electric Co. were on some shareholders’ minds Thursday at OGE Energy Corp.’s annual meeting in Oklahoma City.
OGE executives explained the utility’s recent support of a Oklahoma bill affecting rooftop solar and small wind turbine customers that drew opposition from environmentalists and some conservative groups. Senate Bill 1456, which allows regulated utilities to create a new pricing structure for distributed generation customers, takes effect in November.
In response to a shareholder question about the bill, OGE Chairman and CEO Pete Delaney said the utility wanted its distributed generation customers to pay their fair share for hooking up to the grid and having it available when the sun isn’t shining.
“There’s no tax, and we’re not trying to discourage (solar),” Delaney said. “We’re just trying to make sure the pricing is correct. The best thing for solar and distributed generation is to get the right price signals to continue to drive innovation and to continue to drive those prices down.”
Delaney said the amount of the base customer charge for future distributed generation users will be determined through a public process at the Oklahoma Corporation Commission.
Paul Renfrow, the company’s vice president of public affairs, told shareholders SB 1456 was complicated to explain because it dealt with how electric rates were calculated.
“Many thought the state of Oklahoma was adding a surcharge to the bill of customers using distributed generation, and that’s just not the case, that’s not what this bill was about,” Renfrow said. “The new law simply provides a way to calculate a bill differently than we’ve done it historically because the technology has changed.”
On another matter, Delaney said OG&E expects to hear by the end of the month if the U.S. Supreme Court will take up an appeal over power plant emissions affecting visibility at national parks and wilderness areas. OG&E, the Oklahoma attorney general’s office and a group of industrial customers are fighting a federal plan for addressing regional haze regulations.
In response to a question about coal use, Delaney said the utility is working to install nitrogen oxide controls on its coal units and signed up 94,000 customers on the SmartHours program to reduce demand during peak summer times.
“We’re doing a lot of things to reduce our emissions, given the amount of electricity we produce,” he said.
Delaney thanked OG&E employees for their work that was recognized through several industry awards, including the Edison Award for utility of the year from the Edison Electric Institute and customer service awards from J.D. Power and Associates.
OGE had net income in 2013 of $1.94 per common share, up from $1.79 per share in 2012. Delaney said the successful initial public offering of Enable Midstream Partners LP and its future performance would help increase cash flow at OGE, which holds a 26.7 percent limited partner interest in Enable.
“This enhanced cash flow should enable us to fund our environmental compliance plan without equity issuance, avoiding both dilution of earnings and the uncertainty associated with selling equity in the stock market,” he said.
In the business portion of the meeting, shareholders elected 10 members of the board to one-year terms. Shareholders rejected an effort to create an independent board chairman. The board recommended voting against that shareholder resolution, saying it already has an independent lead director and the company has fared well under a combined chairman and CEO.
OGE’s board of directors declared a quarterly dividend of 22.5 cents per common share, payable July 30 to shareholders who held their shares by July 10. The dividend was unchanged from the previous quarter.