OGE Energy (OGE) - 2022 Q3 - Quarterly Report

Cover Page - The report is a Quarterly Report (Form 10-Q) for the period ended September 30, 2022, filed by OGE Energy Corp. and Oklahoma Gas and Electric Company[1] - OGE Energy Corp. is classified as a Large Accelerated Filer, while Oklahoma Gas and Electric Company is a Non-accelerated filer[5] Outstanding Common Shares (September 30, 2022): | Registrant | Shares Outstanding | | :----------------------------- | :----------------- | | OGE Energy Corp. | 200,202,672 | | Oklahoma Gas and Electric Company | 40,378,745 | Table of Contents Glossary of Terms - The glossary provides definitions for frequently used abbreviations throughout the Form 10-Q, including regulatory bodies (APSC, FERC, OCC), accounting standards (ASC, ASU, GAAP), and company entities (OG&E, OGE Energy)[10][11] Filing Format - This is a combined Form 10-Q filed separately by OGE Energy and OG&E, with each registrant filing information on its own behalf[14] - Neither OGE Energy nor its other subsidiaries have obligations for OG&E's debt securities, and vice versa, emphasizing the separate financial responsibilities[14] Forward-Looking Statements - The report contains forward-looking statements, identified by terms like 'anticipate,' 'believe,' 'estimate,' and 'expect,' which are subject to various risks, uncertainties, and assumptions[16] - Factors that could cause actual results to differ materially include general economic conditions, capital market access, regulatory decisions, commodity prices, competitive factors, environmental laws, and cybersecurity risks[16][17] - The Registrants do not undertake any obligation to publicly update or revise these forward-looking statements[18] Part I - Financial Information This section presents the unaudited financial statements for OGE Energy Corp. and Oklahoma Gas and Electric Company, including statements of income, comprehensive income, cash flows, balance sheets, and changes in stockholders' equity. It also includes detailed notes to the financial statements, management's discussion and analysis of financial condition and results of operations, quantitative and qualitative disclosures about market risk, and controls and procedures Item 1. Financial Statements (Unaudited) This section provides the unaudited condensed financial statements for OGE Energy Corp. and its subsidiary, Oklahoma Gas and Electric Company (OG&E), for the three and nine months ended September 30, 2022 and 2021, along with combined notes detailing significant accounting policies, regulatory matters, and other financial disclosures OGE Energy Corp. Consolidated Condensed Financial Statements OGE Energy Corp. Net Income and Diluted EPS: | Period | Net Income (Millions) | Diluted EPS | | :-------------------------------- | :-------------------- | :---------- | | Three Months Ended September 30, 2022 | $262.8 | $1.31 | | Three Months Ended September 30, 2021 | $252.5 | $1.26 | | Nine Months Ended September 30, 2022 | $615.4 | $3.07 | | Nine Months Ended September 30, 2021 | $418.1 | $2.09 | OGE Energy Corp. Key Balance Sheet Items (Millions): | Item | September 30, 2022 | December 31, 2021 | | :-------------------------- | :----------------- | :----------------- | | Cash and cash equivalents | $456.2 | $0.0 | | Total current assets | $1,712.8 | $613.6 | | Equity securities investment in Energy Transfer | $0.0 | $785.1 | | Regulatory assets | $493.9 | $1,230.8 | | Total assets | $12,604.0 | $12,606.4 | | Total current liabilities | $1,876.0 | $1,089.6 | | Long-term debt | $3,548.2 | $4,496.4 | | Total stockholders' equity | $4,440.7 | $4,056.3 | - Net cash provided from operating activities for OGE Energy Corp. significantly increased to $767.8 million for the nine months ended September 30, 2022, from net cash used of ($494.1) million in the prior year[27] Oklahoma Gas and Electric Company Condensed Financial Statements OG&E Net Income: | Period | Net Income (Millions) | | :-------------------------------- | :-------------------- | | Three Months Ended September 30, 2022 | $253.1 | | Three Months Ended September 30, 2021 | $223.8 | | Nine Months Ended September 30, 2022 | $392.8 | | Nine Months Ended September 30, 2021 | $320.1 | OG&E Key Balance Sheet Items (Millions): | Item | September 30, 2022 | December 31, 2021 | | :-------------------------- | :----------------- | :----------------- | | Cash and cash equivalents | $2.1 | $0.0 | | Total current assets | $1,451.2 | $605.1 | | Regulatory assets | $493.9 | $1,230.8 | | Total assets | $12,233.8 | $11,688.0 | | Total current liabilities | $1,051.8 | $575.8 | | Long-term debt | $3,498.4 | $3,996.5 | | Total stockholder's equity | $4,997.9 | $4,602.8 | - Net cash provided from operating activities for OG&E was $843.9 million for the nine months ended September 30, 2022, a significant increase from net cash used of ($529.6) million in the prior year[38] Combined Notes to Condensed Financial Statements Note 1. Summary of Significant Accounting Policies This note outlines the organizational structure of OGE Energy Corp. and its subsidiary OG&E, detailing their electric utility and natural gas midstream operations. It also covers the basis of financial statement presentation, accounting records, allowance for uncollectible accounts, and the accounting treatment for investments in equity securities (Energy Transfer) and unconsolidated affiliates (Enable) - OGE Energy is a holding company primarily focused on electric utility operations through OG&E, having sold all its Energy Transfer limited partner units by September 30, 2022[51] - OG&E's rates are regulated by the OCC, APSC, and FERC, and its accounting records adhere to the Uniform System of Accounts, allowing for deferral of certain costs as regulatory assets or liabilities[52][57][58] OGE Energy Corp. Gain on Equity Securities (Millions): | Period | 2022 | | :-------------------------------- | :----- | | Three Months Ended September 30 | $39.4 | | Nine Months Ended September 30 | $282.1 | Note 2. Accounting Pronouncements This note discusses the adoption of ASU 2021-10, 'Government Assistance,' effective January 1, 2022, which required additional annual disclosures for government assistance. It highlights the accounting treatment for the $750 million securitization funds received from the ODFA for Winter Storm Uri costs, analogizing to the grant model under International Accounting Standards 20 - The Registrants adopted ASU 2021-10, 'Government Assistance,' prospectively on January 1, 2022, requiring additional annual disclosures for government assistance[79] - OG&E received approximately $750 million from the ODFA in July 2022 from securitization bonds to fund extreme fuel and purchased power costs incurred during Winter Storm Uri, accounted for by analogy to the grant model[79] Note 3. Revenue Recognition This note disaggregates OG&E's revenues from contracts with customers by classification (residential, commercial, industrial, oilfield, public authorities, and street light, integrated market, transmission, and other) for the three and nine months ended September 30, 2022 and 2021 OG&E Revenues from Contracts with Customers (Millions): | Classification | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Residential | $512.3 | $365.5 | $1,028.4 | $1,112.2 | | Commercial | $305.5 | $203.4 | $627.0 | $619.2 | | Industrial | $109.8 | $79.9 | $248.6 | $264.1 | | Oilfield | $101.8 | $68.0 | $234.0 | $257.5 | | Public authorities & street light | $109.8 | $75.0 | $228.9 | $235.1 | | System sales revenues | $1,139.2 | $791.8 | $2,366.9 | $2,488.1 | | Integrated market | $69.8 | $17.2 | $135.6 | $447.6 | | Transmission | $36.9 | $30.8 | $105.6 | $103.8 | | Other | $3.8 | $8.4 | $13.4 | ($5.8) | | Total | $1,250.6 | $848.2 | $2,619.7 | $3,033.7 | - Operating revenues for the nine months ended September 30, 2021, were significantly higher due to increased fuel, purchased power, and direct transmission expenses resulting from Winter Storm Uri, which are generally recoverable from customers[81] Note 4. Related Party Transactions This note details the operating costs charged between OGE Energy and its subsidiary OG&E, as well as historical transactions with Enable prior to its merger with Energy Transfer OGE Energy Operating Costs Charged to OG&E (Millions): | Period | 2022 | 2021 | | :-------------------------------- | :--- | :--- | | Three Months Ended September 30 | $31.7 | $32.2 | | Nine Months Ended September 30 | $97.8 | $101.3 | OGE Energy Operating Costs Charged to Enable (Millions): | Period | 2021 | | :-------------------------------- | :--- | | Three Months Ended September 30 | $0.1 | | Nine Months Ended September 30 | $0.3 | OG&E and Enable Related Party Transactions (Millions): | Item | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Electricity to power electric compression assets | $4.1 | $10.0 | | Natural gas transportation services | $9.4 | $23.4 | | Natural gas purchases (sales) | ($7.7) | ($28.3) | Note 5. Fair Value Measurements This note describes the fair value hierarchy (Level 1, 2, 3) used for financial instruments and discloses the fair value and carrying amounts of OGE Energy's previous investment in Energy Transfer's equity securities and the Registrants' long-term debt. It highlights OGE Energy's divestiture of all Energy Transfer units by September 30, 2022 - OGE Energy's investment in Energy Transfer's equity securities, previously valued at $785.1 million (Level 1) at December 31, 2021, was fully sold by September 30, 2022[91][92] - Long-term debt for both OGE Energy and OG&E is primarily classified as Level 2 fair value measurements, with OG&E Tinker Debt being Level 3[92] Note 6. Stock-Based Compensation This note presents the pre-tax compensation expense and related income tax benefit for stock-based compensation (performance units and restricted stock units) for OGE Energy and OG&E for the three and nine months ended September 30, 2022 and 2021 Total Stock-Based Compensation Expense (Millions): | Entity | Period | 2022 | 2021 | | :------------- | :-------------------------- | :--- | :--- | | OGE Energy | Three Months Ended Sep 30 | $2.3 | $2.3 | | OGE Energy | Nine Months Ended Sep 30 | $6.9 | $7.1 | | OG&E | Three Months Ended Sep 30 | $0.8 | $0.6 | | OG&E | Nine Months Ended Sep 30 | $2.3 | $1.6 | - During the nine months ended September 30, 2022, OGE Energy issued 27,278 shares of new common stock under its Stock Incentive Plan[94] Note 7. Income Taxes This note explains that OGE Energy files consolidated income tax returns, with income taxes allocated based on stand-alone taxable income. It also mentions the deferral and amortization of federal investment tax credits and the earning of federal and state tax credits from wind and solar facilities - OGE Energy files consolidated income tax returns, and income taxes are generally allocated to each company in the affiliated group based on its stand-alone taxable income or loss[95] - Federal investment tax credits are deferred and amortized over the life of the related property, and OG&E earns federal and state tax credits from its wind and solar generating facilities[95] Note 8. Common Equity This note details OGE Energy's common equity, including information on its Automatic Dividend Reinvestment and Stock Purchase Plan and the calculation of basic and diluted earnings per share - No shares of common stock were issued under OGE Energy's Automatic Dividend Reinvestment and Stock Purchase Plan during the three and nine months ended September 30, 2022[96] OGE Energy Corp. Basic and Diluted EPS: | Period | Basic EPS 2022 | Basic EPS 2021 | Diluted EPS 2022 | Diluted EPS 2021 | | :-------------------------------- | :------------- | :------------- | :--------------- | :--------------- | | Three Months Ended September 30 | $1.31 | $1.26 | $1.31 | $1.26 | | Nine Months Ended September 30 | $3.07 | $2.09 | $3.07 | $2.09 | - Potentially dilutive securities for OGE Energy consist of performance units and restricted stock units[97] Note 9. Long-Term Debt This note confirms the Registrants' compliance with debt agreements and details OGE Energy's new $100.0 million floating rate unsecured three-year credit agreement (including a $50.0 million term loan) entered in May 2022. It also provides information on OG&E's tax-exempt pollution control bonds, which are subject to optional redemption - OGE Energy entered into a $100.0 million floating rate unsecured three-year credit agreement in May 2022, including a $50.0 million term loan, with a weighted-average interest rate of 3.23% at September 30, 2022[102] - OG&E has $135.4 million in tax-exempt pollution control bonds that are subject to optional tender by holders within the next 12 months but are classified as long-term debt due to the intent and ability to refinance[103][104] Note 10. Short-Term Debt and Credit Facilities This note describes the Registrants' short-term borrowing methods, including commercial paper and revolving credit agreements. It highlights OGE Energy's decrease in short-term debt and OG&E's regulatory approvals for short-term borrowings - OGE Energy had no short-term debt at September 30, 2022, a decrease from $486.9 million at December 31, 2021[105] - The Registrants have unsecured five-year revolving credit facilities totaling $1.1 billion ($550.0 million for OGE Energy and $550.0 million for OG&E)[106] - OG&E has regulatory approvals to incur up to $800.0 million in short-term borrowings through December 31, 2022, and has requested approval for up to $1.0 billion for 2023-2024[109] Note 11. Retirement Plans and Postretirement Benefit Plans This note details the net periodic benefit cost components for OGE Energy's Pension Plan, Restoration of Retirement Income Plan, and postretirement benefit plans. It explains the recognition of a one-time settlement charge for pension plans due to increased lump sum payments to retirees and the regulatory treatment of pension and postretirement medical costs - The Registrants recorded pension plan settlement charges due to an increase in employees electing lump sum payments upon retirement, which accelerates future pension expense without requiring a cash outlay[110] OGE Energy Total Net Periodic Benefit Cost (Millions): | Plan | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Pension Plan | $4.6 | $3.5 | $23.4 | $35.4 | | Restoration of Retirement Income Plan | $0.4 | $2.1 | $1.4 | $3.0 | | Postretirement Benefit Plans | ($0.1) | ($0.4) | ($0.3) | ($1.3) | - OG&E defers the difference between actual pension and postretirement medical expenses and the amount approved in its last Oklahoma rate review as a regulatory asset or liability[111] Note 12. Report of Business Segments This note presents the financial results of OGE Energy's two business segments: electric utility (OG&E) and natural gas midstream operations. It highlights that the natural gas midstream operations segment is not comparable year-over-year due to the divestiture of Enable and Energy Transfer investments - OGE Energy reports operations in two segments: electric utility (OG&E) and natural gas midstream operations[119] - The natural gas midstream operations segment's results are not comparable between 2022 and 2021 due to the December 2, 2021 merger of Enable and Energy Transfer, and OGE Energy's subsequent sale of all Energy Transfer equity securities by September 30, 2022[119][186] OGE Energy Net Income (Loss) by Segment (Millions): | Segment | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | OG&E (Electric Utility) | $253.1 | $223.8 | $392.8 | $320.1 | | OGE Holdings (Natural Gas Midstream Operations) | $16.1 | $30.8 | $227.3 | $100.9 | | Other operations | ($6.4) | ($2.1) | ($4.7) | ($2.9) | | Total OGE Energy net income | $262.8 | $252.5 | $615.4 | $418.1 | Note 13. Commitments and Contingencies This note states that the Registrants' material commitments and contingent liabilities are largely consistent with those reported in the 2021 Form 10-K, with additional details provided for environmental laws and regulations. It asserts that any reasonably possible losses from pending or threatened lawsuits are not expected to be quantitatively material - The Registrants' operations are subject to numerous stringent federal, state, and local environmental laws and regulations, which can impact business activities and costs[124][218] - Management believes that all operations are in substantial compliance with current federal, state, and local environmental standards[124][218] - Based on available information, any reasonably possible losses in excess of accrued amounts arising from pending or threatened lawsuits or claims are not expected to be quantitatively material to the condensed financial statements[126][217] Note 14. Rate Matters and Regulation This note provides updates on completed and pending regulatory matters affecting OG&E's rates and operations in Arkansas and Oklahoma, including the approval of securitization bonds for Winter Storm Uri costs, the 2021 Oklahoma General Rate Review, and ongoing proceedings related to fuel costs, SPP transmission upgrades, and environmental regulations - The ODFA issued securitization bonds in July 2022, providing OG&E with approximately $750 million to recover extreme fuel and purchased power costs incurred during Winter Storm Uri[129][130] - The OCC approved a Joint Stipulation and Settlement Agreement on September 8, 2022, for the 2021 Oklahoma General Rate Review, resulting in a base rate revenue increase of $30.0 million for OG&E, effective July 1, 2022[131][132] - OG&E estimates a potential refund of $13.0 million (net of amounts paid to other utilities) plus interest related to FERC's order on sponsored transmission upgrades (Z2 charges), with $5.0 million impacting Registrants and $8.0 million impacting customers[138] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides a detailed discussion and analysis of OGE Energy Corp.'s and OG&E's financial condition and results of operations for the three and nine months ended September 30, 2022, compared to the same periods in 2021. It covers the company's strategy, recent developments, operating results by segment, liquidity, capital resources, and critical accounting policies Introduction - OGE Energy is a holding company with electric utility operations (OG&E) and, prior to September 30, 2022, natural gas midstream operations[154] - As of September 30, 2022, OGE Energy sold all its Energy Transfer limited partner units, transitioning to primarily an electric utility[154][156] - OG&E generates, transmits, distributes, and sells electric energy in Oklahoma and western Arkansas, with rates regulated by the OCC, APSC, and FERC[155] Overview - OGE Energy's strategy focuses on creating long-term shareholder value by targeting consistent EPS growth of 5-7% at the electric utility, supported by strong load growth and investments in lower-risk infrastructure projects[158] - The company aims to grow its dividend, targeting a payout ratio of 65-70% in the next five years, with EPS growth expected to exceed dividend growth[158] - Long-term sustainability is predicated on exceptional customer experiences, grid improvements, cleaner generation resources, environmental stewardship, strong governance, and supporting members and communities[159] Recent Developments - The ODFA issued securitization bonds in July 2022, providing OG&E with approximately $750 million to recover Winter Storm Uri costs[160] - The OCC approved a $30.0 million base rate revenue increase for OG&E on September 8, 2022, effective July 1, 2022, with no refund of interim rates required[161] - The OCC Public Utility Division Staff initiated a cause on September 29, 2022, to determine the appropriate methodology to recover OG&E's $424.0 million fuel clause under recovery balance, with updated fuel factors implemented October 1, 2022[162] - Global macroeconomic pressures, including raw material inflation, logistical challenges, and component shortages, are impacting the Registrants' operations and capital projects[163] Summary of OGE Energy Operating Results OGE Energy Net Income and Diluted EPS: | Period | Net Income (Millions) | Diluted EPS | | :-------------------------------- | :-------------------- | :---------- | | Three Months Ended September 30, 2022 | $262.8 | $1.31 | | Three Months Ended September 30, 2021 | $252.5 | $1.26 | | Nine Months Ended September 30, 2022 | $615.4 | $3.07 | | Nine Months Ended September 30, 2021 | $418.1 | $2.09 | - The increase in net income for the nine months ended September 30, 2022, was primarily driven by a $126.4 million increase at OGE Holdings (due to a $282.1 million pre-tax gain on Energy Transfer equity securities) and a $72.7 million increase at OG&E (due to higher operating revenues)[167] - OG&E is projected to earn $417.0 million to $425.0 million ($2.08 to $2.12 per diluted share) in 2022, while the holding company expects a loss of $2.0 million to $6.0 million ($0.01 to $0.03 per diluted share)[167] Results of Operations OGE Energy Net Income and EPS: | Period | Net Income (Millions) | Basic EPS | Diluted EPS | | :-------------------------------- | :-------------------- | :-------- | :---------- | | Three Months Ended September 30, 2022 | $262.8 | $1.31 | $1.31 | | Three Months Ended September 30, 2021 | $252.5 | $1.26 | $1.26 | | Nine Months Ended September 30, 2022 | $615.4 | $3.07 | $3.07 | | Nine Months Ended September 30, 2021 | $418.1 | $2.09 | $2.09 | Net Income (Loss) by Business Segment (Millions): | Segment | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | OG&E (Electric Utility) | $253.1 | $223.8 | $392.8 | $320.1 | | OGE Holdings (Natural Gas Midstream Operations) | $16.1 | $30.8 | $227.3 | $100.9 | | Other operations | ($6.4) | ($2.1) | ($4.7) | ($2.9) | | Total OGE Energy net income | $262.8 | $252.5 | $615.4 | $418.1 | OG&E (Electric Utility) - OG&E's net income increased by $29.3 million (13.1%) for the three months and $72.7 million (22.7%) for the nine months ended September 30, 2022, compared to the same periods in 2021[176] - Operating revenues increased by $406.4 million (47.0%) for the three months ended September 30, 2022, primarily due to higher fuel, purchased power, and direct transmission expense (recoverable), price variance from rate reviews, and increased cooling degree days[177][178][179] - Operating revenues decreased by $408.6 million (13.3%) for the nine months ended September 30, 2022, primarily due to lower fuel, purchased power, and direct transmission expense compared to the elevated costs during Winter Storm Uri in 2021[177][178] - Fuel, purchased power and direct transmission expense increased by $343.7 million for the three months ended September 30, 2022, due to higher fuel prices and market prices for SPP purchases, but decreased by $554.1 million for the nine months ended September 30, 2022, due to inflated fuel costs during Winter Storm Uri in 2021[180][181][182][183] OGE Holdings (Natural Gas Midstream Operations) - Operating results for the natural gas midstream operations segment are not comparable between 2022 and 2021 due to the merger of Enable and Energy Transfer in December 2021 and OGE Energy's subsequent sale of all Energy Transfer equity securities by September 30, 2022[186] - OGE Holdings' income tax expense decreased by $4.6 million (48.4%) for the three months ended September 30, 2022, due to lower pre-tax income[188] - OGE Holdings' income tax expense increased by $33.0 million for the nine months ended September 30, 2022, primarily due to higher pre-tax income and state deferred tax adjustments related to the Energy Transfer investment[188] Liquidity and Capital Resources - Net cash provided from operating activities for OGE Energy increased by $1,261.9 million for the nine months ended September 30, 2022, primarily due to increased cash from customers, securitization funds from the ODFA, and decreased vendor payments[189][190] - Net cash provided from investing activities for OGE Energy increased by $919.8 million for the nine months ended September 30, 2022, driven by $1,067.2 million in proceeds from the sale of Energy Transfer's limited partner units, partially offset by increased capital expenditures[189][190] - OGE Energy intends to use the $1,067.2 million proceeds from the sale of Energy Transfer units to help repay $1.0 billion in senior notes due in May 2023[214] - OG&E expects to issue $300.0 million to $400.0 million in long-term debt in the first half of 2023 to help fund its capital investments[208] Critical Accounting Policies and Estimates - Management exercises significant judgment in areas such as Pension Plan assumptions, income taxes, contingency reserves, asset retirement obligations, regulatory assets and liabilities, unbilled revenues, and the allowance for uncollectible accounts receivable[216] - The Registrants believe they have taken reasonable positions in using assumptions and estimates to minimize potential negative financial impacts[215] Environmental Laws and Regulations - OG&E's operations are subject to numerous stringent federal, state, and local environmental laws and regulations, including the Federal Clean Air Act, Endangered Species Act, Federal Resource Conservation and Recovery Act, and Federal Clean Water Act[218][221][225][230][232] - OG&E has reduced carbon dioxide emissions by over 40% and ozone-forming NO and SO emissions by approximately 70% and 85% respectively, compared to 2005 levels, with a target of 50% CO reduction by 2030[224] - OG&E is monitoring proposed EPA rules (e.g., Cross State Air Pollution Rule, Regional Haze) and USFWS proposed listings for endangered species (Lesser Prairie Chicken, Alligator Snapping Turtle, Northern Long-Eared Bat, Tricolored Bat), which could impact operations or require mitigation measures[223][226][227][228][229] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states that there have been no significant changes in the market risks affecting the Registrants since those discussed in their 2021 Form 10-K - There have been no significant changes in the market risks affecting the Registrants from those discussed in their 2021 Form 10-K[237] Item 4. Controls and Procedures This section confirms that the Registrants' disclosure controls and procedures were effective as of September 30, 2022, and that no material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter - The Registrants' disclosure controls and procedures were effective as of September 30, 2022[238] - No material changes in the Registrants' internal control over financial reporting occurred during the most recently completed fiscal quarter[239] Part II - Other Information This section provides additional information not covered in Part I, including updates on legal proceedings, risk factors, unregistered sales of equity securities, and a list of exhibits filed with the report Item 1. Legal Proceedings This section refers to the 2021 Form 10-K for a description of certain legal proceedings and states that there are no new significant cases or material changes to previously reported proceedings, except as described in Note 14 of the financial statements - There are no new significant legal cases or material changes in previously reported proceedings, except as described in Note 14 within 'Item 1. Financial Statements'[241] Item 1A. Risk Factors This section states that there have been no significant changes in the Registrants' risk factors from those discussed in their 2021 Form 10-K - There have been no significant changes in the Registrants' risk factors from those discussed in their 2021 Form 10-K[242] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section indicates that there were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds to report for the period[243] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including the Securitization Property Purchase and Sale Agreement, certifications, and Inline XBRL documents - Exhibits include the Securitization Property Purchase and Sale Agreement dated July 20, 2022, certifications pursuant to the Sarbanes-Oxley Act, and Inline XBRL documents[244] Signature - The report was signed by Sarah R. Stafford, Controller and Chief Accounting Officer, on behalf of OGE Energy Corp. and Oklahoma Gas and Electric Company on November 2, 2022[248]