OGE Energy’s Enable Midstream ownership pushes its first-quarter results into negative territory
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A sizable goodwill impairment charge related to OGE Energy’s ownership in Enable Midstream Partners pushed its first quarter results negative, the company reported Thursday.
The company, parent of Oklahoma Gas & Electric, posted a net loss of $491.8 million, or $2.46 per share, on operating revenues of $431.3 million.
In the first quarter of 2019, OGE earned a net income of $47.1 million, or 24 cents per share, on operating revenues of $490 million.
The impact on OGE’s bottom line this quarter was a non-cash impairment of $780 million tied to a decline in the value of units it owns in Enable Midstream Partners.
The company owns the stock as a 50% general interest partner in the midstream company.
However, officials also stated Thursday that OGE continues to benefit from that partnership. Enable, they said, contributed $22 million in net income to the company during the first quarter, plus paid OGE $37 million in stock dividends.
As for the utility, its first-quarter 2020 net income of $20 million matched what it earned the same time a year ago.
The company saw an increase in the amount it recovered from ratepayers for assets recently placed into service, but noted that gain was offset by energy sales that were impacted by unfavorable weather.
“We continue to execute on our plans to deliver safe, reliable and low-cost energy to our customers,” stated Sean Trauschke, OGE’s CEO. “While the Enable write-down was impactful to earnings this quarter, it was not a reflection of the cash flows generated by those assets.
“I am very proud of our members’ performance during these difficult times,” Trauschke continued.
Through March 31, the first quarter amount of megawatt hours of energy consumed by OG&E's customers fell, year over year, from 7 million in 2019 to 6.8 million this year.
Residential customers used a little less energy, year over year, while commercial customers used a little more. Industrial customers’ usage was unchanged, but energy consumed by its oil and gas customers climbed slightly.
The number of first-quarter customers OG&E served grew, year over year, from 852,141 in 2019 to 859,628 this year.
Trauschke said Thursday the utility really began to see an impact in usage patterns caused by the pandemic-created economic lockdown in April.
During that month, residential usage climbed as usage involving those other customer groups went the other direction.
“A lot of our commercial and industrial customers are telling us they plan to start back toward normal operations in coming weeks, so we expect that will begin to come back,” Trauschke said.
“The oilfield sector may take longer. This whole thing with the energy industry has just been unprecedented,” he added.
Trauschke noted OGE’s efforts to aggressively grow its business, in part by offering the lowest-cost electricity in the nation to its utility’s customers, continues to pay dividends through increased customer counts and other various measures.
“Our mission is to build communities, not drive customers away through unreasonable rates.”
The utility also benefited during the first quarter of 2020 from much lower costs to provide the electricity, year-over-year.
In 2019, it cost the utility $212.6 million. This year, that bill was only $135 million.
Trauschke said Thursday that more than half of OGE Energy’s workforce works in the field and continues to deliver essential services, including responding to outages caused by severe weather.
Its office staff continues to work remotely, and he noted that will gradually change as state and federal guidelines evolve.
“I am incredibly proud that we don’t have any employees who have tested positive for the coronavirus so far, and that speaks to the preparations we made and the way we implemented those,” he said.
Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›
OGE Energy Corp. (NYSE: OGE), is headquartered in Oklahoma City and is the parent company of Oklahoma Gas and Electric Company (OG&E), a regulated electric utility serving approximately 842,000 customers in Oklahoma and western Arkansas. Read more ›