1021635--2/16/2007--OGE_ENERGY

related topics

{cost, contract, operation}

{cost, operation, labor}

{gas, price, oil}

{debt, indebtedness, cash}

{operation, natural, condition}

{capital, credit, financial}

{condition, economic, financial}

{cost, regulation, environmental}

{competitive, industry, competition}

{provision, law, control}

{investment, property, distribution}

Our profitability depends to a large extent on the ability of OG E to fully recover its costs from its customers and there may be changes in the regulatory environment that impair its ability to recover costs from its customers. OG E s rates are subject to regulation by the states of Oklahoma and Arkansas, as well as by a federal agency, whose regulatory paradigms and goals may not be consistent. Costs of compliance with environmental laws and regulations are significant and the cost of compliance with future environmental laws and regulations may adversely affect our results of operations, financial position, or liquidity. We may incur additional costs or delays in power plant construction and may not be able to recover our investment. We may not be able to recover the costs of our substantial planned investment in capital improvements and additions. The regional power market in which OG E operates has changing transmission regulatory structures, which may affect the transmission assets and related revenues and expenses. Increased competition resulting from restructuring efforts could have a significant financial impact on us and OG E and consequently decrease our revenue. Recent events that are beyond our control have increased the level of public and regulatory scrutiny of our industry. Governmental and market reactions to these events may have negative impacts on our business, financial condition and access to capital. We are subject to substantial utility and energy regulation by governmental agencies. Compliance with current and future utility and energy regulatory requirements and procurement of necessary approvals, permits and certifications may result in significant costs to us. Our results of operations may be impacted by disruptions beyond our control. Weather conditions such as tornadoes, thunderstorms, ice storms, wind storms, as well as seasonal temperature variations may adversely affect our results of operations and financial position. Increasing costs associated with our defined benefit retirement plans, health care plans and other employee-related benefits may adversely affect our results of operations, financial position, or liquidity. We face certain human resource risks associated with the availability of trained and qualified labor to meet our future staffing requirements We are a holding company with our primary assets being investments in our subsidiaries. We and our subsidiaries may be able to incur substantially more indebtedness, which may increase the risks created by our indebtedness. Certain provisions in our charter documents and rights plan have anti-takeover effects. Any reductions in our credit ratings could increase our financing costs and the cost of maintaining certain contractual relationships. We are subject to commodity price risk. We are subject to credit risk.

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1021635--2/16/2007--OGE_ENERGY_CORP