74145--2/13/2009--OKLAHOMA_GAS_&_ELECTRIC

related topics

{cost, contract, operation}

{cost, operation, labor}

{debt, indebtedness, cash}

{condition, economic, financial}

{operation, natural, condition}

{capital, credit, financial}

{gas, price, oil}

{cost, regulation, environmental}

{loss, insurance, financial}

{competitive, industry, competition}

Our profitability depends to a large extent on our ability to fully recover our costs from our customers and there may be changes in the regulatory environment that impair our ability to recover costs from our customers. Our 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 not be able to recover the costs of our substantial planned investment in capital improvements and additions. The regional power market in which we operate 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 consequently decrease our revenue. 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 position, cash flows 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. Economic conditions could negatively impact our business. Terrorist attacks, and the threat of terrorist attacks, have resulted in increased costs to our business. Continued hostilities in the Middle East or other sustained military campaigns may adversely impact our financial position, results of operations and cash flows. Market performance, increased retirements, changes in retirement plan regulations and 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 may be able to incur substantially more indebtedness, which may increase the risks created by our indebtedness. Any reductions in our credit ratings could increase our financing costs and the cost of maintaining certain contractual relationships or limit our ability to obtain financing on favorable terms. We are exposed to the credit risk of our key customers and counterparties, and any material nonpayment or nonperformance by our key customers and counterparties could adversely affect our financial position, results of operations and cash flows. Our debt levels may limit our flexibility in obtaining additional financing and in pursuing other business opportunities.

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74145--2/13/2009--OKLAHOMA_GAS_&_ELECTRIC_CO