Fitch Ratings affirmed OGE Energy Corp.'s (OGE) Long-Term Issuer Default Rating (IDR) at 'BBB+' and Oklahoma Gas & Electric Company's (OG&E) Long-Term IDR at 'A-', with a Stable Outlook for both entities. The Short-Term IDRs for both were also affirmed at 'F2'. This affirmation reflects the low business risk profile of OG&E and the generally balanced rate regulation in Oklahoma and Arkansas.
OG&E plans to invest $6.25 billion from 2025 to 2029, a material increase from previous periods, primarily for grid resilience, reliability, and strong demand growth. Fitch anticipates this elevated capital expenditure will pressure credit metrics, but robust load growth, including a 7.6% weather-normalized load growth in 2024, is expected to partially mitigate this impact.
Fitch estimates OGE's Funds From Operations (FFO) leverage to average 4.5x and OG&E's to average 4.1x during 2025-2027, consistent with their current ratings. The rating agency noted the Oklahoma Corporation Commission's November 2024 approval of a $126.7 million base rate revenue increase for OG&E, effective July 1, 2024, based on a 9.5% return on equity.
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