OG&E files application to buy Redbud Plant near Luther

Journal Record, The (Oklahoma City), Mar 21, 2008

Oklahoma Gas and Electric Co. on Thursday filed an application with the Oklahoma Corporation Commission seeking pre-approval of a plan for OG&E and two state power authorities to buy the 1,230- megawatt Redbud power plant near Luther.

OG&E plans to buy a 51-percent interest in the Redbud plant for $434.5 million and will operate the plant.

The Grand River Dam Authority will own 36 percent and the Oklahoma Municipal Power Authority 13 percent. The total cost of the Redbud facility is about $852 million.

OG&E, Grand River and the OMPA announced plans to buy the power plant in January.

In the filing, OG&E asked the Commission to issue an order approving a cost-recovery mechanism to go into effect as soon as the sale is completed and the plant begins supplying electricity to OG&E's customers. The estimated net monthly impact for an average OG&E residential customer totals $2.82 per month.

OG&E has filed for approval to buy the plant with the Federal Energy Regulatory Commission.

"Redbud represents our most cost-effective means available to meet the growing base load generation needs of the system," said Pete Delaney, OGE Energy Corp. chairman, president and CEO. "It's a modern, natural gas-fired plant connected to the OG&E system that can be purchased for about 25 percent less than the cost of constructing a new gas facility with similar capabilities."

OG&E, GRDA and OMPA announced plant to buy Redbud after OG&E's request to build a coal-fired generating plant near Red Rock was denied by the commission in October.

In January, OG&E signed a definitive agreement with Kelson Holdings LLC, a Maryland holding company, to buy the plant, which I near the center of OG&E's service area in northeast Oklahoma County.

OG&E has purchased capacity from Redbud since 2005.