OGE Energy Corp. (OGE: 37.04 0.00 0.00%) has decided to invest $366.0 million over three years to deploy smart grid technology after receiving the regulatory approval from the Oklahoma Corporation Commission. Out of $366.0 million, $127.0 million will be funded out of the federal stimulus package.As part of the deployment, OGE Energy will install an advanced metering infrastructure and distribute automation equipment outside the house of each customer. This equipment will communicate the reading through touch-screen information panels inside the customers’ homes.
The system will be automatic and will enhance efficiency and reduce operating costs for OGE Energy. Although the new system will add $1.57 more to the average residential customer’s monthly electric bill, the equipment will help reduce customers’ costs as they will be able to monitor their electricity costs by the hour and reduce consumption accordingly.
OGE Energy is the largest electric utility in Oklahoma, and its well positioned regulated utility and unregulated midstream gas businesses are low risk. The company is pursuing an aggressive energy efficiency program, investing in renewable energy technologies and upgrading its infrastructure.
However, OGE Energy’s utility operations are subject to federal, state and local legislative requirements, as well as extensive environmental regulations. Change in the regulatory environment could also impact the company’s earnings. Inability to comply with various laws and regulations and obtain fair and timely rate relief and requisite regulatory approvals could have an adverse impact upon its future earnings and growth. Thus, we reiterate our Neutral recommendation.
No comments:
Post a Comment