Oklahoma Gas and Electric (OG&E) said that it will acquire a 51% interest in the Redbud plant for approximately $434.5 million and will operate the plant, while the regional utilities Grand River Dam Authority (GRDA) will own 36% and the Oklahoma Municipal Power Authority (OMPA) will own 13%.
The total cost of the Redbud facility is reported to be about $852 million. In its filing, OG&E is asking the commission to recognize the prudence of the transaction and 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 net monthly impact for an average OG&E residential customer is estimated at $2.82 per month. OG&E’s current rates are reportedly about 28% lower than the national average and 17% lower than the regional average. OG&E has also filed for the necessary approvals of the transaction with the Federal Energy Regulatory Commission.
Pete Delaney, OG&E Energy’s chairman and CEO, said: Redbud represents our most cost-effective means available to meet the growing base load generation needs of the system. It is a modern, natural gas-fired plant connected to the OG&E system that can be purchased for about 25% less than the cost of constructing a new gas facility with similar capabilities.
