OGE Energy Q1 Earnings Call Highlights

Key Points

• OGE Energy reported Q1 consolidated EPS of $0.24 versus $0.31 a year ago, attributing the decline to milder weather and timing of O&M expenses, but management reaffirmed its 2026 guidance of $2.43 per share (range $2.38–$2.48) assuming normal weather.
• The company will file long‑term special contracts with regulators to serve multiple Google data centers — identifying Google as "Customer X" — with multiyear minimum charges, exit provisions and Google paying 100% of connection costs to limit risk while adding large, high‑load customers that should spread fixed costs and pressure rates downward.
• OGE is expanding generation and storage capacity (98 MW Tinker commissioned; 450 MW turbines at Horseshoe Lake expected in Q4 plus two additional 450 MW units; 300 MW Frontier battery project; and 600 MW of solar tied to the Google deals), has secured 2026 financing needs, and saw Moody’s revise its outlook to stable.

OGE Energy NYSE: OGE reported first-quarter 2026 consolidated earnings of $0.24 per diluted share, down from $0.31 in the same period last year, as management pointed to mild weather and timing-related operating and maintenance expense as key headwinds. Despite the softer start to the year, executives reiterated confidence in full-year guidance and outlined a series of regulatory filings, generation additions, and large-load contracting steps expected to shape the company’s outlook through the end of the decade.

First-quarter results and guidance

Chairman, President and CEO Sean Trauschke said the company posted “consolidated earnings of $0.24 per share,” noting that the first quarter “typically represents approximately 10% of our company’s earnings for the year.” He added that “even with milder weather in the first quarter, we remain confident in our 2026 guidance.”

CFO Chuck Walworth provided additional detail, stating consolidated net income was approximately $50 million, or $0.24 per diluted share, compared to $63 million, or $0.31 per share, a year ago. At the electric company, net income was approximately $58 million, or $0.28 per diluted share, compared to $71 million, or $0.35 per share, in the prior-year quarter. Walworth said the decrease “was primarily driven by mild first quarter weather and the timing of O&M year-over-year,” partially offset by “lower depreciation and interest expense on assets placed in service.”

The holding company reported a loss of approximately $8 million, or $0.04 per diluted share, “consistent with the prior year,” Walworth said.

Management reaffirmed 2026 earnings guidance of $2.43 per share, with a range of $2.38 to $2.48, “assuming normal weather for the balance of the year,” Walworth said.

Load trends and data center contracting with Google

Walworth said the company’s service area continued to show customer growth “just under 1%,” while weather-normalized load was “stable year-over-year,” reflecting “temporary outages at a few large customers,” offset by strength in the public authority and oil field sectors. He also highlighted what he called a longer-term tailwind, citing “approximately 24% load growth over the past 5 years.”

Trauschke said the company would soon file long-term special contracts with Google to serve “multiple previously announced data centers in Oklahoma” with the Oklahoma Corporation Commission. He identified Google as the previously referenced “Customer X” and said the “expected load and ramp rate is consistent with our 2026 IRP.”

Walworth described the planned energy service agreements as an “important milestone” that followed a “disciplined approach to structure, terms, and risk allocation.” He said management believes “the addition of a large, high-load-factor customer allows OG&E to spread fixed system costs over a significantly larger customer base, creating downward pressure on rates for existing customers.”

Executives emphasized protections designed to limit risk to existing customers. Trauschke said the company worked closely with Google on “broad customer protections, including minimum charges,” and added that Google will pay “100% of the cost to connect to the grid and its fair share to power the data center sites.” Walworth similarly cited “multiyear commitments with minimum charges and exit provisions to mitigate stranded cost risk,” along with “strong credit support to fully back customer obligations.”

In the Q&A, Trauschke said legislation advancing in Oklahoma, HB 2992, was “clearly supportive of the direction we’ve been heading,” and reiterated that “protecting the existing customer base has been paramount to us from day one.”

Generation additions, solar capacity agreements, and storage

Trauschke outlined several generation and capacity developments, including commissioning the 98 MW Tinker power plant in February. He said the company expects 450 MW of new combustion turbines at Horseshoe Lake to come online in the fourth quarter, while also “breaking ground on two additional 450 MW units.” He also said the company continued advancing the 300 MW Frontier Energy Storage Project.

He said that, “including the aforementioned capacity agreements,” OGE has “1.7 GW of capacity” that “strengthens our system today and positions us well for continued growth ahead.”

Separately, management said it secured capacity from two solar facilities currently under construction tied to the Google arrangements. Walworth said those projects total “600 megawatts of nameplate capacity,” and the company will seek pre-approval from both the Oklahoma Corporation Commission and Arkansas commissions for the power purchase agreements.

In response to an analyst question, Walworth said the 600 MW solar capacity was “not included as a resource in the 2026 IRP that showed a need of 1.9,” referencing a winter resource need. He added that, using a “rough math from the SPP” of around “a 20% accreditation on solar in the winter,” management’s “high-level estimate” would reduce that winter need “to about a 1.8” for that timeframe.

Asked about the company’s preference for owning generation versus contracting for capacity, Trauschke said it remains the company’s intent “to own and operate these assets,” while noting that capacity agreements can be used to “bridge you during construction.” He pointed to performance during severe events, saying that during Winter Storm Uri, “the assets that we owned and we operated ran and performed very well,” and added that the company wants to be “the ones holding the ball… when the severe weather comes in.”

Regulatory calendar, large-load tariff, and financing updates

Trauschke said the company expects to finalize a standalone large-load tariff in Oklahoma and file it “no later than July 1,” describing it as a way to provide “a clear, durable regulatory path for future large load activity.” He also said OGE is preparing for a rate review filing later this year, with “new rates anticipated in 2027.”

On project approvals, Trauschke said the company expects pre-approval of the Frontier Energy Storage Project in August. He added that as projects from an RFP process are selected and negotiated, OGE expects to seek pre-approvals “on a rolling basis rather than waiting for the full portfolio of projects to be complete.”

During the Q&A, Trauschke said large-load customers would be expected to pay “all those CIAC payments” and “make those in advance,” adding that tariff design would focus on “contract terms and security,” “pricing structures and charge allocations” that protect the existing customer base, and a service eligibility threshold (such as “75 megawatts” or “100 megawatts”).

Walworth also updated investors on financing, saying that in April the company completed a debt issuance at the electric utility that “satisfies our financing needs for 2026 under the current plan.” He reiterated that OGE issued equity late last year to support incremental capital in the long-term plan and noted flexibility through May 2027 to exercise “approximately 4.6 million shares in the forward equity agreements.” Walworth said the company continues to target credit-supportive metrics and expects to maintain “FFO to debt around 17% over the planning horizon.”

On credit, Walworth said Moody’s revised the outlooks for both OGE Energy and OG&E to “stable from negative” while affirming all ratings, citing a “constructive regulatory framework” and “improvements to cost recovery mechanisms,” along with balance sheet actions including the 2025 equity issuance. He added that Moody’s “lowered the parent level downgrade threshold to 17%.”

Looking ahead to potential plan updates, Walworth said management expects clearer visibility on key items later this year, including an anticipated August order in the Frontier battery storage pre-approval case and accepting final notices to construct from SPP for direct-assign transmission projects in October. In discussion of the Seminole-to-Shreveport line, Walworth said an SPP in-service date referenced previously was based on modeling and did not reflect a finalized construction timeline; he said the company expects clarity “by the early Q4 timeline this year,” and indicated it would require “new” rights of way.

Walworth said the company’s near-term earnings growth framework was unchanged, reaffirming “5 to 7” and “pointing to the upper end” through the next few years, while suggesting the identified catalysts could extend the runway once projects are approved and incorporated into the capital plan.

About OGE Energy NYSE: OGE

OGE Energy Corp. NYSE: OGE is an energy and infrastructure holding company headquartered in Oklahoma City, Oklahoma. Through its principal subsidiary, Oklahoma Gas & Electric Company, the company provides regulated electric service to residential, commercial and industrial customers across Oklahoma and western Arkansas. Its diversified generation mix includes coal, natural gas and wind-powered facilities, complemented by ongoing investments in grid modernization and smart technology to enhance reliability and customer satisfaction.

In addition to its core electric utility operations, OGE Energy Corp.

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