OGE Energy (OGE) risk factors, FY2025 10-K

REGULATORY RISKS

1. 01The Registrants' profitability depends to a large extent on the ability of OG&E to fully recover its costs, including its cost of capital, from its customers in a timely manner, and there may be changes in the regulatory environment that impair its ability to recover costs from its customers30% rewritten
2. 02OG&E is a vertically integrated electric company. Most of its revenue results from the sale of electricity to retail customers subject to bundled rates that are approved by the applicable state regulatory commission22% rewritten
3. 03Costs of compliance with environmental and other laws and regulations are significant, and the cost of compliance with future environmental and other laws and regulations may adversely affect our results of operations, financial position or liquidity
4. 04In addition, we may be required to make significant expenditures in connection with the investigation and remediation of alleged or actual spills, personal injury or property damage claims, and the repair, upgrade or expansion of our facilities to meet future requirements and obligations under environmental laws
5. 05We are subject to financial risks associated with climate change and the transition to a lower carbon economy77% rewritten
6. 06within "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations." It is unknown what the outcome, or any potential material impacts, if any, will be from the litigation or any final action by the EPANew
7. 07We may not be able to recover the costs of our substantial investments in capital improvements and additions42% rewritten
8. 08The regional power market in which OG&E operates has changing transmission regulatory structures, which may affect the transmission assets and related revenues and expenses40% rewritten
9. 09Increased competition resulting from efforts to restructure utility and energy markets or deregulation could have a significant financial and load growth impact on us and consequently impact our revenue and affordability of services
10. 10We are subject to substantial regulation by governmental agencies. Compliance with current and future regulatory requirements and procurement of necessary approvals, permits and certifications may result in significant costs to us

OPERATIONAL RISKS

1. 11Our results of operations may be impacted by disruptions to fuel supply or the electric grid that are beyond our control
2. 12OG&E's electric generation, transmission and distribution assets are subject to operational risks that could result in unscheduled plant outages, unanticipated operation and maintenance expenses, increased purchased power costs, accidents and third-party liability
3. 13catastrophic events such as fires, explosions, tornadoes, floods, earthquakes or other similar occurrences
4. 14Changes in technology, regulatory policies and customer electricity consumption may cause our assets to be less competitive and impact our results of operations
5. 15Weather conditions such as tornadoes, thunderstorms, ice storms, windstorms, flooding, earthquakes, prolonged droughts and the occurrence of wildfires, as well as seasonal temperature variations may adversely affect our financial position, results of operations and cash flows

FINANCIAL RISKS

1. 16Market performance, increased retirements, changes in retirement plan regulations and increasing costs associated with our Pension Plan, health care plans and other employee-related benefits may adversely affect our financial position, results of operations or cash flows
2. 17OGE Energy is a holding company with its primary asset being its subsidiary, OG&E

GENERAL RISKS

1. 18Governmental and market reactions to events involving other public companies or other energy companies that are beyond our control may have negative impacts on our business, financial position, results of operations, cash flows and access to capital
2. 19Economic conditions, including inflationary pressures and supply chain disruptions, could negatively impact our business and our results of operations22% rewritten
3. 20We are subject to cybersecurity risks and increased reliance on processes dependent on technology
4. 21The failure of our technology infrastructure, or the failure to enhance existing technology infrastructure and implement new technology, including artificial intelligence, could adversely affect our business63% rewritten
5. 22Terrorist attacks, and the threat of terrorist attacks, have resulted in increased costs to our business and could impact our ability to operate critical infrastructure. Continued hostilities or sustained military campaigns may adversely impact our financial position, results of operations and cash flows
6. 23Health epidemics and other outbreaks could adversely impact economic activity and conditions worldwide, which could have a material adverse effect on our results of operations and financial condition
7. 24We face certain human resource risks associated with the availability of trained and qualified labor to meet our future staffing requirements
8. 25We may be able to incur substantially more indebtedness, which may increase the risks created by our indebtedness
9. 26Any reductions in our credit ratings or changes in benchmark interest rates could increase our financing costs and the cost of maintaining certain contractual relationships or limit our ability to obtain financing on favorable terms48% rewritten
10. 27Our debt levels may limit our flexibility in obtaining additional financing and in pursuing other business opportunities
11. 28We are exposed to the credit risk of our key customers and counterparties, and any material nonpayment or nonperformance by our key customers and counterparties could adversely affect our financial position, results of operations and cash flows25% rewritten