OGE Energy and CenterPoint Energy executives last week added color to their agreement disposing of their master limited partnership in Enable Midstream Partners, a gas-gathering business being acquired by Energy Transfer.

Both companies said Energy Transfer’s $7.2 billion all-equity acquisition of Enable will allow them to focus on transitioning to a fully regulated utility business model and lessen their exposure to the gas market’s volatility.

The acquisition was announced Feb. 17. (See Energy Transfer to Acquire Enable Midstream.)

CenterPoint CEO David Lesar reminded financial analysts during an earnings call Thursday of his earlier comments to them that the Houston-based company is “absolutely focused on reducing and eventually eliminating our midstream exposure through a disciplined financial approach.”

“And now have a transaction that we expect to achieve … exchanging our interests into a more liquid security, which will facilitate an accelerated exit, increased autonomy … giving us flexibility to make decisions about our exit strategy, and, of course, that reduces risk to distributions while we wind down our position,” Lesar said. “This transaction will have zero impact on our broader strategic goals.”

As CenterPoint’s earnings call concluded, OGE’s began.

“Let me be clear: We will exit our midstream investment, and we will do so in a responsible way that does not create overhang to the Energy Transfer units,” CEO Sean Trauschke told many of the same analysts. “We will do what we’re focused on … making sure that we continue to take costs out of our business to minimize that impact to customers at the same time.”

Trauschke said the company plans to reinvest the reinvest the transaction’s proceeds back into its utility business, Oklahoma Gas & Electric.

“We are not constrained or limited in any way in terms of the opportunities we see in our growing service territory,” he said.

OGE holds a 25.5% limited partner interest and a 50% general partner interest in Enable. CenterPoint owns 53.7% of the common units representing Enable’s LP interests. It will own approximately 3% of Energy Transfer’s outstanding LP units after the merger’s consummation, which is expected later this year.

CenterPoint will also pay OGE $30 million when the transaction closes.

Lesar also addressed the company’s restoration efforts following the Feb. 15 power outages that almost knocked out the ERCOT grid. He said once power was restored to CenterPoint’s system, the utility was able to bring power back to 98% of its 2.6 million electric customers in about 12 hours.

“This was a systemwide failure across the state, as has been well written,” he said. “There’ll be something that comes out of [the state legislature] from this, but people have done a good job of understanding our role in this.”

The company spent an additional $1.25 billion buying natural gas during the outage, Lesar said. CenterPoint will work with regulators to recover the costs.

CenterPoint reported fourth-quarter earnings of $15 million ($0.27/diluted share), up from 2019’s closing quarter of $128 million ($0.25/diluted share). Year-end earnings resulted in a $949 million loss (-$1.79/diluted share), compared to a $674 million ($1.33/diluted share) profit the year before.

On a guidance basis that excluded income and debt from the Enable preferred units and other impairments, earnings were $173 million ($0.29/share) for the quarter and $793 million ($1.40/share).

The company’s share price finished the week at $19.44, a 6.4% drop from Wednesday’s close of $20.78.

OG&E Files $1B Cost Recovery

OGE also reported a loss for 2020, saying year-end earnings were $173.7 million in the red (-$0.87/diluted share), compared to 2019’s earnings of $433.6 million ($2.16/diluted share). For the quarter, earnings were $54.8 million ($0.27/diluted share), compared to $35.4 million ($0.18/diluted share) a year ago.

The company said OG&E was among several utilities that began recovery proceedings at the Oklahoma Corporation Commission over restoration costs following February’s severe winter storm. OG&E is seeking to recover $1 billion for natural gas and purchased power costs, more than 2019’s total fuel costs.

Trauschke said OGE has secured $1 billion of additional bank financing or liquidity to cover the costs.

“We certainly understand the pressure that this event will have on our customers, and we will work with our commissions to help mitigate the impact to our customers’ bills,” he said.

OGE’s stock price fell 5.5% following the earnings release, closing the week at $29.27.