By Tom Kleckner

OGE Energy hopes that a proposed legislative review of the Oklahoma Corporation Commission will relieve some of the company’s frustration regarding the regulator.

The state Senate in April unanimously approved a bill to create an executive-level task force to examine the OCC’s structure, mission, budget and staffing. OGE has complained recently about commission delays in approving rate cases, forcing the state’s utilities to implement interim rates that often have to be refunded following final regulatory approval.

The legislation still faces a final vote in the House of Representatives before it can be sent to Gov. Mary Fallin for her signature.

OGE is “fully supportive” of the bill, CEO Sean Trauschke told financial analysts during a May 4 first-quarter earnings call.

“It is not intended to undermine the OCC, but it’s a legislative effort to make it work better,” he said. “I am confident Oklahoma’s regulations will improve, but it won’t happen overnight.”

Trauschke said this would be the first full review of the OCC since its creation in 1970. The task force would consider whether commissioners should be appointed rather than elected, and whether to increase the commission’s seats from the current three.

“Are they funded properly? Are they regulating the right industries?” he said, noting the OCC currently oversees oil and the electric, gas and telecommunications utilities. “I do think the legislation will really address the efficiency and speed in which things are completed.”

As currently written into the bill, the seven-member review group would be led by Oklahoma’s secretary of energy and environment and include two legislative members, the state treasurer, attorney general and an appointee from the OCC. The task force would file a final report by September 2018.

Trauschke deferred several questions on Enable Midstream, its gas gathering and processing joint venture with Texas’ CenterPoint Energy, to its majority partner. CenterPoint has been looking to sell or spin off its 55.4% share of the venture, in which OGE holds a 25.7% limited-partnership interest in addition to its 50% management interest in Enable’s general partnership.

Enable on May 3 reported a first-quarter profit of $120 million, up from $86 million in the first quarter of 2016. Revenue increased to $666 million from $509 million a year ago.

Better margins at Enable and lower depreciation expenses at Oklahoma Gas & Electric boosted OGE’s profits for the first quarter. The company had net income of $36 million ($0.18/share), compared to $25.2 million ($0.13/share) in the first quarter of 2016.

OG&E contributed earnings of 8 cents/share, up from 3 cents/share the year previous, and Enable pitched in with 10 cents/share, compared to 9 cents/share a year ago.

Wall Street reacted by driving OGE’s shares down 66 cents from Wednesday’s close of $34.62 to $33.96 in after-hours trading Friday.

CenterPoint Says Wait on Enable Update

CenterPoint is still on track to provide an update on its Enable ownership stake in August, when it will report second-quarter earnings, CEO Scott Prochazka told analysts during a May 5 call.

“We have talked about the list of options being a sale, a spin or keep,” Prochazka said. “And even under the keep situation, we continue to work on things that would reduce the variability associated with our ownership of Enable.”

The Houston-based company said Enable contributed 10 cents/share in the first quarter, compared to 9 cents/share the year prior. Prochazka said daily volumes of gas gathered, processed and transported were all up from the previous year, and noted the business recently announced a new project in the Texas-Oklahoma Panhandle’s Anadarko basin that adds 400 Mcfd of processing capacity.

“We continue to believe Enable is well positioned for success in [its] industry,” Prochazka said. “I think it’s fair to say … that improvements in the industry and changes that are occurring at Enable are both favorable for us, from an ongoing ownership perspective.”

CenterPoint reported earnings of $192 million ($0.44/share) for the first quarter of 2017, as compared to a profit of $154 million ($0.36/share) over the same period last year.

The company has asked for electricity and gas rate hikes to help recoup $480 million spent on transmission infrastructure in 2016 and $16.5 million spent on its natural gas distribution business.

CenterPoint’s share price closed at $27.98 on May 4 and dropped to $27.72 shortly after the earnings call the next day, before finishing at $28.05 in after-hours trading.