2. The Story of OG&E
3. Early Years Discouraging
4. Few Customers on System
5. Company Control Changed
6. System Capability Jumps
7. Myth Delayed Reading
8. New Stations Needed
9. Revenue Growth Skyrockets
10. Chandler Electric Acquired
11. Rural Program Grows
|12. Rates Consistently Lowered
13. Tornado Flattens Woodard
14. Osage Work Completed
15. Largest Unit Planned
16. Old Plant Torn Down
17. Lines Most Economical
18. Kilowatt Hours Multiply
19. Territories Swapped
20. Embargo Pinched Utilities
21. Byng Plant Retired
22. Coal Stockpile Begun
|23. Coal Makes a Comeback
24. Winter Peaks Noted
25. Scheduling System Begun
26. Storm Pounds City Area
27. Sales Approach Changed
28. Peaks Program Started
29. Audit Program Begun
30. Fire Damages Transformer
31. Program Adds Interest
32. Goose Colony Started
33. Magazine Honors Company
When Oklahoma Gas and Electric Company was formed in 1902, the electric power industry was still in it's infancy. Thomas Edison had developed the concept of central power stations only 23 years earlier, in 1879.
So, from the very beginning, OG&E has been a pioneer. The company is five years older than Oklahoma and is the state's oldest Oklahoma-chartered corporation. However, saying that "the company" is a pioneer does not tell the whole story. After all, the company is composed of people of OG&E who have been the real pioneers.
The purpose of this booklet is to recall some of this unique history. It is, more important to look ahead to the future, for only the future can reveal the wisdom of decisions made today.
Much of the material herein was gleaned from past issues of the company magazine, The Meter, and other historical documents.
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OG&E's history is an exciting one which officially began in February, 1902, when the company was incorporated in Oklahoma Territory. Actually, it started many years before that with such famous men as Thomas Edison, James Watt and Thomas Newcomen, whose inventions paved the way for today's vast electric industry.
Throughout its sometimes turbulent history, OG&E members have built the company's reputation as a pioneer in the electric utility industry...conservative when necessary, but not afraid to try new ideas. For many years, the company emblem was surrounded by the words "pioneers in public service," and although the present emblem does not contain those words, OG&Eers still like to think of their company as one filled with the pioneering spirit for which its headquarters state has become famous.
Here are just a few "firsts" with which OG&E has been credited along with some notable milestones:
There are of course, many other instances of OG&E's pioneering attitude, but these examples should indicate that the slogan "pioneers in public service" was just so many words, but a true appraisal of the company's philosophy... then and now.
As mentioned earlier, OG&E was started in 1902 in Oklahoma City. But the history of electricity in the capital goes back even farther. In fact, it goes back to the year of the famous "run" of 1889.
That same year, two companies were by one group of men. it electricity to embryonic Oklahoma City, which at that time had less than 4,200 population. One firm, the Oklahoma Ditch and Water Power Company was supposed to produce the electricity and the other company, Oklahoma City Light and Power, was set up to distribute the electricity.
The history of the "ditch" is short and bittersweet. Here was the plan: A ditch or canal, was dug from North Canadian River to the site of the power plant near Robinson and Frisco Streets. The canal was six miles long, 32 feet wide and 10 feet deep. In its six-mile flow, it achieved a fall of 32 feet.
Part of the ill-fated hydro power project in Oklahoma City, 1890
With much publicity and anticipation the plant's grand opening was set for Christmas Eve, 1890, and the gates to the canal were thrown open while the spectators held their breath. The few light bulbs around the plant did "flash on" but the crowd's elation was short lived.
The engineers who had designed this rather crude attempt at hydro-electric generation had overlooked one important factor... the sand along the canal absorbed the water faster than the river could furnish it. By the third day it was obvious that the "ditch" would never be anything but a sandy trench.
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Reluctant to give up, the engineers spent another six months trying to find a way to solidify and harden the banks of the canal, but to no avail. All the hopes of the promoters, and the citizens who hoped the ditch would attract large new industries, were dashed and the entire project was unceremoniously abandoned.
In spite of this huge financial and emotional setback, the owners of OD&WP and OCL&P did not give up. They decided to build a steam electric plant at the site of the water plant. Because of financial problems and the death of one of the principals, the new plant did not begin operation until September 1, 1892, almost two years after the ill-fated ditch project.
The next four years were perhaps the most discouraging in the history of Oklahoma City. Many new businesses the company started and failed. It was also a rough time for the struggling electric utility business and at one time it became so hard to collect for service from businesses that the company had to bill commercial customers in advance because so many would-be merchants disappeared without ever paying their electric bill.
Electricservice from Oklahoma City Light Power Company was, quite frankly, poor and overly expensive. The generators, all 250 horsepower of them, were insufficient to carry the load and outages were frequent. The lack of money made it impossible to fill applications for new business.
The years 1896 to 1902 were not much better. During the first part of this period the business was hard to secure, but in the later years conditions were reversed and the company was unable to finance the necessary plant expansion to serve new customers.
Investors viewed Oklahoma City's progress as a "short boom." At one time, OCL&P was thrown into a court of receivership by stockholders who thought their investments were not being properly managed by the men in control.
Seynour S. Price, who had been head of the Company for a number of years, had quit in 1896 to become a registrar for the Oklahoma City Land Office. G.E. Wheeler, a Californian, became president then and was later named president of OG&E.
By 1900, Oklahoma City had really begun to grow. Population was listed at 10,037, and that figure was to be multiplied six times before the next census in 1910 when 61,000 souls called Oklahoma City home.
In addition to Wheeler, a major stockholder in OCL&P was E.H. Cooke, president of an Oklahoma City bank. In 1902 Cooke and Wheeler sold their holdings to F.B. Burbridge and Harry M. Blackmer of Colorado. The two incorporated under the name of Oklahoma Gas & Electric Company.
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At that time, the company's accounting problems were small, because the entire customer load could be broken down thusly: 89 street arc lamps, 120 commercial arc lamps, 7,000 incandescent lamps in homes and 200 horsepower of electric motors. Business houses were metered, but all residents were on a monthly flat rate basis.
The city council granted OG&E its first franchise in February, 1902 for a period of 21 years. An electric rate of 20 cents per kilowatt hour for residences was established. (This is several times as much as a kilowatt hour costs today.)
The new company secured capital through a $300,000 bond issue at 5%, underwritten by companies in New York and Boston. This money was used to modernize the gas plant, rebuild and enlarge the power plant and to extend electric lines and gas mains. It should be mentioned here that this was before the discovery of natural gas in this area and that all gas sold by OG&E then was manufactured or "artificial" gas, which also quite expensive.
As an indication of the precarious nature of the company, at one time in late 1902, the bank balance was down to $62.67. It became necessary on Saturday nights to cut out all residential service because of the heavy demand in downtown business. By October of 1903 the company was in on better shape. A $147,000 bond issue had been used for new construction and little money was available for day-to-day operations.
The financial situation was so rough about this time that the old "pre-pay" gas meters, which issued 1,000 cubic feet of gas for a quarter, had to be collected from frequently in order to meet the payroll.
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1904 was a significant year for OG&E, although it did not start very auspiciously. The largest stockholder, Harry Blackmer, had put up his stock security for a loan from two of OG&E's directors, C. B. Ames and Dennis T. Flynn. (Flynn, incidentally, was the father of Streeter B. Flynn, who also served as an OG&E director from 1945 until his death in 1971.) When Blackmer could not repay the loan, Ames and Dennis Flynn assumed control of OG&E.
These two men were fine attorneys, but they knew little of the electric utility business. In addition to being utility operators, it was necessary that the owners be financial promoters, and neither qualified on that store.
Somewhere in his travels, possibly on a trip to Denver, Mr. Flynn had met a man named J.J. Henry, a big jolly fellow, a flashy dresser and reputedly the model for a fictional series of the day entitled "Get Rich Quick Wallingford." Henry was a high pressure operator and the two new owners thought that he was the man to get the sick utility on its feet. In early 1904 he succeeded Ames as President.
Evidently, the east coast financiers knew of Henry's reputation and they became even more tight-fisted concerning OG&E. As a result, Henry resigned in September of 1904 and Flynn reluctantly assumed the presidency.
Dennis Flynn had also become acquainted with a former associate of Thomas A. Edison, Colonel H. M. Byllesby. The Colonel headed a utility management company with headquarters in Chicago. At that time the Byllesby company was managing the Enid, Okla., electric utility and they agreed to assume management of OG&E on a percentage basis.
Colonel Byllesby's organization was chock full of experts in electrical and gas engineering, management and operating, and the Colonel himself was a shrewd manager.
By this time, Oklahoma City had about 22,000 inhabitants whose electric and gas service were woefully inadequate. The plants were plainly incapable of meeting present and future demands. The Byllesby-run organization immediately went to work to solve some of the problems.
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In 1904, the company's generating capability was 700 kilowatts. By 1909 capability had jumped to 4,050 kilowatts with the addition of a new substantial power plant built near Noble Street. Natural gas had been discovered in the area and was now used as fuel for the steam generators.
Lineman's nightmare, 1905
Electric distribution lines increased from 76 miles to 227 miles and the number of customers expanded from 1,400 to 4,500. Because of the new-found efficiency of operation, electric rates were reduced on the average of 15%. Population of Oklahoma City in 1909 was 50,000.
Another important development emerged about this time...investors finally began to show a fair rate of return and the company showed a substantial, if not spectacular, profit.
Heading the company during this big expansion was T.K. Jackson who was made manager when Byllesby came into the picture in 1904. He was succeeded by F. H. Tidnam, a man who had worked with Edison in many of his experiments with electricity. He remained as manager until July 1911 when W.R. Molinard was elected Secretary and General Manager. The year 1910 was important because this was when OG&E began expanding outside of Oklahoma City. That year the El Reno Gas and Electric Company was purchased and later became a district headquarters town. In 1911 OG&E built an electric distribution system in Britton and began serving customers there.
By this time, most residential customers had meters, rather than being billed on the flat rate. The early meters were located inside the houses and were in metal boxes with a small glass window revealing the dials on the meter.
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Electric powered OG&E service truck, about 1915-20
The story got around, as such things do, that a flat iron placed on top of the meter box would make the meter run slower, resulting in a lower electric bill. The result was that it took some of our early meter readers twice as long to make the rounds since they had to wait at the door of most of the houses while the wife ran to the meter and removed the flat irons.
No further acquisitions were made until 1917 when the distribution system in Norman was purchased and transmission lines were constructed between Norman and Oklahoma City and El Reno and Oklahoma City.
These were the first in OG&E's present vast network of interconnected transmission lines. Also, in 1917, the Enid Electric and Gas Company was acquired and was the key city in the expansion of the company's service territory in northern Oklahoma.
From 1917 to 1924 there was a continued expansion of facilities and electric systems were purchased in several eastern and northern Oklahoma towns.
Then came a period of construction of more interconnected transmission lines under the new manager, J.F. Owens, who was to serve as chief executive officer until 1942, when he was elected Chairman of the Board.
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In the early 20's, OG&E continued to grow and this fast growth emphasized the need for more economical and expandable power stations. None of the stations owned at that time could be expanded because of the limited water supply near them. Therefore, the company needed to adopt a plan to build larger power plants near good water supplies and to connect these stations and load centers by large transmission lines.
Turbine room at Horseshoe Lake takes shape, 1924
In 1922 construction was begun on the Riverbank plant on the Arkansas River near Muskogee. It was completed in 1924 with the then-huge capacity if 7500 kilowatts. 1923 marked the beginning of the Horseshoe Lake Plant near Harrah and,also in 1924, the first unit of 15,000 kilowatts was completed at Horselake Lake. These plants burned coal.
From 1922 to 1927, OG&E began serving several of Oklahoma's larger and faster-growing cities and towns. Including were Muskogee, Shawnee, Ardmore, Ada, Durant, Sapupa,Holdenville, and Seminole. The first three cities were to become three of the company's six present region headquarters towns.
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OG&E emergency car, 1925
Probably the best gauge of the company's growth during this hectic period is gross revenues. In 1920, the gross was 2. By had grown to almost 9 million...more than triple in just five years. Customer count was also increasing, but at a slower rate. For instance, in 1922 there were 92,552 customers and in 1928 this figure had increased only to 118,231.
The meaning is, of course, obvious. People, business and industry were using more and more and more electricity, a trend that continues even today. Also, the number of towns served jumped from 27 in 1921 to 88 in 1924.
The early 20's also marked the beginning of another important source of revenue, the booming oil, gas and coal fields throughout the service area.
In 1928 OG&E sold all of its gas properties, most of which had been acquired with the purchase of electric systems. The management felt that the "gas and" portion of the corporate name was so well known that the full name should be retained, even though gas was no longer sold.
The wisdom of that move has been questioned and probably will be questioned in the future. Incidentally, OG&E is not unique in this respect. Kansas Gas and Electric, our neighbor to the north, doesn't sell gas either.
The late 20's and early 30's were also heavy growth periods for OG&E. The largest acquisition was the Muskogee Gas and Electric Company, which also owned the Sapulpa later became region headquarters towns. Sapulpa is now a district headquarters.
Another big gain about that time was the purchase of the Southern Oklahoma Power Company and its subsidiaries. That company owned a generating station at Byng which had been constructed on 1919 and had subsidiaries. That company owned a generating station at Byng which had been constructed in 1919 and had subsidiary companies in Shawnee and Ada and some smaller towns.
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In 1926 OG&E acquired the Chandler Electric Company and the United Power Company. The Chandler company consisted of electric distribution systems in Chandler and four smaller towns, and the United Power Company had electric properties in 10 communities in northern Oklahoma.
All of these towns were connected by transmission lines from Enid. Also in 1926 the company acquired from Public Service Company the Guthrie area plus distribution systems on four other towns.
On 1925 OG&E had begun selling electric appliances direct to the consumer in to increase the use of electricity. By 1930, it became obvious that the desire for these labor-saving devices had been established and a good network of appliance dealers had sprung up throughout the service area. So, on 1930, appliance sales were suspended and OG&E began helping individual dealers merchandise these important "load builders."
1928was an important year. It marked the completion of the six-story general office building at 3rd and Harvey. (An additional six floors were added 30 years later.) This was also the year that the Belle Isle property in north Oklahoma City was acquired. This included a generating plant which was later dismantled... to make way for the Belle Isle Generating Station.
This property had been owned by the Oklahoma Railway Company. The old plant furnished electricity for the operation of the company's streetcar system and the interurban system, and, along with purchase of the plant, OG&E leased the transmission lines owned by OCR and contracted to serve the streetcar and interurban systems.
Also,in 1928, the company expanded into Arkansas through a purchase from the Mississippi Valley Power Company. Included in the Acquisition were distribution systems in Fort Smith, Van Buren and several smaller towns.
Fort Smith Light & Traction was part of the Arkansas acquisition made by OG&E
Also during this period, OG&E extended electric service to the rural territory near towns it served. It was the policy of the company to extend service to these rural areas as rapidly and as economically as possible. As early as 1925, OG&E had built experimental lines for farm service and in 1927, the company undertook a definite program for rural electrification.
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This rural program has been expanded each year and has been of benefit to the company and the consumer. The company also cooperated with the federal government's program for rural electrification. In fact, the first REA cooperative in Oklahoma was served wholesale by OG&E and the company now provides wholesale electric service to several co-ops in Oklahoma and western Arkansas.
During the 1925-30 period, two additional major generating stations were built. The Lincoln Beerbower Plant (later renamed Osage Plant) was built near Ponca City. The Arthur S. Huey Plant was built at Belle Isle and two units were added to the Horseshoe Lake Plant. Those three plants, together with the Riverbank Plant, gave us a total generating capability of 132,500 kilowatts.
OG&E made and sold ice in several towns, phasing those operations out in the early 30's
Thus, by 1930 many major consolidations and construction projects had been completed which forged the company into a well-rounded operating electric utility. OG&E had built of acquired over 5,000 miles of transmission and distribution lines and was providing retail service to 192 cities and towns and wholesale service to 42 communities or customers.
The next major acquisition was in 1936 when the Western Light and Power Company in northwestern Oklahoma was bought. This purchase included electric systems in Woodward and Wakita, plus some smaller towns. Woodward is one of western Oklahoma's larger towns and was an important addition to OG&E service system.
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It is interesting to note here that with all of the expansion and new construction during this period, electric rates were constantly being reduced. Beginning with 1928, rates were reduced every year for 10 years. This was made possible by the improved technology and efficiency brought about by a completely interconnected system.
So far, this period sounds pretty rosy, but it should be remembered that it was in 1929 that the nation was stunned by the great depression. Obviously, it affected OG&E as much or more than many other businesses. Sales dropped from $12.1 million in 1928 to $10.8 million in 1932.
Layoffs and salary reductions were common, but somehow, with the help of loyal employees and customers, OG&E came through it all, perhaps a little bloody, but certainly unbowed. By 1939, sales had risen to $13.6 million, and from that time until today, the upward trend has been constant.
The company had just about recovered from the depression when-World War II began. As was the case with about everyone, OG&E had to make tremendous adjustment s to the war-time economy. Many people enlisted or were drafted into military service, necessitating extensive personnel changes throughout the operation.
About the only large, new customers were the military bases. The biggest load was the sprawling Tinker Air Force Base, which has since become one of the company's largest customers.
It was during this hectic period that George Ade Davis took over as OG&E's new President in 1942.
Because of limited materials and personnel, the next three years saw very little in the way of new construction. About the only notable addition to the system was a 20,000 kilowatt turbine generator at the Belle Isle Plant.
With 1945 came the end or the war and beginning of another tremendous growth period for OG&E. The following year a new steel tower transmission line was built over the Arkansas River at Fort Smith and a new generating unit was installed at Horseshoe Lake Plant.
As mentioned earlier, OG&E had been able to reduce rates consistently during these years, and in '46 the largest single rate reduction in the company's history up to that time occurred. It meant an actual dollar savings of almost a million dollars to customers. Several other rate reductions were made up to 1965.
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As you might suspect, an electric utility is more vulnerable to natural disasters that just about any other type of business. One of the worst such disasters ever to this state occurred on April 9, 1947.
That was the day the Woodward tornado twisted out of the Texas panhandle, cutting a wide swath of death and destruction almost 172 miles long. Some 200 square blocks were leveled or severely damaged in Woodward and there were 114 deaths attributed to the storm, one of which was an OG&Eer on duty at the Woodward power plant when the storm hit.
Needless to say, OG&E's facilities were practically annihilated by the tornado. The power plant was demolished and most electric lines were downed, with many poles snapped as it they were toothpicks. Fortunately, an emergency plan had been formulated to cover just such contingencies and that plan proved to be invaluable in this case.
Basically, the plan called for bringing in help from throughout the system not only to aid in restoring electric service, but to "help the helpers" with food and places to sleep plus any needed personal services.
Many OG&Eers worked night and day with a minimum or rest and, somewhat amazingly, had restored power to Woodward Saturday, the 12th, after the twister had hit at 8:43 p.m. on Wednesday, the 9th.
A paragraph from the May 1947 issue of our company magazine, The Meter pretty well sums up the tornado and its effect on the company:
"The most inspiring thing was the complete unity. Everyone was working not for a department or a boss but for the company. The OG&E spirit was everywhere present, from the "old-timers" who always perform superbly under challenging conditions, to the newcomers, who could scarcely have been expected to display the same endurance and understanding. But the did, taking the hardships like the soldiers most of them once were."
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During 1948, work was completed on Osage #2, rated at 25,000 kilowatts. This was the first hydrogen-cooled generator on the system.
In 1949, General Davis retired as president and Donald S. Kennedy was elected president and Chairman or the Board, after having served previously as Executive Vice President.
Mustang Plant, west of Oklahoma City, first unit on line in 1950
The early 50's began a new era in generating plant construction. The individual units were becoming larger and larger and the new Mustang Plant was selected for the first two large units. Mustang Unit 1, completed in 1950, was rated at 60,000 kilowatts and Mustang Unit 2 at 58,000 kilowatts, producing more than 100,000 kilowatts in one plant, which at that time was the largest in Oklahoma. Now, for the first time, OG&E could speak of plant capability in "megawatts," or millions of watts, instead of kilowatts, or thousands of watts.
Arbuckle Plant, southern Oklahoma. Only unit in the system with an outdoor turbine
Then in 1953 came another innovation... an outdoor generator was built near Sulphur and named South Plant. The plant was later renamed Arbuckle Plant. This 78,000 kilowatt unit is the only one on the system where the generator is not enclosed within a building. (The unit works fine, but it's a little rough on operators who have to work on the unit in bad weather.)
1955 saw the first single unit of over 100,000 kilowatts on the OG&E system. Unit 3 at Mustang went on line that year and began producing 114,000 kilowatts.
The following year, 1956,a 185,000 kilowatt unit was completed at Riverbank Plant near Muskogee and was the first reheat turbine on the system. This year also marked the 75th anniversary of Edison's most famous invention, the incandescent light bulb.
Transmission lines were getting larger and larger, too. In 1955, a 161,000-volt line from Horseshoe Lake Plant to a point near Tahlequah was completed. This was OG&E's first line larger than 138,000 volts.
Okahoma's semi-centennial year was 1957, the year the company started construction for Mustang Unit 4, by far the largest unit at 240,000 kilowatts. In 1958, Horseshoe Lake Unit 6,181,000 kilowatts, went on the line.
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In 1960, it was announced that Horseshoe Lake Unit 7 would be a combined cycle gas and steam turbine unit, the largest in the nation at 245,000 kilowatts. Basically, what combined cycle means is that the exhaust from the gas turbine is used as the combustion air for the steam turbine's boiler, making the entire unit more efficient.
It works very well in units of this size, but in generators of over 300,000 kilowatts, as all of OG&E's new ones are, the extra cost of the larger gas turbines is prohibitive. That's why more combined cycle units have not been built.
Gross revenue in 1961 was $65.8 million as opposed to $16.4 million in 1942. This shows again that OG&E customers were using about twice as much electricity in '61 and they did in '42 because as you can see, customer count doubled and revenue quadrupled, even though the rates were lower in '61 than in '42.
1960 was also a very important yea in one major category... safety. Quite frankly, OG&E's safety record up to this time was not exactly the envy of the industry. However, in 1960, there was a turn-about and OG&Eers went for an entire six-month period without a disabling injury. In fact, from June 9, 1960, to January 12,1961, on a company-wide basis, OG&E members worked 2,804,603 man-hours without a serious accident. The previous best record had been 1,309,097 man-hours.
OG&E'sa accident prevention record is now consistently among the best in the nation.
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In 1961 a small but important part of company operations passed into history. In July of that year the old Noble Street power plant was torn down. This DC plant was Oklahoma City's first operable generating station and, surprisingly, was still producing power as late as 1959.
The early 60's were the beginning of what some have called the "age of computers." OG&E soon recognized the value of data processing to its far-flung operation and, in 1961, installed the IBM 1401 system, primarily for customer accounting, today practically all accounting functions are computerized.
It was about this time that OG&E began laying groundwork for an extensive "power swap" between the Tennessee Valley Authority and 11 investor-owned electric utilities in the southwestern U.S.
The idea for the power exchange is simple: TVA's peak load occurs in the winter while the company's peak always happens in the summer. The reasoning was, "Why not swap electricity, kilowatt for kilowatt, when the need is greatest?" That idea became a reality and was a big help to the companies as well as TVA.
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Although the companies had to build new extra-high voltage transmission lines for the interconnection, this was much more economical than building 345,000 kilowatts of new generating capacity, which would have been necessary without the TVA hookup. This arrangement resulted in the company's first 345,000 and 500,000 EHV transmission lines.
The year was OG&E's 60th anniversary and a "huge" construction budget of $19 million was announced. Compare that with later amounts and you can immediately see how quickly things are happening.
The importance of bringing in new industries expand had long been recognized. As an outgrowth of this philosophy, an industrial development department was established in 1953.
This department, now known as Community Development, was instrumental in bringing numerous new industries to the OG&E service area.
Wayne A. Parker, a veteran OG&Eer who "came up through the ranks," was elected President of OG&E on December 1, 1996.
Between 1965 and 1975, most of OG&E's construction efforts were aimed at the new Seminole Generation Plant near Konawa. Around 1965, the company began looking for about 3,000 acres on which to build the state's largest generating plant and a lake to provide cooling water for the plant's operation.
Seminole Plant. Last large gas-fired units constructed on OG&E system
All things considered, the Konawa site turned out to be the best available and on May 2, 1968, ground was broken. Original plans called for one 540,000 kilowatt unit, but it was later decided to install two more of the same size. Seminole Unit 1 went on the line early in 1971, Unit 2 in 1973 and Unit 3 in 1975. These three units, plus an additional 19,000 kilowatt gas turbine starting unit, gave Seminole Plant a total capability of 1,639,000 kilowatts.
After it was determined that a cooling reservoir would be built for the Seminole Plant, it was decided to open it to the public for recreational purposes. The 1,350-acre Lake Konawa is complete with concrete boat ramps, picnic tables, rest rooms, swimming beach and parking areas. The Oklahoma Department of Wildlife Conservation has stocked the lake and it has become one of Oklahoma's fishing "hot spots." Lake Konawa has proven tremendously popular with people in the area. This is just another of the pioneering activities of OG&E: true dual land use... industry and recreation coexisting side by side.
One of the most positive aspects of OG&E is the company's relations with its various "publics." As most people are well aware, the ingredient of "good people" is the key to the public relations of any business which deals with the general public.
Of course, OG&E has other publics in addition to its customers. Since utilities are so highly regulated, one of the most important publics is government at all levels, from town councils to the U.S. Congress. Various commissions such as the Oklahoma Corporation Commission, Arkansas Public Service Commission, Federal Power Commission, Securities and Exchange Commission and others are vital in OG&E's day-to-day operations.
A good example of how the general public feels about OG&E is the way the vote turns out in franchise elections, which are held every 25 years in communities served by the company. The "yes" votes have consistently accounted for over 90% of the total vote! This probably speaks louder than anything as to what OG&E customers think of the electric company serving them.
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You have already read several examples of OG&E's growth in terms of revenue dollars, but perhaps the best indication of growth rate is the output of kilowatt hours per year. (A kilowatt hour can be described as ten 100-watt light bulbs burning continuously for one hour.) Over the decades, the increases have been as follows:
|1931||458 million kwh||1961||3.5 billion kwh|
|1941||636 million kwh||1971||10.7 billion kwh|
|1951||1.5 billion kwh||1981||21.3 billion kwh|
The year 1970 was one in which several milestones were recorded by OG&E. That year's construction budget was $63 million, an all-time high up to that year. The company was also recognized nationally in 1970 for having the lowest number of disabling injuries per million man-hours worked of all company's third in four years.
The following year, 1971 marked a significant milestone. It was then that OG&E's residential customers exceeded for the first time the national average for annual kilowatt-hour usage.
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It was also in 1971 that a unique "swapping" of territories between OG&E and Public Service Company of Oklahoma took place. OG&E began serving the towns of Mustang and Union City, formerly served by PSO, and PSO took over responsibility for the electric service in Jenks, formerly supplied by OG&E. The trade has proven mutually beneficial to both companies.
Late 1971 also saw the election of the first female member to the OG&E Board of Directors. Mrs. Guy Anthony Of Oklahoma City was elected that year and has served continuously since that time.
Change was also evident in 1972. Riverbank Plant located on the Arkansas River near Muskogee, was renamed Muskogee Generating Plant and OG&E announced that two new 515,000 kilowatt units would be built near the existing plant. Initial announcements stated that the two new units would be fueled by low-sulphur Wyoming coal.
This change in fuel proved to be both wise and prophetic, as the events of late 1973 were to verify.
That year started out well enough. OG&E's 1973 construction budget of $101 million topped $100 million for the first time. Wayne Parker retired as OG&E President and was replaced by James G. Harlow, Jr. A completely new generating station, Sooner Plant, was announced for north-central Oklahoma. Several new work safety records were established.
Sooner Plant. First all coal-fired station, located south of Ponca City
But the otherwise rosy year was to be marred near its end. It was in October that the oil-exporting countries in the Middle East imposed an embargo on all oil shipments to the United States.
Although many experts had been predicting such a move for several years, the entire nation seemed to be caught unprepared. Almost overnight, the words "energy crisis" were on the lips of every radio and TV commentator and on the front pages of every periodical in the country.
Few people realized that the United States was importing fully one-third of its oil needs. When that supply was suddenly cut off, the effect was immediate and crippling.
The scarcity of gasoline for the nation's automobile-oriented economy caused the most vocal outcries at first. The average U.S. citizen just accustomed to waiting in line for an hour to buy five gallons of gasoline when he really wanted to buy 20 Gallons. Neither was that citizen accustomed to paying close to .60 per gallon. The price for a gallon of gasoline had been around 30 for years.
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But the short-term gasoline shortage turned out to be relatively insignificant when compared with the long-range effects of that infamous embargo. The most important effect of the energy crisis has been the pinch felt by utility companies and their customers.
Hardest hit were the electric companies located on both coasts. Many of them relied heavily on oil as boiler fuel and their fuel costs jumped drastically almost overnight. The effect on OG&E and other southwestern utilities was not as immediate.
The year 1974 was a mixture of good news and bad news for OG&E. The construction budget again hit an all-time high, $124.7 million. General Motors announced a huge new auto plant for Southeast Oklahoma City, then postponed construction because of lagging car sales.
OG&E and the Oklahoma State Health Department began a joint study of aquatic life at Horseshoe Lake Plant. A series of tornadoes ripped through OG&E-land, leaving death and destruction, mostly in the Drumright area.
Muskogee Plant. The tall stack to the left is for Unit Six, latest coal-fired unit to be constructed.
A new summer peak of 3,140,000 kilowatts was reached and Muskogee Plant celebrated 50 years of operation. The energy crunch, however, was beginning to be felt by OG&E and neighboring utility companies.
It was pretty much the same situation in 1975. There were some good things happening, but also some things that weren't so good.
On the good side, OG&E won the first place work safety awards from Edison Electric Institute and the National Safety Council. Negotiations for Sooner Plant property were completed.
An indication of the mixed-up nature of '75 was the fact that the summer peak of 3,185,000 kilowatts was recorded in September. This was the first time since 1954. The company was forced to file for its first rate increase since 1954. The amount sought was $30.5 million. The amount received was much less than that, as shall be seen later.
While preparation for the rate case took the time of many OG&Eers during 1975, other company members continued to work well together and several positive events occurred during the year.
Arkansas Region, for instance, set a new company safety record for regions by working 2.5 million man-hours without a disabling injury. After years of dispute, a territorial boundary agreement was worked out between investor-owned electric companies and rural electric cooperatives in Oklahoma. Seminole Plant's Unit 3 went on the line. Earnings per share of common stock were $1.90.
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Nostalgia buffs moaned when the old Byng Plant in southern Oklahoma was retired after more than half a century of service. OG&E's 1975 fuel expenses increased by 50% over the previous year. Central Region, headquartered in Sapulpa, was reorganized for greater efficiency and combined with Eastern and Shawnee Regions, reducing the number of OG&E regions from seven to six.
The year 1976 began with crossed fingers. The company had spent untold hours preparing its case for a rate increase. The rate hearings at the Oklahoma Corporation Commission in Oklahoma City took nine days. But, finally, they were over and all OG&Eers could do was wait and see how much of the $30.5 million request would be granted. In May, the Commission announced its decision, and allowed the company a $9.6 million increase.
As disappointing as the allowed increase was, it was probably not as suprising as another section of the rate order. This clause said, in effect, that OG&E could no longer go on private property to install electric service facilities.
This was the old "property line issue" which had been fought with a small group of union electrical contractors for years. It was heard many times at the Oklahoma Corporation Commission. Legislation favoring the contractors group had been introduced but always defeated by the Oklahoma Legislature. So, to say that OG&E officials were surprised at the property line order would be a tremendous understatement.
But the word "surprised" could not describe the feelings of many OG&E customers. "Enraged" would be more like it. Protests of the property line order began trickling in slowly at first, but as more and more people realized just what it meant(that customers would have to buy and maintain their own electric service facilities), the protest movement ballooned into huge proportions.
Chambers of Commerce throughout the OG&E service area passed resolutions. Newspapers and radio and television stations editorialized against the order. But most important were the thousands of letters and telephone calls received by the Oklahoma Corporation Commission in opposition to the order.
Soon after the order was issued, OG&E asked for a stay of the property line portion. A few days after the protest movement became so intense, the commission granted the stay and stated that the matter would be "taken under advisement." As important as the rate case and property line issues were, 1976 also produced some other significant events for OG&E. On January 1, Donald S. Kennedy relinquished the title of Chief Executive Officer to President James G. Harlow, Jr., but remained active as Chairman of the Board of Directors.
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The '76 construction budget again reached an all-time high, $190 million. In June the company began stockpiling coal and the first 110-car unit-train load of low-sulphur Wyoming coal was delivered to Muskogee Plant.
During 1976 work began in earnest on the Sooner Plant in north-central Oklahoma. There are two 515-megawatt, coal-fired units, but there are space and water enough for additional units. Sooner Unit 1 began operation in 1979.
It was also in 1976 that OG&E completed the largest transmission line project ever undertaken by the company's own personnel. It was a 15-mile, 345,000-volt tower loop south of Muskogee.
Before 1976 ended, the company filed a wholesale rate increase application with the Federal Power Commission. Company records dating back to 1927 were searched and failed to show any prior wholesale rate increases, although records did reveal numerous rate reductions.
The company was awarded $2.29 million of the $2.99 million requested. The order was issued in March of 1978.
A retail rate increase request was filed in the Oklahoma jurisdiction on April 1, 1977. The request totaled $40,544,000 and was based on the test year ending August 31,1976. The request represented an increase of 15.4 percent of test year revenue.
The Oklahoma Corporation Commission issued a decision in the case on September 30, 1977. OG&E was granted $20,243,354 or about 50 percent of the requested amount, and only 7.7 percent of test year revenue.
Construction continued on the coal-fired generating units, with 75 percent of the $188 million 1977 construction budget earmarked for the new units.
As the Sooner Plant continued to take shape, OG&E added a "housing development" to the plans. The residents were to be several types of game fish to be stocked in the reservoir. The residences, or more correctly, habitats, consisted of cable-anchored brush piles and collections of worn out heavy equipment tires.
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July saw the opening of a new era for OG&E- the operation of a modern coal-fired generating unit. Muskogee Unit 4 came on line on that date, adding 515,000 kilowatts of available power to the company's capacity.
Fly ash, a waste byproduct of coal burning, became an asset for the company. The addition of fly ash to Portland cement was found to produce a lighter, stronger concrete than the cement alone.
A local company in Muskogee contracted to sell the fly ash resulting from the operation of the Muskogee coal-fired unit. Proceeds from the sale of the ash are applied to the OG&E operating expense costs as a credit.
Horseshoe Lake Plant was the site for another fish project in 1977. OG&E agreed to lease the use of the station's cooling reservoir to Hickory Ridge Fisheries, Inc., a firm owned and operated by Dr. Leery Carpenter.
Under the lease, Hickory Ridge stocked the reservoir with tilapia, buffalo, carp, channel catfish and freshwater shrimp. The fish are harvested and sold to local markets. Also, the tilapia, an African fish, thrives on algae. This helps to control the growth of the green water plant that creates a slime problem on power plant condensers.
For 1978, the construction budget was $184 million, with the emphasis on completion of the three remaining coal-fired generating units, Muskogee Unit 5 and Sooner Unit 1 and Unit 2.
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Electric heating for residential customers was causing an increase in winter usage. No less than 21 Western Region substations reached winter peaks higher than the peaks recorded the previous summer.
To provide information to the public and counter growing criticism of the electric utility industry, OG&E produced a 10-minute film called "The Good Old Days." The film was a collection of old photos from the 1800's and 1900's, which, with the narration, showed that the "good old days" were really hard and inconvenient. Reception by clubs and civic groups was very favorable.
The computer age continued to make itself felt throughout the company. A new Honeywell 60 computer was installed and cathode ray tube terminals began appearing all around the service area. With the new equipment, accounting work was speeded up and engineering and other applications expanded.
A long-time landmark in downtown Oklahoma city came down during the summer of 1978. The "OG&E-Live Better Electrically" sign that had stood atop the Corporate Headquarters building for a half-century was dismantled by OG&E crews.
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To improve crew and material scheduling within the company, a system of planner-analysts was initiated. Their primary job is to make sure that crews and equipment are utilized in the most efficient and cost-effective manner.
On December 15, another Oklahoma retail rate increase was requested. This time the amount was $93,356,000, an increase of 25.5 percent over the revenue of the test year, calendar year 1978. A decision in this case was handed down nearly 11 months after the application, on November 8, 1979, the Oklahoma Corporation Commission granted the company $ 38,100,000 or 9.75 percent of test year revenue.
On March 22, 1979, the first coal train arrived at Sooner Plant. During regular operation of the plant, a coal train would consist of 110 cars with 100 tons of coal in each car.
Also in March, envelope billing was begun by the company, replacing the previous postcard-style bills. The new method, which included a return envelope, drew very favorable customer reaction.
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On June 21, a thunderstorm knocked out service to 700,000 OG&E customers in the Oklahoma City area. Damage reached a half million dollars and restoration of service took three days in some cases. The storm knocked out 48 substation circuits and 3 1/2 miles of transmission line. Thirty-two line crews and 48 service crews were involved in repairs.
During 1979, the construction at Sooner Plant included the building of two public recreation areas. The areas, consisting of boat ramps, swimming beaches, picnic areas, restrooms and parking lots, located along SH 15 at the south end of the lake, became popular with many visitors.
Waterfowl hunting was also approved for the Sooner reservoir later on.
On December 28, the company filed for a $39,323,000 interim rate increase in the Oklahoma retail jurisdiction, an increase of 8.9 percent over revenue in the test year, ended October 31, 1979, an order issued on March 31, 1980.
The annual construction budget for 1980, $94,796,900, was less than half the projected $190 million originally planned. The company's financial problems dictated the cut, and the budget ended up the lowest since 1972.
The reduction meant a delay of a year and a half for the completion of Muskogee Unit 6, just getting under way. A number of upgrading projects were deferred to a later time.
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1980 also saw the beginnings of a drastic shift in OG&E's approach to sales. Marketing philosophy began shifting to the reduction of peak demand, and the first stirrings of load management efforts became evident.
The Oklahoma Corporations Commission directed state utilities to begin planning for home energy audits and other means of lowering peak demand.
In April, Belle Isle Plant in Oklahoma City was retired after a half century of service. Initially a base load, adn later a peaking plant, Belle Isle had become virtually unsuable because of the silting of the lake.
In August, the lake was drained for core samples and contour mapping. Private developers expressed interest in teh porperty, and an option to buy was issued later to an Oklahoma City concern. The firm subsequently exercised the option and purchased the property in June 1983.
The one-year warranty overhaul was conducted on Sooner Unit 1 in 1980, as Sooner Unit 2 neared completion.
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During the summer, a new load management program, PEAKS, (Planned Economy and Kilowatt Saver), was introduced in the Arkansas Region.
The program consisted of voluntary installation of cutoff devices on residential central air conditioning systems. The devices, thermostatically controlled, cycle off the compressor for 7 1/2 minutes every half hour after the outside temperature reaches a certain level and continues until the temperature drops to a lower level.
PEAKS proved quite popular with the Arkansas customers, since the company included a credit on the three summer month bills to participating customers, based on the connected air conditioning load.
No less than three rate increase requests were filed in 1980. On May 20, OG&E filed for a $17.3 million increase in the Arkansas jurisdiction. On May 18, 1983, teh Arkansas Public Service Copmmision granted $11,851,338, an increas of 34.9 percent of test year revenue.
On May 29, a request was filed with the Federal Energy Regulatory Commission for an increase of $11.9 million. A settlement agreement in the amount of $10,060,637 was filed August 4, 1981.
On July 30, an application was filed for a permanent rate increas in Oklahoma for $141,300,000. The amount included the $39.3 million interim request made in December 1979.
The Oklahoma Corporation Commission granted $78,421,893, the largest amount ever granted in an Oklahoma case, on January 9, 1981.
All three cases were filed with the same test year, the 12 months ended October 31, 1979.
The beginning of 1981 saw an annual construction budget of $130 million, and a number of steps taken in load management.
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In the spring, the ECHO (Energy Conservation Helps Oklahoma) program was introduced. This program, mandated by the Oklahoma Corporation Commission, consisted of home energy audits, to be performed by all utilities under the commission's jurisdiction.
ARCS (Arkansas Residential Conservation Service) program, the Arkansas equivalent of ECHO, also got underway.
Sensing the value of the program for the company as well as residential customers, OG&E immediately set out to make ECHO a success. Soon, the company was the leader in number of audits requested and performed.
Under ECHO, a trained energy auditor performs an inspection of the customer's home. Insulation is measured, as well as window area, floor area, type of heating and cooling and other aspects of the home's energy efficiency.
Data collected is fed into the company computer via a phone link and results are returned immediatiely. The auditor discussed the findings with the homeowner and makes suggestions for ways to save energy and money.
The cost to the homeowner was $15 for the original audit. This was below the actual cost, but was used as a means of weeding out homeowners not really interested in energy saving. In 1983, customer charges for the home audit was reduced to $5. In addition, the homeowner is presented with an energy saving kit of do-it-yourself intems, including weatherstripping, caulking, etc.
The PEAKS Program, already successful in Arkansas, was approved by the Oklahoma Corporation Commission for implementation in OG&E's Oklahoma service area.
The Oklahoma application of PEAKS uses two different methods to activate the devices. In the Oklahoma City area, an FM radio signal, activated by the OG&E dispatcher, is trasmitted from the antenna tower of a local television station.
Outside the range of the signal, temperature-controlled devices are used.
With virtually no advertising, the PEAKS program got off to a running start, and a waiting list for installation soon developed, and remained.
To give the public an idea of where all teh millions of dollars in the utility industry goes and how well OG&E uses them, the company began a power plant tour program. Tours can be arranged though Sooner, Mustang, Horseshoe Lake, Arbuckle, Seminole and Muskogee Plants.
This program, too, became immensely popular, finally reaching the point that each station developed a staff of well-trained tour guides from plant personnel who were assigned to show the public where their electricity comes from.
Plant tours were also held for OG&E family members. During the Family Days tours in the spring, 1400 family members toured the plants.
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A fire on March 22 knocked out the main power transformer of Muskogee Unit 4.
There were no injuries, but the unit was out service until a leased transformer was installed. The unit returned to the system on May 26.
On April 2, the company filed a request for a $76.1 million retail rate increase in the Oklahoma jurisdiction, based on the test year ended December 31, 1980. The Oklahoma Corporation Commission approved a $53.7 million increase on October 16, 1981.
On May 12, a request for a $5.26 million retail rate increase was filed in Arkansas.
Rounding out year's load management activities, the Oklahoma Corporation Commission approved the OG&E plan to pay customers $200 per saved kilowatt, based on before and after ECHO audits.
Under this program, dubbed AWARD (Audit and Weatherization Aid Reduce Demand) a homeowner having an ECHO audit is advised of particular steps that can be taken to qualify for AWARD.
Increasing ceiling insulation and adding storm windows and doors are two common suggestions. If the recommended steps result in significant improvement of energy, the reduction in demand by the home qualifies for payment.
For example, if adding insulation saves a half kilowatt, the homeowner is is advised. If the homeowner adds the insulation, a second audit may be requested. Once the audit is made and the addition of the insulation verified, the homeowner is given a check for $100.
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The AWARD program has added new interest to the already popular ECHO and ARCS audits, and OG&E auditors have been busy every since.
1982's construction budget was $208,856,626. Of that amount, 64 percent was to go for work on Muskogee Unit 6.
On March 1, Western Region Customer Service installed a telecommunication device for the deaf in order to serve hearing impaired customers better. The device consists of a printer connected to the telephone, so that the customer can type messages and read the replies over the telephone circuit.
Also in March, OG&E President and Chief Executive Officer James G. Harlow, Jr., was elected Chairman of the Company's Board of Directors.
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During the summer, a flock of 246 giant Canada geese was released at Sooner Plant in an effort to start a nesting colony of the formerly endangered birds. More were released at Konawa in 1983.
The summer peak for 1982 was 4,440,000 kilowatts recorded on August 24.
Also in August, the company was named number one in vehicle safety for utilities of its size by Edison Electric Institute for 1981. Company members drove 1,375 vehicles a total of 14,877,872 miles with 63 vehicle accidents. This came to 4.23 accidents per million miles driven, compared to the industry average of 8.14 accidents per million miles.
On January 21,1983, OG&E filed for a retail rate increase of $82.4 million in the Oklahoma jurisdiction, representing an overall increase of 11.7 percent. An interim increase was requested pending the hearing later in the year. The amount was later revised to $87.4 million after actual figures were obtained to replace estimates. The Oklahoma Corporation Commission ruled on May 9 that there would be no interim increase. Hearing on the case was held beginning September 27 and running through September 30. On December 9, the Commission allowed a two-stage increase-$5.2 million immediately, followed by $29.4 million when Muskogee Unit 6 became commercial in mid-1984. Since the allowed increase was far below that requested, signs pointed to another rate case in the future.
Early in the year, all meter reading became computerized. All 116 meter readers in OG&E began using the Roadrunner device, which records the reading electronically in its memory and transmits the entire route readings at the end of the day to the corporate computer through a phone link.
Load management also showed continued progress during 1983. By July 15, $775,826 had been paid to OG&E customers during teh AWARD program. At that time, 4,000 Oklahoma and 487 Arkansas customers had received AWARD payments.
In May, the Arkansas Public Service Commission approved the additon of certain commercial and industrial customers to the Arkansas PEAKS program.
The summer peak on OG&E's system exceeded the previous year's high on four days. On July 25, demand reached 4,570,000 Kilowatts. The following day, it registered 4,630,000 kilowatts. On both August 16 and August 30, demand reached 4,700,000 kilowatts.
A retail rate increase request was filed in Arkansas on September 12 for $17.9 million, or a 29 percent overall increase. Hearing was set for March 13, 1984.
Six OG&E workers were presented the Red Cross Certificate of Merit, that organization's highest award, on October 12, 1983. The presentation was made by Governor George Nigh in crcognition of two separate cardio-pulminary resuscitation lifesaving efforts on the job. The OG&Eers honored were: Rufus V. Cox and Charlie Butler, North Oklahoma City District, Western Region; and Jim Arnold III, Ted Brumit, Richard Sprague and Jim Thomas of Mustang Power Plant.
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Toward the end of 1983, Electric Light and Power magazine named OG&E Utility of the Year. This singular honor showed that the company's management and emplayees are setting the standard for utility performance.
As we come down to the present, it seems proper to look back over the past and think about what was done and what might have been done. It is, however, more important for OG&E members to look ahead to the future, for only the future can reveal the wisdom of decision made today.
Those decision are now charting the future of OG&E. As stated at the beginning, a company is only as strong as its people... every single company member working together. Company members frequently refer to themselves and members of the OG&E family.
That's OG&E's strong suit. return to contents
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