Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following combined discussion is separately filed by OGE Energy and OG&E. However, OG&E does not make any representations as to information related solely to OGE Energy or the subsidiaries of OGE Energy other than itself.

Introduction and Overview

OGE Energy is a holding company whose primary investment provides electricity in Oklahoma and western Arkansas. OGE Energy's electric company operations are conducted through its wholly-owned subsidiary, OG&E, which generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas and are reported through OGE Energy's electric company business segment. OG&E's rates are subject to regulation by the OCC, the APSC and the FERC. OG&E was incorporated in 1902 under the laws of the Oklahoma Territory and is the largest electric company in Oklahoma, with a franchised service territory that includes Fort Smith, Arkansas and the surrounding communities. OG&E sold its retail natural gas business in 1928 and is no longer engaged in the natural gas distribution business.

The accounts of OGE Energy and its wholly-owned subsidiaries, including OG&E, are included in OGE Energy's condensed consolidated financial statements. All intercompany transactions and balances are eliminated in such consolidation.

OGE Energy's purpose is to energize life, providing life-sustaining and life-enhancing products and services that enrich its communities, encouraging growth and a higher quality of life. OGE Energy's purpose comes with a balanced approach to multifaceted stewardship: keeping its employees (internally referred to as "members") safe, reducing its environmental impact, strengthening its diverse communities and ensuring its effective corporate governance. OGE Energy's business model is centered around growth and sustainability for members, communities and customers and the owners of OGE Energy, its shareholders. OGE Energy is focused on creating long-term shareholder value by targeting the consistent growth of consolidated earnings per share of five to seven percent, supported by strong load growth enabled by low customer rates and a strategy of investing in lower risk infrastructure projects that improve the economic vitality of the communities it serves in Oklahoma and Arkansas. OGE Energy's long-term sustainability is predicated on providing exceptional customer experiences, strengthening the energy grid, investing in proven technologies to meet generation capacity needs, environmental stewardship, strong governance practices and caring for and supporting its members and communities. Further discussion of OGE Energy's strategy can be found in its 2024 Form 10-K.

Recent Developments

OG&E's Regulatory Matters

On March 27, 2025, the OCC issued a final order on the general rate review filed in December 2023, which finalized its previous interim order approving the settlement agreement and approved the ALJ report on the remaining one MW issue with one exception. OG&E also recently issued its 2025 IRP to the OCC and APSC. These matters, as well as other regulatory matters, are discussed in Note 13 within "Item 1. Financial Statements."

Legislative Matters

Federal

On July 4, 2025, the legislation known as the "One Big Beautiful Bill" was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Registrants. The Registrants are still reviewing the bill but do not believe there will be any material impacts to their ongoing or future operations.

Oklahoma

In May 2025, SB 998 was passed into law and became effective August 29, 2025. This legislation allows rate-regulated retail electric service providers, such as OG&E, to receive CWIP recovery of new natural gas generation capacity, if those proposed generation sources are approved by the OCC under existing statutory review procedures, and sets specific timelines for the OCC to review proposed projects. SB 998 also allows utilities to establish a regulatory asset to defer 90 percent of depreciation expense and return associated with qualified plant investments, that are not classified as transmission or new generation, for recovery over an

allowed 20 year period in a future rate review filing. OG&E began deferring such costs to a regulatory asset in September 2025, as further discussed in Note 1 within "Item 1. Financial Statements."

Arkansas

In March 2025, Act 373 was signed into law by the Governor of Arkansas. Act 373 enables rate-regulated retail electric providers, such as OG&E, to receive CWIP recovery of "strategic investments", including (i) new electric generating facilities, including transportation and storage facilities for associated fuel, (ii) upgrades, expansions, or fuel conversions of electric generating facilities, including transportation and storage facilities for associated fuel, and (iii) new or upgraded electric transmission facilities, including substations. All projects are subject to review and approval by the APSC. Act 373 further authorizes use of a rider to recover approved strategic investments that are not being recovered through previously approved rates, upon approval of the project by the APSC.

Summary of OGE Energy Operating Results

Three Months Ended September 30, 2025 as compared to the Three Months Ended September 30, 2024

OGE Energy's net income was $231.3 million, or $1.14 per diluted share, during the three months ended September 30, 2025 as compared to $218.7 million, or $1.09 per diluted share, during the same period in 2024. The increase in net income of $12.6 million, or $0.05 per diluted share, is further discussed below.

Nine Months Ended September 30, 2025 as compared to the Nine Months Ended September 30, 2024

OGE Energy's net income was $401.5 million, or $1.99 per diluted share, during the nine months ended September 30, 2025 as compared to $339.6 million, or $1.69 per diluted share, during the same period in 2024. The increase in net income of $61.9 million, or $0.30 per diluted share, is further discussed below.

2025 Outlook

OGE Energy's 2025 consolidated earnings guidance remains projected to be in the top half of its original 2025 earnings guidance range of $2.21 to $2.33 per average diluted share. This guidance assumes, among other things, approximately 202.1 million average diluted shares outstanding and normal weather for the remainder of the year. OG&E has significant seasonality in its earnings due to weather on a year-over-year basis. See OGE Energy's 2024 Form 10-Kfor other key factors and assumptions underlying its 2025 guidance.

Results of Operations

The following discussion and analysis presents factors that affected the Registrants' results of operations for the three and nine months ended September 30, 2025 as compared to the same period in 2024 and the Registrants' financial position at September 30, 2025. Due to seasonal fluctuations and other factors, the Registrants' operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or for any future period. The following information should be read in conjunction with the condensed financial statements and notes thereto. Known trends and contingencies of a material nature are discussed to the extent considered relevant.

Results by Business Segment

The following discussion of results of operations for OG&E includes intercompany transactions that are eliminated in OGE Energy's condensed consolidated financial statements.

OG&E (Electric Company)

OG&E's net income increased $17.9 million, or 8.0 percent, and $62.1 million, or 17.3 percent, during the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The following section discusses the primary drivers for the increase in net income during the three and nine months ended September 30, 2025 as compared to the same periods in 2024.

Operating revenues increased $79.6 million, or 8.2 percent, and $309.5 million, or 13.9 percent, during the three and nine months ended September 30, 2025, respectively, primarily driven by the below factors.

Fuel, purchased power and direct transmission expense for OG&E consists of fuel used in electric generation, purchased power and transmission related charges. As described above, the actual cost of fuel used in electric generation and certain purchased power costs are generally recoverable from OG&E's customers through fuel adjustment clauses. The fuel adjustment clauses are subject to periodic review by the OCC and the APSC. OG&E's fuel, purchased power and direct transmission expense increased $38.4 million, or 11.0 percent, and $197.4 million, or 25.4 percent, during the three and nine months ended September 30, 2025, respectively, primarily driven by the below factors.

Other operation and maintenance expense increased $12.1 million, or 9.2 percent, and decreased $2.4 million, or 0.6 percent, during the three and nine months ended September 30, 2025, respectively. The increase during the three months ended September 30, 2025 was primarily due to an increase in vegetation management activities resulting from approvals in OG&E's most recent

Oklahoma rate review and higher payroll and benefits, net of capitalized labor, driven by lower capitalized labor due to work on certain technology projects being completed by mid-year. The decrease during the nine months ended September 30, 2025 was primarily due to a decrease in contract technical and construction services driven by the timing of certain projects, lower payroll and benefits, net of capitalized labor, and the timing of energy efficiency program activities, partially offset by an increase in vegetation management activities resulting from approvals in OG&E's most recent Oklahoma rate review.

Depreciation and amortization expense increased $2.7 million, or 1.9 percent, and $16.0 million, or 3.9 percent, during the three and nine months ended September 30, 2025, respectively, primarily due to additional assets being placed into service and increased amortization of certain regulatory assets, partially offset by deferrals of allowable depreciation and amortization expense of $2.8 million to a regulatory asset in accordance with SB 998, as further discussed in Note 1 within "Item 1. Financial Statements."

Net other income decreased $4.3 million, or 37.1 percent, and $5.2 million, or 18.3 percent, during the three and nine months ended September 30, 2025, respectively, primarily due to higher other net periodic benefit expense driven by changes to the level of pension expense included in base rates as a result of the most recent Oklahoma rate review. For the decrease during the nine months ended September 30, 2025, the higher other net periodic benefit cost was partially offset by increased interest income related to the carrying charge for the higher fuel under recovery balance.

Interest expense increased $0.1 million, or 0.2 percent, and $14.0 million, or 8.7 percent, during the three and nine months ended September 30, 2025, respectively, primarily due to the $350.0 million senior notes issuance in April 2025, and with respect to the nine months ended September 30, 2025 also due to the $350 million senior notes issuance in August 2024, partially offset by a decrease in other interest expense related to borrowings under OG&E's revolving credit agreement during the second and third quarters of 2024, as well as the deferral of certain interest expense to a regulatory asset in accordance with SB 998, as further discussed in Note 1 within "Item 1. Financial Statements."

Income tax expense increased $5.6 million, or 12.3 percent, during the three months ended September 30, 2025 primarily due to higher pretax income and increased $17.2 million, or 24.0 percent, during the nine months ended September 30, 2025 primarily due to higher pretax income, partially offset by an increase in the recognition of unfunded deferred taxes.

Liquidity and Capital Resources

Cash Flows

OGE Energy

Working Capital

Working capital is defined as the difference in current assets and current liabilities. OGE Energy's working capital requirements are driven generally by changes in accounts receivable, accounts payable, commodity prices, credit extended to and the timing of collections from OG&E's customers, the level and timing of spending for maintenance and expansion activity, inventory levels and fuel recoveries. The following discussion addresses changes in OGE Energy's working capital balances at September 30, 2025 compared to December 31, 2024.

Accounts Receivable and Accrued Unbilled Revenues increased $217.3 million, or 68.9 percent, primarily due to an increase in billings to OG&E's retail customers reflecting higher seasonal usage in September 2025 as compared to December 2024.

Fuel Inventories decreased $25.1 million, or 16.9 percent, primarily due to net withdrawals of coal and natural gas.

Fuel Clause Under Recoveries decreased $74.2 million, or 65.8 percent, primarily due to higher recoveries from OG&E retail customers as compared to the actual cost of fuel and purchased power.

Other Current Assets decreased $14.9 million, or 16.7 percent, primarily due to SPP security deposit refunds received during the second quarter of 2025, as well as a decrease in the SPP transmission formula rate true-up.

Customer Deposits increased $11.7 million, or 10.5 percent, primarily due to an increase in large commercial customers.

Accrued taxes increased $38.9 million, or 66.1 percent, primarily resulting from the timing of payments for federal tax liabilities.

Accrued Interest increased $18.7 million, or 29.3 percent, primarily due to the issuance of OG&E's $350.0 million senior notes issuance in April 2025, as well as the timing of interest payments and accruals.

Long-Term Debt due within One Year decreased $32.4 million, or 100.0 percent, due to the repayment of the Muskogee industrial authority bonds that matured in January 2025.

Future Material Cash Requirements

OGE Energy's primary, material cash requirements are related to acquiring or constructing new facilities and replacing or expanding existing facilities at OG&E. Other working capital requirements are expected to be primarily related to maturing debt, operating lease obligations, fuel clause under recoveries and other general corporate purposes. Further, working capital requirements can be seasonal. OGE Energy generally meets its cash needs through a combination of cash generated from operations, short-term borrowings (through a combination of bank borrowings and commercial paper) and permanent financings. OGE Energy believes its cash flows from operations, existing borrowing capacity, and access to debt and equity capital markets, as needed, should be sufficient to satisfy material cash requirements over the short-term and long-term.

Capital Expenditures

OGE Energy's estimates of capital expenditures, which represent base maintenance capital expenditures plus capital expenditures for known and committed projects, for the years 2025 through 2029 are presented in the following table. The capital investments are customer-focused and targeted to maintain and improve the safety, resiliency and reliability of OG&E's distribution and transmission grid and generation fleet, enhance the ability of OG&E's system to perform during extreme weather events and to serve OG&E's growing customer base.

In May 2024, OG&E issued requests for proposals for resources to meet the capacity needs identified in its 2024 IRP. OG&E has selected projects to meet a portion of its capacity needs and has filed for approval of these projects with the OCC and the APSC, as discussed in Note 13 within "Item 1. Financial Statements." The capital costs of the projects included in the approval filings are expected to be approximately $506 million, as indicated in OG&E's filing with the OCC. Following a determination by the OCC, OG&E expects to update its capital and financing plans to reflect the projects that have been approved. The annual level of investments in the transmission and distribution system could vary depending on the amount and timing of incremental generation capacity investments.

Financing Activities and Future Sources of Financing

Management expects that cash generated from operations, proceeds from the issuance of long- and short-term debt, proceeds from the sales of common stock to the public, including through OGE Energy's Automatic Dividend Reinvestment and Stock Purchase Plan, or other offerings will be adequate over the short-term and the long-term to meet anticipated cash needs and to fund future growth opportunities. OGE Energy utilizes short-term borrowings (through a combination of bank borrowings and commercial paper) to satisfy temporary working capital needs and as an interim source of financing capital expenditures until permanent financing is arranged.

Short-Term Debt and Credit Facilities

OGE Energy borrows on a short-term basis, as necessary, by issuance of commercial paper and borrowings under its revolving credit agreements.

OGE Energy has unsecured five-year revolving credit facilities totaling $1.1 billion ($550.0 million for OGE Energy and $550.0 million for OG&E), which can also be used as letter of credit facilities. OGE Energy also has a $120.0 million floating rate unsecured three-year credit agreement, of which $60.0 million is considered a revolving loan. The following table presents information about OGE Energy's revolving credit agreements at September 30, 2025.

The following table presents information about OGE Energy's total short-term debt activity for the three and nine months ended September 30, 2025.

OG&E must obtain regulatory approval from the FERC in order to borrow on a short-term basis. OG&E has the necessary regulatory approvals to incur up to $1.0 billion in short-term borrowings at any one time for a two-year period beginning January 1, 2025 and ending December 31, 2026.

Issuance of Long-Term Debt

On April 1, 2025, OG&E issued $350.0 million of 5.80 percent senior notes due April 1, 2055. The proceeds from this issuance were added to OG&E's general funds and used for the repayment of short-term debt and borrowings under its revolving credit facility, and to fund OG&E's capital investment program and working capital needs.

Security Ratings

Access to reasonably priced capital is dependent in part on credit and security ratings. Generally, lower ratings lead to higher financing costs. Pricing grids associated with OGE Energy's credit facilities could cause annual fees and borrowing rates to increase if an adverse rating impact occurs. The impact of any future downgrade could include an increase in the costs of OGE Energy's short-term borrowings, but a reduction in OGE Energy's credit ratings would not result in any defaults or accelerations. Any future downgrade could also lead to higher long-term borrowing costs and, if below investment grade, would require OGE Energy to post collateral or letters of credit.

A security rating is not a recommendation to buy, sell or hold securities. Such rating may be subject to revision or withdrawal at any time by the credit rating agency, and each rating should be evaluated independently of any other rating.

On April 14, 2025, Moody's Investors Service revised their ratings outlook on both OGE Energy and OG&E from stable to negative. Moody's Investors Service indicated that the revised outlook reflects pressure related to OG&E's capital expenditure plan and higher debt levels at the holding company.

Critical Accounting Policies and Estimates

The condensed financial statements and notes thereto contain information that is pertinent to Management's Discussion and Analysis of Financial Condition and Results of Operations. In preparing the condensed financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Changes to these assumptions and estimates could have a material effect on the condensed financial statements. The Registrants believe they have taken reasonable positions where assumptions and estimates are used in order to minimize the negative financial impact to the Registrants that could result if actual results vary from the assumptions and estimates.

In management's opinion, the areas where the most significant judgment is exercised include the determination of pension and postretirement plan assumptions, income taxes, contingency reserves, and regulatory assets and liabilities. The selection, application and disclosure of the critical accounting estimates have been discussed with the Audit Committee of OGE Energy's Board of Directors and are discussed in detail within "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Registrants' 2024 Form 10-K.

Commitments and Contingencies

In the normal course of business, the Registrants are confronted with issues or events that may result in a contingent liability. These generally relate to lawsuits or claims made by third parties, including governmental agencies. When appropriate, management consults with legal counsel and other experts to assess the claim. If, in management's opinion, the Registrants have incurred a probable loss as set forth by GAAP, an estimate is made of the loss, and the appropriate accounting entries are reflected in the condensed financial statements. If the assessment indicates that a potential loss is not probable but reasonably possible, the nature of the contingent matter, together with an estimate of the range of possible loss if determinable and material, would be disclosed. At the present time, based on currently available information, except as disclosed in Note 12 within "Item 1. Financial Statements," the Registrants believe that any reasonably possible losses in excess of accrued amounts arising out of pending or threatened lawsuits or claims would not be quantitatively material to their condensed financial statements and would not have a material adverse effect on their financial position, results of operations or cash flows. See Notes 12 and 13 within "Item 1. Financial Statements" for further discussion of the Registrants' commitments and contingencies.

Environmental Laws and Regulations

The activities of OG&E are subject to numerous stringent and complex federal, state and local laws and regulations governing environmental protection. These laws and regulations can change, restrict or otherwise impact the Registrants' business activities in many ways, including the handling or disposal of waste material, planning for future construction activities to avoid or mitigate harm to threatened or endangered species and requiring the installation and operation of emissions or pollution control equipment. Failure to comply with these laws and regulations could result in the assessment of administrative, civil and criminal penalties, the imposition of remedial requirements and the issuance of orders enjoining future operations. Management believes that OG&E's operations are in substantial compliance with current federal, state and local environmental standards.

Changes in presidential administrations can result in uncertainty regarding policy or initiatives relating to activities that may affect the environment. On March 12, 2025, the EPA announced that it would begin reconsideration of numerous regulations, including several that apply to OG&E. The EPA has begun this process for certain regulations as described below and must adhere to the legal requirements for enacting, revising, repealing, or replacing agency regulations. Future developments, such as changes in existing laws, introduction of new laws or regulations, or the emergence of new facts or conditions, may result in significant costs for the Registrants.

Environmental regulation can increase the cost of planning, design, initial installation and operation of OG&E's facilities. Management continues to evaluate its compliance with existing and proposed environmental legislation and regulations and implement appropriate environmental programs in a competitive market.

Air

OG&E's operations are subject to the Federal Clean Air Act of 1970, as amended, and comparable state laws and regulations. These laws regulate air pollutant emissions from industrial sources, including electric generating units, and require monitoring and reporting. These laws and regulations may require OG&E to secure pre-approval for constructing or modifying projects or facilities that are anticipated to generate air emissions or increase current emission levels. Additionally, OG&E may need to obtain and comply with air permits outlining specific emission and operational requirements or implement emission control equipment. OG&E likely will be required to incur certain capital expenditures in the future for air pollution control equipment and technology in connection with obtaining and maintaining operating permits and approvals for air emissions.

Cross State Air Pollution Rule

In 2015, the EPA updated the ambient air standards for ozone. Although Oklahoma meets these standards, the Clean Air Act requires states to submit plans to the EPA to ensure their emissions do not affect other states. Oklahoma submitted its plan in 2018. However, in January 2023, the EPA disapproved the plans of 19 states, including Oklahoma. In response, the Oklahoma Attorney General, the ODEQ and OG&E filed petitions for review in March 2023. A stay on the EPA's disapproval was granted in July 2023. The timing of further action is currently unknown.

In a related matter, in April 2022, the EPA published a proposed FIP related to the "Good Neighbor" requirements intended to reduce interstate NOXemissions. OG&E commented on this proposed FIP in June 2022. By June 2023, the EPA finalized this plan for 23 states, including Oklahoma. This final Good Neighbor FIP would revise Oklahoma's NOXemissions budget for electric generating units, including OG&E's, starting in 2023. The emissions budget would decrease over time based on achievable reductions. OG&E estimated a 34.5 percent reduction by 2026 from 2023 levels and a 50 percent reduction by 2027 from 2021 levels. In October 2023, several petitioners sought a stay of the final FIP from the U.S. Supreme Court, pending review of the challenges in the U.S. Court of Appeals for the District of Columbia. The U.S. Supreme Court granted the stay in June 2024. The EPA requested a delay in the case in February 2025, which was denied. In March 2025, the EPA sought to reconsider the rule without vacating it. The D.C. Circuit Court agreed to hold the case in abeyance in April 2025, requiring status reports every 90 days. The timing of further action is unknown.

Following the FIP issuance, OG&E has been considering options to cut emissions at its generating units, including buying emission allowances, installing selective catalytic reduction systems, switching coal units to gas, or retiring and replacing capacity. OG&E submitted its final 2024 IRP to the OCC and APSC on March 29, 2024, which evaluates various compliance options related to the EPA's Good Neighbor FIP. Due to the uncertainty surrounding the SIP disapproval and FIP implementation, OG&E cannot determine the exact cost of compliance. The costs depend on the litigation outcome, chosen control strategies, regulatory approvals, and project timelines. However, OG&E estimated in mid-2023 that compliance costs could range from $2.4 billion to $2.8 billion, including $100 million to $300 million over the first 12 to 18 months following the FIP's effectiveness. OG&E plans to seek recovery of necessary environmental expenditures but cannot guarantee approval or timely recovery of all such expenditures.

New Source Performance Standards

On December 13, 2024, the EPA published in the Federal Register a proposed rule that would revise the new source performance standards regulating NOxand SO2 emissions from new, modified, and reconstructed stationary combustion turbines. The EPA is proposing more stringent NOxemissions standards and to retain the existing SO2standards. OG&E participated with trade associations to submit comments on the Proposed Rule on April 15, 2025. It is unknown what potential material impacts, if any, there will be from any final action by the EPA.

Particulate Matter NAAQS

On February 7, 2024, the EPA issued a final rule resulting from its reconsideration of the primary (health-based) and secondary (welfare-based) NAAQS for PM, which were set in 2013 and which the EPA declined to revise in 2020. The final rule lowers the primary annual PM2.5NAAQS from 12.0 µg/m3to 9.0 µg/m3and retains the other PM standards at their current levels, including the 24-hour PM2.5NAAQS. The EPA will determine which areas of the country meet the standards, such as making initial attainment and nonattainment designations, no later than two years after new standards are issued. States must develop and submit attainment plans no later than 18 months after the EPA finalizes nonattainment designations.

The final rule was published in the Federal Register on March 6, 2024. Litigation on the final rule is proceeding in the D.C. Circuit. A coalition of 24 states, including Oklahoma, filed challenges to the final rule, and a separate coalition of states and other stakeholders filed to intervene in these challenges on behalf of the EPA. A coalition of 22 state governors separately requested the EPA to pause implementation of the final rule.

The revised NAAQS could impact regional air quality goals and emission limits for emission sources; however, it is unknown at this time what, if any, potential material impacts to OG&E individual operating permit emission limits will result from the EPA actions.

Regional Haze

In July 2020, the ODEQ notified OG&E that the Horseshoe Lake generating units would be included in Oklahoma's second Regional Haze implementation period evaluation of visibility impairment impacts to the Wichita Mountains. OG&E submitted an analysis of all potential control measures for NOxon these units to the ODEQ. The ODEQ submitted a revised SIP to the EPA on August 12, 2022. On June 28, 2024, the EPA entered a consent decree that requires the EPA to propose action on the Oklahoma SIP no later than December 31, 2025, and take final action no later than December 31, 2026. It is unknown at this time what the outcome, or any potential material impacts, if any, will be from the evaluations by OG&E, the ODEQ and the EPA.

Mercury and Air Toxics Standards

On April 25, 2024, the EPA released the final revised Mercury and Air Toxics Standards regulation with a compliance date in July 2027. A coalition of states, including Oklahoma, challenged this rule in the D.C. Circuit Court and sought a stay, which was denied. This coalition of states then filed an emergency stay application with the U.S. Supreme Court, which was also denied. On April 14, 2025, the EPA extended the compliance deadline to July 8, 2029. On June 17, 2025, the EPA proposed to repeal the revised Mercury and Air Toxics Standards, which would remove the revised emission limit and monitoring requirements. The potential material impacts, if any, of further actions by the EPA or final action by the D.C. Circuit Court are currently unknown.

Greenhouse Gas

OG&E is monitoring changes in legal standards for greenhouse gas emissions. Federal rules from 2024 may impose new requirements on fossil fuel assets. If these rules are implemented, or if new regulations are passed, OG&E could face significant compliance costs that may impact its financial position, results of operations, and cash flows if not recovered through regulated rates.

On May 9, 2024, the EPA issued final rules for emission guidelines under Section 111(d) for existing fossil fuel-fired steam units and revised standards under Section 111(b) for new gas turbines. Under the rules, existing coal units must use carbon capture for 90 percent of emissions by 2032 if they plan to operate beyond 2039. If they plan to operate until 2039, they must co-fire with natural gas at 40 percent by 2030. Coal plants retiring by 2032 are exempt. Compliance decisions must be submitted to the state by May 2026.

OG&E's existing natural gas-fired boilers meet the new requirements, so no additional steps beyond reporting are needed. New natural gas-fired turbines commencing construction after May 23, 2023, would be required to use capacity factor thresholds to differentiate among new units establishing three subcategories: baseload, intermediate load, and low load. All three categories are subject to efficiency standards. Baseload units, those with a capacity factor greater than 40 percent, are also subject to a phase two requirement based on 90 percent capture of CO2with a compliance deadline of January 1, 2032.

Significant litigation is ongoing, including a challenge by OG&E and a multi-state challenge joined by Oklahoma. On May 24, 2024, several petitioners, including OG&E, filed motions to stay the rule in the D.C. Circuit, but all stay requests were denied on July 19, 2024. OG&E and others appealed this denial to the U.S. Supreme Court, which also denied the stay request on October 16, 2024. In February 2025, the D.C. Circuit, at the request of the EPA, placed the case in abeyance for 60 days. The EPA later requested to continue holding the case in abeyance while reconsidering the rule, which was also granted. On June 17, 2025, the EPA proposed to repeal the 2024 greenhouse gas rules for both existing and new units. The EPA also included an alternative proposal to repeal the rule for existing units in its entirety and the future carbon capture and sequestration requirements for new combustion turbines only. OG&E submitted comments and participated with trade associations to submit comments on the proposed rule to the EPA on August 6, 2025. The outcome of the litigation or proposed repeal of the greenhouse gases regulations is unknown, but the 2024 regulations are currently not stayed and future compliance timelines are in effect. OG&E continues to plan for compliance and, if the new emission standards and guidelines are implemented, compliance costs could be significant. Relatedly, on August 1, 2025, the EPA published a proposed

rule to rescind the EPA's 2009 determination that greenhouse gas emissions cause or contribute to the endangerment of public health and welfare (the "2009 Endangerment Finding"). While the rescission of the 2009 Endangerment Finding would have no direct effect on the 2024 greenhouse gas rules for power plants or the pending proposed reconsideration, the rationale underlying such a rescission could impact the legal arguments raised in the ongoing litigation challenging the EPA's 2024 greenhouse gas rules or any future litigation challenging the EPA's potential repeal of the 2024 rules. OG&E continues to monitor these developments and plan for compliance with standards currently in effect.

Endangered Species

Certain federal laws, including the Bald and Golden Eagle Protection Act, the Migratory Bird Treaty Act and the Endangered Species Act, provide special protection to certain designated species. These laws and any state equivalents provide for significant civil and criminal penalties for unpermitted activities that result in harm to or harassment of certain protected animals and plants, including damage to their habitats. If such species are in an area in which OG&E conducts operations, or if additional species in those areas become subject to protection, OG&E's operations and development projects, particularly transmission, wind or solar projects, could be restricted or delayed, or OG&E could be required to implement expensive mitigation measures.

Waste

OG&E's operations generate wastes that are subject to the Federal Resource Conservation and Recovery Act of 1976 as well as comparable state laws which impose detailed requirements for the handling, storage, treatment and disposal of waste.

During 2024, approximately 95 percent of the ash from OG&E's River Valley, Muskogee and Sooner facilities was recovered and reused off-site in various ways, including soil stabilization, landfill cover, road base construction and cement and concrete production. Reusing fly ash reduces the need to manufacture cement resulting in reductions in greenhouse gas emissions from cement and concrete production. Based on estimates from the American Coal Ash Association, OG&E fly ash reuse helped avoid over approximately 4 million tons of CO2emissions in the last 16 years.

OG&E has sought and will continue to seek pollution prevention opportunities and to evaluate the effectiveness of its waste reduction, reuse and recycling efforts. OG&E obtains refunds from the recycling of scrap metal, salvaged transformers and used transformer oil. Additional savings are expected to be gained through the reduction and/or avoidance of disposal costs and the reduction in material purchases due to the reuse of existing materials.

Water

OG&E's operations are subject to the Federal Clean Water Act and comparable state laws and regulations. These laws and regulations impose detailed requirements and strict controls regarding the discharge of pollutants into state and federal waters.

In 2015, the EPA issued a final rule addressing the effluent limitation guidelines for power plants under the Federal Clean Water Act. The final rule establishes technology- and performance-based standards that may apply to discharges of six waste streams including bottom ash transport water. On April 25, 2024, the EPA released a supplemental effluent limitations guidelines rule. OG&E has completed installation of dry bottom ash handling technology at an affected facility and is evaluating options at another affected facility to comply with the final rule. On October 2, 2025, the EPA released a proposed rule that would extend the December 31, 2029 compliance date to December 31, 2034.

Since the purchase of the Redbud facility in 2008, OG&E has made investments in the infrastructure that have led to OG&E's average use of approximately 2.4 billion gallons per year of treated municipal effluent for cooling water at Redbud and McClain. This use of treated municipal effluent offsets the need for fresh water as cooling water, making fresh water available for other beneficial uses like drinking water, irrigation and recreation.

Site Remediation

The Comprehensive Environmental Response, Compensation and Liability Act of 1980 and comparable state laws impose liability, without regard to the legality of the original conduct, on certain classes of persons responsible for the release of hazardous substances into the environment. Because OG&E utilizes various products and generates wastes that are considered hazardous substances for

purposes of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, OG&E could be subject to liability for the costs of cleaning up and restoring sites where those substances have been released to the environment. No associated liability is expected to significantly impact OG&E at this time.