ITW's Strategic Growth Insights and 2026 Margin Plans

How large customer agreements influence OGE Energy’s future growth prospects

Large customer agreements (especially “large load” data center contracts like Google) appear to be a central growth lever for OGE Energy’s regulated utility business because they simultaneously (1) provide demand visibility and (2) are structured to manage cost allocation, credit risk, and “stranded cost” concerns for existing customers.

1) They create measurable demand growth with visibility into scale

OGE/OG&E’s growth outlook benefits when large customers sign contracts consistent with the company’s planning documents and load expectations. Management said that they will file long-term special contracts with Google to serve previously announced data centers and that Google’s expected load and ramp rate are consistent with OG&E’s 2026 IRP. ¹ In addition, OGE Energy cited a broader “growth tailwind,” including approximately 24% load growth over the past five years, and characterized underlying demand as “healthy” with strong local economies and its low-cost model. ²

Why this matters for future growth: large customer agreements convert uncertain demand into contracted, utility-accountable demand growth—supporting both planning and project execution (generation/transmission) aligned to that demand. ¹³

2) They improve unit economics by spreading fixed system costs (rate protection effect)

A key mechanism management highlighted is that adding a large high load factor customer lets OG&E spread fixed system costs over a larger customer base, which exerts downward pressure on rates for existing customers. ⁴ Management also emphasized “customer protections” in the agreements (including multiyear commitments with minimum charges and exit provisions) intended to mitigate stranded cost risk. ⁴

Implication: These agreements make it more politically and economically feasible to pursue new capacity needed for new customers, because the structure is designed to avoid shifting costs onto the existing customer base. ⁴⁵

3) They reduce execution risk through tariff/accounting structure and protections

OG&E/OGE’s approach appears to be to require contract terms and security while preserving existing-customer protections through the tariff and related legislative/regulatory framework. Management described how large load contracts are structured around pricing structures and charge allocations to protect the existing customer base, plus thresholds for service eligibility. ⁶ They also stated that the tariff approach is aligned with legislation and centered on ensuring customers pay required charges and do so in advance. ⁶

Implication for growth prospects: by structuring large-customer entry in a way regulators can accept (cost causation protections, minimum charges, security/credit support), OGE improves the likelihood that additional large load projects will be allowed to proceed without regulatory backlash that could delay capacity additions. ⁴⁷

4) They support a pipeline of capital-intensive projects by strengthening the business case for capacity additions

Large customer agreements are not just revenue announcements—they are used to underpin capacity procurement and capital deployment. Management cited secured generation capacity related to Google, specifically “2 solar facilities … under construction,” totaling 600 MW of nameplate capacity, and they plan to request Oklahoma and Arkansas commission preapproval for these CPAs. ⁴ They also discussed their broader 2026 capacity build: commissioning a 98 MW Tinker power plant, expecting 450 MW of new CTs at Horseshoe Lake in Q4, breaking ground on two additional 450 MW units, and advancing the 300 MW Frontier energy storage project. ¹

Implication: large customer contracts appear to help justify and prioritize incremental supply projects (generation and storage) that are needed to serve the load reliably and competitively. ¹⁴

5) They bolster financing confidence and planning horizon execution

Management linked the large-customer agreement activity to financing planning and balance sheet support. They said that in April they completed a debt issuance at the electric utility to satisfy 2026 financing needs under the current plan, and they referenced equity issued late last year to support incremental capital. ⁴ Management also stated they expect to maintain FFO to debt around 17% over the planning horizon. ⁴ Additionally, there was flexibility between now and May 2027 to exercise approximately 4.6 million shares in forward equity agreements. ⁴

Implication: if large customer agreements are structured with robust commitments and credit support, they can help the company sustain a stable credit/financing posture while building the capital assets needed for growth. ⁴⁸

6) They are designed to be compatible with regulatory sequencing (reducing the “crowding” concern)

Regulatory sequencing matters when large-load-driven investments could be perceived as disproportionately burdening customers. OGE described an approach to file large-load tariff and related items in a way intended to protect large-load customers and manage timing across jurisdictions: for 2026, management expects to finalize a stand-alone large load tariff in Oklahoma and file it with the Oklahoma Corporation Commission no later than July 1, and they planned rate review filings later in the year with new rates anticipated in 2027. ³ They also stated they would file tariff/project preapprovals on a rolling basis rather than waiting for a full portfolio. ³

In Q&A, management characterized their large-load tariff/legislative changes as “continuing and consistent,” not a sudden shift in strategy, and described the playbook approach to file items as negotiation completes and then sequence Oklahoma/Arkansas rate filings accordingly. ⁹¹⁰

Implication: compatible regulatory sequencing reduces the likelihood that growth-driven investments get delayed or materially re-engineered by regulators, which supports OGE’s ability to execute its “foundation for the remainder of the decade.” ³¹⁰

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Bottom line

Large customer agreements influence OGE Energy’s future growth prospects primarily by (a) converting demand growth into contracted, planning-aligned load (e.g., Google’s contracted ramp consistent with the 2026 IRP) ¹ while (b) embedding protections that manage cost allocation, stranded cost risk, and credit exposure for the benefit of existing customers ⁴—thereby (c) enabling OGE to justify and execute a larger generation/transmission/storage pipeline with more financing confidence and regulatory compatibility. ¹³⁴

If you want the growth-prospects impact in one sentence: OGE’s large customer deals appear to be structured to make growth reliable, financeable, and regulatorily survivable, which improves the odds that planned capacity additions translate into sustained earnings power over the planning horizon. ⁴¹⁸