Good morning. My name is Alicia and I will be your conference operator for today. At this time I would like to welcome everyone to the OGE Energy Corp Q3 Earnings Call. (Operator Instructions). Thank you. Mr. Todd Tidwell, you may begin your conference.

Thank you. Good morning, everyone, and welcome to OGE Energy Corp’s Q3 2010 earnings call. I’m Todd Tidwell, Director of Investor Relations, and with me today I have Pete Delaney, Chairman, President and CEO of OGE Energy Corp; Sean Trauschke, Vice President and CFO of OGE Energy Corp; and several other members of the management team to address any questions you may have. In terms of the call today we will first hear from Pete followed by an explanation of Q3 results from Sean, and finally as always we will answer your questions. I would like to remind you that this conference is being webcast and you can follow along on our website at www.oge.com. In addition, the conference call and accompanying slides will be archived following the call on that same website. Before we begin the presentation I would like to direct your attention to the safe harbor statement regarding forward-looking statements. This is an SEC requirement for financial statements and simply states that we cannot guarantee forward-looking financial results but this is our best estimate to date. In addition there is a Regulation G reconciliation for ongoing earnings guidance in the appendix along with projected capital expenditures. I will now turn the call over to Pete Delaney for his opening comments. Pete?

Thank you, Todd. Good morning, everyone. Welcome to our Q3 earnings call. This morning I’ll update you on some of our more important initiatives and the outlook for our businesses, and Sean will review our financial results in more detail. Our Q3 consolidated operating results were $1.65 per share up from $1.40 compared to the Q3 of last year, with increased earnings at both the utility and midstream businesses. Utility earnings increased primarily due to hot summer weather and regulatory riders associated with various investments in the utility. Cooling degree days were 19% above normal and 30% above the cool summer of last year. These gains were tempered by higher operation and maintenance expenses. The extreme summer temperatures which produced five new system peaks strained our electrical system, particularly our generation, and my many thanks to our members for doing a great job of managing through those tough conditions. We remain focused on controlling our operating costs and we have several initiatives focused on controlling costs. One of those as you know is our 2020 Plan, underway now for several years, that defers the need for any additional fossil fueled capacity for another ten years. Part of that effort is an effective demand response and distribution automation, both based on our SmartGrid deployment. As I will discuss later, we have committed to cost savings associated with that deployment. To leap into a very topical discussion, in the face of ever-tightening environmental regulation of generation planning, our generation has a low embedded cost of about $180 per KW, excluding wind, reflecting the age of our fleet and the cost of the recent purchases in the last five years of about 1000 megawatts, for a combined cycle capacity for about $575 per KW. As a consequence, with the older units our operational…

Thank you, Pete. For the Q3 our net income was $163.1 million, or $1.65 per average diluted share, as compared to net income of $136.8 million, or $1.40 per average diluted share in 2009, for an 18% increase in quarterly earnings. The contribution by business unit on a comparative basis is listed on the slide. At OGE, net income for the quarter was $142.1 million, or $1.43 per share, as compared to net income of $123.2 million, or $1.26 per share in 2009. Some of the primary factors are as follows: gross margin increased nearly $70 million, or 20%, and I’ll touch on gross margin on the next slide. Operation and maintenance expense increased by $25.1 million. Of that, $7.8 million of the variance was from new riders which have revenue offsets. There are two primary drivers for the increased O&M in 2010. First, the hot summer put a great deal of stress on the generation system, and in particular as we began work on some of our units we found more repair work needed to be done than expected. We’re taking this information and incorporating this into our outage plans for the remainder of the year as well as next year. Second, our post-retirement medical costs continued to escalate and this year they expect it to run about $8 million higher than our previous estimates. We are working on various solutions and regulatory options regarding these issues which I’ll discuss later. Depreciation and amortization expense increased $5.8 million, primarily due to additional assets being placed into service, including the OU Spirit wind far and the Wind Speed transmission line. Net other income and expense was lower by $9.1 million, primarily due to lower margins associated with the guarantee flat bill program of $4.8 million as a result of our…

(Operator Instructions.) And our first question comes from the line of Anthony [ph] (inaudible). Your line is open.

Good morning. Just a question, I think you mentioned the South Canadian processing facility that goes online I guess in mid-’12 and maybe I think there’s another increase in processing facilities. Are those fully contracted or how long does a contract last? Or do I think of it as like a merchant facility and you’re really out there looking for volumes?

This is Keith Mitchell. We have dedications from producers and they’re drilling, and we see the volume growth increasing and we’re going to need that capacity at that time that those come on.

What is dedication? Is dedication the same as a contract that somebody takes say an PPA or something out of an electric power plant? Is it similar or is dedication something different?

No, it’s a situation where they have certain acreage that they have contracted, they have leased up, and so they have plans to drill that. And what it is, is in their agreements when they drill that that volume will come to us. We have the contract where that volume will come to us upon drilling.

Okay, thank you.

Our next question comes from the line of Arlen Buchanan [ph]. Your line is open.

Hey, thanks for taking the call. Regarding ArcLight, can you just talk about ultimately where this relationship ends up? What is the game plan there? And also the growth opportunities that you see. And then lastly just on South Canadian to follow up the last question, is it possible that the producers could not drill out that acreage?

This is Pete Delaney. Let me do reverse order. Keith will talk about South Canadian. You want to talk about the producers?

Sure.

And the risks associated with the South Canadian.

Sure. You know, first of all these areas that the volumes are coming from is the granite wash areas as well as the Canadian County Woodford area. These are very economic because of the liquids associated with these areas, so these are very economical to drill even at low commodity prices. So we really looked at what the different drilling plans are, the various producers and there are multiple producers. We see an opportunity for volumes exceeding the capacity that we are building, and so we feel like this is the appropriate amount of capacity to build given the activity that we see in the area.

Okay, so just to be clear then, there is potential risk there on the CAPEX if for some reason the drilling doesn’t take place.

The drilling would have to drop off fairly significantly for us to really have too much CAPEX here. I think that we’ve looked at that, assessed that risk, and we think it’d really have to drop off quite significantly.

Okay.

The other parts of your question, ArcLight. We are expecting to close on Monday so we’re very excited about that, and you know, the transaction structure really focused on continuing growth on Enogex in the midcontinent. We’ll talk about that for a minute. We see a lot of potential opportunities for continued expansion. Keith just talked about the additional, well I mentioned and talked about South Canadian but the Fort Elliott plant that we added in the far western part of our system. Again, when looking at the economics and using consultant numbers, not our numbers but, and what the producers tell us, that this is probably their best returning plays that they have in their portfolio. We’ve seen analysis of natural gas prices below $3 and still being able to provide a return to the producers that keep them actively engaged – because of the wet nature of this gas and the correlation with oil prices they’ll be getting very good returns. So we see other basins’ growth of course not being that strong and again we believe that fundamentally that demand for natural gas going forward is pretty good, particularly looking at the power generation side. So we see a lot of opportunities. Our policy has been that we put in our capital expenditure plans known and committed projects, but at all times we have a, I would say pretty robust backlog – backlog may not be the right word but a lot of projects we’re working on. And at this point in time we see that as strong as ever, and so we’re very excited about that. And of course the ArcLight plays into that. Again, we hope that they are able to increase their ownership. The only way that really happens is that we need new equity capital and they’re working hard, and we are already meeting with them looking for opportunities. And I was really talking more about in the midcontinent but of course we see there’s some opportunities with them to expand our presence outside the midcontinent and we’re already talking about those. So we’re very excited about that business.

And can you just talk about ultimately what their exit strategy might be for this?

Say again? What’s that question?

Can you talk about ultimately what their exit strategy might be for this investment?

Oh, exit strategy. Well, I can’t talk for ArcLight. I just know from the structuring of it it’s a long-term transaction. And basically we preserve all the options we have today. Our anticipation is it’ll grow the company dramatically and we’ll have all the opportunities. We could do an MLP at some point in the future and we’re going to look and see what the best thing is for our shareholders at that time.

Okay, thank you.

(Operator Instructions.) Our next question comes from the line of Greg Reese [ph]. Your line is open.

Hi guys, quick question. Could you elaborate a little bit more on this new Enogex processing facility you have in your guidance and also talk about how it’s going to be funded?

Yes. Keith, do you want to cover this?

Sure. We have a pretty extensive processing header where we gather a lot of gas to process in Oklahoma, as well it extends into the Texas panhandle. And in addition to South Canadian we’ve now sited a plant site out in the Texas panhandle in Wheeler County. There’s a lot of development out there in the granite wash, a lot of producers that are producing that very condensate-rich area, and given the location of that production we felt like the right spot to put that was in Wheeler County, Texas, out there on the west side of our processing header. So it was a 120 million a day skid, processing skid that we had in our inventory that we’ll be installing, and that’ll go online in early ‘12.

And is this going to be primarily funded with equity contributions from ArcLight?

This is Sean. That’s primarily going to be funded actually out of working capital and cash on hand at Enogex unto the extent that equity would be required. That would be drawn on by OGE and ArcLight, you’re correct. But this project’s $109 million; we actually had some of the materials already procured in previous years and so as Keith said, this’ll come on late in ‘11, early ‘12 and we’re very comfortable with the funding plan.

And in terms of any potential equity contribution, would it be 50/50? Is that a safe assumption? Or would you guys let ArcLight pick up the majority of whatever equity (inaudible)?

I think we’re going to look at those on a case by case basis. And that’s actually part of the beauty of this agreement is, you know, that gives us the flexibility to decide what our position is and how we’re going to participate. But again, our preference is really to continue to invest in the business with ArcLight, and to the extent that we can do that and maintain our credit metrics we’re going to continue to do so.

Our next question comes from the line of Rudy [ph] (inaudible). Your line is open.

Hi. With regard to the processing facilities, can you just kind of give us an idea of what type of contracting strategy you’re pursuing? Are these mostly fee-based type contracts or are you also taking on frag spread risk exposure as well?

Yeah, this is Keith. Obviously we’ve made a tremendous amount of shift towards fixed fee, and you’ll see that as we continue to grow the percentage of our portfolio in fixed fee. Obviously that is our preference. So these agreements are fixed fee as well as some percent of liquids agreements that we have had. I mentioned a lot of this gas has been dedicated under previous agreements and so some of those will be those previous percent of liquids agreements. But as you look at our volume forecast and then the change in the portfolio as we go forward we continue to see an increase in fixed fee percentage.

Okay, and as far as the additional contracts, can you give an idea of what percentage incrementally is fixed fee a percent of liquids roughly?

Well, I think if we look at our portfolio for 2010 by the end of the year we’re looking at a 30% fixed fee percentage of our portfolio which is up from previous years, and we certainly see that transition continuing.

Okay. I guess we’ll chat more at EI next week.

Okay.

Thank you.

Thanks, Rudy.

Our final question comes from the line of Brian Russo. Your line is open. Brian Russo – Ladenburg Thalmann & Co: Hi, good morning. Just curious in terms of the utility projected capital expenditures. Are there any projects being considered outside of what you’ve outlined on slide 13? Or is this pretty much with Crossroads and the two SPP transmission projects, is this pretty much a good outlook for the utility CAPEX through ‘15?

That’s a good outlook of where we are today, Brian. This is Sean, and you know, we’re, as you know the SPP’s continuing to evaluate additional projects and we’d be very interested in pursuing more projects there. As we look at the generation portfolio at OGE, as we mentioned before we were always open to additional renewable opportunities, and that Crossroads opportunity presented itself and it was very attractive to our customers so we pursued that. So right now that plan we’ve laid out, we’re good with that, but again, if the SPP were to award some more projects, as we’ve said before we like that business and we would certainly go after that. I think the other big wildcard out there is environmental, and we’ll see where that ends up. But obviously if environmental regulations came out we would have to deal with that. Brian Russo – Ladenburg Thalmann & Co: Okay, and just on the renewable side. Is there any more appetite for wind in Oklahoma? I know Oklahoma doesn’t have an RPS standard, so I’m just wondering how much of your generation or sales are derived from the wind projects under development and how that might compare to a federal RPS.

Well, I think we actually have a goal in Oklahoma of 15% and when we complete Crossroads and the other PPAs come online we’ll have 10% of our generation portfolio with wine. So there is a goal. It’s not a standard or anything like that. So there is certainly appetite. Oklahoma does have a lot of wind resources available, and again, I think we’re going to look at that in terms of what’s good for our customers. Brian Russo – Ladenburg Thalmann & Co: Okay. And can you give us a sense of your earned ROE in Arkansas that’s embedded in your 2010 guidance?

Yeah Brian, I think we’re probably earning close to 5% there in Arkansas, about half of what we’re allowed. Brian Russo – Ladenburg Thalmann & Co: Okay. And maybe can you just comment or elaborate on some comments earlier. It seems as if I’ve been hearing that a lot of the gas drillers are targeting liquids-rich areas, and I’m just wondering if you had any thoughts on how that might impact future NGL pricing along with how that might impact your future volume growth and processing and gathering volumes.

Yeah, this is Keith. You know, there’s certainly if you look at the NGL pricing as a percent of crude, it’s been continuing to go down as a percent of crude. But crude stays strong. And if you look at the petrochemical market, obviously a lot of these folks who were cracking heavies have switched to the lighter ends. And so we’ve seen actually good demand side response on NGLs. So certainly as the drilling continues and more NGLs are produced, I think that what we see anyway is that petrochemicals are liking the light ends and that they’re picking those up. Brian Russo – Ladenburg Thalmann & Co: Okay. And just which looks like incremental growth in Enogex in ‘10 and possibly extended into ‘11 and ‘12. Can you comment on your 5% to 7% (inaudible)?

Sure. And Brian, I think one of the real beauties of that growth rate, that’s a long-term growth rate as we’ve said before; that’s not just a one- to two-year outlook. We have a very clear line of sight much longer beyond that. You’re exactly right with the two projects Keith has mentioned coming online in late ‘11 and ‘12, obviously that’s helpful for Enogex in the future. You’re looking at the same numbers I’m looking at with a lot of the utility and transmission lines coming in. So some years it’s going to be on the high end of that, some years it’s going to be on the low end of that. We’re going to put out our 2011 guidance early in February at the yearend call, but we feel very good about the long-term growth rate. And as we’ve talked before, some years it’ll be a lot higher and some years it’ll be lower, but we feel pretty good about the long-term prospects. Brian Russo – Ladenburg Thalmann & Co: Okay, thanks very much.

Thanks, Brian.

We have no further questions at this time. I turn the call back over to the presenters.

Thank you, operator, and I want to thank everybody for dialing in this morning. Thank you for your continued interest in OGE Energy and have a great day.

This concludes today’s conference call. You may now disconnect.