POSITIVE ENERGY TOGETHER ® Pay As You Go - Draft Executive Product Development Meeting 3/29/2013

POSITIVE ENERGY TOGETHER ® Agenda 2 Pay As You Go Pilot Overview Hypothesis Results Pay As You Go Program Next Steps Assumptions Benefit/Cost Results Shareholder Impact Mitigation Customer Risk Assessment Shareholder Risk Assessment Notification Cost IT Cost Business Case Development

POSITIVE ENERGY TOGETHER ® Pay As You Go Pilot Overview 3

POSITIVE ENERGY TOGETHER ® Pay As You Go Pilot Hypothesis 4

POSITIVE ENERGY TOGETHER ® Pay As You Go Pilot Results 5

POSITIVE ENERGY TOGETHER ® Pay As You Go Program Next Steps

POSITIVE ENERGY TOGETHER ® Program Assumptions 7 Participation of 8% of OG&E’s residential customer base (~52,000) over 5 years Customers behavior will be similar to that of the study participants ~15% reduction in KWH usage over entire year ~0.5KW per year reduction per customer Average customer remains on the program for 3.5 years (Salt River Project’s 2010 study results) Use of Exceleron for front-end, back-end, and notification software tools Target filing date of November/December 2013 OK Rate cases in 2014 and 2017 for regulatory lag

POSITIVE ENERGY TOGETHER ® Benefit/Cost Overview 8 Program ParticipantsAll Rate PayersShareholders Benefits$88M$90M$1.7M Costs$1.5M*$22M$6.6M Net Benefit$87M$68M($4.9M) * Assumes no customer charge/fee for participation Costs include: Allocation of program costs in rates Customer charge for Pay As You Go (if applicable) Benefits include: Reduction in KWH consumption Fuel Savings Reduced late payment charges Costs include: Customer Acquisition Costs Internal IT Costs External IT Costs (if applicable) Notification Costs Benefits include: Avoided Generation Avoided Capacity Reduced administrative costs (call center, bad debt, paperless bills) Costs include: Reduced KWH sales between rate cases Benefits include: O&M reduction during regulatory lag

POSITIVE ENERGY TOGETHER ® Potential Shareholder Impact Strategies 9 Convert O&M to Capital Build front-end tool, back-end tool, notification tool, or some combination Include an IHD or similar device as component of the program Develop Pay As You Go application to push notifications to customers at lower cost Develop capability of taking payments in house and/or owning OG&E payment stations Charge customers a one-time sign up fee for the program Rate Design Charge customer a monthly fee for program participation Provide one weekly text & notification and charge for additional notifications Develop two bundled Pay As You Go rates (TOU and Standard version) that include fuel, riders, monthly customer charge, and the rate all into one price (two for TOU). Customers benefit from easy to understand pricing for budget planning Shareholders assume risk of fuel price changes and charge risk premium Modify the monthly customer charge to be a price per day instead of price per month Make changes to the way we send outbound notifications to save money

POSITIVE ENERGY TOGETHER ® Notification Changes 10 Currently, we send text, , or outbound phone notifications to customers as frequently as they desire Customers can also access the website or call the OG&E call center at any time Average spend on text notifications is $0.56 per month. Average spend on phone notifications is $0.10 per month. notifications were free with the service used in the pilot. Average number of text notifications was 14 per month. Average number of phone notifications is 2 per month. Average number of notifications is 5 per month. If OG&E continued current practices, it would spend over $400K per year in notification costs (assuming 50,000 Pay As You Go customers)

POSITIVE ENERGY TOGETHER ® IT Costs 11 IT cost is the biggest driver of the customer value Currently, OG&E is using Exceleron for its front-end, back-end, and notification tool For 52,000 customers, the annual cost is ~$2.5M OG&E has three options Renegotiate the contract with Exceleron Build internal OG&E tools to perform these functions Perform RFP for a new vendor to perform the services

POSITIVE ENERGY TOGETHER ® Business Case Development 12 Business Case to be completed by July 31, 2013 Tasks to be completed include: Develop shareholder impact strategy Refine program composition and details Continued work with IT to evaluate and select best IT solution Document business case assumptions Perform customer and shareholder risk analysis Next update presentation on Pay As You Go will be at the end of April