Table of Contents Allocation Overview 3 Allocation Objectives 5 Allocation Categories 6 Driver Based Settlements 9 Distrigas Allocations10 Total Allocations for Overheads Applied13 Direct Support14 Indirect Support15

Allocation Overview The purpose of the Enterprise Services allocation process is to distribute corporate costs to the various business units in a transparent and equitable manner. During 2013, to the extent possible, corporate costs are assigned directly to the business unit for whom the work is being performed. For those costs not directly assignable, we will begin defining the cost drivers where feasible. If no specific cost driver can be assigned, we will utilize the commonly accepted Distrigas (Three factor method) for allocations. 3

Allocation Overview There are three basic methods of allocating our corporate support costs: Overheads - Certain defined costs, allowable for capitalization and incurred by the business as a whole, that are not directly attributable to a specific project or process, but are shared by all projects and processes. These costs are applied to all work based on certain cost elements as defined by the overhead. Direct Support - Costs expended by Corporate functions in support of a specific business unit. These costs are charged and settled directly to the business unit. Indirect Support - Costs expended by Corporate functions in support of the business as a whole. These costs are applied based on the settlement basis (driver) of the work. If no defined driver, these costs are settled based on the three factor method (Distrigas). 4

Allocation Objectives Direct assignment of costs to the correct business unit or business activity where possible. Assign drivers to costs that are not directly assigned for equitable spread across business units. Establish responsibility and accountability for support provided. Make costs visible. 5

Allocation Categories - Overhead 6 Purchasing – Costs related to the procurement of goods and services. Warehousing – Costs related to the storage and movement of goods. Facilities - Costs related to the upkeep of physical locations. Computing Equipment - Cost of acquisition, operation, and maintenance of computing equipment, software, and data network. Includes acquisition and annual maintenance of each PC or server, other associated equipment and the operation and maintenance of the local and wide area networks, intra/inter net. Information Systems - Costs related to general operation and maintenance of the Corporate Enterprise Solution including SAP/R3 (financial and work management systems), SAP/CCS (customer billing system), and CADS/OMS (outage management system). Telephone- Costs related to the acquisition, operation, and maintenance of the telephone systems. Radio - Costs related to the acquisition, operation, and maintenance of radio communication system.

Allocation Categories - Overheads Applied Detail 7 All costs categorized as overheads are first assigned to either a specific business unit, or a non-specific cost collector. Those costs are then allocated across all projects and processes within that group. Purchasing Overhead Applied to all work projects and process, based on the dollars recorded against certain cost elements. The cost element Group PURCH-ALOC includes Non-Stock materials, Outside Services, Professional Services, Rentals, Communications, Fleet, etc. This group includes all cost elements for which Purchase Orders are created. Warehousing Overhead Applied based on the dollars recorded as stock materials, materials issued from the warehouse Facilities, Computing Equipment, Information Systems, Telephone, and Radio Overheads Applied based on the dollars recorded as internal labor. These items are all used in the day to day work of each employee, and therefore follow employee labor activity.

Allocation Categories Direct and Indirect Support The following functions charge costs both directly to a business unit, and have costs that are for the benefit of all business units. Each area has cost collectors that designate either direct or indirect cost charging and identify the driver and recipient of the charge. Executive Audit Corporate Secretary, Compliance, Security Legal Public Affairs Human Resources Accounting, Finance, Treasury Regulatory Strategy, Marketing Corporate Risk Information Technology Supply Chain Business Process Improvements 8

Driver Based Settlements 9 The table below shows the indicator used to move Enterprise Services’ costs, how often the rule is updated and who has responsibility for updating. Each Cost Collector will have one rule assigned. NAMEDescriptionFrequencyResponsibilityUsed when 0001BASIS0001 RCC for all CEPerpetualAccountingHolding Company costs that do not get allocated. These costs remain in Co BASIS0400 RCC for all CEPerpetualCost AccountingUtility Costs that are corporate in nature and remain in Co APINVOICESAP Invoices by CompQuarterlyCost AccountingCorporate Accounts Payable costs allocated to all Business Units. DIRECTNon0001 Direct to CCPerpetualCost AccountingCost that is incurred for a specific Business Unit or Area. DIRECTENOGDirect to Enogex CCPerpetualCost AccountingCorporate Cost incurred specifically on behalf of Enogex. DIRECTUTILDirect to Utility CCPerpetualCost AccountingCorporate Cost incurred specifically on behalf of the Utility. DISTRIGASDistrigas to multiple CC'sAnnualFinance3 Factor Method of allocation for shared corporate costs with no defined driver. GISSoftware LicensesAnnualITGIS Software related costs shared by Enogex and the Utility. GPTSGather/Process/Transport/StorageAnnualEnogex FinanceCorporate Costs in support of all Enogex Business Units. HEADCOUNTBy Headcount %QuarterlyCost AccountingCorporate Costs that fluctuate or are driven by the number of employees. LGLGENCSLLeg Gen Counsel FeesAnnualLegalCost allocation determined by the Legal Department based on current caseload. OGEEGXHOLDOGE Enog Hold LLCAnnualFinanceHolding Company Costs in Support of Enogex Holding Company. OPNJOBREQOpen Job ReqsQuarterlyCost AccountingCorporate Recruitment costs incurred for the benefit of all Business Units. UTIL DSGASUtility DistrigasAnnualFinanceCorporate Costs in support of all Utility Business Units UTIL SALRYUtility Payroll and BenefitAnnualAccountingCorporate costs incurred for Utility specific Benefits - Regulatory Pension accruals

Three Factor (Distrigas) Allocations Distrigas method is used to calculate the split between the Utility and Enogex. The percentages calculated are based on three factors: Net Operating Revenue Gross Plant Payroll 10

Three Factor (Distrigas) Allocations 11 For the Year 2013 Distrigas Based on 12 Months Ended August 2012 OG&EEnogexTotal Net Operating Revenue $1,231,568$470,105$1,701, %27.63%100.00% Gross Plant 8,335,5752,812,74411,148, %25.23%100.00% Payroll 186,23371,894258, %27.85%100.00% Total $9,753,377$3,354,744$13,108,121 % Allocation 73.10%26.90%100.00%

Total Allocations for 2013 Based on 2013 Budget $ in 000’s 12 Power Supply Power Delivery Retail Energy OG&E Utility Corporate Services Enogex Utility Capital Enogex Capital Other Capital Total Allocations Overheads $ 7,114 $ 4,429 $ 2,083 $ 2,270 $ 6,401 $ 13,752 $ 1,954 $ 101 $ 38,104 Direct Support 20,359 30,980 10,877 (10,567) 8,699 60,348 Indirect Support 10,492 18,850 4, ,856 47,293 Total Allocations from Enterprise Services $ 37,965 $ 54,259 $ 17,083 $ (7,325) $ 27,956 $ 13,752 $ 1,954 $ 101 $ 145,745

Overheads Applied to Work Based on 2013 Budget $ in 000’s 13 Power Supply Power Delivery Retail Energy OG&E Utility Corporate ServicesEnogex Utility Capital Enogex Capital Other Capital Total Overheads Applied Purchasing $ 203 $ 177 $ 14 $ 68 $ 112 $ 3,222$ 958 $ 14 $ 4,768 Warehousing 1, , ,967 Facilities ,655 Computing Equipment , ,663 Information Systems 2,9932,3491,3131,1062,7802, ,534 Telephone 1,3561, ,6891, ,424 Radio ,093 Planning Adjustments - (700) - - (130) Total Overheads Applied $ 7,114 $ 4,429 $ 2,083 $ 2,270 $ 6,401 $ 13,752 $ 1,954 $ 101 $ 38,104

Direct Support Based on 2013 Budget ($ in 000’s). 14 Power Supply Power Delivery Retail Energy OG&E Utility Corporate Services Enogex Total Allocations Executive $ 1,402$ 2,540$ 394$ (1,442)$ 297$ 3,191 Corporate Secretary and Compliance 3,1432, ,113 Audit Public Affairs Accounting, Finance & Treasury 2,5554, ,24610,213 Human Resources 1,7763, ,513 Legal 1,7822, ,809 Strategy and Marketing 1,1892,2374,965(7,234)11,158 Corporate Risk 1,6743, ,54110,038 Regulatory Affairs Information Technology 8543, ,829 Supply Chain 3,0744, ,265 Business Process Improvements 1,2042, ,894 Utility Technical Training 1,5791,45242(3,073)- Total Indirect Support $ 20,359 $ 30,980 $ 10,877 $ (10,567) $ 8,699 $ 60,348

Indirect Support Based on 2013 Budget ($ in 000’s). 15 Power Supply Power Delivery Retail Energy OG&E Utility Corporate Services Enogex Total Allocations Executive $ 945$ 1,776 $ 382$ (8)$ 1,142$ 4,237 Corporate Secretary and Compliance 9701, ,1674,347 Audit ,380 Public Affairs 8641, ,0533,925 Accounting, Finance & Treasury 1,1191, ,4874,974 Human Resources 1,3522, ,6696,248 Legal ,834 Strategy and Marketing ,457 Corporate Risk ,049 Information Technology 2,7125,0991,098-3,27912,188 Supply Chain 1,2552, ,5175,640 Business Process Improvements Total Indirect Support $ 10,492 $ 18,850 $ 4,123 $ 972 $ 12,856 $ 47,293