Fitch Affirms OGE Energy & Subsidiaries; Outlook Stable.

NEW YORK -- Fitch Ratings has affirmed the credit ratings of OGE Energy Corp. (OGE) and its operating subsidiaries, Oklahoma Gas & Electric Co. (OG&E) and Enogex, Inc. (Enogex). The Rating Outlook for all three issuers is Stable. A complete list of ratings is set out below.

The affirmation of OGE's credit ratings reflects the stable cash flows from the company's utility operations, despite a less favorable than anticipated rate increase for OG&E in its most recent rate proceeding, and strong cash flow generation from the company's non-regulated businesses. The recent announcement of plans to construct a new coal-fired plant will not affect cash flows in the near term, but if approved by regulators, could stress credit measures during the construction period.

In December 2005, the Oklahoma Corporation Commission issued an order authorizing OG&E to raise rates by $42.3 million. This was less than half of the $89.1 million sought by the company and somewhat lower than Fitch had been anticipating. Fitch views the rate order as indicative of the relatively challenging regulatory environment in Oklahoma. In addition, the company, along with partners Public Service Company of Oklahoma (PSO) and Oklahoma Municipal Power Authority (OMPA), has announced plans to build a 950MW supercritical, pulverized coal plant at the site of the company's existing Sooner plant. OG&E will own a 42% stake in the project and will operate the facility. The total capital cost for the plant is projected to be approximately $1.8 billion. Construction is expected to begin in 2007 with an anticipated in-service date of 2011.

OGE's ratings also take into consideration the higher risk nature of the non-regulated natural gas related activities of Enogex, which include natural gas midstream transportation services, storage, processing and wholesale energy marketing. In the current high natural gas price and high commodity spread environment, Enogex is generating very strong cash flows. At the same time, Enogex has largely eliminated the downside risk associated with negative commodity margins. As such, while Enogex's earnings and cash flow are levered to increases in commodity prices, its exposure to declines in commodity prices is meaningfully lower than it has been in recent years. In addition, Enogex has significantly reduced its debt levels and current credit metrics are appropriate for the ratings category.

Fitch expects consolidated credit metrics to decline over the next several years, driven principally by the interest expense associated with the construction of the recently announced coal plant. However, it should be highlighted that OG&E's participation in this plant is contingent upon receiving regulatory pre-approval in Oklahoma for the project. Assuming the pre-approval is received, given the large size of the project, allowance for funds used during construction (AFUDC) will comprise a substantial portion of consolidated and utility earnings going forward. While this will help stabilize earnings, as AFUDC is non-cash, it will not provide an offset to the increased interest expense associated with the construction. Managing the credit aspects of this construction project will present a challenge for management. Fitch notes that OGE has historically been very prudently managed from a credit perspective and we anticipate this prudency to continue.

Fitch affirms the following ratings with a Stable Outlook:

OGE Energy Corp.

--Issuer Default Rating at 'A';

--Senior unsecured debt at 'A';

--Short-term at 'F1'.

Oklahoma Gas & Electric Co.

--Issuer Default Rating at 'A+'

--Senior unsecured debt at 'AA-';

--Short-term at 'F1'.

Enogex, Inc.

--Issuer Default Rating at 'BBB';

--Senior unsecured debt at 'BBB'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.