Evergy(US:EVRG)2021-05-08 19:19Financial Data and Key Metrics Changes - Adjusted earnings per share (EPS) for Q1 2021 were $0.55, up from $0.41 in Q1 2020, driven by favorable weather, income tax benefits, and higher other income [7][41] - The company reaffirmed its 2021 adjusted EPS guidance of $3.20 to $3.40 per share and targeted long-term annual EPS growth of 6% to 8% from 2019 through 2024 [8][39] Business Line Data and Key Metrics Changes - The power marketing business achieved unusually high gross margins during the February weather event, contributing approximately $0.41 per share to pre-tax earnings, which was excluded from adjusted EPS [13][41] - Weather-normalized retail sales increased by 1.1% in Q1 2021, with residential sales up 3.2% and industrial sales up 2.9%, while commercial sales declined by 1.5% [45][46] Market Data and Key Metrics Changes - The company experienced its 40th consecutive quarter of customer growth, with total customers increasing by 1% compared to Q1 2020 [48] - National unemployment rates have declined, with Kansas City metro area unemployment landing at around 4.2%, below the national average of 6.2% [48] Company Strategy and Development Direction - The company is focused on a balanced strategic plan that emphasizes reliability, affordability, and sustainability, with a phased approach to adding renewables and retiring coal plants [19][34] - The Integrated Resource Plan (IRP) reflects a commitment to reducing carbon emissions by 70% by 2030 and achieving net zero carbon emissions by 2045 [36][37] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of the February extreme weather event on costs and emphasized the importance of balancing reliability with the transition to renewables [9][32] - The company plans to retire the last two units at the Lawrence Energy Center by late 2023 and add 700 megawatts of utility-scale solar, consistent with its Sustainability Transformation Plan [30][31] Other Important Information - The company is actively pursuing regulatory mechanisms to recover costs associated with the extreme weather event, including accounting authority orders in Kansas and Missouri [10][11] - Securitization legislation is under review in Missouri, which could provide a beneficial cost recovery approach [12][25] Q&A Session Summary Question: Anticipated pushback from customer groups regarding Missouri IRP - Management believes the IRP reflects a balanced approach focusing on rates, reliability, and sustainability, with a phased addition of renewables [54] Question: Opportunities for transmission spend and partnerships - Management sees incremental opportunities for transmission and has an existing partnership with AEP, evaluating potential projects like the Greenbelt D.C. line [62][65] Question: Differences between competing securitization bills in Missouri - Management indicated that the bills are similar with no significant differences, and they are optimistic about the outcome [78][79] Question: Potential size of securitization related to the Lawrence plant - The anticipated securitization amount related to the Lawrence plant retirement is about $350 million [84] Question: Timeline for the STP process in Kansas - The STP process is informational, with the next steps including filing responsive comments and holding a workshop in late May [90] Question: Impact of the February weather event on the IRP - Management noted that the event reinforced the need for a balanced approach to reliability and sustainability, with ongoing evaluations of the IRP [92][95]