OGE Energy (US:OGE)2023-05-04 16:31Financial Data and Key Metrics Changes - The consolidated earnings for Q1 2023 were reported at $0.19 per share, a decrease from $1.39 per share in Q1 2022, which included $1.15 per share from natural gas midstream operations that were exited in 2022 [8][9] - The Electric Company achieved net income of $40 million or $0.20 per diluted share in Q1 2023, compared to $39 million or $0.19 per share in the same period of 2022, primarily due to increased recoveries of capital investments and strong load growth [8][9] Business Line Data and Key Metrics Changes - The Electric Company reported a net income increase attributed to strong load growth and capital investment recoveries, despite higher operational and maintenance costs [8][9] - Other operations, including the holding company, reported a loss of $1.5 million in Q1 2023 compared to a net income of $10 million in Q1 2022, mainly due to a prior year tax benefit that reversed [9] Market Data and Key Metrics Changes - Customer growth was approximately 1%, with weather-normalized load growing at a rate of 3.9% compared to Q1 2022, indicating a robust economic environment in Oklahoma and Arkansas [10] - The commercial sector experienced its third consecutive quarter of double-digit year-over-year increases in weather-normalized load [10] Company Strategy and Development Direction - The company is focused on expanding generation capacity to meet growing demand, with plans to file for approval of multiple RFPs this summer [6][10] - Investments in grid and weather hardening are aimed at improving operational performance and reliability, especially in light of severe weather events [4][6] - The company is pursuing opportunities through the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) to enhance clean energy initiatives [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong start to the year, highlighting the positive economic development in their service areas and the potential for continued growth [3][12] - The company anticipates a long-term earnings per share growth rate of 5% to 7% at the Electric Company, supported by a solid balance sheet and strong fundamentals [12] Other Important Information - The company reported a fuel under-recovery balance of approximately $370 million at the end of March, a reduction of $145 million since year-end [11] - The Oklahoma Corporation Commission approved the 2021 fuel prudency audit, and the company is evaluating the timing of its next rate review, which could be filed in the second half of the year [7] Q&A Session Summary Question: Can you talk about some of the offsets that you're embedding in the reiterated guidance? - Management acknowledged a negative impact from mild weather but emphasized strong tailwinds from load growth and sales mix, maintaining a bullish outlook for 2023 [14][15] Question: Can you provide more details on the latest round of solar RFPs? - Management indicated ongoing negotiations and emphasized the importance of cost, timing, and risk in the RFP process, with plans to file results this summer [21][22] Question: How do you perceive the sustainability of the 4% to 5% load growth trajectory into 2024 and beyond? - Management expressed optimism about sustained growth, citing diverse economic development and a solid base of residential customers [24] Question: Can you clarify the timeline for the outstanding RFPs? - Management confirmed plans to file for approval in the summer, with a potential approval timeline of up to 240 days in Oklahoma [35] Question: How are you thinking about the level of the rate increase? - Management emphasized a focus on affordability and a goal of avoiding large rate spikes, indicating a commitment to keeping rates attractive for continued growth [36][38]