OGE Energy (US:OGE)2021-08-07 00:59Financial Data and Key Metrics Changes - For Q2 2021, the company reported consolidated earnings of $0.56 per share, an increase from $0.43 per share in Q2 2020, driven by higher utility earnings and improved performance in midstream operations [5][24][25] - The utility earnings were $0.42 per share, while earnings from the investment in Enable were $0.16 per share, with a holding company loss of $0.02 per share [5][24] - The company achieved net income of $113 million in Q2 2021 compared to $86 million in the same quarter of 2020 [24] Business Line Data and Key Metrics Changes - The utility segment's performance improved despite mild weather, primarily due to higher revenues from capital investments and customer growth [24] - The natural gas midstream operation reported earnings of $0.16 per share, up from $0.10 per share in 2020, attributed to higher commodity prices and improved volumes [25] Market Data and Key Metrics Changes - Customer growth was reported at 1.3% year-over-year, with commercial and industrial customer classes showing significant load growth of approximately 12% and 9% respectively [26] - The overall load increased by 5.7% during the quarter, aligning with expectations, and the company anticipates a weather-normalized load increase of more than 2% above 2020 levels for the full year [26][16] Company Strategy and Development Direction - The company is focusing on a draft integrated resource plan (IRP) that includes retiring approximately 850 megawatts of aging gas plants over the next five to six years, replacing them with solar and hydrogen-capable combustion turbines [11][12] - The strategy emphasizes fuel diversity and cleaner energy solutions while maintaining affordable rates, with a long-term EPS growth target of 5% through 2025 [30][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the economies within their service territory, noting low unemployment rates compared to national averages [22] - The company remains committed to maintaining affordable rates, which is seen as a competitive advantage in attracting new customers and supporting sustained load growth [20][22] Other Important Information - The company received its 19th EEI Emergency Response award for power restoration efforts, highlighting its commitment to service reliability [6] - A securitization filing in Oklahoma is on track to recover approximately 85% of costs associated with the February winter storm, with a hearing scheduled for October [13][33] Q&A Session Summary Question: Can you provide insights on the IRP filing and CapEx? - Management indicated a gradual increase in capital expenditures, planning to layer in 100 to 150 megawatts of solar capacity annually while managing customer impact [41] Question: How will the exit from Enable affect capital allocation? - The focus will be on reinvesting in the business and growing the company, with a commitment to increasing dividends as well [43][44] Question: What is the remaining book value on coal plants and plans for retirement? - Management stated that coal plants have a significant useful life, with no immediate plans for accelerated retirement, focusing instead on the next five years [55]