Evergy(EVRG) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported third quarter adjusted earnings of $2.02 per share, an increase from$1.88 per share a year ago, driven by demand growth and new retail sales [7][49] - Year-to-date adjusted earnings are $3.46 per share compared to$3.27 per share a year ago, reaffirming the 2024 adjusted EPS guidance range of $3.73 to$3.93 per share [8][63] - A 4% increase in quarterly dividend to $2.67 per share on an annualized basis was announced, aligning with the updated growth outlook [12] Business Line Data and Key Metrics Changes - Weather-normalized demand grew by 0.8$0.10 to EPS for the quarter [51][53] - The company anticipates a regular cadence of rate case filings approximately every 18 months, which will support consistent growth [28][88] Market Data and Key Metrics Changes - The overall economic development pipeline remains robust, with projects representing more than 6 gigawatts of demand actively considering the service territory [39] - The company is in advanced stages of negotiation with two new data centers, representing between 500 and 1,000 megawatts of incremental load [40] Company Strategy and Development Direction - The company aims for a long-term growth target of 4% to 6% through 2029, based on a capital investment plan totaling approximately $16.2 billion from 2025 to 2029 [11][21] - Investments include$2.4 billion in incremental generation and $1.3 billion in distribution to support growth and improve reliability [22][108] - The strategic plan focuses on affordability, reliability, and sustainability, with a balanced mix of resource additions [44][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth outlook, driven by new large customer loads and a supportive regulatory environment [67][93] - The company expects to manage regulatory lag effectively through provisions like PISA in both Kansas and Missouri [88][90] Other Important Information - The company announced plans to invest in two new combined cycle natural gas plants and three solar farms totaling 325 megawatts, with commercial operations expected to start in 2027 [15][18] - The updated capital expenditure forecast represents a$3.7 billion increase relative to the prior five-year forecast [21] Q&A Session Summary Question: Earnings sensitivity regarding large loads - Management indicated that the current plan includes only three announced customers, and additional customers could provide upside potential [66][68] Question: Capital structure workshop impact - The capital structure workshop is seen as an opportunity for dialogue about attracting capital and will influence future rate cases [70][72] Question: Long-term growth rate cadence - Management clarified that while they aim for consistent execution in the top half of the growth range, year-over-year dynamics may vary [84][86] Question: Regulatory lag management - Management noted that provisions like PISA will help mitigate regulatory lag, and they plan to file rate cases regularly [88][90] Question: Cost estimates for gas plants - Management acknowledged that costs have risen since prior estimates, but they remain justified for meeting growth needs [104] Question: Incremental CapEx breakdown - Of the incremental CapEx, approximately $2.4 billion is for generation and$1.3 billion for distribution projects [108]