Evergy(EVRG) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For the full year 2024, Evergy reported adjusted earnings of $878 million or$3.81 per share, compared to $816 million or$3.54 per share for the same period last year, reflecting a year-over-year increase in adjusted EPS driven by strong cost management and load growth [49][50][66] - The adjusted EPS growth was impacted by a 5% decrease in cooling degree days and a 4% decrease in heating degree days, leading to a $0.13 decline in EPS versus 2023 [50] - The company reaffirmed its 2025 adjusted EPS guidance range of$3.92 to $4.12 per share, with a midpoint of$4.02, representing a 5% increase over the 2024 guidance midpoint [15][66] Business Line Data and Key Metrics Changes - Retail sales trends showed a weather-normalized increase of 1.1% in 2024, driven by solid growth in both residential and commercial usage [52][54] - The company anticipates a 2.4% growth in load demand for 2025, with significant contributions expected from new large customers such as Meta and Panasonic [53][54] Market Data and Key Metrics Changes - The economic development pipeline in Kansas and Missouri has grown from approximately 6 gigawatts to over 11 gigawatts, reflecting robust demand from large customers [18][19] - The company expects weather-normalized demand growth of 2% to 3% through 2029, with upside potential from additional customer wins [17][54] Company Strategy and Development Direction - Evergy's strategic objectives focus on affordability, reliability, and sustainability, with a five-year capital investment plan totaling $17.5 billion aimed at modernizing infrastructure and supporting economic growth [9][28][45] - The company is actively pursuing regulatory and legislative initiatives to support infrastructure investment and mitigate regulatory lag, including the passage of House Bill 2527 in Kansas [11][12][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic challenges and maintain strong performance, citing successful regulatory execution and a solid capital investment plan [10][15] - The company anticipates continued growth driven by a strong labor market and robust customer demand in its service areas [53][54] Other Important Information - The company raised its dividend by 4$2.67, consistent with its target payout ratio [15] - Evergy's capital investment program is expected to result in 8.5% annualized rate base growth through 2029, compared to a prior forecast of approximately 8% [28][67] Q&A Session Summary Question: Timeline for finalizing agreements on 1.6 gigawatts - Management indicated that discussions are advancing well and expects announcements later this year, with agreements finalized over the course of the year [72][76][78] Question: Next steps for capital structure in Kansas - Management characterized the proceeding as procedural and expressed a desire to seek a constructive settlement during the rate case [79][82] Question: Timeline for developing associated generation - Management confirmed that they have a good plan to serve customers from both transmission and generation perspectives, with updates to the Integrated Resource Plans (IRPs) expected in March and April [89][92][100] Question: Protections for existing customers in large load tariff - Management is seeking a well-balanced tariff that covers incremental costs while providing protections for existing customers, including minimum bills and contract periods [107][111] Question: Timeline for Senate Bill 4 in Missouri - Management expressed confidence in the bill's passage, highlighting its transformative potential for the regulatory framework in Missouri [120][125] Question: Matching load with generation projects - Management provided clarity on the load forecast, indicating that they expect to have the necessary transmission and generation capacity to serve the anticipated load growth [126][130]