OGE Energy (US:OGE)2025-07-30 14:02Financial Data and Key Metrics Changes - For the second quarter, consolidated net income was $108 million or $0.53 per diluted share compared to $102 million or $0.51 per share in the same period of 2024, indicating a year-over-year increase in earnings per share [15][16] - The electric company achieved net income of $108 million or $0.53 per diluted share, slightly down from $109 million or $0.54 per share in the same period of 2024, primarily due to milder weather and higher interest and depreciation expenses [15][16] - The holding company reported a small loss of less than $1 million, flat on a per diluted share basis compared to a loss of $7 million or $0.03 per share in the same period of 2024 [16] Business Line Data and Key Metrics Changes - Year-over-year customer growth continued at a healthy pace near 1% in the second quarter, with weather-normalized load growing 6.5% year to date compared to the same period in 2024 [17] - The two largest customer classes, residential and commercial, showed year-to-date growth of 12.5% respectively, indicating strong demand [17] - Industrial and oilfield load showed some softness this year, attributed to unplanned customer outages, but future growth in these sectors is anticipated [18] Market Data and Key Metrics Changes - The local economy remains strong, with Oklahoma and Arkansas unemployment rates continuing to outpace the national average, and Oklahoma City maintaining an unemployment rate below 4% for the 46th consecutive month [13] - The Oklahoma Department of Commerce announced the 2025 Oklahoma Innovation Expansion Program, which includes 83 companies in the service area, supporting new capital investment and job creation [11] Company Strategy and Development Direction - The company is focused on adding approximately 550 megawatts of capacity, with new natural gas combustion turbines under construction and expected to be operational within the next year [9] - The company plans to continue exploring options to meet growing generation needs and expects to add generation at a similar pace for the next few years [9][10] - Legislative successes have provided new customer benefits and credit accretive provisions, allowing for CWIP recovery during the construction phase of certain generation capacity projects [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving results in the top half of the earnings guidance range for the year, emphasizing a strong foundation for future growth [6][14] - The company is optimistic about the future, citing ongoing negotiations with data centers and the potential for increased load projections [10][12] - Management highlighted the importance of maintaining a competitive low rate advantage and focusing on cost structure to minimize customer impacts [23][24] Other Important Information - The company received a notice to construct a transmission line from Fort Smith, Arkansas to Muskogee, Oklahoma, which will address reliability and capacity issues in the Fort Smith area [22] - The estimated cost for the transmission line is approximately $240 million, with construction expected to occur in multiple phases from 2027 to 2029 [22] Q&A Session Summary Question: What is driving the weaker industrial sales? - Management noted that industrial customers are more power-intensive and experience cycles for maintenance, which can lead to noticeable fluctuations in sales [29] Question: Excluding the midstream operations one-time legacy benefit, how can the parent drag for 2025 be expected to grow? - Management indicated that the one-time benefit should be largely ignored, and they remain focused on guidance for the year excluding that item [31] Question: Can you provide an update on generation capacity additions? - Management expressed a strong preference to own new assets while securing short-term bridge capacity during construction, with ongoing negotiations for additional agreements [32] Question: Any updates on the Google Stillwater data center site? - Management reported that negotiations are progressing and they are getting closer to achieving objectives that protect existing customers while being value accretive [39] Question: Does the top end of guidance include the one-time midstream tax gain? - Management confirmed that the guidance includes the impact of the one-time benefit mentioned [40] Question: Is the company expected to be long capacity at the end of the decade? - Management does not anticipate being long on capacity, stating that they will continue to add capacity in response to load growth [46]