OGE Energy (OGE) - 2025 Q4 - Earnings Call Transcript
OGE Energy OGE Energy (US:OGE)2026-02-18 15:02

Financial Data and Key Metrics Changes - Consolidated earnings for 2025 were reported at $2.32 per share, an increase from $2.19 per share in 2024, reflecting a strong year [11] - Consolidated net income for 2025 was approximately $471 million, compared to $442 million in 2024 [11] - At the electric company, net income rose to approximately $500 million, or $2.47 per share, up from $470 million, or $2.33 per share in the previous year [12] - The holding company reported a loss of $29 million, or $0.15 per share, slightly higher year-over-year due to increased interest expense [12] Business Line Data and Key Metrics Changes - Customer growth was just under 1%, while weather-normalized load grew approximately 7%, indicating strong local economies [12] - The company expects customer count to increase about 1% and weather-normalized load to grow 4%-6% in 2026 [14] Market Data and Key Metrics Changes - The service area continues to perform well, with weather-normalized load up more than 24% since 2021 [14] - The company is targeting a 60%-70% dividend payout ratio with a stable and growing dividend [16] Company Strategy and Development Direction - The company is focused on reliable electricity at some of the lowest costs in the nation, with a commitment to affordability and efficiency [4][8] - Plans include advancing the transmission strategy and finalizing opportunities from the Southwest Power Pool (SPP) [4][5] - The company aims to secure approval for the Frontier Energy Storage Project and file for generation pre-approval in both Oklahoma and Arkansas [5][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the financial plan, with a clear investment roadmap and a target of 5%-7% EPS growth through 2028 [18] - The company highlighted the importance of balancing affordability and execution in its growth strategy [18] - Management noted that they are actively negotiating with several large load customers and expect to finalize agreements soon [25][36] Other Important Information - The company executed a well-subscribed equity offering and filed for recovery of generation needs to meet growing demand [4] - A draft Integrated Resource Plan (IRP) was issued, outlining long-term resource strategy and identifying approximately 1.9 gigawatts of capacity needs by 2031 [17][58] Q&A Session Summary Question: Rate base growth versus investment plan - The company indicated a rate-based growth of about 9% under the current investment plan [24] Question: Changes in large load opportunities - Management confirmed ongoing negotiations with 6-7 large load customers, with progress on agreements for Customer X [25] Question: Weather-normalized load growth moderation - Management explained that the moderation is part of a broader trend, with an average of about 5% since 2021 [32] Question: Black Kettle Energy Storage capacity purchase agreement - Management affirmed their preference for owning and operating generation assets, which supports their strategy [36] Question: Capital prioritization and generation capacity - Management stated they have flexibility in capital allocation and are focused on affordability metrics [38] Question: 765 kV transmission line project - Initial estimates suggest the company's portion of the project could be around 20% of the current capital plan [42] Question: Data center contract and customer protections - The contract for Customer X is integrated into the IRP, with customer protections ensuring fair share and minimum terms [46]

OGE Energy (OGE) - 2025 Q4 - Earnings Call Transcript - Reportify