Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- OGE Energy Corp (OGE, Financial) reported strong third-quarter consolidated earnings of $1.09 per share, driven by robust demand and customer growth.
- The company expects to be at the top of its original earnings guidance range of $2.06 to $2.18 per share for the year.
- OGE Energy Corp (OGE) has achieved exceptional weather-normalized load growth of 8.4% for the quarter, with strong growth across all customer classes.
- The company has completed its planned financings for the year and maintains a strong balance sheet with no fixed rate maturities until 2027.
- OGE Energy Corp (OGE) continues to invest in generation capacity and system reliability, with significant projects underway, including new hydrogen-capable natural gas units.
Negative Points
- Third-quarter net income decreased compared to the same period in 2023, primarily due to higher depreciation, interest, and operation expenses.
- The holding company reported a loss of approximately $6 million or $0.03 per diluted share in the third quarter.
- Higher interest expenses and income tax expenses have impacted the company's financial performance.
- The company faces challenges with turbine availability, which could affect resource mix and generation capacity planning.
- There are ongoing regulatory challenges, including the need for approval of the uncontested Oklahoma rate review settlement.
Q & A Highlights
Q: What is your opportunity set for SPP, and would that be incremental to the plan?
A: Sean Trauschke, CEO: We are awaiting notices to construct from SPP, expected in December. Once finalized, these will be integrated into our plans. We have flexibility to adjust our investments accordingly, and there are opportunities for growth.
Q: How are you thinking about the potential to increase rate base growth, CapEx, and earnings guidance given the current 5% to 7% EPS CAGR?
A: Sean Trauschke, CEO: Load growth is a key driver. As growth materializes, we will deploy more capital. Our sustainable business model allows us to spread costs over more customers, maintaining low rates while supporting long-term growth.
Q: Will you be in a position to update CapEx fully at year-end given the generation RFP time frame?
A: Sean Trauschke, CEO: By February, we will not have filed for approval of our generation RFP decision. Once approved, we will update our CapEx table and any financing adjustments.
Q: Are there opportunities for near-term upgrade projects due to constraints around turbine availability?
A: Sean Trauschke, CEO: We continuously evaluate plant upgrades, which is an ongoing effort. Availability is crucial, and we aim to provide the best value for customers, potentially bridging with short-term capacity if needed.
Q: With accelerating load growth, is there a scenario where you might need more capacity than currently identified?
A: Sean Trauschke, CEO: We are considering filing a new IRP to update assumptions and evaluate growth. Load growth isn't linear, but we expect it to be above historical levels, and we are managing this as we finalize RFP results.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
