Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Evergy Inc (EVRG, Financial) reported a significant increase in third-quarter adjusted earnings, reaching $2.02 per share compared to $1.88 per share a year ago, driven by demand growth and new retail sales.
- The company reaffirmed its 2024 adjusted EPS guidance range of $3.73 to $3.93 per share, indicating confidence in its financial performance.
- Evergy Inc (EVRG) announced plans to invest in two new combined cycle natural gas plants and three solar farms, reflecting a balanced approach to energy generation and supporting economic development.
- The company has established a long-term growth target of 4% to 6% through 2029, with expectations to be in the top half of this range relative to the 2025 baseline.
- Evergy Inc (EVRG) reached a unanimous settlement in its Missouri West rate case, which, if approved, would provide a balanced outcome for customers and reflects a supportive regulatory environment.
Negative Points
- The increase in earnings was partially offset by cooler summer weather, which led to a 12% decrease in cooling degree days and impacted EPS negatively.
- Higher depreciation and amortization expenses due to increased infrastructure investment resulted in a $0.03 decrease in EPS.
- The company anticipates a regular cadence of rate case filings, which could lead to regulatory challenges and potential customer rate increases.
- Evergy Inc (EVRG) plans to issue common stock starting in 2026, which may dilute existing shareholders.
- The company's growth outlook does not yet reflect the potential load from the 6-gigawatt customer pipeline, indicating uncertainty in future demand projections.
Q & A Highlights
Q: Can you provide an earnings sensitivity for the large customer class and how additional deals might impact your growth outlook?
A: David Campbell, CEO: The current plan includes only the three announced customers, and we have high confidence in achieving the top half of our 4% to 6% growth range through 2029. Any additional large customer loads would represent upside potential.
Q: How will the upcoming capital structure workshop influence your 2025 rate case?
A: David Campbell, CEO: The workshop is not decisional but aims to facilitate dialogue on capital structure outside of a litigated proceeding. It will inform our Kansas Central rate case filing in Q1 2025, focusing on reliability and efficiency investments.
Q: What is the rationale for not including certain elements of the Integrated Resource Plan (IRP) in the current capital plan?
A: David Campbell, CEO: We have included a substantial portion of the IRP, but some elements like the CCGT and CT in the out years are not yet included. This reflects a conservative approach, ensuring high confidence in executing the current plan.
Q: How should we think about regulatory lag in your five-year capital plan?
A: Bryan Buckler, CFO: Regulatory lag is better managed under PISA provisions in Kansas and Missouri. We plan a more regular cadence of rate cases, approximately every 18 months, to stay current on investment recoveries.
Q: Can you clarify the expected rate trajectory for customers through 2029?
A: David Campbell, CEO: We aim to keep rate increases in line with inflation, maintaining regional rate competitiveness. This is crucial for supporting economic development and aligning with our growth investments.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
