The paragraph introduces the Q4 2024 Evergy, Inc. Earnings Conference Call. The operator informs participants about the listen-only mode and provides instructions for the Q&A session. The conference is being recorded. Peter Flynn, the Director of Investor Relations, welcomes attendees and mentions the availability of webcast slides and financial information on Evergy's Investor Relations website. He notes that the discussion will include forward-looking information and references disclosures in SEC filings regarding potential discrepancies between expectations and future results. The speakers on the call include David Campbell, the chairman and CEO, and Bryan Buckler, the executive VP and CFO. Campbell will discuss highlights from 2024, economic development updates, and regulatory agendas, while Buckler will review financial results, retail sales trends, and the financial outlook. Other management members will be available for Q&A.

In this paragraph, David Campbell begins by expressing gratitude to Evergy employees for their work in achieving the company's strategic goals of affordability, reliability, and sustainability. He highlights Evergy's solid financial performance in 2024, reporting adjusted earnings of $3.81 per share, up from $3.54 the previous year, despite weather challenges. The company invested $2.3 billion in infrastructure to enhance grid reliability and resilience. Looking forward, Evergy aims to execute a five-year, $17.5 billion capital plan to drive regional economic prosperity. Regulatory advancements were also notable, with Kansas passing House Bill 2527 to support infrastructure investment, and a favorable settlement in Missouri regarding the Missouri West rate case, including a stake in the Dogwood Energy Center.

The paragraph discusses a settlement that balances customer and community interests and supports infrastructure investments to provide reliable, affordable electric service. The company plans to construct three new natural gas facilities and three solar farms in Kansas and Missouri, totaling over 2,100 megawatts, as part of its 2024 integrated resource plans aiming for cost-effective, resilient service. Despite severe weather in 2024, reliability improvements achieved in previous years were maintained, thanks to diligent line crews. Financially, the company increased its dividend by 4% to $2.67 and reaffirmed its 2025 adjusted EPS guidance range, highlighting ongoing fiscal stability and performance.

The company is reaffirming its long-term growth target of 4% to 6% through 2029, based on a 2025 midpoint. It anticipates being in the top half of this range from 2026 to 2029. They highlight recent economic development successes with companies like Google, Panasonic, and Meta, contributing 800 megawatts to their demand. Their demand growth forecast remains at 2% to 3% through 2029. The economic development pipeline in Kansas and Missouri is robust, growing from 6 to over 11 gigawatts. Projected peak demand for 2025 is 10.6 gigawatts, offering significant growth opportunities. They are in advanced talks with two large customers, expecting a combined load of 1.6 gigawatts, with potential expansions in Kansas and Missouri.

The paragraph discusses the anticipated growth in demand from new customers expected to impact the economy in Kansas and Missouri around 2027 or 2028. Two major customers are expected to announce their plans later this year, with ongoing efforts to work with others representing approximately 3 gigawatts of load. There are significant economic benefits anticipated, including jobs and an expanded tax base. The company is focused on maintaining affordability and competitiveness, and its current capital investment and load growth forecasts only include announced projects, with updates to follow customer announcements. The overall sentiment is one of excitement about the transformative potential for the region.

The paragraph discusses an updated capital expenditure plan for large load power service tariffs in Kansas and Missouri, aiming for implementation by the third quarter. The five-year investment plan from 2025 to 2029 has increased to $17.5 billion, up by $1.3 billion, due to assigning part of a combined cycle gas plant to Missouri West and revising cost estimates for a natural gas facility. The revised plan supports 8.5% annual rate base growth through 2029 and includes future projects pending 2025 updates. Financing will be managed with a balance of debt, equity, and cash flow, maintaining financial stability and credit rating.

The paragraph outlines a company's financial strategy and growth outlook, focusing on transmission and distribution projects aimed at enhancing affordability, reliability, and sustainability. It projects a 4% to 6% growth in adjusted EPS from the 2025 guidance midpoint of $4.02, driven by a $17.5 billion, five-year capital plan to support a 2% to 3% load growth by 2029. The plan includes regular rate case filings every 18 months, although not uniformly applicable across jurisdictions. Additionally, a significant rate review was filed in Kansas requesting a $196 million revenue increase based on a 10.5% return on equity, covering grid modernization investments since the last rate review.

The paragraph outlines various procedural schedules and initiatives involving regulatory processes and legislative actions in Kansas. It discusses the timeline for staff, intervener, and rebuttal testimonies, settlement conferences, and hearings related to Kansas rate cases and requests for partial ownership of energy facilities. Additionally, the company has filed for approval of a large load power service tariff aimed at data center customers, expecting resolution in the third quarter. Furthermore, House Bill 2107 was introduced to establish a legal framework for wildfire damages and propose a workshop on wildfire mitigation strategies. The company's efforts are focused on achieving constructive regulatory outcomes and advancing regional prosperity.

The paragraph discusses legislative developments in Kansas and Missouri regarding utility regulations. In Kansas, a bill (HB 2107) requiring lawsuits to prove utility negligence in wildfires and facilitating stakeholder dialogue on risk mitigation has been favorably recommended for passage in the house. In Missouri, Senate Bill 4, which includes provisions for new natural gas units, extends the PISA statute, and allows for recovery of construction work in progress (CWIP), has passed the senate and is now in the house. The bill also introduces an integrated resource planning process and lifts a longstanding prohibition on CWIP. Both pieces of legislation involve collaboration between various stakeholders and are expected to have significant impacts on the respective state's regulatory frameworks.

The paragraph discusses a bill in Missouri aiming to boost infrastructure investment, resource adequacy, reliability, and growth. It mentions pending requests for certificates for solar farms and natural gas units. Staff reports for these projects are due in March and April. A request for a large load power service tariff in Missouri was filed, awaiting a resolution expected in the third quarter. The strategic plan aims to maintain affordability and align rate increases with inflation, to sustain economic growth. Efforts include grid modernization, focusing on safety, customer service, and infrastructure investment, supporting a cost-effective energy transition with new natural gas and solar projects for Missouri and Kansas customers.

The paragraph provides a financial update from Bryan Buckler on Evergy's 2024 results. Evergy achieved adjusted earnings of $878 million or $3.81 per share, up from $816 million or $3.54 per share in 2023. The increase was primarily driven by higher residential and commercial sales volumes and recovery from regulated investments, despite a cooler summer and mild winter negatively impacting earnings. Additional expenses from operations, maintenance, depreciation, and infrastructure investment slightly offset these gains. Weather-normalized retail sales grew by 1.1%, supported by solid residential and commercial demand, including impacts from Meta's new data center operations.

The paragraph discusses the anticipated growth in customer demand and earnings for a company operating in Missouri, Kansas, and the Kansas City metro area. Due to strong local economies and low unemployment rates, customer demand is expected to increase, with a 2.4% growth forecast for 2025 compared to 2024, largely driven by contributions from Meta and Panasonic's operations. The company anticipates weather-normalized demand growth of 2% to 3% annually through 2029. Financial projections include a rise in 2025 EPS to $4.02, starting from a 2024 adjusted EPS of $3.81. This increase is attributed to various factors, including normalized weather conditions and higher kilowatt-hour sales, partly balanced by increased operational and maintenance costs, depreciation, and interest expenses.

The paragraph discusses the company's financial plans, including a projected $0.04 drag related to convertible debt and no new common stock issuances in the 2025 guidance. The company is optimistic about achieving its financial plan, with infrastructure investments benefiting customers and communities. It mentions an updated financing plan with $17.5 billion in capital investments through 2029, reflecting an increase of $1.3 billion and the addition of new projects. The company plans to fund these investments with debt and equity instruments while maintaining a target FFO to debt ratio of 15%. As a result of increased investments, projected equity issuances from 2026 to 2029 have risen to $2.8 billion. The plan accounts for load growth expectations from the first set of large customer additions.

The paragraph discusses Evergy's capital plan of $17.5 billion, which could require less equity if more large customers join by 2028, improving earnings and cash flow. The 2025 guidance does not include new equity, but the company may prepare structures for future equity needs, like an ATM or equity distribution program, targeting issues in 2026 and 2027. Evergy emphasizes flexibility in capital markets and remains open to different equity instruments beyond common stock. The 2025 EPS guidance is reaffirmed at $3.92 to $4.12, with growth expected in the top half of a 4% to 6% range through 2029. The capital plan aims to enhance grid resilience and support economic development in Kansas and Missouri.

The paragraph discusses a company's growth plan, with an expected average rate base growth of 8.5% from 2024 to 2029. The company is confident in its strategy and is focused on achieving customer, operational, and financial goals to ensure affordability, reliability, and sustainability for long-term customer and community prosperity. During a Q&A session, Shahriar Pourreza from Guggenheim Partners inquires about the timeline for finalizing agreements for 1.6 gigawatts and when growth rates might be revisited. David Campbell responds, explaining that discussions are progressing well and mentions a recent power tariff filing in two states.

The paragraph discusses the progress of large customers' projects being advanced while tariffs are finalized, citing the example of Panasonic's facility built before tariff completion. Announcements are expected later in the year, with updates typically provided in the third-quarter and year-end calls, based on customer activity and agreement finalization. Shahriar Pourreza acknowledges the cautious approach and inquires about the next steps regarding a rejected cap structure request in Kansas. David Campbell explains it was a procedural step to consider the capital structure issue on legal grounds.

The paragraph discusses a commission's decision to address procedural and substantive issues in a rate case, highlighting the focus on seeking a constructive settlement. Shahriar Pourreza congratulates Bryan Buckler and David Campbell for their work, and Julien Dumoulin-Smith asks about the timeline for developing associated generation, mentioned as 2026 to 2029 in slides. Dumoulin-Smith inquires if the generation will be self-served by clients or through short-term PPAs, and how this affects Capital Expenditure timing and tariff filings given the compressed demand.

David Campbell discusses the company's strategic approach to balancing integrated resource plans (IRPs) with announced customer loads, focusing on both transmission and generation aspects. He mentions the company's forward capital plan, including the addition of 50% of a combined cycle gas turbine (CCGT) coming online in 2030, while a thousand megawatts of gas generation are planned for 2031 and 2032. Campbell highlights the dynamic discussions with customers, particularly those providing renewable generation options like solar and storage, which offer more capacity than wind alone. He emphasizes the need to integrate various factors into the transmission and generation plan to serve customer demands. Furthermore, Campbell notes that the company is on track with tariff procedures, expecting resolutions by the third quarter, having engaged in proactive discussions and previews with counterparties.

The paragraph features a discussion between Julien Dumoulin-Smith and David Campbell about the process of updating Integrated Resource Plans (IRPs). Campbell explains that IRPs have become more dynamic and require regular updates, unlike in the past when they were filed less frequently with minimal updates. The company has scheduled updates for its IRP in March and April, which will incorporate necessary changes and reflect the latest expectations. Campbell emphasizes the proactive approach to aligning the IRP with demand projections and mentions past decisions to include Combined Cycle Gas Turbines (CCGTs) in the plans. The paragraph ends with some congratulatory remarks from Dumoulin-Smith.

In the conversation, Durgesh Chopra from Evercore ISI asks David Campbell about the large load tariff, seeking details on customer protections compared to current tariffs. David explains that the tariff aims to cover incremental and fixed costs, benefiting both existing and new customers. Protections discussed include minimum bills, contract periods (around fifteen years), and exit fees, similar to practices in other areas. He notes that major customers want assurance of capacity, quick processes, and clear frameworks. Durgesh also asks if commission approval of these tariffs is needed before announcing a 1.6 gigawatt opportunity, or if they are separate issues.

The paragraph involves a discussion between David Campbell and Michael Sullivan about the progress of a legislative initiative referred to as SP4 in Missouri. David expresses optimism about the progress of the legislation, noting that it had a successful week and passed through the Missouri Senate, which is considered a significant hurdle due to the state's complex legislative procedures. The next step is for the legislation to be approved by the Missouri House. David commends the hard work of the commission and legislative leaders for advancing the bill, highlighting the potential transformative impact of the legislation on their plans.

The paragraph discusses the support from the governor's office for a transformative bill in Missouri regarding new generation investments and utilities. The bill has passed the Senate with widespread support and includes provisions for Construction Work in Progress (CWIP) for new natural gas plants, marking a significant change in how CWIP has been managed over the past fifty years. Additionally, the bill introduces a new integrated resource planning process to improve planning and infrastructure investment. The legislative session will conclude by May, and there's confidence that the bill will pass. Michael Sullivan asks how the new builds align with the economic development pipeline, referencing earlier slides in a presentation.

David Campbell discusses the electricity load forecast, indicating that approximately 500 megawatts of demand is expected to be covered by ongoing generation projects, with an additional 600 megawatts from agreements still being finalized. By the end of 2029, they anticipate a total load of 1.1 gigawatts. Although the current forecast includes only the initial 500 megawatts, the complete demand coverage is being planned through existing and upcoming energy resource plans. These plans account for future transmission and generation needs. Further developments, such as potential new plants, will be reflected in updates to their integrated resource plan (IRP) in March and April, particularly as they consider additional customers.

The paragraph discusses a conversation between Travis Miller from Morningstar and David Campbell about a company's actively building 800 megawatts of power capacity, which is detailed on slides of a presentation. This includes projects for Google, Panasonic, and Meta, as well as two additional data centers. David clarifies that while the total capacity being developed is 800 megawatts, only about 500 megawatts are expected to be fully loaded by 2029 based on their demand forecast, while the remaining 300 megawatts will ramp up after 2029. The discussion also touches on the concept of a Genco structure, where companies create separate regulated entities for specific large load contracts.

The paragraph is a discussion about the potential for different or additional corporate structures to handle large investments, with a focus on the energy sector in the U.S. David Campbell emphasizes the creativity arising from large pipeline projects and load opportunities. He mentions the possibility of incorporating renewable generation, including dispatchable generation like gas, and exploring options like demand response or leveraging backup generation. While Campbell does not speculate on specific corporate structures like a Genco, he notes there is significant growth potential that could lead to innovative solutions. He clarifies that no plans for a new corporate structure have been announced or are being advanced at this time. Travis Miller expresses appreciation for Campbell's insights.

In a discussion about equity needs related to customer agreements, Nicholas Campanella from Barclays inquires about the impact of bringing a 100-megawatt customer online. Bryan Buckler responds by explaining that they are in the process of finalizing agreements that could bring significant load growth. Specifically, up to 600 megawatts could come online by 2029, in addition to an initial 500 megawatts. This could boost their projected load growth from 2-3% to 4-4.5% by 2029. As a result, there would be a substantial reduction in equity needs, amounting to hundreds of millions of dollars over a five-year period, assuming the expected load growth materializes.

The paragraph is an excerpt from a conference call involving a discussion between David Campbell and Nicholas Campanella regarding growth rate expectations and capital expenditure (CapEx) plans for a company, Evergy. Nicholas queries why the growth rate wouldn't exceed 6% if everything aligns as expected, given the CapEx increase and potential large customer loads. David Campbell responds by explaining that the growth rate doesn't include potential future customer announcements, which will be integrated as they occur. He highlights that increased CapEx is largely planned for future years, primarily related to a power project coming online in 2030. Campbell is confident in the company's current plan and notes that updates will be provided as new customer estimates are realized. The call concludes with expressions of gratitude and farewell.

This summary was generated with AI and may contain some inaccuracies.