The paragraph is the introduction to the Evergy Q1 2025 Earnings Conference Call. It starts with the operator greeting participants and explaining the format of the call, including a question-and-answer session and the call being recorded. Peter Flynn introduces the call, noting the availability of supplementary materials on the company's Investor Relations website and cautioning about forward-looking information. Key speakers include David Campbell, CEO, and Bryan Buckler, CFO. David will discuss various company updates, while Bryan will address financial specifics. David then reports the first quarter's adjusted earnings per share, noting that results are influenced by regulated investments recovery, lower industrial demand, and increased expenses.

The paragraph discusses the company's financial and operational performance amidst challenging weather conditions and industrial setbacks. Despite a 2.7% growth in retail demand and an 18% increase in heating degree days, cold weather benefits did not translate into higher margins due to declining block pricing. Sales were also affected by heavy snow events and an industrial customer outage, although operations have since normalized. The company reaffirms its 2025 adjusted EPS guidance of $3.92 to $4.12 per share and projects long-term earnings growth of 4% to 6% through 2029. Operational performance has been solid, with favorable metrics in outage duration and frequency, and strong generation availability during extreme weather events. The outlook remains strong, supported by robust demand and favorable regulatory and legislative environments in Kansas and Missouri.

The paragraph discusses the impact of a recent cold spell that set a new peak load record in the Southwest Power Pool, highlighting the importance of continued investment in energy infrastructure such as grid modernization and new generation sources. It acknowledges the dedication of frontline employees and notes recent legislative developments in Kansas and Missouri that strengthen regulatory frameworks, fostering infrastructure investment and economic growth. The legislation aims to position these states as attractive locations for advanced manufacturing and data centers, ensuring infrastructure investment aligns with customer needs. Additionally, provisions like the PISA natural gas CWIP and tax incentives for data centers are emphasized for their role in supporting investment and economic development.

The paragraph discusses legislative advancements in Kansas and Missouri that are expected to attract major industry investments. Evergy is committed to providing safe, affordable, and reliable electric service to its 1.7 million customers as well as new ones. This growth is expected to distribute fixed costs over a larger base, create jobs, spur business development, and strengthen the local economy. Evergy's project pipeline has grown to 12.2 gigawatts, with 300 megawatts moving into active construction, particularly with an expanding data center project in Missouri. Negotiations are in progress for two more data center projects totaling 1.3 gigawatts, one potentially in Kansas and the other expanding in Missouri.

The paragraph discusses the company's excitement about upcoming projects that are expected to contribute to economic development and increase demand growth in 2027 and beyond. It mentions ongoing discussions with customers representing approximately 3 gigawatts of potential energy load, with some projects further advanced than others. The remaining pipeline has grown from 6 to 7 gigawatts, showing significant interest in Kansas and Missouri. Additionally, the paragraph references the 2025 Integrated Resource Plan (IRP) filings in Missouri and Kansas, highlighting updates in demand growth, reserve margin requirements, and anticipated new generation developments amounting to 2.1 gigawatts from 2025 to 2035.

The paragraph outlines Evergy's strategic approach to future projects, highlighting their request for proposals aimed at meeting energy needs through 2032. The company plans renewable and natural gas additions to ensure efficient, reliable, and affordable service while supporting economic development. It discusses the delayed retirement of certain facilities and the associated risks. The ultimate goal is a balanced energy portfolio including solar, wind, batteries, and natural gas. The paragraph also provides an update on regulatory activities, specifically mentioning the Kansas Central Rate Case with key dates for testimony and hearings.

The company is working with regulators and stakeholders to resolve the Kansas rate case by September and seek approval for ownership interests in natural gas plants and a solar farm, expecting an order by July 7th. A new tariff for data centers is under consideration, with settlement processes slated for June, and possible further discussions in the fall. In Missouri, they seek approval for solar and natural gas projects, with the Missouri Public Service Commission staff recommending conditional approval in April. These projects align with Missouri’s energy plans and aim to provide cost-effective, reliable energy solutions.

The paragraph discusses upcoming settlement conferences and hearings for solar and gas projects and outlines a procedural schedule for a power service tariff request in Missouri. It highlights the company's strategy to enhance affordability, reliability, and sustainability by keeping rates aligned with inflation and investing in infrastructure. The aim is to support regional prosperity and ensure reliable services, with efforts detailed in their 2025 IRP updates. The paragraph concludes with a transition to Bryan Buckler, who will review quarterly results.

In the first quarter of 2025, Evergy reported adjusted earnings of $125 million or $0.54 per share, slightly above the $124.7 million or $0.54 per share from the same quarter in 2024. The modest increase was driven by a $0.01 benefit from retail sales volumes, pricing, and weather, despite colder winter weather increasing heating days but providing limited margin benefit due to declining block pricing. A leap year effect from 2024 also influenced last year's results by $0.03. A significant unplanned customer outage further impacted outcomes. Positive contributions of $0.13 to EPS came from investments and new retail rates, while higher depreciation and interest expenses reduced EPS by $0.10, with other factors decreasing results by $0.04. Demand grew by 2.7%, though weather-normalized demand fell by 3%, as snow storms hindered business activities, and an industrial customer's temporary shutdown due to maintenance decreased demand. However, this customer resumed operations in April, returning to expected production levels.

In the paragraph, the company discusses its forecast for growth and earnings for the year and beyond. Despite an unexpectedly slow start in the first quarter due to unusual factors, the company remains confident in meeting its 2025 adjusted EPS guidance midpoint. This confidence is due to strong customer growth, anticipated demand rebound, and revenue from regulated investments. The company is focused on cost efficiencies and operational performance to meet financial targets. Their capital investments over the next five years remain unchanged at $17.5 billion, as stated in a previous quarterly update.

The paragraph outlines the company's financial strategy and growth outlook. It plans to maintain a 15% FFO to debt ratio by funding investments through cash flows and issuing debt and equity. A total of $2.8 billion in equity issuances is forecasted from 2026 to 2029, with $1.2 billion anticipated for 2026 and 2027 combined. The plan assumes capital expenditures of $17.5 billion, and equity needs might be lower if additional large customers join by 2028. The company is prepared to issue equity in 2025, settling in 2026, to address future needs. It forecasts a 2% to 3% demand growth through 2029, driven by large customers like Panasonic, Meta, and Google, adding 500 megawatts of new load, surpassing the traditional retail growth assumption.

The paragraph outlines Evergy's optimistic outlook regarding customer growth and financial expectations. By 2029, customer agreements could increase demand by approximately 600 megawatts, potentially boosting total retail sales growth to 4% to 5%, with more growth expected from a pipeline of customers in advanced discussions. Evergy maintains a strong long-term business outlook and reaffirms an adjusted EPS growth target of 4% to 6% through 2029, projecting to reach the top half of this range. The company aims to sustain growth by focusing on customer, operational, and financial goals, ensuring affordability and reliability, and supporting long-term prosperity. The paragraph concludes with the beginning of a Q&A session.

In the conversation, Durgesh Chopra seeks clarification on the financial performance for the quarter, noting a $0.05 shortfall from expectations. Bryan Buckler explains that the $3.97 figure, which is $0.05 short of the $4.02 target, reflects the base outlook before mitigating actions, but they expect to meet the full-year target after these actions. Chopra queries the timing of signing 1.3 gigawatts contracts, noting positive movement of 300 megawatts to execution. David Campbell expresses confidence in ongoing discussions and an expanded pipeline, with no indication of reduced demand despite external factors like Microsoft news.

The paragraph discusses ongoing investments related to customer commitments and the timing of finalizing large load power service tariff proceedings, which are expected to conclude by the end of the year. The exact timing depends on obtaining settlements following hearings and could impact announcements related to these investments. Positive discussions with counterparties continue, demonstrating a strong interest in the company's territory. Durgesh Chopra verifies the timeline for these tariff proceedings, with David Campbell and Bryan Buckler confirming that discussions are progressing positively. Nathan Richardson from Barclays asks about the impact of increased sales on equity, seeking a quantification from Bryan Buckler.

The paragraph discusses expectations for increased load growth, which could rise from the initial 2%-3% to 4%-5% by late 2027, driven by new customer operations. This growth is anticipated to significantly impact the company's financials, potentially reducing the need for equity issuances by hundreds of millions of dollars over a five-year period, as part of a $17.5 billion capital plan. Nathan Richardson asks about the company's Integrated Resource Plan (IRP), prompting David Campbell to clarify that the current IRP filing includes agreements with active customers, influencing resource needs and retirement timelines. He also mentions an added appendix slide that delineates which resources are included in the financial plan and which are not.

The paragraph discusses the demand growth forecast of 2% to 3% and opportunities for incremental load growth. Nathan Richardson thanks the speakers, and the operator introduces Travis Miller from Morningstar, who asks about the typical timeline for large load or data center customers' projects. David Campbell explains that they expect 1.1 gigawatts of total megawatts, with about 500 megawatts coming online by 2029. He mentions that agreements with large customers are progressing, with 600 megawatts anticipated by 2029. The ramping timeline of projects is typical for these customers.

The paragraph discusses the shifting expectations in load growth categories, particularly in relation to advanced discussions on 2.9 gigawatts of energy demand, which could affect load as early as 2027 and certainly by 2028-2029. This indicates potential load growth within a five-year plan. Travis Miller seeks clarification on residential demand trends, and David Campbell explains that while overall residential demand was up 8%, weather-adjusted figures show a 3% decline. He attributes this to the challenges in balancing art and science in weather-adjusted analysis, though he notes robust residential growth in recent years and anticipates tracking these trends further. Bryan Buckler supports this view, highlighting the complexity of the weather-adjustment analysis.

The paragraph discusses the phenomenon of block pricing in the Missouri metro area, where electricity rates decrease significantly in the winter at higher usage levels but increase slightly in the summer. This pricing dynamic, along with unusual weather conditions such as snow impacting school schedules and economic activities, contributed to variations in residential and commercial energy consumption. Bryan Buckler adds that, over a rolling 12-month period and weather-normalized, residential usage has increased by 1.2% and commercial by 1.5%, indicating economic strength in Kansas and Missouri. The conversation ends with operators transitioning to the next caller in a conference call.

In the paragraph, David Campbell discusses the rationale for extending the retirement dates of coal plants, emphasizing the risks and uncertainties associated with older units, especially as they age into their 60s. He mentions that while investments have been made in some units, those slated for retirement either face potential environmental retrofit needs or have undergone maintenance aligned with their retirement timeline. Campbell acknowledges some flexibility in managing retirement dates, but highlights challenges such as sourcing replacement parts and meeting evolving reliability standards, likening it to maintaining an older car.

The paragraph discusses the strategic management of Lawrence, the company's oldest unit, in the context of adapting to applicable federal rules and handling its retirement and conversion timeline. Despite uncertainties due to the age of the unit, the company remains committed to flexibility. Tanner James shifts the focus to operational and maintenance (O&M) strategies to meet 2025 guidance and address future optionality for 2026 and 2027 as EPS CAGR targets accelerate. David Campbell explains the company's experience in cost management and maintaining business flexibility, highlighting the ability to manage discretionary activities and third-party spending to address issues while maintaining reliability. Though there is work ahead, Campbell expresses confidence in meeting goals with eight months remaining in the year.

The paragraph discusses a conversation between Paul Cole from Bank of America and David Campbell about large load tariff disclosures in Kansas and Missouri. Campbell explains that filing for a large load of power service tariffs is crucial to include key parties in the discussion, as it involves large new customers like data center developers. He emphasizes the mutual benefits: new customers gain from competitive rates and available transmission generation capacity, while existing customers benefit from the distribution of fixed costs. The proceedings in both states have had wide participation and constructive dialogue with large customers, with transparency being a key approach.

The paragraph discusses ongoing discussions and planning for a project, focusing on achieving goals while managing timelines and availability. It mentions that constructive dialogues are underway, with results expected later this year. The exchange includes a query from Paul Cole about equity issuance plans, to which Bryan Buckler responds that while issuing equity this year might be considered, any issuance would not lead to dilution until 2026 or later. Buckler highlights that their capital investment plan aligns with expected load growth starting in 2026. The conversation concludes with thanks and closing remarks.

The paragraph conveys gratitude to the participants of the Evergy call, marks the end of the session, and allows them to disconnect.

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