Evergy, Inc.

Good day and thank you for standing by. Welcome to the Q2 2022 Evergy Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lori Wright, Vice President, Investor Relations and Treasurer. Please go ahead.

Thank you, Michelle. Good morning, everyone, and welcome to Evergy's second quarter call. Thank you for joining us this morning. Today's discussion will include forward-looking information. Slide two and the disclosure in our SEC filings contain a list of some of the factors that could cause future results to differ materially from our expectations and include additional information on non-GAAP financial measures. The releases issued this morning along with today's webcast slides and supplemental financial information for the quarter are available on the main page of our website at investors.evergy.com. On the call today, we have David Campbell, Evergy's President and Chief Executive Officer, and Kirk Andrews, Executive Vice President and Chief Financial Officer. David will cover our second quarter highlights, our integrated resource plan, and our regulatory and legislative priorities. Kirk will cover in more detail the second quarter results and discuss the latest on sales and economic trends. Other members of management are with us and will be available during the question and answer portion of the call. I will now turn the call over to David.

Thanks, Lori, and good morning, everyone. Thanks for joining us today. I'll begin on slide five. I'm pleased to report that we had a solid second quarter as we delivered adjusted earnings per share of 86 cents compared to 85 cents in 2021. The increase in adjusted earnings over last year was driven primarily by favorable weather, an increase in weather normalized demand, and higher transmission margin. partially offset by higher planned operations and maintenance expense, and lower other income net of expense. Kirk will discuss the second quarter drivers in more detail. On our first quarter earnings call, I highlighted that we had just participated in a safety roadshow, and that our focus on safety contributed to strong safety performance in the first quarter. Our employees continued this positive trend through mid-year, reducing work-related injuries, including recordable and restricted events, by 60%, compared to the same period last year. And our customer reliability has been solid despite challenging weather, reflecting the beneficial impacts of our ongoing grid investments. Compared to the five-year trend in our service territory, so far this year, the number of days with sustained winds over 25 miles per hour increased 89% to 65 days, and days with wind gusts over 40 miles per hour increased nearly 50% to 78 days. 2021 was in line with this five-year average for both measures, so 2022 has been a clear outlier. In contrast, relative to the five-year trend, average daily outage events have decreased by 14% in the first six months of 2022, notwithstanding the more extreme weather indicating improved system resiliency. I would like to thank all Evergy employees for their focus on safety and their dedication to providing safe, reliable, and affordable power to our customers. I would also like to highlight a recent generation milestone. As you know, we have been expanding our wind portfolio for over a decade, with about 4,400 megawatts of owned and contracted wind generation. Our portfolio recently marked 100 million megawatt hours of cumulative wind energy production. And in 2021, factoring in the production from our Wolf Creek nuclear plant, our emission-free generation was equivalent to 56% of our total retail customers' usage. Our team's consistent execution has resulted in a solid start to the year, and we are reaffirming our 2022 adjusted EPS guidance of $3.43 per share to $3.63 per share, as well as our target long-term annual EPS growth rate of 6% to 8% from 2021 to 2025. Slide six highlights our annual integrated resource plan update, which was filed in June for both Kansas and Missouri. Our preferred plan for the next decade is consistent with the resource plan laid out in last year's triennial IRP filing and the renewables development plan Kirk discussed during our investor day last September. The minor tweaks in the plan reflect updates to the sequencing of our near-term investments. Specifically, we shifted the 190 megawatt solar addition and the Lawrence coal retirements to 2024 primarily due to the dynamic market conditions facing the solar supply chain and the benefits to customers of keeping Lawrence online with current high natural gas prices. In 2026, we shifted a planned solar project to wind and increased the capacity assumption for the project by 100 megawatts. Beyond 2026, we slightly reduced megawatt assumptions for our solar projects, which on a net basis offsets some upward pressures on pricing. Overall, by the end of 2032, our preferred plan now includes 3,500 megawatts of renewable additions while also responsibly retiring nearly 2,000 megawatts of coal, balancing both affordability and reliability as we advance our fleet transition and advance toward achieving our sustainability and emissions reduction goals. Moving on to slide seven, I'll provide a summary of key regulatory and legislative milestones and ongoing constructive developments in both Kansas and Missouri. In Missouri, we continue to work our way to the pending general rate case. In early June, staff and other interveners filed their direct testimony, and in mid-July, all parties filed rebuttal testimony. In the next few weeks, parties will file true-up and sur-rebuttal testimony with a settlement conference to follow around August 22nd and hearings later this month through early September. Revised rates in Missouri will go effective on December 6th. We look forward to working with the parties to constructively resolve the case. At Missouri West, we have also been advancing the securitization process to recover the roughly $300 million of Winter Storm URI costs. Earlier this week, we filed a non-unanimous settlement that resolves all key issues with the Missouri Commission staff. In terms of timing, hearings are wrapping up this week, and we expect a commission financing order in mid-October. On the legislative front of Missouri, Senate Bill 745, which modifies plant and service accounting, or PISA, was signed by the governor and became law in late June. The modifications reduce the revenue requirement cap to a 2.5% annual compounded growth rate and narrow the calculation to consider PISA deferrals only. Importantly, this bill also puts into law a property tax tracker effective later this month. which will eliminate a historical source of lag in our Missouri jurisdictions. The PISA extension marks the second consecutive year of passing new legislation in Missouri that will benefit customers and stakeholders. In 2021, HB 734 was signed into law, authorizing the securitization of extraordinary costs and the unrecovered book value of retired generation plants. Moving to Kansas, I'm pleased to report that in June, the Kansas Corporation Commission approved the non-unanimous stipulation agreement for winter storm URI costs. The order allows us to recover roughly $120 million of deferred extraordinary fuel purchase power and non-fuel costs at Kansas Central over a two-year period beginning in April 2023. Similarly, the $37 million of net benefits at Kansas Metro will be returned to customers over a one-year period, also beginning in April of next year. Preparations are underway for our Kansas Central and Kansas Metro rate cases, which we will file in April 2023. We expect a test year ending September 30th, 2022, and a true update around June 30th, 2023, with new rates becoming effective in December of next year. Other important milestones in Kansas include the passage and signing of securitization legislation in mid-2021, as well as the completion last November of the docket before the Kansas Corporation Commission relating to the Sustainability Transformation Plan. In both Kansas and Missouri, the Triennial Integrated Resource Plans have completed their review process. The Missouri Public Service Commission approved the IRP in March of this year, and the Kansas Corporation Commission accepted the IRP in May. We will continue to work collaboratively with regulators and interveners in both states to achieve constructive outcomes that advance our core objectives of delivering affordable, reliable, and sustainable power to the customers in the communities that we serve. Overall, we are pleased with a strong start to the year, the progress that we have achieved in working closely with regulators and stakeholders to enhance our service to our customers, and the ongoing consistent execution of our business plan. I will now turn the call over to Kirk.