OGE Energy Corp

Ladies and gentlemen, thank you for standing by and welcome to the OGE Energy Corp third quarter 2021 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 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Jason Bailey, Director of Investor Relations. Thank you. Please go ahead, sir.

Thank you, Natalia, and good morning, everyone, and welcome to OGE Energy Corp's third quarter 2021 earnings call. I'm Jason Bailey, Director of Investor Relations. With me today, I have Sean Trosky, Chairman, President, and CEO of OGE Energy Corp, and Brian Buckler, CFO of OGE Energy Corp. In terms of the call today, we will first hear from Sean, followed by an explanation from Brian of third quarter results, and finally, as always, we will answer your questions. I'd like to remind you that this conference is being webcast, and you may follow along on our website at oge.com. In addition, the conference call and accompanying slides will be archived following the call on that same website. Before we begin the presentation, I'd like to direct your attention to the Safe Harbor Statement regarding forward-looking statements. This is an SEC requirement for financial statements and simply states that we cannot guarantee forward-looking financial results, but this is our best estimate to date. I'll now turn the call over to Sean for his opening remarks. Sean?

Thank you, Jason. Good morning, everyone. It's great to be with you again this morning, and thank you for joining us on the call today. Earlier this morning, we reported third quarter consolidated earnings of $1.26 per share, which includes utility earnings of $1.12 per share and earnings associated with our investment in Enable of $0.15 per share and a holding company loss of a penny. The teams worked hard on behalf of our customers and shareholders, and on our February call after winter storm Yuri, I told you we were going to work to get back to our original guidance. and I'm pleased to announce we've done just that and narrowed our guidance range to $1.79 to $1.83. We remain encouraged by our exceptional utility operations and all of our employees as they focus on energizing life for our customers and our communities. This morning, I want to provide a few updates, and then Brian will discuss our financial results in more detail. First, our grid enhancement programs in Oklahoma and Arkansas continue on pace, The work we're undertaking on our substations, distribution circuits, and other portions of our grid have already had a significant positive impact on the reliability and resilience of the grid for the benefit of our customers. Our solar subscription program continues to grow. Construction on the 5-megawatt solar farm in Branch, Arkansas is now complete. The 5-megawatt expansion of the Choctaw Nation solar farm will be completed in the coming weeks. and customers will soon have an opportunity to purchase electricity from this facility. These two projects increase our total solar capacity to 32 megawatts. In 2022, we have plans for an additional 5-megawatt solar farm in Billings, Oklahoma, with two additional solar farms in the planning stages. Our securitization filing in Oklahoma is on track, covering nearly all of the fuel and purchase power costs associated with February's winter storm URI. We reached a joint settlement with key parties and an order is expected by the end of the year. Earlier this month, we submitted our final Integrated Resource Plan with both the Oklahoma and Arkansas Commissions, detailing our resource needs over the next several years. Key components include replacing retired generation with a combination of solar and hydrogen-capable combustion turbines. We plan to annually add 100 to 150 megawatts of solar over the next several years. This plan is a significant step to meet our objectives of reliability, resiliency, fuel diversity, and provide our customers with cleaner solutions while maintaining our affordable rates. In Arkansas, we filed our fourth formula rate evaluation report in October, with rates going into effect April of 2022. At the same time, we also filed for a five-year extension of the formula rate plan. We plan to file a rate review in Oklahoma towards the end of this year. A significant portion of this case will involve future grid enhancement investments and a continuation of the established recovery mechanism. The process is working quite well, and we want to continue the work to enhance the resiliency and reliability of the grid for the benefit of our customers. Arkansas securitization is expected to be filed in early 2022. As the Arkansas statute is somewhat different from the Oklahoma statute, We continue to work through that process with every expectation of a positive regulatory outcome. Our strong customer growth continues at 1.3% compared to the third quarter of 2020, reflecting the combination of our highly affordable rates and the ability to service commercial expansion in our markets. You may recall that prior to the pandemic, we were pointing to higher load growth than our historical 1% growth rate. With the first nine months of the year now behind us, we expect 2021 weather normalized load to be approximately 2.2% above 2020 levels and also expect this level of load growth to continue into 2022. Last quarter, we discussed the addition of 75 megawatts of load we will add by the end of the year due to our slate of business and economic development activities at that time. I'm pleased to say that the pace of these activities continues to increase. We now estimate 200 megawatts of new connections by the end of 2021, again with these trends continuing into 2022. In addition to the low growth, these projects also bring new jobs and increased economic activity to our communities. To date this year, the 40 new projects secured by our economic and business development partnerships will add nearly 6,000 new jobs across our service area and $27 billion in capital investments. Affordability remains a key competitive advantage for OG&E and is evident in our economic development activity and customer growth, which combined have us on track for sustained low growth. Quickly turning to Enable, we expect that transaction to close this year, subject to the satisfaction of customary closing conditions including the HSR clearance. Our intention to prudently exit our midstream investment remains the same, and we will provide information upon closing. And our exit of this business will positively impact our ability to grow earnings and dividends into the future. Our focus on our customers and key stakeholders has never been stronger. We continue to engage customers directly through media, social media, and community engagement. And just last week, we refreshed our website at OGE.com The site is much easier to navigate and allows us to directly tell our story to both customers and stakeholders. We'll continue telling our compelling story to deliver the information customers and stakeholders need in the way they need us to deliver. One of the efforts I've discussed with a number of you is our disclosures, specifically around all of the great things we're accomplishing on the ESG front. As we continue to tell the OG&E story, watch for our latest SASB report at the end of the month, an upcoming TCFD report in early 2022. Before I hand the call over to Brian, I just want to touch on a few important points. The first is the strength of the economies across our service territory. Oklahoma's unemployment rate in September was 3% compared to the national rate of 4.8%. And Oklahoma City, the largest metro area in our service territory, has a rate of just 1.9%, the best among large metropolitan areas. Our hometown of Oklahoma City grew by more than 100,000 residents in 2010, one of only 14 cities to do so, jumping to the 22nd largest city in the country. In addition to Oklahoma City, Fort Smith, Arkansas, had an unemployment rate of 2.7%. These economies are strong, growing, and continue to grow stronger. Secondly, our business and economic development efforts are driving low growth. with even greater potential ahead. And all this leads to the third and final point of our sustainable business model of growing revenues by attracting new customers, managing expenses by utilizing technology, and this helps us maintain some of the most affordable rates in the nation, which in turn attracts more customers. So with that, I'll turn the call over to Brian. Brian?