OGE Energy Corp

Good day, and thank you for standing by. Welcome to the OGE Energy Corp's second quarter 2022 earnings 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. You will then hear an automated message advising your hand is raised. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your speaker today, Jason Bailey, Director of Investor Relations. Please go ahead.

Thank you, Hope, and good morning, everyone, and welcome to OGE Energy Corp's second quarter 2022 earnings call. With me today, I have Sean Trosky, our Chairman, President, and CEO, and Brian Buckler, our CFO. In terms of the call today, we will first hear from Sean, followed by an explanation from Brian of financial 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 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 today. I will now turn the call over to Shawn for his opening remarks. Shawn?

Thank you, Jason. Good morning, everyone. Thank you for joining us. It's certainly great to be with you this morning. Earlier this morning, we reported second quarter utility earnings of $0.50 per share, which represents an increase of $0.08 per share over the same period last year. Overall, we reported consolidated earnings of $0.36 per share, which includes a $0.05 loss from the holding company and a $0.09 loss from natural gas midstream operations. The second quarter was very productive and included the following. Through the end of July, we've exited 77% of our energy transfer investment at an average sales price of $11.09 per unit, which represents a 33% premium to where the units were when we closed the transaction last December. Interestingly, we've already received more in net proceeds than the value of our investment on the transaction close date, and we haven't even completed the exit. We're pleased with the pace of our progress and the value that we've captured for our shareholders. Brown will go into more details shortly. Regarding the Oklahoma rate review, at the end of June, we reached an uncontested settlement to the rate review pending before the Oklahoma Corporation Commission, and the ALJ has recommended approval of the settlement. We await a final order from the Commission, which will likely be this quarter. Moving to Winter Storm Uri, in early May, the Oklahoma Supreme Court authorized the sale of the bonds. The state of Oklahoma issued the bonds, and we received the proceeds two weeks ago. In Arkansas, we had a productive quarter where we implemented new rates on April 1st associated with our fourth formula rate filing. We continue to work through a five-year extension of the formula rate plan in Arkansas. Also, we filed a request to recover approximately 80 million of URI-related costs over a 10-year period at our weighted average cost of capital. This is consistent with other approvals by the Arkansas Commission. Turn to operations. Temperatures over the last several weeks have been extremely high across the service area, with 18 days above 100 degrees since June 1st. Our generation fleet has performed well, supplying the grid with electricity for our customers and across the SPP. Beyond our generation capacity, the grid is serving customers. It's not strained, and unlike other areas of the country, we have not cautioned the public of potential blackouts, nor called on the public to take conservation measures. The system was designed It was built and was maintained for days like these, and our customers experienced the benefits of our generation investments and enhancements to the grid. Our investments in technology and equipment deliver improved reliability, resiliency, communication, and security to energize their homes, businesses, and lives as we maintain affordability for our customers. Additionally, S&P's annual report on rates was announced in the second quarter, and OGE Energy was listed as having the second lowest rates in the nation. a reflection of our continued commitment to affordability for all customers as we invest in the grid and technology to improve reliability, resiliency, and security. We have billing programs like the Guaranteed Flight Bill and Average Monthly Bill, which allow customers to manage their budget and cash flow more easily. So to quickly recap, in the second quarter, we exited more than three-quarters of our energy transfer investment at a significant premium. We filed an uncontested settlement and Oklahoma rate review. We received bond proceeds from Oklahoma's securitization of winter storm URI expenses. In Arkansas, we implemented new rates and filed a request to recover winter storm URI-related costs. And we continue to provide safe and reliable stable electric service to nearly 900,000 customers during an extremely hot summer. We're accomplishing what we set out to do, what we told you we would do, and have great momentum for the remainder of the year as we continue our strong operational performance We reaffirm our utility earnings guidance for the year and expect to be in the top half of our utility earnings guidance range given warmer than normal weather. You know, I'm really incredibly proud of every single employee, each of whom is solely focused on safely ensuring our customers have the life-enhancing and life-sustaining electricity they need to live their lives. I use that word safely for emphasis because I'm extremely proud of the level of safety excellence we exhibit here at the company. Turning to future operations, we continue the needed investment in the grid, utilizing automation and self-healing technologies to improve reliability and resiliency. The work we're undertaking on our substations, distribution circuits, and other portions of our grid will provide great benefit to our customers in terms of reliability and resiliency. To date, we've seen results from enhanced circuits following storms where customer outages were eliminated or reduced to the tunes of hundreds of thousands of minutes saved. With a growing service area and increasing reserve margin requirements, we recognize our future capacity requirements are changing. We have three active RFPs for long-term generation in the market, and we'll evaluate all the proposals before making decisions with regard to how we will meet the capacity needs in our service area. We'll provide an update once we review the results from all the RFPs. And at the same time, we have other capacity initiatives underway. We continue to offer programs that help customers manage their energy usage in their bill through Smart Hours, our demand response program. More than 100,000 customers are shifting their energy usage and helping achieve 90 megawatts in demand reduction this year alone. Our energy efficiency programs continue to provide strong results for all customers. These programs provide energy savings and demand reduction and enable customers to better manage their energy use. In the current filing years, we expect to achieve savings of more than 100 megawatts in demand and nearly 500,000 megawatt hours of energy savings, helping us to efficiently operate the generation fleet as we grow our customer base and maintain affordability. In times of economic uncertainty, these programs offer customers incredible value for home improvement with no out-of-pocket costs, as well as tools to manage and understand their energy usages. We file these extensions for programs like this every three years, with the next filing in 2024. Our load forecast for 2022 is outpacing 2021 and expect growth above 3.5% this year. Our long-term load forecast remains strong as our service area continues to grow. Brian will talk about load here shortly, but our business and economic development efforts continue to pay dividends for our communities. Through the first half of 2022, The 12 new projects secured and announced by our economic and business development partnerships will help add more than 1,775 new jobs across Oklahoma and Arkansas. Businesses large and small continue to grow, from Mercy Hospital in Fort Smith to No Man's Land Beef Jerky in Enid, Oklahoma. The affordability of our rates is central to our sustainable business model, as the cost of electricity is a significant factor that companies consider when deciding expansion or relocation. Before I hand the call over to Brian, I just want to take a moment to touch on a few important points. First, the economies across our service area are thriving. Unemployment rates are better than the national average, business and economic development is active, and our communities are strong and continuing to grow stronger. Our sustainable business model is designed to grow revenues by attracting new customers and managing expenses by utilizing technology. This helps us maintain some of the most affordable rates in the nation. which in turn attracts more customers, continuing the virtuous cycle and sustaining the momentum for our shareholders, employees, and our customers. So thank you. And I'll now turn the call over to Brian. Brian?