OGE Energy Corp

Good day and thank you for standing by. Welcome to the OGE Energy Corp 2024 Fourth Quarter Earnings and Business Update 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 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference 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, DeeDee, and good morning, everyone, and welcome to our call. With me today, I have Sean Trotsky, Chairman, President, and CEO, and Chuck Walworth, CFO and Treasurer. In terms of the call today, we will first hear from Sean, followed by an explanation from Chuck of our 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 to date. I'll now turn the call over to Sean for his opening remarks. Sean?

Thank you, Jason. Good morning, everyone. Thank you for joining us today. It's certainly great to be with you. 2024 was an outstanding year for the company, for our customers, for our employees, and for your shareholders. I'm excited about our message to you this morning as our consolidated earnings results for 2024 were above guidance. The momentum we've built continues to accelerate, establishing a higher base for growth going forward. Some of our top accomplishments for the year, including adding more than 10,000 customers, continuing to see drop in our SADI numbers as our grid strengthening efforts deliver value for our customers, replacing one of our largest substations ahead of schedule, relieving congestion in one of the SPP's most congested areas. We have nearly 450 megawatts under construction at Horseshoe Lake, which incidentally also celebrated centennial this year, as did Muskogee. We have another 100 megawatts under construction for Tinker Air Force Base, coming online next year to coincide with the base expansion in 2028. We've continued to enhance its self-service tools like our mobile app and website so customers can do business with us 24-7. We continue to use automation and AI to gain efficiencies and reduce costs, further improving that customer's experience. And finally, another incredibly strong safety year. Our safety culture underpins our entire organization, and I couldn't be more proud of our team for putting safety first. Turning to 2024's financial performance, this morning we reported consolidated earnings exceeding the top end of our guidance of $2.19 per share for the year, including $2.33 per share for the electric company and a loss of the holding company of $0.14. Our sustainable business model continues to provide opportunities to drive load growth while simultaneously strengthening the grid for many years to come in ways that smooths the customer impact and delivers consistent financial returns. We're laser-focused on reliability, growth, and affordability, and I know sometimes I sound like a broken record, but history proves that we do what we say we'll do. The investments we make deliver results, build these communities, and present a deep and diverse set of opportunities for us to pursue. Chuck will detail our financial plan going forward as we build on our strong financial base and credit metric. and the momentum of our excellent load and customer growth to deliver the safe, reliable, resilient electric service that our customers expect. On the regulatory front, our constructive regulatory environment enables us to support growth, serve customers, and achieve results. And by mid-year, in Oklahoma, we will file for both recovery of our plans to meet generation needs and a general rate review. And at year-end, in Arkansas, we'll file for a general rate review and a formula rate plan as we have in the past. The advantage of our low rates combined with the overall economic strength of the communities we serve led to the exceptional load growth of 7.6% for 2024. Today, Oklahoma City and Fort Smith unemployment rates beat the national average and our hometown Oklahoma City's unemployment rate of 2.8% clocks in as the sixth best for large metropolitan areas. And the strength of these communities drove our 1.2% increase in customer growth. On the commercial side, load growth is diversified among a number of industries, including multi-unit housing, defense, manufacturing, and tourism. And I can't overstate, these projects are the result of our multi-year effort to drive economic growth in both Oklahoma and Arkansas, partnering with communities to land new business relocations and expansions. Alongside the commercial growth comes the people who support those businesses, and our residential load grew by 2.4% in 24. I understand there's a lot of excitement about data centers, and rightly so. And we are very excited about this opportunity, but I want to be clear that our load growth in 24 and forecasted for 25 is without any data centers. While we remain optimistic about these opportunities, And we're still in discussion with a number of potential projects, and we'll certainly update you when we can. We remain committed to growth for our communities and for our customers. And the case for OG&E is strong, and I'm certainly bullish on our future. We're leveraging the economic development engine we built that's driving this load growth. Our excellent operational execution is driven by a fully engaged set of employees who are determined to reach that North Star of delivering safe, reliable, safe, affordable electricity for our customers. And we operate in constructive regulatory jurisdictions. We've created a competitive and credible financial plan backed by a balance sheet that's one of the strongest, and all of which leads to a long-term plan where we address system growth and customer needs. And today, we're setting a guidance midpoint for 2025 that is 7% higher than a year ago because of the proven and anticipated low growth. We expect to continue to grow 5% to 7% annually from this new midpoint. And next week, OG&E will celebrate its 123rd birthday, and we'll celebrate by investing in the grid and generation in ways that allow us to meet customer demand for electricity, grounded in improving reliability, and maintaining those low rates as we achieve our commitments to you.