Evergy, Inc. Price & Performance (EVRG)

Thank you, Jill, and good morning, everyone. Welcome to Evergy's Evergy quarter twenty twenty four earnings conference call. Our webcast slides and supplemental financial information are available on our Investor Relations website at investors.evergy.com Evergy.

Discussion will include forward looking information. Slide two and the disclosures in our SEC filings contain a list of some of the factors that could cause future results to differ materially from our expectations. Also include additional information on our non GAAP financial measures. Joining us on today's call are David Campbell, Chairman and Chief Executive Officer and Brian Buckler, Executive Vice President and Chief Financial Officer. David will cover 2024 highlights, provide updates on economic development activities, and discuss our regulatory and legislative agendas. Brian will cover our fourth quarter and full year results retail sales trends, and our financial outlook. Other members of management are with us and will be available during the Q and A portion of the call. I will now turn the call over to David. I'll begin on Slide five by first thanking our employees who worked tirelessly throughout the year to advance our strategic objectives of affordability, reliability and sustainability, I'm proud and honored to lead the Evergy team. And with respect to 2024 results, I'm pleased to report that we had a solid year. Overcoming weather headwinds in the fourth quarter and throughout the year, we reported adjusted earnings of $3.81 per share, compared to $3.54 per share a year ago.

Strong cost management helped offset the impact of the mild weather. Brian will discuss earnings drivers in more detail as part of his remarks. In 2024, we also executed investing $2,300,000,000 in infrastructure to modernize our grid, and replace aging equipment. As we look ahead, executing on our five year $17,500,000,000 capital plan is a great challenge and a great opportunity support and enable the economic prosperity of our region. Our success will come from the tremendous teamwork we have within Energies Evergy. 2024 also proved to be a strong year in regulatory execution, and advancing initiatives that allow us to invest for growth in Kansas and Missouri, to the benefit of the customers and communities we serve. In Kansas, the passage of House Bill 2,527 demonstrated the support of Kansas legislators, regulators and stakeholders for infrastructure investment to power economic development. It also underscores the importance of a competitive and constructive regulatory framework helping to mitigate regulatory lag and supporting our credit profile. In Missouri, we are pleased to reach unanimous settlement with stakeholders in our Missouri West rate case included the addition of a joint ownership interest in the Dogwood Energy Center, a low cost energy solution for our customers.

Settlement provided a balanced outcome for customers and communities we serve, reflects the broad based alignment around our infrastructure investments while ensuring we continue to provide reliable and affordable electric service. We also requested to go ahead to construct three new natural gas facilities and three solar farms. If approved by our Kansas Missouri regulators, these will represent the first new dispatchable resources we've built in over ten years our first utility scale solar farms.

And now you'll get these plants total just over 2,100 megawatts. As we outlined in our 2024 Integrated Resource Plans, our overarching goal is to identify the most cost effective and resilient plan that reliably serves our customers. We expect to file our annual updates to our IRPs in March April in Missouri and Kansas respectively. In targeting top tier performance in operations, 2024 was another solid year. After achieving significant improvements in reliability in 2023, we matched and maintained that strong performance during the year with unusually severe weather. Through the summer, we experienced 10 severe storm events, with wind gusts in excess of 50 miles per hour downing trees and causing extensive damages, extensive damage to equipment and structures across our territories. Our line crews who are the bedrock of safely delivering affordable and reliable power to our customers. Work tirelessly through the extreme weather to restore power to our customers and we thank them for their contributions.

In November, we raised our dividend 4% to an annualized $2.67 consistent with our 60% to 70% target payout ratio, and gradually lowering the payout ratio within that range, which is a trend that we expect to continue. As noted on Slide five, we are reaffirming our 2025 adjusted EPS guidance range of $3.92 per share to $4.12 per share with a midpoint of $4.02 per share. We're also reaffirming our long term growth target of 4% to 6% through 2029 of $4.02 per share. From 2026 to 2029, we anticipate being in the top half of this guidance range relative the 2025 baseline.

Moving to Slide six, we highlight our three major economic development wins: Google, Panasonic, Meta, and two traditional data centers in Missouri.

In total, their demand represents 800 megawatts of load. Based on these announcements, we are reaffirming our weather normalized demand growth forecast of 2% to 3% through 2029. Additional large customers will be additive [indiscernible] Slide seven describes our economic development pipeline greater detail. Reflecting the economic vitality and geographic advantages of our region, overall pipeline remains robust in both Kansas and Missouri, and has grown from roughly six gigawatts to over 11 gigawatts.

Including the customers announced today. As a point of reference, our projected peak summer demand for 2025 is approximately 10.6 gigawatts.

So relative to our size, this makes our backlog of growth opportunities one of the most robust in the country. Reflecting the competitiveness of our region. Of course, the environment for new economic development projects is competitive, and we do not expect to win all projects. The queue.

As we discussed in our third earnings call, we remain in advanced stages of negotiation with two large customers. We have identified generation and transmission solutions for both.

We previously shared with you that the load from these projects could total 500 megawatts to 1,000 megawatts in aggregate, which we now anticipate will be 1.6 gigawatts. One of these customers is evaluating Kansas service territory and the other an existing data center customer is evaluating expansion in Missouri. Subject to final agreements and product announcements, we expect to begin to see an impact on our demand growth from these customers in 2027 in 2028 and into the next decade.

We'll be very excited to add these new projects and further establish our region as a leading player in The U. S. Digital and advanced manufacturing economy. Both customers are tracking to share announcements regarding their plans later this year. In addition, we are actively working with customers whose loads would represent approximately three gigawatts These are customers that have acquired land or land rights presented a site plan, and in some cases signed letters of agreement to advance the evaluation process. The remaining six gigawatts in our pipeline are associated with preliminary conversations we had with potential customers. While all of this load may not be addressable, the dialogue nonetheless demonstrates the significant activity and interest in Kansas and Missouri and customers who stand ready if others drop out of the queue.

We're very excited about the economic impact and prosperity that these large customers will bring including construction jobs, permanent jobs and expanded tax base, many other benefits such as helping us to advance our affordability and reliability goals. It is truly a transformative time for our company reflecting and further advancing the vitality of Kansas and Missouri. As a reminder, our capital investment and load growth forecast only reflect the projects announced to date that are shown on Slide six. Many of you will ask about the timing of revising our plan to reflect new large customers. As a general rule, we will announce specifics on these projects tandem with customer announcements regarding their plans. Our focus on affordability and regional rate competitiveness is an important contributor to this pipeline. And provides the foundation for support supporting the tremendous growth As part of the exercise alongside the economic development rates that are in place, in both Kansas and Missouri, we have filed large load power service tariffs in both states to ensure that there is a appropriate and adequate recovery associated with large new loads. The procedural schedules have not yet been finalized, we anticipate resolution in both states in the third quarter.

Slide eight lays out our updated capital expenditure forecast. Our latest rolling five year investment plan totals approximately $7,500,000,000 for 2025 to 2029 which represents a $1,300,000,000 increase relative to the revised five year core forecast we provided on our third quarter earnings call. [indiscernible] This quarter's update primarily reflects the assignment of one half of a combined cycle natural gas plant to Missouri West which was previously unallocated across our operating companies and excluded from our capital forecast. It also incorporates an updated cost estimate for the natural gas combustion turbine facility we announced last year. Along with some minor shifts across divisions. To summarize, our revised capital forecast includes a significant portion of the 2024 Integrated Resource Plans, and we'll continue to evaluate incremental projects pending our 2025 IRP updates. Including a third combined cycle unit at Kansas Central, and a combustion turbine unit our metro jurisdiction. Our five year investment program is expected to result in 8.5% annualized rate base growth through 2029, compares to our prior forecast of approximately 8%. We'll take a prudent approach to financing the tremendous growth tremendous growth opportunity this investment plan represents Utilizing a balanced mix of debt, equity and equity like securities, as well as internally generated cash flow to support our balance sheet and strong investment grade credit rating.

We'll take a flexible approach to equity financing with optionality around timing and Brian will provide more details on our financing strategy in his remarks. Alongside these new generation investments, the majority of our five year capital plan is focused on transmission and distribution projects, and other investments that advance our strategic objectives of affordability, reliability and sustainability and enable us to support economic prosperity and growth in our state. Turning to Slide nine, we highlight our adjusted EPS growth outlook, which projects 4% to 6% growth of the 2025 adjusted EPS guidance midpoint of $4.02 with an expectation to grow in the top half of the 4% to 6% range through 2029. The midpoint of 2025 guidance represents a 5% increase the 2024 guidance midpoint consistent with our prior target. Our growth outlook is driven by our $17,500,000,000 five year capital plan, which includes the investments to serve the 2% to 3% load growth that we expect through 2020 We anticipate a regular cadence of rate case filings across our jurisdictions approximately every eighteen months though that won't be true every cycle or in every jurisdiction. Importantly, our growth outlook only reflects the new customers announced to date and any new announcements will be additive to this forecast.

Moving to Slide 10, I'll provide a brief update on our regulatory and legislative priorities in both Kansas Missouri. A nutshell, it's been a busy and productive start to the year. On January 31, we filed our Evergy Kansas central rate review, requesting a $196,000,000 revenue increase premised on a 10.5% return on equity and approximate 52% equity ratio and a projected $6,700,000,000 rate base as of the proposed 03/31/2025, true up period. Believe this rate request is straightforward and reflects the capital plan and infrastructure investment priorities we've communicated to Kansas regulators and stakeholders in workshops and other settings over the past few years.

The principal items include recovery of and return on our grid modernization and infrastructure investments since our last rate review in 2023. The procedural schedule calls for staff and intervener testimony by June 6, rebuttal testimony on July 3, settlement conferences on July 8 and nine, and hearings beginning on July 21. As a reminder, Kansas rate cases run on an eight month clock We look forward to working with our regulators and stakeholders over the coming months to achieve a constructive outcome for our Kansas customers [indiscernible] also have pending requests for predetermination on partial ownership of two combined cycle gas plants and a solar farm in Kansas. Next up in the predetermination procedural schedule staff testimony, which is due March 14. Followed by rebuttal testimony on April 4, a settlement conference on April 9, and hearings beginning on April 21. Anticipate an order from the KCC by July 7. And as I mentioned earlier, we have filed a request to approve a large load power that would apply to prospective data center customers. We are currently awaiting a procedural schedule and anticipate resolution in the third quarter. We believe the tariff allows for adequate cost recovery associated with large new loads while being competitive with rates in neighboring states.

The filing presents a strong framework that will advance prosperity of our region and we look forward to working with KCC staff all of our stakeholders to the approval process. Now switching the legislative front, we introduced House Bill 2,107 in Kansas this year.

If passed, this bill would codify in statute the legal framework around wildfire damages and call for a workshop before the KCC to assess wildfire mitigation strategies and cost recovery. We view wildfire mitigation through the lens of safety and reliability, which are driving principles. Behind our transmission and distribution capital plan. Along with a limit on punitive damages, legislation requires potential lawsuits To prove that a wildfire was caused by utility negligence, and calls for a wildfire focused workshop at the KCC, providing an opportunity for constructive dialogue with Kansas stakeholders to explore additional risk mitigation and cost recovery options. The bill passed unanimously out of committee was recommended favorably for passage in the House yesterday afternoon.

Later today, in fact, we expect the House to bring HB 2,107 up for final action in the House. The bill would then be sent the Senate. We appreciate the engagement from legislative committee members, Kansas Farm Bureau, Kansas Livestock Association and many others in advancing this legislation. Pivoting to Missouri, earlier this week, Senate Bill four cleared a major hurdle and was passed out of the Senate. Has now been sent to the House. We're awaiting further action. Key provisions include amending the PISA statute, include new natural gas units, and extension of the piece of Sunset to the end of twenty twenty five as well as allowing for recovery of construction work in progress or CWIP new natural gas plant investment, and base rates. Similar to that in Kansas. There are also provisions that would streamline the generation resource planning process and ensure we have sufficient capacity to serve our customers. In addition, SB4 expands CWIP to all forms of generation part of a new integrated resource planning process. Replacing a nearly fifty year old prohibition on seawip put in place. By a statewide boat way back in 1976. If passed, this legislation will be transformative We are grateful for the collaboration with Missouri Public Service Commission, legislative leadership the Governor's Office, Commission staff, thus far.

This build positions Missouri to support infrastructure investment, resource adequacy, [indiscernible] [indiscernible] As a reminder, the legislative session Missouri is scheduled to wrap up in May. On the Missouri regulatory front, we have pending requests certificates of convenience and necessity or CCMs related to two solar farms, partial ownership and two combined cycle natural gas units, and full ownership of a simple cycle natural gas plant all in Missouri West. Staff's recommendation in the solar case is due on March 7, March 17, staff's report and rebuttal the natural gas case is due April 25. Similar to Kansas, we filed a request to Missouri to approve a large load power service tariff on February 14. Are currently awaiting a procedural schedule. We anticipate resolution in the third quarter. I'll conclude my remarks with Slide 11, which highlights core tenets of our strategy. Our efforts to enhance affordability have yielded significant progress in improving regional rate competitiveness over the past few years. Our strategic plan is designed to sustain this momentum by keeping our long term rate trajectory in line with the rate of inflation while investing in infrastructure to support growth across our region. Prioritizing affordability, we contribute to the robust economic development pipeline ahead of us and support this substantial economic potential within our state.

As outlined in our capital plan, we will continue to invest in grid modernization to ensure reliability, strong customer service strong performance in Sadie, Safety, Public Safety, and grid resiliency. This includes a focus on metrics related to personnel safety, customer service, generation availability and infrastructure investment. Our primary sustainability goal is to lead a cost effective energy transition. As reflected by our investments in new natural gas plants and solar farms. In support of our Kansas Missouri customers. We look forward to continuing demands a balanced mix of resource additions over the coming years to support growth and prosperity in our states. With that, I will now turn the call over to Brian. Thank you, David. Thank you, Pete. Good morning, everyone. I'll start on Slide 13 with a review of 2024 financial results. For the full year 2024, Evergy delivered adjusted earnings of $878,000,000 or $3.81 per share compared to $816,000,000 or $3.5 $3.54 per share the same period last year. As shown on the slide from left to right, the year over year increase adjusted EPS was driven by a few factors.

First, a cooler summer and mild winter weather drove a 5% decrease in cooling degree days and a 4% decrease in heating degree days, leading to a $0.13 decline in EPS versus 2023. When compared to normal, weather drove an estimated $0.11 unfavorable impact. Load growth was strong. Increasing 1.1% driven by higher residential and commercial sales volumes. Which added $0.14 per share. Recovery of and return on regulated investments driven by new retail rates and FERC regulated investments contributed $0.48 of EPS for the year. Unfavorable variances for the year included operations and maintenance expense, which drove a $0.05 negative variance for the year As expected, O and M costs were approximately 1.8% higher than the prior year demonstrating continued excellence and cost management. And higher depreciation and interest expense due to increased infrastructure investment drove a $0.17 decrease in EPS. Turning to Slide 14, I'll provide a brief update on sales trends. As I mentioned, 2024 weather normalized retail sales increased 1.1%. This trend has been primarily driven by solid growth in both residential and commercial usage. Including load results that are beginning to benefit from the startup of Meta's data center operations. At a macro level, the continued robust customer demand in our service areas is supported by a strong labor market as the Missouri, Kansas and Kansas City Metro Unemployment rates remain below the national average.

As referenced on the slide, our 2025 load demand growth forecast contemplates a 2.4% growth relative to 2024.

This includes solid contributions from all customer classes. And reflects the resilient growth of our local economies. '25 total load growth. With Panasonic expecting substantial operations to begin by mid year.

As David noted in his earlier remarks, we expect weather normalized demand growth through 2029 of 2% to 3% when factoring in the impact of the announced new large customers, with upside potential as additional customer wins come to fruition. Let's move to Slide 15, the layout we expect to deliver on our previously announced 2025 EPS guidance point of $4.02 Starting on the left hand side and beginning with 2024 adjusted EPS of 3.81 We've modeled a reversion to normal weather in 2024 which would add $0.11 per share. Next, we expect a $0.19 increase from weather normalized load growth in 2025. Reflecting the 2.4 increase in kilowatt hour sales.

Of the $0.19 we expect a contribution of about $0.04 from the new [indiscernible] industrial large load customers as Meta and Panasonic begin to come online. Recovery of and return on our regulated investment from new rates is expected to contribute $0.41 of EPS for the year, primarily related to new rates that came into effect January 1, related to last year's Missouri West rate case. As well as the recovery of FERC regulated infrastructure investments. Offsetting these improvements in earnings is an expected increase in O and M as well as the combined impact of higher depreciation and interest expense net of AFUDC. Which is expected to drive a $0.31 unfavorable impact. Lastly, we assume $0.04 of drag related to our 1,400,000,000.0 convertible debt that matures in December 2027.

This reflects our assumption around a share price higher than the threshold price in the which would increase diluted shares outstanding for accounting purposes.

The impact of this dilution is reflected in our long term forecast. As a reminder, we continue to assume to assume no common stock capital market issuances in our 2025 guidance. Relation to the entirety of this 2025 EPS forecast, we believe this financial plan is highly achievable Our teammates across the company are hard at work on its effective implementation including the deploying deployment of the 2025 infrastructure investments, to the benefit of our customers and communities. Let's now turn to our updated financing plan on Slide 16. As David mentioned, our projected capital investments over the five years through 2029 now stand at 17,500,000,000.0 is $1,300,000,000 higher than the plan we discussed in our third quarter call.

This plan now reflects the addition of three fifty five megawatts of our McNew combined cycle, is being assigned to Missouri West, along with updated cost estimates We plan to fund our investments prudently targeting an FFO to debt ratio of approximately 15% throughout the forecast period. Our strong cash flows from operations will be supplemented by the issuance of debt equity and equity content instruments. As a result of the $1,300,000,000 increase in capital investment our forecasted equity issuances across 2026 to 2029 is now forecasted to be 2,800,000,000.0 This represents a $600,000,000 increase over our previous forecast equal to approximately 50% of the capital investment increase. Which is consistent with the approach we described on our third quarter call.

As stated earlier, the EPS and financing plan we are sharing with you today only includes load growth expectations from the first set of large customer additions. We are optimistic that our equity needs will be lower for this $17,500,000,000 capital plan If additional large customers begin to come online by 2028, which as previously discussed is becoming increasingly likely, In short, our customer pipeline has the potential to not only increase Ebergy's but it would also have to provide a substantial benefit to operating cash flow allowing us to moderate equity issuances in the future. As I stated earlier, our 2025 guidance does not contemplate new equity issuances this year. That being said, you may soon see us set up the structure to begin to address our future equity needs. This could include an ATM program and equity distribution agreement of up to $1,200,000,000 representing a little less than half of our five year need and a size roughly equivalent to our expected issuances 'twenty six and 2027 combined. We would expect any activity in 2025 under such a program to settle no earlier than 2026. These steps will allow us to be nimble in our approach to accessing the capital markets.

And one last reminder on equity.

While we have conservatively forecasted common stock, as the form of equity to be issued, We will continue to evaluate other forms of equity content instruments as we execute on the plan in the years ahead. I will close on Slide 17 with a recap of our financial expectation.

We are reaffirming our 2025 adjusted EPS guidance range of $1.92 to $4.12 per share. From the baseline midpoint of $4.02 in 2025, expect to grow in the top half of our 4% to 6% adjusted EPS target range through 2029 with tailwinds to the plan including potential additional wins from our large customer pipeline, Our updated five year capital plan for 2025 through 2029 total $17,500,000,000 Allowing us to build the infrastructure for a resilient reliable grid with capacity for strong economic development in Kansas and Missouri. Our rate base growth trends upward throughout the five year period with average rate base growth of approximately 8.5% from 2024 to 2029. This is a plan in which we have high confidence. Our employees are focused on consistent execution of our customer operational financial goals as we advance our strategic objectives of ensuring affordability, and reliability, and driving a sustainable business model for the long term prosperity of our customers and communities. Thank you for joining us today. Will now open the line for your questions. Thank you, Brian.

This time, we will conduct the question and answer session. First question comes from the line of Shar Pourreza with Guggenheim Partners.

Good morning, David. Obviously, really good update. What's the timeline for these 1.6 gigs of finalizing agreements? And then just more broadly, what is the podium for revisiting the growth rates at the quarterly update later this year? Wait until the next 4Q. Just any more color on how all this is interacting with your thoughts and updating The Street? Just maybe elaborate a little bit on the prepared Sure.

And thank you, Shar. So with respect to the [indiscernible] bit of detail around how it breaks down, which obviously reflect on Slide seven. These discussions are advancing well. We filed our large load power tariff Earlier this month in both states, With large customers over time, we have seen with many customers, they're as is the case with those who are actively building. Many of them advancing their work, advancing their plans, while the tariffs are being finalized in parallel. It's actually pretty common. We saw certainly with Panasonic, it's you've ever flown over that facility, it's an amazing, incredible facility and much of that was built tariffs were done. So we expect announcements later this year. We're tracking for that.

We're working with the counterparties on that. And what the way we've approached things in terms of when we're incorporating into our guidance are I know there's a range of approaches of our peer utilities, but we thought it made the most sense to include it once our customers have made their announcements. So We're not specifying when exactly which quarterly call that will be.

Because it will depend a little bit on the customer activity. We do expect these agreements to be finalized over the course of the year.

Typically, we give updates on our plan in the third quarter call and then as often refreshes on the year end call, it could be that timeline, but obviously we'll nimble based on when we finalize the agreements with the customers. Hopefully that makes sense.

No, it totally does. And I appreciate the conservative stance. Just on the GRC in Kansas, we just saw the commission reject the cap structure legal analysis request. I guess what is the next for the cap what's the next step for the cap structure as it going to go through the normal testimony process? And kind of more importantly, is this something you want to get finality on or could we see it wrapped up in another settlement like last time? Thanks. Good question, Shar. Thanks for raising it. So I would characterize the proceeding It was a procedural step that we took asking whether the capital structure issue could be considered on purely legal grounds. The commission ultimately decided that from a procedural basis, posing a substantive issues and want to address it. The body of the rate case, which we think is fine and is a difficult place where it is addressed.

We were glad to be able to advance the legal arguments because a lot of the issues here are more legal in nature, but there are substantive issues.

So look forward to addressing them with staff and the parties in the rate case. With respect to resolution, we're we typically like most parties really [indiscernible] towards trying to seek a constructive settlement. We were able to reset last time around. So I would expect that that will be our focus is whether we can get a constructive settlement this time around. And will be one of the important issues that we address as part of the settlement, but we will be seeking a settlement here.

Got it. That's perfect. Congrats to you and Mr. Butler. Appreciate it.

Thank you, Shar.

We stand by for our next question. The next question comes from the line of Julien Dumoulin Doonlin Smith Hey, good morning, team. Congratulations. Really nicely done, guys. Seriously. With that said, obviously, you gave some sense of timeline here. But how do you think about the timeline to develop that associated generation? You specifically called in the slides here 26 to '29.

As you think about serving that need, some of this potentially going to be co located and they'll be self served by the potential client? Or is this something potentially you're thinking along the lines of short term PPAs just thinking through how this could filter into the CapEx from a timing perspective as you think about that generation build? And correspondingly, how do you think about that tariff filing too just given how compressed the potential demand So Julien, I think we we really have been thoughtful on how we've advanced our RFPs relative to the loads that have been announced. So we For the customers who are in the actively building and finalizing agreements categories, we think we've got a good plan to serve them for both the transmission and generation perspective.

As we advance additional customers, We'll need to make sure we've got we're working in tandem what the generation plans are for those. As we discussed On our call, on the in the third quarter, The forward capital plan at that time did not include about 1,000 megawatts of generation in our 2024 IRP of gas generation. Those are the CCGT coming online in 02/1931 and CT in 02/1932. So as we advance, when we need to be factoring those in our plans, we did add though in this update percent of the CCGT that's coming online in 02/1930. So that is part of the forward cap plan. So we do think that we've got game plan at the transmission generation capacity to serve the customers in this category, but it's a set of dynamic discussions. And you're absolutely right in how you laid it out. Some of the customers have in particular renewable generation options are bringing to the table. The extent those are solar or involve storage, they bring more capacity than if it's only wind. So that's part of the dynamic in the discussions you have with the various counterparties. And some have that, some don't. But we are developing a transmission and generation plan to be able to serve that load.

And we're excited about it and it's obviously an integrated set of discussions that got us that has to consider all factors. On the tariff, I think we're on a good schedule.

So while the procedural schedule hasn't been finalized, we do expect those to be resolved in the third quarter. We've had good discussion Our counterparties in advance of and in tandem with those filings and some previewing of it as well. So of course those will be involved process. But we think we've got a good framework for approaching those. And from what I've read of other states, I think it's pretty similar. It's got the right set of protections you'd want to look for our existing customers, because I think there's a real win win here for both existing and the new customers and for the company.

Excellent. Just a quick clarification there. In terms of IR would you be going back and amending that and then subsequently going out with some sort of new procurement effort here? Just in terms of process on that front. [indiscernible] It's I think you've probably seen with the number of peers as well. IRPs are a little more dynamic than they might have been back in the day when you could do triennial filings. With modest annual updates. We have a regularly scheduled update to our IRP we filed in March and April. So you can expect that to incorporate the changes that we think make sense. And as there's mechanisms to do updates on an interim basis. But our next IRP filings or in March and April in our two states.

You can expect that those are going to reflect the latest few of our expectations. And extent there's additional generation capacity and a timeline that requires action sooner rather than later, you'll see associated action with that. We were happy with you may recall, Julian, when we initially had CCGTs in our integrated resource plans for example, it was at a time when many companies were still more focused on CTs. I think we've our team has advanced the IRP and thoughtful about staying lockstep with what we expect from a Durant perspective. So it's a very dynamic environment, but we have that integrated long term planning view as we have these discussions.

Awesome guys. Congrats again. Thanks, Joanne.

The next question comes from the line of Durgesh Chopra with Evercore ISI. Go ahead. Your line is open.

Hey, team. Good morning.

Thanks for giving me time.

Good morning, David. David, I wanted to continue discussion on the large load tariff Can you share some additional color? You mentioned protections for existing customers. Maybe just compare and contrast to that tariff to what is in place today, What protections are you seeking? Just a little more color would be helpful there. Thank you.

Sure.

So, great question. So we're really trying to get a well balanced tariff that is designed to cover the incremental costs to serve the customers. And in consideration of the fixed cost of the system. So it's a so that it's set up as a win win for the the existing customers as well. Now the various protections that we've teed up and these will be subject to discussion of course, but they're pretty consistent we've obviously been looking at to see what has been happening on the jurisdiction. So the kind of protection that we're talking about minimum bill requirements, a contract period our filing references fifteen years, a lot of those you see typically in the ten to twenty year timeframe, but so our contract period and exit fees and protections like that In general and speaking with our big customers, they're interested in knowing that we have the capacity to serve them They want to move quickly and they want to have a clear framework as well. So we think we've got a set up that presents a well balanced framework. For existing and for the new customers.

That's very helpful and seems consistent with the with some of the other filings you've seen in other states Okay. And then just a quick follow-up. Would you need sort of the green light from the commission on these tariffs before you announce something as it relates to the 1.66 gigawatt opportunity or are those two independent paths?

It's a great question. So for example, we've had some large customers in the past including one example would be Panasonic Brothers who have announced and started building going well down the path when the tariffs are renegotiated in parallel. Some of their customers want to wait and have more clarity. It's actually not uncommon to have a lot of activity underway while the tariffs advancing because there's a lot of there's a pretty clear framework for how it goes. So We haven't We'll see when the timeline is for making the announcements, but it's not dependent in many cases on actually having the tariff finalized and certainly seen that in our history, including our recent history.

Very clear. Okay. Thank you so much again. Thank you.

For our next question. The next question comes from the line of Michael Sullivan with Wolfe.

Hey, good morning.

Good morning, Michael.

Hey, David. Hey, Brian. Wanted to start with the SB4 in Missouri. I think you referred to us potentially transformative. Can you maybe just give a sense of timeline for that to get passed and likelihood there and then also if it does, what it actually means for your [indiscernible] So I think the look, this was was a tremendous week for the legislation this week and reflected ton of hard work. So really appreciate the leadership of the commission. And a lot of players in advancing it. The legislative leaders involved. So often in Missouri, as you know, Michael, you're a student of the state, getting to the Senate, is a very involved exercise because there's a significant filibuster rules or otherwise. So it's clearing the Senate is often the most significant step to get through in Missouri. Now has to get approved in the House, but it's was passed in full out of the Senate, so now it's moving over to the House for action. The Governor's Office we believe is fully supportive. So obviously, they're key players in the dialogue in the legislature and legislative session wraps up by May. So we'll know pretty soon. But to get through the Senate, the way it did reflects widespread support widespread alignment around the provisions.

We think it's transformative really in the elements of how it approaches how new generation is treated, inclusion in natural gas In PISA, the provision for the commission being able to grant CWIP for new natural gas plant investment the creation of a new the enablement of a new integrated resource planning process that would allow CWIP for All forms of generation is part of that process. In Missouri, for fifty years, you haven't been able to get CWIP. So I think the how it's transformative and there's some other provisions of wealth of course, including funding for Commission and OPC, but it's transformative in the sense that it's really signaling and putting in place provisions that are supportive of new generation investments, helping to make sure that those are be done in a way that's protective of the credit of the utility with CWIP, but also better enabling planning with a better IRP process, a little more certainty.

So it really positions Missouri to support infrastructure investment and help support growth. So we think it's a a very important bill and we're confident that it will get passed. And [indiscernible] We'll know in the coming months because it's a pretty tight legislative calendar.

Okay. Appreciate all the thoughts there. And just back to the kind of load and supply side, I know you made a lot of comments there and apologies if I'm just not following it along, right? But if we just look at The new builds that you're planning, I think you gave a list on Slide 28. How do we think about that matching up with the economic development pipeline you show on Slide seven, like how much of the load is covered by the generation projects you currently have out there? And what [indiscernible] If you're following. [indiscernible] I appreciate the feedback. I think it's I think it's very important we try to lay this out. So let me talk through this in a couple of different lenses and covered your question. So as noted on Slide seven, Michael, we've included approximately 500 megawatts of demand through 2029 customers who we've categorized in the actively building category. Now if you add in the finalizing agreements category to that amount, It's a total of about 2.4 gigawatts of the pipeline. Received estimates from the from these customers in total [indiscernible] expect load to ramp up to about 1.1 gigawatts by the end 2029.

So that's 500 megawatts from the activity building and 600 megawatts from finalizing agreements category. So it's about 1.1 gigawatts by the end of twenty twenty nine.

We've only included the 500 megawatts in that 2% to 3% load forecast.

Obviously it would be additive if we got up that 1.19.

So I should say we expect to have the transmission and generation capacity to serve that load by that timeline. Of course, the remainder of the load ramp would be in the 02/1930 and the early 2030s. And both with our existing IRP and the IRP that we're going to file in March and April, lay out the solutions we have to serve those customers. And again, we think we've got good line of sight for how we're going to serve them. As I mentioned, our capital plan does not yet include is the CCGT 2,031 and the CT As we add any additional customers, I think you would expect to see those plants be added to the mix and of course we'll have an IRP update March and April and may have some further refinements. But that's how I'd describe it in terms of the timing of the ramp rate. And the incremental generation requirements because the '21 and 2,032 plants that I mentioned about 1,000 gigawatts of gas helping that the ramp rate in the early 2030s.

Okay. Thanks for holding my hands, really helpful.

We'll make our next Our next question comes from the line of Travis Miller with Morning Star. Go ahead. Your line is open.

Good morning. Good morning.

Just another clarification here, Marion, kind of Slide six and [indiscernible] that 800 megawatts of actively building, does that correspond to the 800 megawatts On Slide six or is there some mixing and matching there, right? Trying to understand exactly what's in that 800 megawatts of actively building.

Yes. So active 800 megawatts of actively building is the hundred megawatts that are sprawled on Slide six. So it's the three Google, Panasonic and Meta as well as two additional data centers.

That are comprised of that category. So that's that sort of tap top bar of the actively building category shown on Slide seven, And I know there's a confusing timing element of that too. It's about 500 megawatts out of there to 800, we expect to be that's [indiscernible] their full load 2029, they haven't ramped up fully up to 800 megawatts and that 500 megawatts are included in the demand forecast for 2020 Okay, great. So the $300,000,000 delta would be beyond 2029?

Exactly right. Yes, they're ramping up over time and we just have to load forecast we've only got a five year forecast. So you've got it exactly right.

Okay, very good. Thanks. And then higher level, there's one of your peers really to the east of you, but same areas thinking about a Genco type of structure again like you've been talking about to very specific large load contracts, put some of the generation into a separate entity, all regulated, What's your thought in terms of maybe a different or additional corporate type structure, all regulated or maybe not regulated? To handle some of this large investment. At some level, I think I should respond by emphasizing The size of the pipeline that we have and the large load opportunities for all of the companies in The U. S. Are leading to more creativity certainly and I think a lot of that sense. You'll see in our large power tariff, for example, we have provisions that could accommodate if folks bring their own renewable generation. Because that is a relatively common that some of the larger companies that have direct relationships with renewable developers maybe own some on their own, bring some generation there. It's less common historically to bring dispatchable generation, but we've certainly seen different approaches in different places to how you would bring dispatchable generation like gas particularly as you go deeper into the pipeline, that's certainly something we could consider whether it be a Genco type structure, I mean who knows, I won't comment or speculate on the structure might be, but [indiscernible] The size of the growth opportunities will likely result in some creativity.

And I think still unexplored or still untapped potential, maybe some kind of The demand response or load flexibility elements or leveraging backup generation in some of players have.

So the various elements that from a more traditional approach of leveraging renewable generation they may bring think those elements could be part particularly part of the solution particularly as you go deeper and deeper into the pipeline. But on the specific question, we have not announced nor are we currently advancing that would set any of our plans around a Genco type. [indiscernible] Okay, great. No, that's very helpful. I appreciate the thoughts. Thank you.

The next question comes from the line of Nick Nicholas Campanella with Barclays. Go ahead. Your line is open.

Hey, good morning.

Good morning. Good morning. So just the comment for equity, Brian, just that it doesn't include CFO from finalizing some of these agreements that we've been talking about. Just what's the magnitude or ratio there If you were just to bring 100 megawatt customer [indiscernible] How does that impact the equity needs? Is that like hundreds of millions off that figure? Or how would you kind of frame that? [indiscernible] Yes. Hey, Nick. Good morning. David, talk about the ramp rate, if you will, for this, I'll call it next set of customers with on Slide seven, let me make sure I've used the exact wording right, but we're calling in the finalizing agreements stage [indiscernible] That obviously is some really robust gigawatts of peak load that will come on Over time, there is a ramp rate. For that second category, what we described is that could be another 600 megawatts that could come online by 2029. So we talked about 500 megawatts for the first set and then another 600 megawatts that could come online from this second set by 2029. So that's pretty substantial. You think about our load growth today that we're projecting through 2029 is 2% to 3%.

If we were able to bring in that portion of the next set of customers that could take that low growth upwards to 44%, 4.5%. So that's pretty substantial growth. With that comes margins from serving that load, of course, We're probably not going to give you exact numbers yet because we want to let this play out a bit, but it's it would be hundreds of millions of dollars of less equity need over that five year period, if these loads play out the way we hope and expect them to.

That's very helpful.

And then I guess just a to tie it all together, you were already biased higher in the range in the communication, I think last quarter. And now you're delivering a CapEx increase net of some equity obviously, you have more upside to these large load customers. So So what are we missing in the math or like the offsets we should kind of be contemplating on why you wouldn't be kind of above the 6% growth rate here, if everything kind of comes to fruition, Thanks, Nick. I guess I'll take that one. So as we've described, we're going to layer in the impacts of incremental customer announcements once those are made. So we have not included those. Those will be added into the plan. We have increased CapEx as primarily in the out years of the plan, but that will Evergy time The higher capital and most of it's related to adding the 50% share of the CCGT, which comes online and two thousand and thirty.

Over time, you'll see those impacts flowing through. So I think it's really just a matter of When we try to be very clear that as we get the incremental customer announcements and as we advance through time, We'll provide updates on what that gross earnings. So we're very in the current plan. We see some really nice tailwinds behind them. Trying to take a systematic approach as we see those customers. We'll layer in what the impact is in the plan.

Okay. That's great. Have a great day.

Thanks.

Thank you. Thank you.

This concludes the question and answer session. I would now like to turn it back to David Campbell, closing remarks.

Thank you, Jill, and thank you everyone for your time and interest in Evergy. Have a great day. Concludes the call.

Thank you for your participation in today's conference. This does conclude the program and you may now disconnect.