Evergy Q3 2024 Earnings Report

Evergy EPS Results

• Actual EPS: $2.02
• Consensus EPS: $1.95
• Beat/Miss: Beat by +$0.07
• One Year Ago EPS: $1.88

Evergy Revenue Results

• Actual Revenue: $1.81 billion
• Expected Revenue: $2.35 billion
• Beat/Miss: Missed by -$542.18 million
• YoY Revenue Growth: +8.50%

Evergy Announcement Details

• Quarter: Q3 2024
• Date: 11/7/2024
• Time: Before Market Opens
• Conference Call Date: Thursday, November 7, 2024
• Conference Call Time: 9:00AM ET

Evergy (NASDAQ:EVRG), together with its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity in the United States. The company generates electricity through coal, landfill gas, uranium, and natural gas and oil sources, as well as solar, wind, other renewable sources. It serves residences, commercial firms, industrials, municipalities, and other electric utilities. The company was incorporated in 2017 and is headquartered in Kansas City, Missouri.

Evergy Q3 2024 Earnings Call Transcript

Key Takeaways

• Reported Q3 adjusted earnings of $2.02 per share (versus $1.88) and reaffirmed 2024 EPS guidance of $3.73–$3.93, while introducing 2025 guidance of $3.92–$4.12 and a long-term EPS growth target of 4%–6% through 2029.
• Announced plans for two new combined-cycle natural gas plants in Kansas and a simple-cycle plant in Missouri, plus three 325 MW solar farms, to support reliable, flexible and emissions-friendly generation.
• Extended its five-year capital expenditure plan to 2029, totaling $16.2 billion (up $3.7 billion), with financing via a balanced mix of debt, equity and cash flow to sustain ~8% rate base growth.
• Highlighted regulatory and legislative progress, including Kansas’s HB 2527 enabling CWIP and PISA treatment, a Missouri rate case settlement, and a more regular rate-case cadence to mitigate regulatory lag.
• Secured three major economic development contracts with Google, Panasonic and Meta representing ~750 MW of new load, and is pursuing a >6 GW pipeline of potential data-center and manufacturing projects.

Presentation

[Operator]

Good day and thank you for standing by. Welcome to the Q3 2024 Evergy, Inc. Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session.

[Operator]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Peter Flynn, Director of Investor Relations. Please go ahead.

[Peter Flynn, Director of Investor Relations at Evergy]

Thank you, Jill, and good morning, everyone. Welcome to Evergy's Q3 2024 earnings conference call. Our webcast slides and supplemental financial information are available on our Investor Relations website at investors. Evergy.com. Today's discussion will include forward looking information.

[Peter Flynn, Director of Investor Relations at Evergy]

Slide 2 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. They 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 Q3 highlights, provide updates on our generation plans and our regulatory and legislative agendas and discuss updates to our financial outlook. Brian will cover our 3rd quarter results, retail sales trends and our long term guidance.

[Peter Flynn, Director of Investor Relations at Evergy]

Other members of management are with us and will be available during the Q and A portion of the call. I'll now turn the call over to David.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Thanks, Pete, and good morning, everyone. I'll begin on Slide 5. This morning, we reported 3rd quarter adjusted earnings of $2.02 per share compared to $1.88 per share a year ago. The increase over last year was driven primarily by demand growth, new retail sales and FERC investments, partially offset by cooler summer weather and higher depreciation and amortization expense. Our year to date adjusted earnings are $3.46 per share compared to $3.27 per share a year ago.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

With these solid results year to date, we are reaffirming our 2024 adjusted EPS guidance range of $3.73 per share to $3.93 per share. Brian will discuss these earnings drivers in more detail in his portion of the remarks. Speaking of Brian, as many of you know, he joined Evergy on October 1 as our Chief Financial Officer. Brian brings a strong track record of experience to our company and he'll be a tremendous addition to our leadership team. I would also like to thank Jeff Lay for his very able service in the interim role.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

We all look forward to working with Brian and I know he will be a great mentor and leader for our financial organization. As part of today's announcement, we are establishing 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 establishing a long term growth target of 4% to 6% through 2029 based on the 2025 midpoint of $4.02 per share. From 2026 to 2029, we anticipate being in the top half of this guidance range relative to the 2025 baseline. I'll provide more details in the upcoming slides.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

I'm also happy to announce a 4% increase in our quarterly dividend or $2.67 per share on an annualized basis. This increase is consistent with our updated growth outlook and working toward the midpoint of our 60% to 70% target payout ratio. Let's move on to Slide 6, where I'll highlight our recently announced new generation investments that will help enable the historic economic development opportunities in Kansas and Missouri. 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 across uncertain future scenarios. We expect to achieve that goal through a balanced approach to new resource additions including the use of the latest most efficient new technologies for dispatchable generation complemented by emissions free renewable resources that support economic development in the communities we serve, all while maintaining affordable rates and ensuring that we provide reliable electric service.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

On October 21, we announced plans to invest in 2 new combined cycle natural gas plants in Sumner County and Reno County, Kansas. These high efficiency plants will provide flexible baseload generation that meets stringent emission standards and pairs well with the abundant renewable resources in our region. Over 1,000 jobs will be required for the construction phase of these plants, which will create new skilled craft jobs and generate substantial property tax revenues. We launched the predetermination process with the Kansas Corporation Commission yesterday and we look forward to working with KCC staff, CURB and other parties toward a constructive outcome. Later this month, we will file CCN applications for the Missouri share of the new gas plants, including a simple cycle plant to be located in Missouri.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Construction of these plants is scheduled to begin in 2026 and 2027, respectively. And if approved, these investments will be eligible for CWIP treatment in Kansas or construction work in progress treatment in Kansas as provided for under House Bill 2,00527. We've also announced investments in 3 solar farms totaling 3 25 megawatts. These will be our company's first utility scale solar projects at Kansas Central and Missouri West adding an important element to our portfolio and reflecting an all of the above generation mix. We anticipate all three projects to start commercial operations in 2027.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

We filed a request for certificates of convenience and necessity with the Missouri Public Service Commission on October 25 for 2 projects totaling 165 Megawatts, both of which will be eligible for PISA treatment in Missouri. In addition, we filed for predetermination for a 159 Megawatt solar project in Kansas in tandem with the filing for the new natural gas plants. We are very excited to advance our responsible energy transition as Evergy prepares to meet the growing demands of our customers, ensuring that their needs are met both today and in the future. Slide 7 lays out our updated capital expenditure forecast which has been extended through 2029. Our latest rolling 5 year investment plan totals approximately $16,200,000,000 from 2025 to 2029 which represents a $3,700,000,000 increase relative to our prior 5 year forecast through 2028.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

The forecast includes $2,400,000,000 of incremental generation investment and $1,300,000,000 of incremental distribution investment to support growth and improve reliability and resiliency. The program is expected to result in 8% annualized rate base growth through 2029. We'll take a prudent approach to financing the tremendous growth opportunity this investment plan represents, utilizing a balanced mix of debt, equity and equity like securities and 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 execution options. Brian will provide more details on our financing strategy in his remarks.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Our revised capital forecast incorporates a significant portion of the integrated resource plans filed in April May of this year. These IRPs prioritize a cost effective approach to reliably serve customers and result in a balanced mix that enables fuel diversification and responsible portfolio transition. And alongside these new generation investments, the majority of our 5 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 the tremendous economic development opportunities in our states. On Slide 8, we introduce our updated adjusted EPS growth outlook, which contemplates 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 range through 2029. The midpoint of 2025 guidance represents a 5% increase over the 2024 guidance midpoint consistent with our prior target.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Our updated growth outlook is driven by our $16,200,000,000 5 year capital plan, which includes the investments to serve the 2% to 3% load growth that we expect through 2029. We anticipate a regular cadence of rate case filings across our jurisdictions approximately every 18 months, but that won't be true every cycle over in every jurisdiction. Importantly, our growth outlook only reflects 3 large new customers announced today. Ryan will describe the growth drivers in more details in his remarks. Moving to slide 9, we were pleased to reach a unanimous settlement with stakeholders in our pending Missouri West rate case, which if approved by the Missouri PSC would provide a balanced outcome for customers.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

The settlement calls for a net revenue increase of $55,000,000 which also reflects a significant reduction in fuel costs and base rates. The settlement includes the addition of our 22% share of the Dogwood Energy Center, an operating combined cycle gas plant identified in our 2023 IRP. Dogwood provides a low cost generation solution to support our customers' energy needs. The fuel adjustment clause sharing mechanism remains an outstanding item that will require commission ruling. We believe that our position which contemplates maintaining the existing 95% and 5% sharing split is well supported by the record and past commission decision.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

We continue to view Missouri as a supportive jurisdiction for infrastructure investment as evidenced by this rate case. We expect the commission order in December with new rates effective by January 1, 2025. On Slide 10, I'll provide a brief update on our regulatory and legislative priorities in both Kansas and Missouri. First, I'm pleased to highlight House Bill 2,527 in Kansas, which became effective on July 1. The passage of HB 2,527 reflects the support of Kansas legislators, regulators and stakeholders for infrastructure investment in support of economic development.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

As we described earlier, our capital investment plan includes new combined cycle gas plants and incremental distribution projects, which will qualify for CWIP treatment and PISA treatment respectively, which serve to mitigate regulatory lag and support our credit profile. We look forward to our capital structure workshop and ROE workshop in Kansas, which is scheduled for November 20 and will be live streamed. This workshop was born out of discussions with Kansas stakeholders earlier this year and presents an opportunity outside the confines of a litigated proceeding for constructive dialogue around the importance of a clear and stable framework for regulatory capital structure and authorized returns. This framework serves as an important backdrop for providers of Capital Kansas for their investments and for Evergy to attract competitively priced capital much like the constructs that exist in Missouri and other neighboring states. As always, we are committed to advancing the generational economic development opportunity ahead of us in concert with Kansas policymakers and stakeholders.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Also in Kansas, we've begun the planning process for our Kansas Central rate case, which we expect to file in the Q1 of 2025. Key drivers of the case will include a request for the recovery of our reliability and efficiency focused distribution investments as well as customer and technology infrastructure investments. We look forward to working constructively with our regulators and stakeholders just as we have in multiple forms over the years to advance these cases and deliver benefits for our Kansas customers and communities. Lastly, as mentioned earlier on Wednesday, we filed for predetermination for our new natural gas plants and the Kansas Sky Solar Farm. Predetermination filings run on an 8 month clock and we anticipate an order from the Kansas Commission in the summer of 2025.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Moving to Missouri, we expect to commission order on our Missouri West rate case in December. And for the CCN proceedings, the procedural schedule has not yet been finalized. But based on prior CCN proceedings, we anticipate resolution approximately 7 to 9 months after the filing. Moving to Slide 11, we highlight our 3 major economic development wins Google, Panasonic and Meta. In aggregate their demand represents approximately 7 50 megawatts of load and each will be the largest customer in their respective jurisdiction by a wide margin.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

The overall economic development pipeline remains robust in both Kansas and Missouri with projects representing more than 6 gigawatts of demand actively considering our service territory. We're happy to share that we're in advanced stages of negotiation with 2 new data centers and combined these represent between 500 megawatts and 1,000 megawatts of incremental load. As a reminder, our capital investment and load growth forecasts only reflect the 3 projects announced today. I know many of you will ask about timing. As a general rule, we will announce specifics on these projects in tandem with customer announcements regarding their plans.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Of course, the economic the environment for new economic development projects is competitive. And while we do not expect to win all projects in the more than 6 gigawatt pipeline, we're currently having a very active dialogue with these potential new customers. Our focus on affordability and regional rate competitiveness is an important contributor to this pipeline and provides a foundation of support with a tremendous potential in our region, building on our success with Panasonic, Meta and Google. We are very excited to work with potential customers as they consider our region. As part of the exercise, along with the economic development rates that are in place in both Kansas and Missouri, we are looking at rate design elements to ensure that there is appropriate and adequate recovery associated with large new loads.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Based on the announcements of Google's data center, Panasonic's EV battery manufacturing facility and Meta's data center, we are extending our weather normalized demand growth forecast of 2% to 3% through 2029 previously ran through 2028. I'll conclude my remarks on Slide 12, which highlights the 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 that positive trajectory by keeping our long term rate trajectory in line with inflation, while at the same time investing in infrastructure and technology to meet customer demand. By prioritizing affordability, we contribute to the robust economic development pipeline ahead of us and support the substantial economic potential within our states.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

As outlined in our capital plan, we will continue to invest in grid modernization to ensure reliability, strong customer service and improvements in safety, public safety and grid resiliency. This includes a focus on metrics related to customer service, the performance of our generation fleet, safety and all operational elements including infrastructure investment. Our primary sustainability goal is to lead a responsible and cost effective energy transition as reflected by our investments in new hydrogen enabled natural gas plants and in new solar farms to support our Kansas and Missouri customers. We look forward to continuing to advance a balanced mix of resource additions over the coming years, always with a focus on affordability, reliability and sustainability. And with that, I will turn the call over to Brian.

[Bryan Buckler, EVP & CFO at Evergy]

Thank you, David. Thank you, Pete, and good morning, everyone. I'd like to start by saying that I'm thrilled to join David's team and the Evergy family and be a part of these wonderful communities in Kansas and Missouri. In my first few weeks on the job, I've been very impressed with our employees' dedication to our customers and with their excitement to deliver the infrastructure needed to power these communities for long term economic growth. There's a lot of enthusiasm around here for the future and I'm honored to help lead our efforts to seize opportunities in front of the company.

[Bryan Buckler, EVP & CFO at Evergy]

With that, I'll start on Slide 14 with a review of our results for the quarter. For the Q3 of 2024, Evergy delivered adjusted earnings of $466,000,000 or $2.02 per share compared to $432,000,000 or $1.88 per share in the Q3 of 2023. As shown on the slide from left to right, the year over year increase in Q3 adjusted EPS was driven by the following. First, a cooler summer drove a 12% decrease in cooling degree days and a $0.14 decrease in EPS when compared to the Q3 of 2023. When compared to normal, weather drove an estimated $0.06 unfavorable impact.

[Bryan Buckler, EVP & CFO at Evergy]

Next, weather normalized demand grew 0.8% driven by growth in all three customer classes, which added $0.02 per share. New retail rates in Kansas contributed $0.10 of increased EPS for the quarter and recovery of our FERC regulated investments drove a $0.06 benefit. Next, higher depreciation and amortization expense due to increased infrastructure investment drove a $0.03 decrease in EPS and the net impact of tax items for the quarter drove a $0.07 increase. Turning to Slide 15, I'll provide a brief update on recent sales trends. On the left side of the screen, you will see that weather normalized retail sales

[Bryan Buckler, EVP & CFO at Evergy]

for both

[Bryan Buckler, EVP & CFO at Evergy]

the Q3 and year to date increased 0.8%. The positive year to date 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 area unemployment rates remain below the national average of 4.1%. 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 new large customer load. While we have not yet included any of the additional 6 gigawatt plus customer pipeline in our 5 year plan, we certainly are in active talks with several large customers.

[Bryan Buckler, EVP & CFO at Evergy]

We believe this pipeline represents real upside to our EPS and credit metric forecast. Let's now turn to our updated financing plan on Slide 16. As David discussed earlier, our updated 5 year rolling capital investment plan contemplates $16,200,000,000 of investment from 2025 through 2029, including an incremental $1,000,000,000 of capital in 2025 and 2026 combined. Overall, as David alluded to, we will 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 like instruments.

[Bryan Buckler, EVP & CFO at Evergy]

Our first common stock issuances are planned for 20262027 at approximately $400,000,000 in each of those years and will be higher in 20282029 consistent with the increase in annual level of capital investments in those years. Our 2025 guidance does not currently contemplate a common stock issuance next year. So we will remain flexible and opportunistic in the timing and type of funding we deploy throughout the 5 year plan as we balance earnings growth and balance sheet strength. And as I stated earlier, there are several upsides to our EPS and credit metric forecasts, including the potential load from the 6 gigawatt large customer pipeline. Shifting to Slide 17, I'll discuss key 2025 earnings considerations.

[Bryan Buckler, EVP & CFO at Evergy]

As we mentioned previously, we are introducing 2025 adjusted EPS guidance of $3.92 to $4.12 per share. Primary drivers for consideration include load growth ramping up from the Meta Data Center in our Missouri West territory and the Panasonic EV battery manufacturing plant in Kansas Central. Growth will also be driven by new rates Missouri West, which will go in effect in January, a potential partial year impact from new rates at Kansas Central as early as the Q4 'twenty five and ongoing recovery of our investment in FERC jurisdictional projects. We expect these positive drivers to be partially offset by the impact from depreciation and interest expense, net of accounting for the deferral benefits from PISA in both Kansas and Missouri. Moving to Slide 18, we highlight key adjusted EPS drivers beyond 2025 when we expect growth in the top half of our 4% to 6% target.

[Bryan Buckler, EVP & CFO at Evergy]

Meaningful margin uptick will begin to manifest itself as we expect a significant increase in load growth in each year 2026 through 2029 as Panasonic, Meta and Google work towards their full run rates. Also, the foundational earnings power of the company will be fortified by our capital investment program, which will drive a rate base CAGR of approximately 8% through 2029. We also plan to have more frequent rate cases to avoid large customer rate increases and to ensure the financial stability of our utilities. In short, we believe our long term plan strikes an appropriate balance of affordability for our customers, strong infrastructure and economic development for our communities and solid EPS growth. I will close on Slide 19 with a recap of our future financial expectations.

[Bryan Buckler, EVP & CFO at Evergy]

With solid results year to date, we are reaffirming our 2024 adjusted EPS guidance of $3.73 to $3.93 per share. We are also establishing our 2025 adjusted EPS guidance at $3.92 to $4.12 per share with the midpoint representing 5% growth from 2024. From the new baseline midpoint of $402,000,000 in 2025, we expect to grow in the top half of our 4% to 6% adjusted EPS target range through 2029. This is a plan we have high confidence in with many tailwinds for our business. Our employees are focused on consistent execution of our operational and financial goals as we advance our strategic objectives of ensuring affordability, reliability and sustainability for our customers.

[Bryan Buckler, EVP & CFO at Evergy]

And with that, we will open the call for your questions.

[Operator]

Thank you, Brian. At this time, we will conduct the question and answer session. The first question comes from Shahriar Pourrezi with Guggenheim Partners. Go ahead. Your line is open.

[Shar Pourreza, Senior Managing Director at Guggenheim Partners]

Hey, guys. Good morning.

[Bryan Buckler, EVP & CFO at Evergy]

Good morning, Shahriar. Good morning.

[Shar Pourreza, Senior Managing Director at Guggenheim Partners]

Brian, congrats on your first earnings call, buddy.

[Bryan Buckler, EVP & CFO at Evergy]

Thanks, Shahriar. Happy, very excited to be here.

[Shar Pourreza, Senior Managing Director at Guggenheim Partners]

I'm sure, I'm sure. Congrats. David, the industry is starting to see some of the larger loads trickle into CapEx earnings growth as we look at this kind of top end of the 4% to 6% you guys rolled out today. Is there kind of a general earnings sensitivity you can give us for this customer class as we look at the potential 6 gigs plus coming down the line? I guess put differently, could another deal or 2 put you over the top end at this point?

[Shar Pourreza, Senior Managing Director at Guggenheim Partners]

I mean, you seem to elude it's accretive, but just kind of curious in the context of

[Shar Pourreza, Senior Managing Director at Guggenheim Partners]

the 4% to 6%? Thanks.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Charles, great question. I'd echo Brian's comments about our high confidence in the plan with some real tailwinds. The plan as currently laid out only includes the 3 announced customers. So we've got high confidence in the top half of our range through 2029 with the 3 announced customers. We land additional ones that would be upside opportunity.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

So I won't give you that always depending on how big and which ones and rates are, but we see real tailwinds, real potential from any incremental customers and we have a couple of very active ones in a big pipeline.

[Shar Pourreza, Senior Managing Director at Guggenheim Partners]

Okay. No, that's helpful. I think that answered the question. And then just obviously you have your cap structure workshop coming up on the 20th. You talked about it on the prepared.

[Shar Pourreza, Senior Managing Director at Guggenheim Partners]

It's not exactly kind of a decisional or docketed process. I guess any updated thoughts on how this will feed into your 25 case? And any updated thoughts on the 25 GRT itself? Thanks guys.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Yes, sure. Another good question. So the and you have it exactly right. Excuse me, I've got a I'm so excited I've got a frog in my throat. But the capital structure workshop is one where it's not a decisional meeting.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

It's an opportunity to have a dialogue about a very important driver of the competitiveness of Kansas and ability to track capital. So we view it as an opportunity for us to share information around both the economic development landscape, the importance of attracting capital landscape when many other jurisdictions are in the same posture, what the common practices are and really outside of a litigated proceeding have the opportunity to have a robust dialogue around it. It's not a decisional meeting, it's a workshop. It will be manifested kind of results in how the Kansas rate case advances next year and nears following. But even setting up that dialogue outside of a litigated proceeding we think is a constructive step.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

So we're excited to have that workshop. We'll have presentations jointly with staff. We'll have some outside presenters who are there and it'll be largely a dialogue. In terms of the general rate case, we plan to file in Kansas Central. As I mentioned in the Q1 of 2025, that schedule rates will go into effect sometime in the early or in Q4 of next year as well.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

So we look forward to that discussion and it's going to be our reliability focused investments. We don't have any big generation that's come online in that timeframe. So it will be investments will be made through the last rate case and reflective of a more regular cadence. So I think it avoids customers having to see a big step change if you have a regular cadence rate case. So see that filed in the Q1 next year.

[Shar Pourreza, Senior Managing Director at Guggenheim Partners]

Perfect. Thanks guys. Appreciate it. See you in a couple

[Shar Pourreza, Senior Managing Director at Guggenheim Partners]

of days and congrats again Brian. See you.

[Bryan Buckler, EVP & CFO at Evergy]

You too, Shar. Thank you.

[Operator]

One moment for our next question. The next question comes from Julien Dumoulin Smith with Jefferies. Go ahead. Your line is open.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Hey, good morning team. Brian, congratulations again. It's a pleasure.

[Bryan Buckler, EVP & CFO at Evergy]

Thank you, Julien.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Good morning, Julien.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Hey, so nicely done team. Look, maybe to follow-up on Shar's line of questioning here. I mean, when you think about what could put you over the edge here and you talk about that top end here, I'm going to continue to needle you a little bit on this. How do you think about some of the other angles, right? So you talk about including a significant portion of the IRP, what's remaining?

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

And then separately and related, SPP has come up with this ITP here, seems pretty robust. How do you think about what's reflected in terms of that into this latest plan update, if you will?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Yes. You read and digest quickly as always, Julian. So how would I frame it? So and Brian has been great to have on the team because he's taking a clean look at things. And I think the tone and confidence in his remarks, I would echo, we have high confidence of the plans in front of us.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

That's based on these 3 customers and the CapEx plan that we have. We know how important execution is. So we want to put a plan out there that we have high confidence in executing. We did notice substantial portion of the IRP. So the main elements we there was a big solar portion of our solar investment that you see coming online in 2027, the IRP that we expect to do through our PPA.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

And there's in the out years, a CCGT and a CT that have not yet been included. So those all represent additional capital. And then what I'd emphasize is the robust discussions we're having with large new customers that all represents opportunity as well. But it was really important for us to put out a plan that we had high confidence in executing and that's exactly what we've done and we really see a lot of tailwinds as Brian described. And we don't have to worry about that.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Yes, go ahead please.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

No, I was looking at a follow-up. Why not include the CCCT here? Is that predicated on getting that incremental load going back

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

to the sort of the vector we

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

were talking about earlier? Or is this more about just regulatory clarity, etcetera? And maybe the same dynamic on that solar PPA, the trick is you're uncertain whether it will be a PPA or an ownership opportunity, I presume?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

I would bifurcate the 2, Julian. We do expect the solar opportunity to be a PPA. I would say for the gas plants, it's just it's a little it's a level of conservatism. We ran them through the IRP. They're needed based on the current 3 announced customers and the load that we see in our system.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

So we expect that we're going to need those plants, but those are the plants that are coming online. I think it's in the 2030 1 to 2030 2 timeframe. So I just view it as a we expect those still be built at some level of conservatism and also as we will walk through the process with the plants. As you saw there was a lot of enthusiasm and support for the gas plants announcements that we made. A couple of weeks ago in Kansas, we had the Governor, the Speaker, the House, the President of the Senate, key local officials, chairs of the respective House and Senate committees.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

So there's a lot of support for these for the investments in these communities, the dispatchable generation that it represents. So I view it, Julian, as we want to we have a plan we have high confidence in and we think we have some real tailwinds and upside alongside that plan.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Got it. And just to clarify here, I mean basically you roll forward and eventually include the CCCT, I mean the plan basically or effectively accelerates here is best I read it. Obviously you talked about the high end of

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

the plan, but seems like it even further accelerates if you roll up a further period forward, if

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

you will. Is that kind of

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

the way to start to read this? Is the CapEx just so long dated, whether it's the CC or the ITP?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

I think adding the those 2 gas plants would all people increase the capital investment would be towards the back end of the plan, right? Those units come online in 31 and 32, but it will be further incremental investment relating to further rate base growth. And again, that was reflected in the IRP and reflects our approach to a balanced mix of generation and prioritizing affordability alongside reliability and sustainability. So yes, adding those in would be additional capital in the outer years of the plan.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Got it. All right. Sorry for all the details here. We really appreciate it. Best of luck again.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

We'll see you at EI.

[Bryan Buckler, EVP & CFO at Evergy]

Thanks, Ewan.

[Operator]

One moment for our next question. Next question comes from the line of Durgesh Chopra with Evercore. Go ahead. Your line is open.

[Durgesh Chopra, Managing Director at Evercore]

Hey, team. Good morning. Thank you for taking my questions. Brian, my congratulations to you as well.

[Bryan Buckler, EVP & CFO at Evergy]

Thanks, Kurt.

[Durgesh Chopra, Managing Director at Evercore]

Absolutely, sir. So just guys, can you talk about the cadence of the long term growth rate here, upper half of 4% to 6 Is that a range that you will hit each year? Or is that more sort of a CAGR approach tied to rate case timings, etcetera, etcetera?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Durgesh, good question. And just to reiterate, we've established our 2025 guidance range in part to be give a baseline for that 4% to 6% following 2025 in a top half expecting the top half of that range. In general, we're going to have consistent execution in the top half. There are year over year that can be some dynamics relating to timing. So we haven't given year over year guidance, but our overall goal is for consistency.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

But there can be some dynamics year over year. In particular, our jurisdictions and their relative size can drive some variation, but we don't expect to be all that significant. And certainly our goal is to be consistent. We know that that's what the investors like to see and that's what we'll strive for. More regular cadence of rate cases can help with that and it can also help from the customer perspective.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

We always balance that of course when we think about timing because then there's a more predictable and sort of ratable impact on customers as well.

[Durgesh Chopra, Managing Director at Evercore]

Got it. So more close to just linear and consistent growth year on, year out. That's great. And then just as you think about regulatory lag, and you've got all this constructive legislation in the States, you're going to be in a more active rate filing cycle. How should we think about regulatory lag throughout your 5 year plan?

[Bryan Buckler, EVP & CFO at Evergy]

Yes, Durgesh, I'll take that. And I'll just add on to what David said before, I really think it's 2026 is right around the corner and we have a lot of momentum and tailwinds for the plan that are going to kick in, beginning in 2025, but certainly in 2026 beyond. And as you think about our 5 year plan and your question around regulatory lag and rate case cadence, we certainly are pleased to have PISA both in Kansas and Missouri. As you know, we have sea weapon rates for new gas generation. That's really important to help our credit metrics as we make these large of investments for our customers.

[Bryan Buckler, EVP & CFO at Evergy]

So regulatory lag is certainly better managed under the provisions of PISA going forward. And not that there's not any, there's still going to be some regulatory lag. And with this large of an investment profile over the next 5 years, it's going to be important that we stay current on our recoveries and investments. So that's why you'll see, as David described, us being a bit more regular in our cadence. Think about it as roughly every 18 months for most jurisdictions, but not all.

[Bryan Buckler, EVP & CFO at Evergy]

Yes.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

And Girgu, all I'd add is the I think we've seen in Missouri and we've got superior utilities in the Missouri jurisdiction. PISA creates a framework where you can manage a regulatory lag, a pretty regular cadence for the other utilities in Missouri as well, reflecting that PISA doesn't lead to the earnings contribution. It just helps to mitigate lag. So there's still you want to have a regular cadence. So we're really pleased to have PISA enacted in Kansas, not only for the provisions in the regulatory lag mitigation, but because it reflects the consistent and widespread support for investment to support economic development in Kansas State.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

So we've got mechanisms in Kansas now that are actually slightly ahead of Missouri because there is 90% deferral around 85% and the seaweed provision on the Kansas side, not yet on the Missouri side. So we think there are tools to manage that regulatory lag, but a regular cadence of rate cases will be important. And again, from my perspective, also beneficial for customers because a little more predictable and more regular as opposed to having longer delays and then step function increases.

[Durgesh Chopra, Managing Director at Evercore]

I appreciate that discussion, very helpful. But just kind of putting a finer point on it, Jeff. Are you modeling substantial improvement in regulatory lag as you roll out this 5 year capital plan or how should we think about that? Maybe just directionally, if you don't want to quantify it.

[Bryan Buckler, EVP & CFO at Evergy]

Yes, I mean directionally, there's no doubt. As we I'll give it to you this way, Durges. When we went through the modeling, I was able, as David mentioned, to come in with some fresh lenses, but I'm quite fortunate to come into the company after that there was some the company had notched some significant achievements in 2024. We've talked about the support of legislation in Kansas, constructive rate case settlement Missouri and then the Google announcement in the second quarter. So certainly the team has been through very much the detailed planning.

[Bryan Buckler, EVP & CFO at Evergy]

We've looked at earnings growth that is, as I mentioned, very strong beginning in 2026, which is right around that corner. We've embedded the load growth we expect, but with more tailwinds to come, we now have rate base growth. That's 8% versus the past, it was 6%. So all those things give us tremendous confidence in being in the top half of that 4% to 6% growth through 2029. I do think we're being conservative in our messaging, as David mentioned, because we want to execute across our work streams and firmly land at a higher growth rate hopefully in the future.

[Bryan Buckler, EVP & CFO at Evergy]

But directionally speaking, for sure, regulatory lag is less burdensome than it was in previous plans given the provisions of the law we have.

[Durgesh Chopra, Managing Director at Evercore]

Thank you, guys. I appreciate all the commentary there. Thanks so much.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Thank you.

[Bryan Buckler, EVP & CFO at Evergy]

Thank you.

[Operator]

One moment for our next question. The next question comes from Michael Sullivan with Wolfe. Please go ahead. Your line is open.

[Michael Sullivan, Director - Equity Research at Wolfe Research]

Hey, good morning.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Good morning.

[Michael Sullivan, Director - Equity Research at Wolfe Research]

Just, hey David, just picking up on that last kind of point you all were making. I guess just at a high level, how should we think about taking rate base growth up by 2 percentage points and then that only translating to the EPS CAGR going up 0.5 percentage point, I guess, if you think about midpoint to upper half?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

So I think, Michael, the way I think about it, you can model it from all perspective. If you look at our capital investments over time, they get significantly larger in the out years of the plan that it also reflected the 8% rate base growth is the average from 24% to 29% has to be more accelerated in the out years. So we did provide a sort of an overall integrated growth outlook that's going to be and as Brian described that we've got some tailwinds going into 2026. So the way I look at it Michael is that we've got potential and we believe some tailwinds to drive profitability drivers over time that are significant and we'll amplify in the back half of the plan. We provide an overall outlook that we're confident in executing off of that 2025 baseline starting in 2026.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

So there's upside potential particularly as we get into the out years.

[Michael Sullivan, Director - Equity Research at Wolfe Research]

Okay. Yes, no, that's helpful. I mean, I think part of it is just also the introduction of equity and I was just maybe looking for more color on the amount of equity is actually that how much you're introducing is more than half of the CapEx increase. And I think you're also kind of moderating the dividend growth a little bit as well. So just how do we think about that on the funding side of things?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Yes. And I'll let Brian weigh in. As you know, what we said in the past was that we did not anticipate based on the prior capital plan, equity issuances before 2026. Now implicit in that, Michael, as you know, is that equity issuances would begin in 2027 and 2028. So I would encourage you to think about the equity issuances we described today is also we're not talking about what we what was also in the plan before as well as what we need to do for funding with respect to the incremental investments that we've made.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Hopefully that makes sense?

[Michael Sullivan, Director - Equity Research at Wolfe Research]

It does.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Yes. And in terms of timing and overall levels, and I think this is in Brian, so actually Brian, you want maybe want to go over again what our expected sort of size and cadence is this time recognizing that we'll be flexible and opportunistic.

[Bryan Buckler, EVP & CFO at Evergy]

Yes, absolutely. And I would say, Michael, as you understand, we're going to be targeting this 15% FFO to debt target throughout. And as I discussed earlier, our 2025 EPS guidance does not contemplate a new common stock issuance in 2025. So I just want to be clear about that. As you think about the out years, equity needs began in 'twenty six and 'twenty seven because again, we added a lot of capital to the plan in 'twenty five and 'twenty six.

[Bryan Buckler, EVP & CFO at Evergy]

It does grow in 20 28, 20 29 as the capital plan grows. But as far as the 5% to 7% question, increasing to not increasing the 5% to 7%, staying at the 4% to 6% in the top half of that and yet rate base going up 2%. As David said, there's a lot of tailwinds. And certainly, I think the short answer to your question is conservatism, because we want to execute and deliver on this plan, meet or beat expectations, and we got a lot of tailwinds and we'll reevaluate periodically our long term growth prospects.

[Michael Sullivan, Director - Equity Research at Wolfe Research]

Okay. Appreciate all the color. If I could just do one more real quick. Cost of the gas plants, can you give us any rough estimate there?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

No, I think there's no question that the costs have risen since the prior estimates that we had in the IRP that we filed. We're in line with what you've seen with some of the other utilities that have published. There have been a couple utilities that have gone out. So you'll see the numbers as we do our filings and we'll have an update in particular as we go through our we have a proposal for an RFP for the EPC that's out now. So we'll have an updated filing in the Q1, but it's in line.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

You've seen a couple of utilities that have put out numbers. So it's we still think it's they're fully justified and important for our customers to have a balanced portfolio and meet our growth needs. But it's a little higher than certainly than they were in the last stage. And I think we're pretty pleased with our progress too. Another question you probably asked is around timing.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

We've made good progress in our technology selection for the Power Island. So that's the turbine, the generator, steam turbine as well as the gas turbine and the generator and related equipment. It's still confidential as to who we've selected, but that process is moving to move forward.

[Michael Sullivan, Director - Equity Research at Wolfe Research]

Thanks so much. Appreciate it.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Thank

[David Campbell, CEO, President & Chairman of the Board at Evergy]

you.

[Operator]

The next question comes from Travis Miller with Morningstar. Go ahead. Your line is open.

[Travis Miller, Analyst at Morningstar]

Good morning. Thank you.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Good morning.

[Bryan Buckler, EVP & CFO at Evergy]

Good morning.

[Travis Miller, Analyst at Morningstar]

Brian, I'm just wondering if you've become a Chiefs fan yet or if that was a requirement for getting the job?

[Bryan Buckler, EVP & CFO at Evergy]

That's a great question. I can assure you that it was.

[Travis Miller, Analyst at Morningstar]

Okay.

[Travis Miller, Analyst at Morningstar]

Very, very good. I'll note that. Yes.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

We've lost that

[David Campbell, CEO, President & Chairman of the Board at Evergy]

over time game, we might have to reconsider.

[Travis Miller, Analyst at Morningstar]

Yes.

[Travis Miller, Analyst at Morningstar]

Maybe that was a good that was good luck. Second question is, of that new CapEx, the incremental part, how much roughly was T and D versus generation?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Yes. So the incremental portion about $2,400,000,000 of the $3,700,000,000 is incremental generation, about $1,300,000,000 is primarily distribution products, investment in reliability and serving growth because obviously that drives distribution needs as well. So those 2 categories primarily.

[Travis Miller, Analyst at Morningstar]

Okay. Sure thing. And then just to triple clarify, the gas plants are not in the 2029 number, right?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

The gas plants, they're yes. So thank you for the clarifying question. The gas plants are definitely in our forward CapEx plan. Julian was asked a good question because we described in the release of my script that we've included a substantial portion of the integrated resource plan. So we've included the gas plants that are in our integrated resource plan through 2,030.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

There's a CCGT and a CT in 2,031 and 2,032 that are not yet included at this time. It's about 1,000 megawatts together. Of the ones that aren't included? Correct. And those are in the RFPs later come online in 2,030 1,032.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

So it's capital in the out years of the plan, but it's again in the spirit of turn on this call, it's conservatism. We do think they'll be needed. We brought broad based support for those kind of investments in our service territory, but we just launched a process for the 1st set, so we'll march through systematically. It's very important for us to work closely and constructively with our regulators obviously as we move through this. And we'll always be focused on that as we go through this process.

[Travis Miller, Analyst at Morningstar]

Okay, great. Understood. And I think you answered my question just a minute ago on supply chain. Are you able to go through the E and C RFP process and procure some of the equipment before getting the predetermination?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Well, it's an insightful question. The bulk of the spend is would of course follow predetermination. So we'll line up and have robust contracting practices and how we what risk we take beforehand. But we're taking some steps to line up slots and otherwise, but with modest risk relative to overall project size of course. But predetermination is the key gating item for the vast majority of the spend.

[Travis Miller, Analyst at Morningstar]

Sure.

[Travis Miller, Analyst at Morningstar]

Okay. That's all I had. Thanks so much.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Thank you.

[Bryan Buckler, EVP & CFO at Evergy]

Thank you.

[Operator]

One moment for the next question. Our next question comes from Ryan Levine with Citi. Go ahead. Your line is open.

[Ryan Levine, Analyst at Citigroup]

Good morning. I guess one follow-up in terms of your engagement with these hyperscaler customers, when you're looking at your supply chain, is it safe to say that any incremental generation at this point would not be eligible or available until the 2,031 and beyond time period? And how does that shape the pace of conversations with these customers?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Well, that's part of the magic of the conversation. So it's right in the middle of it. Their interest primarily is speed at this stage. A lot of that comes down to transmission and distribution availability as well and the specific ramp rates of the customers. We the advanced discussions that we have for the incremental 500 megawatts to 1,000 megawatts, we're part of that active discussion is we believe being able to line up opportunities to meet their load needs.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

We like everyone else around the country, no one's got much capacity over the next couple of years. But we believe that we've got the ability to sign up a couple of additional customers and continue down with potentially more with the plans we have in front of us and with potential incremental opportunities as well. So we think that we can line up with the customer needs and timelines, recognizing that here just like everywhere they'd love to be able to go maybe even faster. But we feel good about the discussions we're having and we know them reach a middle ground where we can meet their needs. But we've got to have the ensuring that we have the capacity both generation and transmission distribution available.

[Ryan Levine, Analyst at Citigroup]

Okay. Thanks for taking my question.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Thank you.

[Operator]

One moment for our next question. The next question comes from the line of Paul Patterson with Glenrock Associates. Go ahead. Your line is open.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Hey, good morning.

[Bryan Buckler, EVP & CFO at Evergy]

Good morning.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Good

[David Campbell, CEO, President & Chairman of the Board at Evergy]

morning.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Just a few clarification questions. On the no need for common equity in 2025, is that also associated with equity linked securities and that kind of stuff or is it or are you just referring to common equity? I guess what I'm saying is there any potential for is there any distinguishment between the 2 in your comments?

[Bryan Buckler, EVP & CFO at Evergy]

Great question, Paul. Yes, no plans for common equity in 2025. You're absolutely right. We'll be thoughtful about market conditions and be opportunistic as we think about 'twenty six, as we roll through 2025, but nothing on common stock that we think will become outstanding during the year. We still have a little bit of our financing plan to finish out for 2024.

[Bryan Buckler, EVP & CFO at Evergy]

We have some holding company debt we need to term out roughly in the neighborhood of $400,000,000 or $500,000,000 and you'll see in our financing plan footnotes that we know we're going to evaluate whether we do unsecured debt or junior subordinated note to fill that. But all the potential interest costs associated with that issuance are fully baked into our 2025 EPS plan. So that's just a little bit of finer detail on that financing slide that I wanted to give you.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Okay. And then with respect to the robust discussions, when do you think they might come to some sort of conclusion or something that you when do you think an announcement if there were to be one might potentially come out?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Paul, commercial discussions you can set timelines, but then it's the goals and objectives. We hope to I know from our counterpart's perspective as well, we are advancing those with a goal to try and wrap something up by year end and certainly by the year end call. So there's a time urgency on both sides related to it, takes 2 to tango. In this case, it's more than one counterparty. So we don't fully control the timeline.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

What we do know is that there's very strong interest, very active discussions getting down to specific details. But these are of course, these are large loads complicated approaches. So we can't guarantee anything, but we're targeting the next few months given how active these discussions are.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Okay, great. And then finally, on the current projections that you have on the 8% rate base growth and I think it sounds like you said very achievable with the but what's the how should we think about what your expectations are in terms of the potential rate trajectory for customers during that during this period of time, this through 2029? Obviously, it's going to vary and what have you, but just roughly speaking, what how should we think about the rate impact of the current plan?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Yes, Paul. And I think you how we described it as highly confident, we would emphasize that point. And I appreciate the question because working with all this plan, we will work closely with our regulators as we implement it because this is about supporting and helping to advance the economic development opportunities and growth in our area. So we believe that the plan lines up with a rate trajectory that's in line with inflation. That's important for us.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

We've made tremendous progress on improving our regional rate competitiveness these past few years and we don't want to let up on that. And the growth that we're seeing helps to enable making these significant investments, helping to diversify our portfolio, add dispatchable generation, but the target is to keep line rates in line with inflation.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Okay. And what is your expectation for that? That seems to be changing here on the street. So what do you when you think about inflation, what do you guys I mean, is that just sort of a generic whatever inflation is or do you guys have a projection for inflation?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

In general, Paul, I think we're closer to the historical view where inflation goes, what the Fed target is. There's some tie in with what actual inflation is because obviously can have an impact on our costs. But we're hopeful that inflation is trending towards the 2% range. It could be in the mid-2s going forward. But your guess is as good as mine.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

With the election impacts, maybe the general expectation of the macro economy is that inflation could be higher. So I will not get into that game because there are many who are more thoughtful about that. But our view is that we more with it in line with the historical transit inflation. And again, our goal is to keep affordability at the forefront, make sure that we're continuing to maintain and advance our regional rate competitiveness.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Okay. And then just finally, on the gas plants that's been announced and everything, it sounds very regular stuff. There's nothing if there's no there's no plan for you're not going to be asking your CCCN or are you for any specific something like CCS or something that some new technology or something that's associated with it. I think you mentioned hydrogen, but I think that's hydrogen ready. Could you just I mean, it sounded to me like these were pretty much kind of regular plant things and nothing no real advanced technology or something out of the ordinary.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Am I right about that?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Paul, what I would describe is that these are highly efficient. They're the modern advanced CCGT and CT technologies, but they're not there's no carbon capture sequestration element that we've embedded in our plan or forecast. We're hopeful that that develops over time and I think our sites would have enough room to accommodate them over time, but that's not part of our baseline ask. And I would describe all the technology and the technology selection relates to proven technologies. They're in the most advanced and highly efficient group, but they're proven technologies that have been deployed.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Awesome. Thanks so much. Have a great one.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Thank you.

[Bryan Buckler, EVP & CFO at Evergy]

Thank you.

[Operator]

One moment for our next question. Our next question comes from the line of Paul Fremont with Ladenburg Thalmann. Go ahead. Your line is open.

[Paul Fremont, Managing Director at Ladenburg Thalmann]

Thank you very much. I'm going to take one more shot at the 4% to 6%. If you were successful on all three of the advanced negotiations involving the 500 to 1000 megawatts of incremental load, would that be enough to put you above 6% or within 6%?

[David Campbell, CEO, President & Chairman of the Board at Evergy]

I would probably echo, and we mentioned a couple of advanced discussions, but you have it right, combined in the 500 megawatt to 1,000 megawatt range. What I would describe is we got high confidence in the plan that we have and signing additional loads would represent incremental tailwinds. So leave it at that. Then it all comes down to 6 of it, but high confidence in the plan with the 3 large customers that have already announced and then with many tailwinds including the discussions underway.

[Paul Fremont, Managing Director at Ladenburg Thalmann]

Great. Thank you very much.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Thank you.

[Operator]

At this time, I'm showing no further questions. I would now like to turn it back to David Campbell for closing remarks.

[David Campbell, CEO, President & Chairman of the Board at Evergy]

Great. Thank you, Jill. Thank you, everyone, for your time this morning and for your interest in Evergy. Have a good day, and we'll see you at EEI. That closes the call.

[Operator]

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

Participants

Executives

• Peter Flynn, Director of Investor Relations
• David Campbell, CEO, President & Chairman of the Board
• Bryan Buckler, EVP & CFO

Analysts

• Shar Pourreza, Senior Managing Director at Guggenheim Partners
• Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group
• Durgesh Chopra, Managing Director at Evercore
• Michael Sullivan, Director - Equity Research at Wolfe Research
• Travis Miller, Analyst at Morningstar
• Ryan Levine, Analyst at Citigroup
• Paul Patterson, Analyst at Glenrock Associates LLC
• Paul Fremont, Managing Director at Ladenburg Thalmann