Evergy Q2 2025 Earnings Report

Evergy EPS Results

• Actual EPS: $0.82
• Consensus EPS: $0.78
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: $0.90

Evergy Revenue Results

• Actual Revenue: $1.43 billion
• Expected Revenue: $1.45 billion
• Beat/Miss: Missed by -$19.84 million
• YoY Revenue Growth: -0.70%

Evergy Announcement Details

• Quarter: Q2 2025
• Date: 8/7/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 9:00AM ET

Evergy (NASDAQ:EVRG), Inc., 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 Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Evergy reported Q2 adjusted EPS of $0.82, beating internal budget despite a ~$0.09 weather headwind, and reaffirmed full-year 2025 EPS guidance of $3.92–$4.12 along with long-term 4–6% EPS growth.
• Positive Sentiment: Key regulatory approvals in Kansas and Missouri for new natural gas plants and solar farms were secured, showcasing stakeholder alignment and advancing the company’s all-of-the-above generation strategy.
• Positive Sentiment: Evergy’s economic development pipeline expanded to over 15 GW, with 4–6 GW of Tier One large customer load (e.g., Panasonic, Meta) poised to potentially raise demand growth from 2–3% to 4–5% through 2029.
• Neutral Sentiment: The company initiated the sale of its Evergy Ventures portfolio, recording an $8 million loss this quarter and planning to use proceeds to reduce holding company debt, with no future earnings contributions assumed.
• Neutral Sentiment: Evergy reaffirmed a $17.5 billion capital plan through 2029 (targeting ~8.5% average rate base growth) to fund infrastructure investments and expects O&M to remain under budget for 2025.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Q2 twenty twenty five 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]

To ask a question during the session, you will need to press 11 on your telephone. 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, Senior Director of Investor Relations and Insurance. Please go ahead.

[Peter Flynn, Senior Director - IR & Insurance at Evergy]

Thank you, Shannon. Good morning, everyone. Welcome to Evergy's second quarter twenty twenty five 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, Senior Director - IR & Insurance at Evergy]

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. 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 second quarter highlights and provide updates on economic development activities, recent regulatory outcomes, and our generation plans. Brian will cover in more detail our second quarter results, retail sales trends, and our financial outlook.

[Peter Flynn, Senior Director - IR & Insurance at Evergy]

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.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Thanks, Pete, and good morning, everyone. I will begin on slide five. This morning, we are pleased to report second quarter adjusted earnings of $0.82 per share, exceeding our internal budget for the quarter and overcoming approximately $09 of unfavorable weather. Our results through June put us on target for the midpoint of full year 2025 adjusted EPS guidance of $3.92 to $4.12 per share. Brian will discuss the year over year quarterly earnings drivers in more detail in his remarks.

[David Campbell, Chairman, President, Director & CEO at Evergy]

In terms of reliability, we've demonstrated strong performance through the first half of the year. Our average outage duration or frequency, as measured by SADI and SAIFI, are trending favorably relative to our targets, demonstrating the benefits of our continued grid investments and the hard work of our transmission and distribution teams. I'd also like to recognize our generation team for the strong operational performance of the nuclear, fossil and renewables fleet during the first six months of the year. We achieved several important regulatory milestones in the second quarter, demonstrating the collaborative regulatory environments in which we operate. In Kansas, the Kansas Corporation Commission approved settlement agreements in our predetermination requests to construct new natural gas plants and a solar farm, and we filed a unanimous settlement agreement in our Kansas Central Rate Case.

[David Campbell, Chairman, President, Director & CEO at Evergy]

In Missouri, the Missouri Public Service Commission approved settlement agreements for our Certificates of Convenience and Necessity, or CCNs, for new natural gas plants and two solar farms. These outcomes reflect continued success in finding broad based alignment with stakeholders to support economic development and advance our all of the above generation strategy, always with a focus on our strategic pillars of affordability, reliability, and sustainability for our customers and communities. We are reaffirming our long term growth target of 4% to 6% through 2029 based on the 2025 midpoint of $4.2 per share. From 2026 to 2029, we anticipate being in the top half of this guidance range relative to the 2025 baseline, with significant additional tailwinds from potential large new customers and investments to serve them. Moving on to slide six, we were pleased to reach a unanimous settlement agreement with stakeholders in our pending Kansas Central rate case, which, if approved by the KCC, would provide a balanced outcome for customers and for all parties.

[David Campbell, Chairman, President, Director & CEO at Evergy]

The settlement provides for a net revenue increase of $128,000,000 While the black box settlement does not explicitly address return on equity or capital structure, it specifies a 9.7% return on equity to be utilized in transmission delivery charge filings. The settlement also includes a provision implementing earnings review surveillance reports. Beginning in March and until the next rate case, Evergy will file annually a surveillance report detailing Kansas Central's earned return. Similar to the mechanism in place after the 2018 merger, if our earned return is higher than authorized, excess earnings will be shared fiftyfifty between customers and the company. While the returns at Kansas Central have historically been below authorized levels, this provision reflects the potential for improvement in earned ROEs as Panasonic ramps up its production.

[David Campbell, Chairman, President, Director & CEO at Evergy]

If approved, we believe this settlement achieves a balanced outcome, and as we enter a new era of growth and investment, we remain committed to affordability and reliability. There is a clear need to invest in grid modernization to replace aging infrastructure and support reliability, as well as in new generation resources that support higher capacity margin requirements in the Southwest Power Pool and coincide with load ramps from potential large new customers. These load profiles will allow us to spread system costs over a broader base. Appropriately timing our requests to recover our investments remains critical to our success as a company, and we will continue to be thoughtful in our pace of capital expenditures relative to our peers and in relation to the load growth coming onto our system. We'd like to thank KCC staff, curb, industrial customers, and many others for their participation and willingness to work toward this agreement.

[David Campbell, Chairman, President, Director & CEO at Evergy]

We anticipate an order from the KCC by September 29. Slide seven describes our expanding 15 gigawatt plus economic development pipeline in greater detail. Reflecting the geographic advantages of our region, the overall pipeline is strong in both Kansas and Missouri. We are well positioned to continue to track economic development. Relative to our size, our backlog is one of the most robust in the country, a testament to the competitiveness and vitality of our states.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Focusing on the top three categories from the pipeline, we outline four to six gigawatt opportunity of new large customer load that represents the most active part of our queue. Serving these customers will provide regional and community benefits in Kansas and Missouri through a robust digital economy, construction jobs, permanent jobs, and a significantly expanded tax base. And by attracting and serving these large load customers, we can further enhance affordability by distributing system costs across a broader load base. Our team is working closely with these customers to develop and implement transmission and generation solutions to serve their expected ramp rates over the coming years. We are confident that we will be successful in winning and serving a large portion of this queue, which will in turn transform the size and growth of our company and enhance the economic prosperity of our region.

[David Campbell, Chairman, President, Director & CEO at Evergy]

The remaining balance of our pipeline of over 10 additional gigawatts demonstrates the significant activity and continued strong interest in Kansas and Missouri. Many of these customers have acquired land or land rights, completed their site plans, and are engaging in capacity studies with our utility companies and are eager to move up in our queue. Slide eight takes a closer look at the four to six gigawatts in our Tier one large customer load pipeline. Beginning with the actively building category, two of these customers, Panasonic and Meta, have now completed construction and are ramping up their facilities. Third customer is making steady progress through a heavy construction phase and expects to commence operations in the 2026.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Based on the latest schedules from these customers, we continue to anticipate peak demand of 1.1 gigawatts with 500 megawatts online by 2029, supporting our estimated demand forecast of 2% to 3% through 2029. Regarding Panasonic, we were excited to attend their grand opening in July in DeSoto, Kansas. Their facility stands as the largest EV battery factory in the world. Many of you may have seen headlines from various news outlets regarding production targets and timelines for Panasonic. Importantly, Panasonic's latest schedule is substantially consistent with the load ramp reflected in our existing five year forecast.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Moving to the finalizing agreements category, we are in the final stages of negotiations with large customers for two data center projects representing one to 1.5 gigawatts of peak load. In the 2025, we executed various service agreements with significant financial commitments and credit support from these customers. We are very excited about the economic development that these customers will deliver to our region and remain on track to share announcements regarding their plans later this year. Subject to final agreements and project announcements, we expect to see an impact on our demand growth from these customers in 2027 and 2028 and into the next decade, potentially raising the overall company demand forecast to 4% to 5% through 2029. We also remain in advanced discussions with multiple customers whose load would represent approximately two to 3.5 gigawatts of peak demand.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Although these customer projects aren't as far along as others in the pipeline, they have already secured land or land rights, shared site plans, and in some cases, reached letters of agreement and provided financial commitments to move the evaluation forward. Overall, we see an incredible level of interest in our service territories, and we are making progress with potential new large customers across all stages of discussions. Each category reflects strong customer interest and increasing commitments that will empower growth, investment and drive prosperity and affordability for our region. We achieved several important regulatory milestones that I'll describe in more detail on slide nine. As previously discussed, we anticipate an order on our unanimous Kansas Central rate case settlement by September 29.

[David Campbell, Chairman, President, Director & CEO at Evergy]

On July 7, the KCC approved settlement agreements in our predetermination requests to own partial shares of two new combined cycle natural gas units and a solar farm at Kansas Central. These projects were identified in our IRP preferred plan and reflect our all of the above approach to meeting growing customer demand and capacity margin requirements in the SPP. We're excited to advance the construction phase and appreciate the feedback and dialogue with interveners throughout the approval process. In our Kansas large load power service tariff proceeding, we continue to advance settlement discussions. Staff recently requested an extension for several dates on the procedural schedule to facilitate continued dialogue.

[David Campbell, Chairman, President, Director & CEO at Evergy]

If the new schedule is approved, KCC staff and intervenor testimony would be due August 25, with a second settlement agreement date of September 22, followed by hearings running October. Pivoting to Missouri, the Missouri Public Service Commission approved settlements for our CCN requests related to two solar farms, partial ownership and two combined cycle natural gas units, and full ownership of a simple cycle natural gas plant. We'd like to thank MPSC staff, OPC, and other interveners for their collaboration. We believe these projects form a cost effective package of reliable energy solutions for our customers and this positive outcome demonstrates alignment with the Public Service Commission's interest in securing additional generation resources for our Missouri utilities. Similar to Kansas, the large load power service tariff proceeding in Missouri continues to progress.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Server Vital testimony is due by September 12, followed by a settlement conference on September 23, and hearings from September 29 to October 3. We look forward to ongoing collaboration with the parties as we work toward a solution that supports economic development and is fair and reasonable for all customers. On slide 10, we highlight legislation and regulatory mechanisms that firmly position Kansas and Missouri as premier destinations for infrastructure investment in support of new advanced manufacturing facilities and data centers. The PISA and natural gas CWIP provisions serve to mitigate regulatory lag and support our strong credit profile as we execute on our long term capital investment plan, while data center incentive packages bolster the business friendly environments for which Kansas and Missouri are already known, which have been instrumental in attracting new customers. All told, the supportive backdrop will continue to attract investment of major industry players and prove that Kansas and Missouri are top destinations for new business and growth.

[David Campbell, Chairman, President, Director & CEO at Evergy]

For our part, Evergy remains committed to investing to provide safe, affordable and reliable electric service to our 1,700,000 existing customers and the new customers we are bringing online. All of our stakeholders stand to benefit from this unprecedented economic development and investment opportunity. On slide 11, we provide a summary of our new generation resources under development in Kansas and Missouri. Overall, our approach is aligned with our 2025 IRP preferred plan. It reflects an all of the above strategy for new generation development that will allow Evergy to take advantage of best in class efficiency and ensure a balanced generation portfolio for current and future generations of Kansas and Missouri customers.

[David Campbell, Chairman, President, Director & CEO at Evergy]

These projects will expand the tax base of our communities and bring both construction and permanent jobs in our local economies. These investments are critical to ensuring we can affordably and reliably serve our customers and support growth in our region. Regarding impacts of the One Big Beautiful Bill Act, we believe that we are well positioned to realize the solar tax credits for the benefit of our customers on all three of our approved solar farms. For future unannounced renewables projects that were identified in our 2025 IRP, over the balance of the year we will continue to evaluate a robust set of options, including the results of our pending all source RFP. As part of this review, we will also assess the additional natural gas and storage additions that were identified in the most recent IRP, as well as retirement timelines.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Our expectations for the Go Forward Plan will be reflected in the capital plan update that we will provide during the year end call in February and in future IRP updates. As we develop solutions to meet the generation capacity needs of our customers, we are committed to a flexible approach that evaluates multiple scenarios and incorporates stakeholder feedback with an ultimate goal of ensuring reliability and affordability for our customers. I'll conclude my remarks with slide 12, which highlights the core tenets of our strategy. By prioritizing affordability, we contribute to robust economic development pipeline ahead of us and lay the groundwork for continued support of the substantial economic potential within our states. Ensuring reliability is also a core element of our strategy, as reflected by SADI, safety, grid resiliency and generation fleet availability.

[David Campbell, Chairman, President, Director & CEO at Evergy]

This also includes a focus on metrics relating to customer service, safety in all facets of our operations and infrastructure investment. With respect to sustainability, about half the power generated by Evergy comes from emission free resources. Since 02/2005, we have reduced carbon emissions by 57% and reduced sulfur dioxide and nitrogen oxide emissions by 9890% respectively. Our Integrated Resource Plan embraces an all of the above strategy for future resource additions, supporting a responsible transition of our generation portfolio. We look forward to continuing to advance a balanced mix of resource additions over the coming years as part of our constant focus on affordability, reliability, sustainability. I will now turn the call over to Brian.

[Bryan Buckler, EVP & CFO at Evergy]

Thank you, David. Thank you, Pete, and good morning, everyone. I'll start by saying this was a quarter of strong execution. And given our results through June, we are firmly on plan and forecasting to be at the midpoint of our $3.92 to $4.12 of adjusted EPS guidance. Let's now begin on slide 14 with a review of our results for the quarter.

[Bryan Buckler, EVP & CFO at Evergy]

For the second quarter twenty twenty five, Evergy delivered adjusted earnings of 191,000,000 or $0.82 per share compared to $2.00 $7,000,000 or $0.90 per share in the 2024. As we disclosed in our first quarter slides, we had forecasted approximately $6 to $0.84 of adjusted EPS for the 2025. And thus our results for this quarter came in a bit higher than the midpoint of our forecast, overcoming the mild weather. As shown on the slide from left to right, the year over year drivers are as follows. First, a cooler start to the summer led to a 26% decrease in cooling degree days, which drove a $05 decrease in EPS when compared to the prior year.

[Bryan Buckler, EVP & CFO at Evergy]

By normalizing weather in both Q2 twenty twenty four and Q2 twenty twenty five, you can see we experienced solid year over year total company earnings growth in second quarter twenty twenty five. Next, the net impact of pricing and weather normalized demand, which grew 1.4%, added $08 per share. Recovery of and return on regulated investments contributed $09 of EPS, driven by new rates in Missouri West that were effective in January. Higher O and M drove a $05 negative variance in EPS compared to Q2 twenty twenty four. It is important to note that O and M came in on plan in the second quarter, and we expect to come in under budget for O and M for the full year 2025.

[Bryan Buckler, EVP & CFO at Evergy]

Infrastructure investment resulted in higher depreciation and interest expense, leading to a $07 decrease in EPS. And finally, other items netted to a positive $02 variance. I'd also like to touch on our decision to exit our Evergy Ventures business that holds small, non regulated investments in early stage clean energy and energy solution companies. This business was launched in 2015 and the majority of investment commitments were made in the first five years. Given Evergy's focus on our regulated utilities, we have made limited new investments in recent years And in the second quarter, we initiated a process to sell the portfolio.

[Bryan Buckler, EVP & CFO at Evergy]

We recorded losses related to these investments of approximately $08 in the second quarter, which are excluded from adjusted earnings. The remaining book value of these investments was approximately $100,000,000 as of June 30, and cash proceeds from the sale of this portfolio will be used to reduce holding company debt. Importantly, we assume no annual earnings contributions from these investments in our five year plan. Turning to slide 15, I'll provide more detail on our sales trends. On the left hand side of the screen, you'll see weather normalized demand increased by 1.4% in the second quarter as compared to last year.

[Bryan Buckler, EVP & CFO at Evergy]

This growth was primarily driven by increases in both residential and commercial usage. Looking ahead, we continue to expect strong commercial load growth for the remainder of the year, supported by Meta's data center ramping its operations. Additionally, as David mentioned earlier, Panasonic's latest load ramp schedule remains largely consistent with our assumptions in our five year forecast, which should support a pickup in industrial demand through the balance of the year. In fact, for the month of June, we saw a year over year increase in industrial sales, which we hope portends well for the rest of 2025. I will close on Slide 16 with a recap of our long term financial expectations.

[Bryan Buckler, EVP & CFO at Evergy]

As I previously mentioned, with solid second quarter results and strong operational execution through the first half of the year, we are reaffirming our 2025 adjusted EPS guidance range of $3.92 to $4.12 And with normal weather, the remainder of the year, we believe we are on track to achieve the midpoint of that range. We are also reaffirming our long term adjusted EPS growth target of 4% to 6% through 2029, and we continue to expect to grow in the top half of that range off of the 2025 adjusted midpoint of 4.2 And I want to reiterate that we continue to see strong tailwinds to our forecast, including potential additional large customer announcements. Lastly, we expect to provide an update on our five year load forecast, capital and financing plans, and earnings outlook on our year end call in February. Evergy's employees and leaders remain focused on consistent business execution of our operational and financial goals, as we advance our strategic objectives of affordability, reliability, and sustainability for our customers. And with that, we will open up the call for your questions.

[Operator]

Thank you. At this time, we will conduct the question and answer session. Please go ahead.

[Nathan Richardson, AVP - Equity Research at Barclays]

Hi, everybody. Good morning. It's Nathan Richardson on for Nick. Can you hear me?

[Operator]

I can hear you. Please stand by one second. Please stand by.

[Nathan Richardson, AVP - Equity Research at Barclays]

No worries.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Shannon, can you test the microphone, please?

[Operator]

Yes. Can you hear me?

[Peter Flynn, Senior Director - IR & Insurance at Evergy]

We hear you now. Thank you.

[Operator]

Okay. Okay. Go ahead, Nicholas.

[Nathan Richardson, AVP - Equity Research at Barclays]

Hi, everybody. Good morning. It's Nathan Richardson on for Nick.

[Bryan Buckler, EVP & CFO at Evergy]

Good morning.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Good morning.

[Nathan Richardson, AVP - Equity Research at Barclays]

So I was just wondering if you could expand a little bit on how you're thinking about the timing to derisk equity needs beyond '25. And would you do something this year like a forward or something along those lines if you saw the opportunity?

[David Campbell, Chairman, President, Director & CEO at Evergy]

Sure. I'll open and hand it to Brian. You'll recall from our last quarter call that we described that no planned equity raise in 2025 and roughly $600,000,000 per year in 'twenty six and 'twenty seven. And we laid out in this slide deck again the anticipated cumulative $2,800,000,000 need. Obviously we've seen that our peers have used a variety of tools, including ATMs and others, so we think we have a lot flexibility in how we approach it.

[David Campbell, Chairman, President, Director & CEO at Evergy]

We probably continue to think about it in terms of that size and timeline. But Brian, anything you'd add?

[Bryan Buckler, EVP & CFO at Evergy]

Yeah, no, I think that's absolutely right. We have been patient accessing the equity markets until we made progress on our 2025 initiatives and continue to feel confident in the tailwinds for our stock valuation. But as David said, all that being said, we'll consider chipping away at our equity needs in the months ahead, kind of under our preferred ratable ATM program, you know, that would have Ford sales. And as David mentioned, just as a reminder, we have no need to settle equity here in 2025.

[Nathan Richardson, AVP - Equity Research at Barclays]

Thank you. That's helpful. And then on Panasonic, you mentioned in the prepared remarks that the schedule is on track with your expectations, but if they were to not ramp within your expectations, how could that impact 4% to 5% load growth and is that still achievable if they were to ramp at a lower level than you expect currently?

[David Campbell, Chairman, President, Director & CEO at Evergy]

I attended the grand opening of Panasonic in July. It's an extremely impressive facility that describes the largest EV battery plant in the world. Having seen it, I believe it. Our forecast is in line with what they've described with us recently in AFFIRMED. It's a very big investment that they've made, so obviously they want to start generating from there.

[David Campbell, Chairman, President, Director & CEO at Evergy]

But to get at your question, we've got, as we've described, a very robust economic development pipeline. When you look across the broad set of our customer base, we've only included in our forward outlook and the guidance we've provided up to now, 2% to 3% of load growth through 2029. We've described how the second category of customers and finalizing agreements, if we add those, it get us to 4% to 5%, but we have not yet included them in our forward outlook. So overall what I describe is that we've got a lot of tailwinds overall with respect to demand growth potential. And any given customer, if it has a shift in its ramp rates or otherwise, we've got a robust portfolio and a lot of customers in the queue, of course, who are stand ready and eager hoping to move up if they can.

[David Campbell, Chairman, President, Director & CEO at Evergy]

But overall, describe that we see tailwinds for overall load forecast on emphasize that what we include up now is only the two to 3% load growth through 'twenty nine.

[Nathan Richardson, AVP - Equity Research at Barclays]

Understood, thank you very much for the time.

[Bryan Buckler, EVP & CFO at Evergy]

Thank you.

[Operator]

Thank you. Our next question comes from Julian Smith from Jefferies. Please go ahead.

[Analyst]

Hi, team. This is Tanner on for Julian. Good morning. Just a question on the balance of the large load customer pipeline. You point to the potential to address a portion of that 10 gigs before 02/1930.

[Analyst]

Is the governing factor here the expected development timelines of the customers within this portion of the pipeline? Or is it your ability to process and serve? Thank you.

[David Campbell, Chairman, President, Director & CEO at Evergy]

It's kind of a balance of both what I described because a number of these customers, well, first we're obviously focused on the four to six gigawatts that we described and the Tier one large load customers there. These are complicated, multi billion dollar facilities, there's a lot of work that we've advanced and that they've advanced in moving these forward. So partially this is a stage of development reflecting the different parts of our queue, and partly it's based on who we've advanced to further up in the queue. But different customers may for example be bringing with them potential generation resources, the more flexibility they have, then that raises potential. So I describe it as the first four to six gigawatts are the ones that are in the most advanced discussions.

[David Campbell, Chairman, President, Director & CEO at Evergy]

We've reached agreements with them, they're advancing their infrastructure, we're advancing ours, they've posted significant financial commitments to us with significant credit support. And the remainder of the pipeline are folks who stand ready if for whatever reason we don't expect it to happen, if any of those customers are unable to move forward. But we the more flexibility they bring, the more, resource potentially have that's potential upside from there.

[Analyst]

Great. And then just lastly, on the earnings review surveillance with the Kansas Central rate case, as you're improving your earned return profile in the state, prospectively, should we view this kind of fiftyfifty proportionate share for over earnings as as precedent setting for future proceedings? Or is this a a near term mechanism for this very current high load growth phase you're in?

[David Campbell, Chairman, President, Director & CEO at Evergy]

It's an astute question. So the way the mechanism formally works is it's established between now and the next rate case. So within the four walls of the agreement it applies between the next rate case. Inarguably, it is a settlement and it reflects a precedent, it doesn't mean that it's going to dictate what's going forward. What I'd say that's a positive is that historically Kansas Central has been a jurisdiction that has not achieved its authorized returns, it's had some lag.

[David Campbell, Chairman, President, Director & CEO at Evergy]

And in the post merger phase, for example, we had a mechanism like this in place that didn't end up being operative for Kansas Central because it wasn't earning. So it would be a real positive for that jurisdiction to achieve its authorized levels, so it's a win win for all concerned if we end up in a fiftyfifty sharing posture.

[Analyst]

Fantastic. Thank you very much.

[Bryan Buckler, EVP & CFO at Evergy]

Thank you.

[Operator]

Thank you. Our next question comes from Travis Miller from Morningstar. Please go ahead.

[Travis Miller, Senior Equity Analyst at Morningstar]

Good morning. Thank you. Good morning, Travis. Just a quick one, I think, in terms of the numbers. The 8.5% rate base growth, does that now include those gas plants and solar?

[Travis Miller, Senior Equity Analyst at Morningstar]

Or is there upside to 8.5%? So it's a good question.

[David Campbell, Chairman, President, Director & CEO at Evergy]

The 8.5% reflects the rate base growth associated with the $17,500,000,000 capital plan that we've laid out and the details of that by year are laid out in the appendix. You'll see that the relative share of that capital plan is a little more weighted towards the out years as we ramp up some of our investments. But relative to our most recent integrated resource plan, it only includes a discrete number of investments. And to make that clear to everyone, we've actually laid it out on the slide, it's on slide 21, which lays out the different generation projects in our IRP and there's actually a column specifying whether it's in the capital plan or not. And as I described and as Brian mentioned, as we get to the end of the year, we finalize agreements with additional customers.

[David Campbell, Chairman, President, Director & CEO at Evergy]

We'll also finalize the plans relating to what investments are required to serve them. We'll look at the retirement scenarios that were also included in the last IRP because it's a different environment for some of the assumptions relating to retirements as well. But overall, we expect as part of the year end update on the year end call in February to talk about our new load forecasts, the incremental investments that will be required to serve them, so as part of an updated five year capital plan, and the related earnings impact. So it'll change some from what's on the slide in 'twenty one, because we'll look at that full set of inputs, but as Brian described, are significant additional tailwinds with respect to the low growth and there'll be investments to serve that load and overall it's a great story we think for the prosperity of our region, the growth of our company and the growth of our communities.

[Travis Miller, Senior Equity Analyst at Morningstar]

Okay, so just to summarize here, if I'm looking at those two slides, the gas plants and the solar plants are included.

[David Campbell, Chairman, President, Director & CEO at Evergy]

The ones for which we received predetermination favorable outcome, predetermination, yep, those are in there. Some other plans that have not yet gone through the proceedings are also included in the plan. The bulk of the resources that haven't yet gone through approvals are not yet in the plan.

[Travis Miller, Senior Equity Analyst at Morningstar]

Okay, okay. Very good. And then just conceptually, I know you're going to have said multiple times here that you'll update all this, but just conceptually, the difference between that 8.5% rate base growth and the 4% to 6% EPS growth, Is there a big piece missing? And obviously, there's a finance drag, but should we anticipate an update that brings those closer? Obviously, the earnings going up. Yes.

[David Campbell, Chairman, President, Director & CEO at Evergy]

We described that from this year onward we expect to be in the top half of the 4% to 6% range. You'll see in our capital plan, as I mentioned, that the level of capital investment ramps, 27%, 2829% in particular, that's also laid out year by year in the appendix on slide 22. So our overall average 8.5% rate base growth is higher, that's the average rate, but it's lower in the early years and higher in the out years. So it's partly a reflection of our earnings growth target. We haven't described kinks in the line or otherwise.

[David Campbell, Chairman, President, Director & CEO at Evergy]

But we do think, as Brian described, between the additional customers we'll see, the investments to serve them, some tailwinds that we are hopeful we'll be able to describe in that year end call, all reflecting growth and opportunities for our customers and communities. So it's a dynamic that reflects sort the pacing and schedule of capital investments and wanting to make sure we've high confidence that we're achieving them and having we shown an integrated growth rate, but we look forward to giving you an update on that in the year end call.

[Travis Miller, Senior Equity Analyst at Morningstar]

Sure. Okay. I appreciate that. And then one higher level one. You got a couple of different moving parts here in terms of the load coming on.

[Travis Miller, Senior Equity Analyst at Morningstar]

Now you've got this pretty good sight on the generation build. At what point is the system does this now balance the entire system? Perhaps had the generation shortage, maybe had a demand over coming on faster than expected. Do you now see the system balanced over the next three to four years?

[David Campbell, Chairman, President, Director & CEO at Evergy]

Well, we're in a really dynamic environment. So obviously, even in a range of four to six gigawatts, we're a company that total peak demand in the summer is in the 10.5 gigawatt range. So, in the two gigawatt range is a pretty dynamic element. So, we have a really thorough process in our company of looking at the related long term elements that are going to be important for that balance. So total customer load, generation needed to serve, the transmission and distribution infrastructure to serve.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Those are three parallel long lead time paths that you want to get synced up, and I think we've got a robust process for looking at it. So yes, we anticipate what we described in the year end call is going to reflect a balanced approach to serve the announced customers that we've seen and we've built some flexibility in our system to accommodate the ranges that might result. But that's the magic of the situation we're in, and that's the reason why we're hired to do the jobs we do, is to strike that balance. It was a simpler process when load growth was a half percent to 1% a year as it was when we were fortunate to have growth, but in some jurisdictions it was flat. Now it's a more dynamic environment with the level of growth we're seeing, but we absolutely believe that we can achieve that balance.

[David Campbell, Chairman, President, Director & CEO at Evergy]

But we also know that we have to stay nimble and work with our customers at the same time to strike that balance, because one of the exciting things is that customers, and you've seen one of our large customers announced, for example, renewables investments they were supporting at the time. If we line up the capacity for it, that allows some balancing even as we work with our customers on it. That will be an important feature, particularly for the folks who are in the balance of our pipeline as we look at options. So yes, it's a system that will be in balance, it's certainly a dynamic environment, but we believe that we have a plan, a robust plan that will be able to ensure that we can serve the new customers that come on.

[Travis Miller, Senior Equity Analyst at Morningstar]

Sure thing, yes. No, I appreciate it. That's all I had. Thanks.

[Bryan Buckler, EVP & CFO at Evergy]

Thank you.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Thanks for having

[Operator]

Thank you. Our next question comes from Paul Patterson from Glenrock Associates. Please go ahead.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Hey, good morning.

[Bryan Buckler, EVP & CFO at Evergy]

Good morning, Paul.

[Paul Patterson, Analyst at Glenrock Associates LLC]

On the large load slides that you provided, I'm just sort of wondering in the finalizing agreements and I guess in advanced discussions, how much do these large load proceedings, the tariff ones at the respective commissions play into the finalizing or how should we think of the pipeline and the potential impact? I noticed the staff and I think it was Missouri wasn't completely on board. Know you guys are in discussions or it sounds like you guys are. So my question sort of is A, how much do these large loads look at this thing as sort of a gating factor? And then B, how do you think about the settlement discussions that are underway in the respective commissions?

[David Campbell, Chairman, President, Director & CEO at Evergy]

That's a great question, Paul. We are far advanced in discussions with especially the customers in the actively building category, but also in the finalizing agreements category. We disclosed that we've had $200,000,000 of financial commitments from the customers in the finalizing agreements category. So they are advancing significant work, we're advancing significant work with backing from the customers. So it's not a gating item to starting anything.

[David Campbell, Chairman, President, Director & CEO at Evergy]

I think it's an important input, fair to say, and we described it that way really for the last couple of calls, always expected announcements, some of these incremental, the additional customers by year end because one of the inputs they're looking at is a large load of power service tariff proceeding. But as you know from the broader environment that we're working under in The US, there's such high demand for power infrastructure to support data centers that they're not waiting, they're moving forward and we're seeing significant activity and the financial backing to support it on their side and supporting the work we're doing. So, it's an important input as it would be for any customer, but the work is advancing in parallel. We still anticipate announcements by year end and we think one of the inputs to that timeline is the proceedings. We are in settlement discussions that are active in the Kansas side, promising discussions.

[David Campbell, Chairman, President, Director & CEO at Evergy]

And we laid out the schedule in the script and in the slides as to when those will proceed. But we think the discussions have been constructive and we're certainly going to push forward and seek to find a settlement.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Okay, and Missouri is pretty similar?

[David Campbell, Chairman, President, Director & CEO at Evergy]

It is. Kansas is a little ahead in the settlement discussion timeline. If neither side reaches settlements, then the hearings will start getting on a pretty parallel path. But Kansas is first in terms of settlement discussion timeline.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Okay. Then with respect to renewables, I'm just wondering, as you know, there's been a lot of activity from the new administration in various agencies. Is there any of the stuff that's approved that's subject to any additional federal permitting or approvals whether it's Department of Interior Transportation. Do you follow me? It seems like there's a considerable effort at the administration that seems to be calling at least some of these projects into question and it seems somewhat aggressive frankly.

[Paul Patterson, Analyst at Glenrock Associates LLC]

So I was just wondering if you could comment on how your projects are in that slide vis a vis Sure.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Vis a vis the OBB, VA and federal?

[Paul Patterson, Analyst at Glenrock Associates LLC]

Vis a vis the federal activity that we're seeing. In other words, if there's any sort of permitting or approval process at any the respective agencies and with respect to the Treasury, guess we'll find out what kind of guidance they're going to be giving. I'm sure you guys are aware of that as well. So just how should we think about that and your pipeline? It sounds like the stuff that you guys haven't that's in the RFP process etcetera, I'm not wrong, you're very flexible on it.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Mean, if things change, things change and you'll address them accordingly. But I'm just sort of wondering about the stuff that sort of is kind of in the birthing process, for lack of a better word.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Yep. We believe that the three solar projects that have been approved in the Kansas and Missouri proceedings will qualify under the OBBA, given the work that's already advanced, we believe they'll qualify under the rules. So the other projects that are listed on slide 21 in the renewables category, as you noted and as I mentioned in my comments, we do think we have a robust set of options, so we'll respond to the evolving rules. The executive order dictated a follow-up later this summer, so we'll see what comes out from the federal government and what the eligibility is. Have a range of projects that we think would qualify, but we've got some alternatives and as you know, storage for example is likely to have more qualification criteria, so it's possible the rules come out to be more of a balance towards storage.

[David Campbell, Chairman, President, Director & CEO at Evergy]

Our plan has got a pretty diverse mix, so we'll respond to what the rules are. We do feel good about those three solar projects that have been approved and we think we've got a robust set of to respond. So with respect to our forward plan, even in consideration of some of the uncertainties relating to renewables, we feel good about the prospects of serving large new customers and the tailwinds overall with respect to the potential investments that will be needed to serve those customers and the overall impact on the plan.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Okay, and so with respect to the solar projects that are approved, there's no more federal approvals or permitting or anything associated with that? Is that correct?

[David Campbell, Chairman, President, Director & CEO at Evergy]

Yeah, we believe they qualify and the rules they stand now, will not I suppose possible those could continue to evolve, but given the terms of the OBBBA, even of the executive order, we believe those three projects qualify. Of course, we'll respond to the environment, but we feel good about those three projects. For the rest of the projects, we'll respond to what the rules are, and we've got a lot of alternatives.

[Paul Patterson, Analyst at Glenrock Associates LLC]

Awesome. Thanks so much, guys.

[Bryan Buckler, EVP & CFO at Evergy]

Thank you.

[Operator]

Thank you. Our next question comes from Amber Zhao from Citi. Please go ahead.

[Ryan Levine, Equity Analyst at Citigroup]

Hi, it's Ryan Levine with Citi. A couple of quick questions just around your gas generation build out. What's the labor ramp and EPC strategy for the new gas generation building? And any color you can share around confidence to achieve the COD target?

[David Campbell, Chairman, President, Director & CEO at Evergy]

So, we have some of those terms are confidential, but we're working with a leading EPC provider and we feel good about our contractual terms and the overall approach to building these plants, so we're part of the predetermination process and laying those out. Work closely with that EPC provider in their labor strategy. They're very seasoned, play with a lot of experience in building plants across The US. We benefit in our region from access to skilled workforce, prospective workforce and geographically we're positioned in sort of the epicenter of EPC capability as Black and Veatch, Burns and McDonnell and Kewits Power Division are all headquartered here in Kansas City. So we have a group that's dedicated to, that has advanced those projects moving forward and we've worked closely with the EPC provider with the predetermination and CCN approvals in hand moving forward with them.

[David Campbell, Chairman, President, Director & CEO at Evergy]

We feel good about the COD dates. I've been around new construction builds in my past, so you need to make sure you've got a robust partnership and oversight process with those EPC providers. I believe we have that. And these are technologies that are known, they are proven, they've been constructed by other parties, so that helps, including by our counterparties. We feel good about the overall setup for the process, that large project execution is a core skill that we're going have to demonstrate.

[David Campbell, Chairman, President, Director & CEO at Evergy]

We think we've set ourselves up from contracting in a capability perspective and in our selection of our technology that we're doing to be in a good position to manage these projects. So we're excited about those prospects and really grateful for the collaboration from staff in both states and the different parties in getting those approvals for the gas plants.

[Ryan Levine, Equity Analyst at Citigroup]

And then just one follow-up. In terms of the contractual arrangement, do the EPC companies have the ability to reprioritize resources if other generation if they get contracted for other projects? Or do you have contractual prioritization that's already been pre negotiated in this agreement that you already spoke to?

[David Campbell, Chairman, President, Director & CEO at Evergy]

We feel good about the overall contractual approach and commitment reflected in it from our EPC provider. So we feel good about the overall terms of the agreement that we have with our provider, and it'll be a partnership with them, but they're a seasoned enterprise that's built a lot of these. So we feel good about the protections that we built in the agreement.

[Ryan Levine, Equity Analyst at Citigroup]

Thanks to the color.

[Bryan Buckler, EVP & CFO at Evergy]

Thank you.

[Operator]

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

[David Campbell, Chairman, President, Director & CEO at Evergy]

Thank you for your interest in Evergy, and have a great day. This concludes our call.

[Operator]

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

Participants

Executives

• Peter Flynn, Senior Director - IR & Insurance
• David Campbell, Chairman, President, Director & CEO
• Bryan Buckler, EVP & CFO

Analysts

• Nathan Richardson, AVP - Equity Research at Barclays
• Analyst
• Travis Miller, Senior Equity Analyst at Morningstar
• Paul Patterson, Analyst at Glenrock Associates LLC
• Ryan Levine, Equity Analyst at Citigroup