President and Chief Executive Officer at Evergy
Thanks, Lori, and good morning, everyone. I'll begin on Slide 5, and I'm pleased to report that we had another solid quarter as we delivered adjusted earnings of $2.01 per share compared to $1.97 per share in 2021. The increase in adjusted earnings over last year was driven primarily by favorable demand, above normal weather and higher transmission margin, partially offset by higher D&A and interest expense. For year-to-date, September 30, adjusted earnings were $3.43 per share compared to $3.35 per share a year ago. With these strong results, we are raising the midpoint of our guidance from $3.53 per share to $3.58 per share, and revising our adjusted EPS guidance range to $3.53 to $3.63 per share from $3.43 to $3.63 per share. Kirk will detail the drivers of our third quarter performance and upward guidance revision.
I would also like to call out and complement the strong work of the entire Evergy team in providing safe and reliable power to our customers and communities through a hot summer and early fall. In particular, I'll call out our team's strong safety performance with a 66% reduction in DART events and a 62% reduction and OSHA recordables compared to the first nine months of 2021.
On August 9, we announced an agreement to acquire Persimmon Creek Wind Farm, a 199-megawatt operating wind farm in Western Oklahoma, for $250 million. This investment satisfies two-thirds of our planned 300 megawatts of renewal additions in 2024. Persimmon Creek will deliver low-cost power to our Missouri West customers, subject to approval from the Missouri Public Service Commission and supports our carbon reduction and net zero emission targets. We also announced a 7% increase in our quarterly dividend to $0.6125 per share or $2.45 per share on an annualized basis. This increase is consistent with our recent growth trajectory and long-term targets. We remain laser focused on executing our plan and advancing our strategic objectives of affordability, reliability and sustainability in the context of historically volatile economic conditions and inflation. We remain confident in our long-term plan and we are reaffirming our target annual EPS growth rate of 6% to 8% from 2021 to 2025.
Now moving to Slide 6 in Missouri, we are pleased to reach partial stipulations and agreements with our stakeholders in the pending Metro and Missouri West rate cases, which we expect will provide a balanced outcome for customers and shareholders. The approved agreements call for a $67.5 million revenue increase across our Missouri jurisdictions. Not all of the relevant details are public in the Black-box settlement, but I'll highlight the 8.25% pre-tax rate of return for plant and service accounting, or PISA, as a helpful data point. This will apply to go-forward investments. While the settlement resolved most of the key economic issues, there are several items that the Missouri Commission will resolve in the coming weeks. Revised rates will go into effect on December 6. We're pleased that we were able to find common ground with our stakeholders in these settlements. We continue to view Missouri as a very attractive jurisdiction to invest in, as evidenced by the rate case and the constructive extension and changes to the PISA legislation that were enacted earlier this year.
Turning to Slide 7, I'll provide a summary of other key regulatory and legislative milestones and ongoing constructive developments in both Kansas and Missouri. I'm happy to report the Missouri Commission issued a financing order in October that approved our request to recover and securitize approximately $300 million of Winter Storm Uri costs at our Missouri West jurisdiction. We expect to go to market in the first half of 2023 to complete this financing. For the Persimmon Creek acquisition, we filed for a Certificate of Convenience and Necessity, or CCN, in August. We expect this investment to qualify for PISA treatment at our Missouri West jurisdiction. Missouri Commission staff will issue its recommendation by November 18, and we requested approval by year-end.
On the other side of the state line, the Kansas Corporation Commission issued an order in mid-September that determined our 2022 capital investment plan meets the requirements of the capital investment plan framework. Consistent with prior years, the commission also requested Evergy attend a workshop to explain the impact of the proposed capital spending and to answer questions for the commissioners, KCC staff and the Citizens' Utility Ratepayer Board or CURB. The workshop will take place on December 13. We look forward to the opportunity to highlight the benefits of our planned transmission and distribution investments in a system with a lot of older infrastructure, the addition of renewables consistent with our integrated resource plan, the benefits of which are now further enhanced by the federal subsidies in the IRA, as well as upgrades to technology and customer service platforms that will help us to serve customers more effectively and efficiently. In addition, we'll cover our ongoing progress in advancing the regional rate competitiveness of Evergy's system, which is a core element of our strategic focus on affordability.
Also in Kansas, preparation is underway for our 2023 rate cases, which we will file in late April. This will be our first request for new base rates in Kansas since we formed Evergy in 2018. Key drivers of the case will include return on equity, capital structure, review of our reliability and efficiency-focused distribution, customer and technology infrastructure investments since our last rate case, as well as passing on the significant O&M savings we've generated for customers since the completion of the merger. We look forward to working constructively with our regulators and stakeholders just as we have in multiple forms of the past few years in Kansas to advance the 2023 rate cases and deliver against our strategic objectives of ensuring affordability, reliability and sustainability for our Kansas customers and communities.
Turning to Slide 8. I'll review our demand growth and comment on economic trends and developments. For the third quarter, total weather normalized retail demand increased by approximately 1.7%, driven by robust increase in industrial demand for the chemical and oil and gas sectors. Year-to-date, weather normalized demand is up approximately 2%. Total demand is up 2.4% for the quarter and approximately 3% for the year. While 2021 was warmer than average, temperatures were even higher than the third quarter of 2022. Our regional economy has remained healthy as the unemployment rate in both Kansas and Missouri continues to track below the national average. We are also excited by the ongoing growth that we've seen as reflected in the numbers I just shared, as well as the large project announcements such as Meta's Data Center and Panasonic's new electric vehicle battery manufacturing plant.
I'll conclude my remarks with a few comments on the Inflation Reduction Act, or IRA, on Slide 9. There's no question that the IRA is a very consequential piece of legislation. We are assessing the key impacts of the IRA through the economic and customer affordability lenses as the bill provides longer-term certainty and visibility for significant renewable energy tax credits and emerging technologies. This economic support will further enhance our ability to take advantage of the abundant renewable potential of our region and deliver savings to our customers by replacing energy produced from resources with higher fuel and O&M costs. We also expect the Wolf Creek nuclear plant to be eligible for the IRA's nuclear production tax credit, which will have a beneficial impact for customer bills in years with low realized prices for Wolf Creek. We expect to provide an update on our future renewable generation plans by mid-2023 when we file our revised annual integrated resource plans in Kansas and Missouri. This update will incorporate the impact of the IRA, updated commodity projections and higher capacity requirements in the Southwest Power Pool. We are excited to advance the program that will further enhance our affordability, reliability and sustainability goals.
I will now turn the call over to Kirk.