Evergy says earnings top estimates on heels of Kansas rate filing

Evergy, the Kansas' largest electricity provider, said it expected a "constructive dialogue" around its newly filed rate case. The company reported earnings for the quarter that exceeded expectations.

Analyst estimates for Q1 2023 earnings per share of $0.56 were surpassed by $0.59. The company's Q1 2023 adjusted earnings of $0.59 per share (or $136 million) also exceeded analyst estimates.

In a press release, Evergy's president and CEO David Campbell said, "A solid start of the year keeps us in pace to achieve our targets for 2023." The company also reaffirmed their 2023 adjusted EPS guideline of $3.55 to $3.75.

Evergy, NASDAQ: EVRG, filed a rate review at the Kansas Corporation Commission on April 25. The review would result in an increase of $14.24 per month for a typical residential customer within the Evergy Kansas Central Service Area -- which includes Wichita.

The rate increase will take effect in December if approved.

The company said that the request was necessary for improving customer service, and making the grid more reliable and resilient. It also added that its rates had risen lower than inflation, and were comparable to other regional companies.

Campbell stated on a conference call to discuss earnings that the KCC shouldn't have any surprises in regards to what Evergy filed.

Campbell said, "We think these rate requests reflect the communication that we have had with Kansas regulators and stakeholder groups in workshops and other venues over the last few years," adding "the frame is there for constructive dialogue."

The company has requested a $204 million increase in net revenue for Evergy Central (an increase of nearly 10%). Evergy Kansas Metro, which includes Kansas City suburbs in Kansas, is asking for a net increase of $14 millions.

Campbell said Evergy, which is filing its Kansas rate review for the first time since it was formed from the merger of Westar Energy and Great Plains Energy in 2018, is waiting on the schedule. The case will be processed over an eight-month period.

Campbell stated in the earnings announcement that Evergy was formed with a goal of reducing costs, enhancing infrastructure and making rates more competitive and affordable. Over the last five years, we've made great progress towards each of these goals. In our rate filing from last month, our goal was to recover those investments and share the cost savings made in order to improve Kansas' electric grid.

Evergy confirmed on Friday that it will still release updated integrated resource planning for Kansas and Missouri in mid-June.

Campbell said that the IRP would include updated cost estimates of new generation, and the impact on carbon-free resources from substantial subsidies under the Inflation Reduction Act.

Campbell, who said he couldn't provide specific numbers, said that the IRP would reinforce "the importance of renewables in the long-term, and it all comes down to the availability" linked to supply chain challenges. This is especially true for the near term.