OGE Energy (OGE) 9 Aug 232023 Q2 Earnings call transcript

Good day and welcome to the Q2 2023 OGE Energy Corp Earnings Conference Call [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Jason Bailey, Director of Investor Relations. Please go ahead, sir.

good and Sherry you, morning, everyone. Thank to welcome OGE Energy Corp. And

our Earnings Second and today, Buckler, Call. I XXXX CEO; have Bryan President me Chairman, With Quarter our Sean and CFO. Trauschke,

at is today, may like we terms followed an that to oge.com. will finally, remind from explanation answer the follow And conference In of results. always, will you by financial of being Bryan as hear you from first your along webcast Sean, and call we questions. this I'd

conference the slides be addition, accompanying In call that will archived and on call same following the website.

I'd Before forward-looking we is begin to financial is our results and simply to attention the statement statements statements. financial presentation, to harbor the but This this regarding states for forward-looking estimate like safe best that guarantee your cannot date. requirement SEC an direct we

now opening his I Sean call remarks. Sean? the will to over for turn

all call. the morning, earnings the on per Thank and great to you, joining for including of Jason. us with you. loss $X.XX company. Good a you company holding morning, It's from quarter $X.XX consolidated certainly thank share, reported second and of Earlier today's electric $X.XX everyone, from be we this

on delivered the XX%, the that grow from to XXXX, over utility. and the commitments better the XXXX, To earnings in we've Since more we've and been future customers' company the very holds bullish to by period. I'm future. and our our than utility segment increased a never our OG&E. meet EPS needs we've We're begin, on for grow replaced into position for midstream contribution We've target on what the

customers our long we that and us and every help diverse as runway of electricity reliable, nearly earnings execute day. on investment delivering Star, grow to XXX,XXX a the plan to to opportunities safe North each affordable, our offers continue long-term We reach

of combustion turbine second having approval for Filing our Oklahoma units the our new the our we of These power generation the more Corporation two plant. requested Commission, oldest productive following. served and the XX units Horseshoe for units Lake was included customers than approval two quarter years. very in replace our Overall, new with at would fleet,

in a These step the We've company. needs first for of begin in two are future units filed Arkansas constructions approval units. great generation these meeting on also capacity to our

We now through of very IRA. the IIJA are our and and to strong, projects and and applications four year, this have continue benefiting communities these customers the our submitted should IIJA applications We Department to we proposed alike. word will opportunities additional Energy on later pursue receive believe

from damaging Through of we service. quarter, restore experienced and that the a This on it team began to to weather quickly our significant all, Father's and tornadoes Day. devastated that safely responded wind weekly string the of and number events, Oklahoma, thunderstorms April Shawnee, XXth

As fair you our get weather. severe of share know, more we than

an Let exceeding levels. our of looks of Weather The meeting did had and service share And as customers quickly restored. Service illustrates or example in territory categorized one-third experienced service July those National me an like. our outage, during month of severe that what the XX% that never yet, storm winds really who

degrees; with arrived Our benefits recently reliability customers well, has our very so nation performed across In response. area, with switching supplying and as significant investments days fleet of our in many proud above gears, are to OG&E Generation and our high providing customers, service our team's electricity. I'm most temperatures the XXX

in as country. delivering grid customers of Beyond electricity hear not is the occurring parts Generation, other you the and to our is strained,

average. illustrates OG&E's at safety make OSHA put that the the and our we've safety than our But generation company with We is overall a our were ago, when every time, by journey. always to customers. in our job, ensure and every grounded an first, look even our of of must years for Eight just outpacing dramatic will improvement financial Nothing from for affordability, XX% out. strength customers safety better reliability that XX%, since grid in knowing storm, sense continue perspective, investments an at significantly and center you has day day rate SCE injury experienced more DAR improvement. improved the And we we

Turning to future growth.

Our XXXX for and growth year. outpace to for expect load forecast XXXX continues the X% we above

our to business long-term From Our as strong wide-ranging business continues forecast our to development dividends service area continue communities. electrification to for efforts grow. pay and load our remains economic increased expansion,

to is first and service driven jobs Through Arkansas development, data we XXXX, projects add group our the experiencing by growth secure industries years. will and are our thousands that the half in defense. of of diverse coming and tribal a manufacturing, in non-crypto from continue centers, area of new partnerships new Oklahoma business development economic The in healthcare,

positive our of electrification low factor The are is And model well. contributing deciding forecast companies increased as consider relocation. service our when existing electricity field, seeing within and affordability our or tribal the central rates to base, sustainable of business significant sectors, all a customer we that as enterprises, our of manufacturing, to is cost oil, expansion

plans We focus future with a continue our for on our customers. the to affordability ground for

this great that affordability, on to a share customers will in significant And made our front, we've the to future. topic balance benefit on was which year, be progress unrecovered a and the I'm of headwind fuel that into our going pleased

are Another emerging mitigate deployed and environments risk business customer catalyst of has associated technologies. in proper learning for technology mechanisms and and technologies efficiency of expansion building in operations affordability AI to new to and successfully the AI the with any our We drive and machine been both engagement. several operational governance in use and continued corporate

certainly in then to a next the rate process. we'll year, February you plan, and the we've rate our the us IRP of great end things expect file an Oklahoma call. as and then look review got company, submit of on can an you Arkansas, can all going you of lot and year, our our you this As year, update a in consolidate to IIJA balance Lake see, on Arkansas forward approval Horseshoe update and on of our I provide applications, in early file Oklahoma And the both we'll on at generation the formula

So before is can all guidance And low-growth. these we earnings our with you that opportunity to year. capital performance, continue fuel the operational see, high-class us reaffirm engine a in manner we allocate economic and as the of opportunities, for to our this continues as strong

have we what to the to momentum to remainder years set we momentum come. the for and importantly, for what we're have we we Now more but going do, we're great accomplishing And year, we were said accomplishing out do. great importantly,

and over Bryan. you call I'm the Bryan? turning Thank to

Thank you, everyone. Jason, you, Thank Sean. and morning, good

quarter for second income on or sale same was diluted start and Let's million X the $X.XX XXXX share, included transfer exited compared share $XX gas to discuss $XX in quarter basis, $X.XX last of our of second which slide per units. XXXX a loss consolidated per period On million $X.XX year we share the results. Earnings net per through fully or natural from XXXX. a second in energy the of midstream operations, quarter

or per share degree operations quarter share, approximately cooling the same impacted $XXX fewer per quarter. million or share achieved during year-over-year results utility due $XX income second performed per in the company in million core $X.XX XXXX. second diluted the $X.XX period primarily $X.XX The of by electric days. compared Weather OG&E's to well quarter, net to negatively

As over activities. mostly quarter our timing well interest increased operational expected, made of the current reflect results as as to O&M, and expense past capital depreciation reflecting also related year, investments the higher

in load track Oklahoma retail results strong recovery continued from as the for adjustments full diluted company growth, benefited June were Arkansas. results to and $X.XX per the rate plan Year-to-date year. to related Our capital as continue on our through and investments at well share electric of

same year midstream adjustment prior related a the reported XXXX. results of the operations, have of $X.XX company, results while XXXX. including million per the in we included to diluted million exited $X per tax a $X.XX share $X quarter, a in year in to Other or that our business or our loss come expense holding within the second period forecasts, compared share loss in Current

to on to year quarter XXXX, load the at be XXXX in X, to of of total the compared coming well to electricity in X.X% weather OG&E exceptional normalized consecutive slide growth, Turning setting X%. up continues excess second growth uses third factors load, experience in

returning Residential the groups year-over-year XX.X% load has offices, and economic the again success workers commercial expected the business our and and to largest the a showcase efforts. been customer delivered sector two has once solid, positive of of effects despite trends strength of with development seeing growth, increase. our remarkable These

ensure Oklahoma business in Robust of centered Arkansas. strength confidence economic and investing deliver of success on are we in long-term the landscape growth excess of told, for in strong, All the factors pace load of the our total XXXX resiliency around economic future load infrastructure the provide These and our X%. is us serve. in we sustainable to in reliable vibrancy communities which a the serve thriving customers, growth demonstrate grid we to the and states includes model, in

Now on for plan. let's move to our financing update XX slide an

As quarter the debt year. issuance for call, first I activity have results discussed in our we our completed

continues metric the our forecast XX% for and our to a five-year capital of be sheet no FFO to current to industry, need of XX.X% the in fastest debt one equity to Our projected issue balance forecast, throughout with period.

assessing turned have support the growth remarkable, our come. to while customers. time the XXXX, opportunities range in and to shareholders is of placing opportunities, truly is best growth commitments exciting reliability company OG&E, are an delivering investment and great XXXX and at to to economic our years It and a for wide decisions Given of continued load on us on be capital XXXX, beyond, we investments, attention for our allocation earnings path this shape, to

to Before improved the we has share under since mentioned, important to on fuel the balance, slide, which I last year. as would move like update end our significantly of Sean an recovery final

is as $XXX XXth, $XXX the total June under year. of which by fuel million lower recovery the million Our since of beginning is balance

fuel recover We reduction to a and when costs should are their commodity year's implemented. the new are electricity fuel factors months, in prices bills levels, fully assuming meaningful in stay our current customers coming on pace experience last near

to move XX. slide briefly Let's

solid start we year, in for our remainder reaffirming the guidance February. Given sound of in issued of execution half the continued year, the of and are the our first expectations

in generated to plan. on year, typically and earnings the XX% of accordingly company are second approximately reminder, a are right we the As of half electric XX%

and look forward proud come. our customers, to record, and are employees track shareholders years for of and great for communities, delivering our We our company to its

that, With for we the will your questions. line open

Thank will the first come line Partners. Instructions] Shahriar Pourreza our with question from Guggenheim you. And [Operator of

is Your line open.

Shahriar. Constantine morning, taking Thanks It's for Good actually Hi. here question. team. for the

suspected you're morning, you, have said We Constantine. glad we so Shah when here. here. We're glad Hey you're to going she were good

Thanks.

to the case XXX going last of the plan recovery on relative the well for So run some your impact does your tracking original XXX terms regulatory there, beyond rate adjustments CapEx you forth? it comment that and year-to-date and is drivers and so annual year. or anything timely rate in require Can any versus does how mechanisms forward, of CapEx

Constantine. question, great so Yes,

sometimes online, think of the I forecast and I and more and some difficult the like think going said Oklahoma, seeing. that through, investments. end fueling health new large load And, and these load we're economy, the think case of speaks investment. up going growth our really we're come pick this seeing so XXXX. when we're to of to not that going But, is are the to linear to is growth case. not before, it's It's growth making And come the our it's into when is, they're quarter necessarily going growth we investments to projects a a the coming that as of be really exactly in this first service way what file the since end about that we're economic vibrancy to is and said That we've at year. those of to

smooth. our in We make that to to want just speaks regulatory impacts customers. filings out. to that hear strategy So, smoothing from customers of staying our terms sure We our and are current with

timing any plan. foresee We're anything or either. our don't changes I on that like in So, strategy regulatory or

regulatory recent have transmission PBR you ROFR of terms in on In Oklahoma? activity, any specific [Ph] do docket views that the opened was

of supportive very I'm Yes, it.

be think going and that's it great of it's one by it's that policy the to and the in things -- what involved think good of from going We leadership shows we've I we're docket it's customers that. number heard very that their consistency would they and our like of be way that a one this the to to Commission. are bills achieve like look

good by positive the policy So we think action. and and move I'm a encouraged it's

were are bit slides some The one. broadly. more we've quick seen mix but prior showing U.S. last XXXX, some across moderation as What we seven how sales industrial you that seeing load and And guidance? five continued especially are and load growth a Great. normalized the the that and and rolling growth sales into kind into in down look going terms of of forward roll of at does to kind

Yes, that to well take Bryan you one? want

seeing Sure, morning of proud Constantine. we're results sure. year-to-date. that Good We're the really load

Our teams, know business and respect expansion, new into it's as our and ever development and commercial, pipeline you doing territory two those are entrance our great industrial pipeline of good service classes, largest customer with groups, as and been. and customer other is of to public residential and our the authority some customer expansions that with speaking

feel more XXXX. I'm So for more what in does that I and beyond? confident feeling and mean XXXX

able rate beyond. X%, be really and on XXXX I'm beat us so bullish see to load again to and historical going and growth our XXXX You're

continue to that forecast there's growth us. to clearly plan load conservatively great with and for it but assumption when tailwinds X% We comes some

for And will next moment the of line one with our Bank America. Paul of question. come Zimbardo from That

line is Your open.

morning good team. you. Hi, Thank

Hey, Paul. good morning

avoid was and disclosure said I in Good new and differently, but give billion, just is to of the additional you could bit million if the around plants any you disclosures months of much EPA on you I just a helpful. Yes, potential running compliance you more potentially XX how million if could [Ph] with capital that hoping after the out around break be X.X XXX XXX good color and little costs months detail if kind the could to you that implementation, would know XX Neighbor, morning some

were week stay XXth Yes from and a so with respect to last we just the first thing I would say, Casper. granted Circuit

will plan that I that some operations that's So you in things being certain is mean be federal and capital. for dispatch said, the change not the there effect primarily would look but units, primarily us. the all implementation is to, that of But obviously capital. at

of Okay those on kind timing? potential courts need and is caught any to there wouldn't some making in we're start but of now, the investments? sense know you I right

for Well, it's not effective us.

have the not stay from so proceeding that the are we Circuit, we XXth down So path.

greenhouse with round its way and our courts mind decisions have we've and that's make and we make regulations to come Casper, experienced but our rules the out plan and and accordingly and previously of that'll as So we'll through just gas with not mean planning, have but that mats just that have you this in overall I you part and prudent haze. regional of planning begin

at you to we comply, imminent. nothing need and So is when comply. need we will But look to it total we'll, in

the company in past gears and the bit, finance Okay. a And around then you. Understood. to issuances you little know some gave terms switching Thank before. in expected holding I that quantified rate-based details you growth EPS

of in for the future? interest in thinking be guidance the good to rates, still holding latest is the move refresher, with any a Just is assumption there there company

of think the in a the just core want whole utility Hey so morning. seeing part at XXXX company. all company, year just more We're at growth Paul, for up our Bryan. of really in the business company. tailwinds anything, XXXX company we Good the and change to puzzle do XXXX seeing plan at more finance When the how the for holding months. for If with of is tailwinds finalize The to well. we're electric out and is our respect in holding coming Paul, this of A message the I shaping utility. for very lot at the I we'll bring trending no beyond, in and and utility. here remainder beyond XXXX look we But nicely it's exceptional

bullish we're provide that So EPS rate update in February. we'll really on and growth comprehensive a consolidated a on

next our Mizuho. from Thank Crowdell you. And with the line will one of for come That Anthony moment question.

Your line is open.

morning, good Hey, morning, Jason. Bryan. Good Sean. Good morning,

doing? girls How while. been good Anthony. are It's Hey, a morning, the

Everyone's think happens, healthy but that's getting But more I what right? expensive.

Well, hear I to understand. from understand. good you. I

one had make jump come But Paul's I I and rich true. never my last just on retiring going of dreams to of if could they're dreams questions.

Bryan, think, a said looking that you you're I to update. consolidated give had

an maybe I on of in check. some fourth other want the year. quarter update? EPS want get growth just we know towards Oklahoma completion more quarter of will or that don't an and to rate update to this the to filing call filings you're for making That You I the the the call. filings will on come end fourth maybe have

Sean. Anthony, is this

I think that the you expect should February call. on

we Okay, know great. could to here. tight And last just the then keep I question. to if want it I move

X some know on long more about in project or you great I'm of into what a or XX.X% was and slide territory. you XX% like load like curious just I commercial growth give detail certain activity on go or if talk one drove was very your the that, it it could on You in commercial a going growth. runway load there's deep

that? happened maybe to year. expect what I what next in or I'm should Maybe of drove year-over-year trying XXXX. just don't think I another XX Just know I

Yes, hey morning. Anthony. Good

and really just load, They part mining you're when we're that of with Oklahoma of again commercial coasts growth year. beverage about part and in lot able a double-digit to both industries a and facilities There's to puzzle. early companies in food that online growth particular Manufacturing expanded and is commercial U.S. we've that EV in but and automobile commercial to supporting in sector a take Oklahoma-based management front. and ownership lot late last the manufacturers starting mining as of delivery We really to a the be us, manufacturers off in is talked as this this as charging and load well. corporation EV strong the other so There customer expansion for increased have the of came Oklahoma on helped are stations as across the and a great Arkansas well country year that's within data as see that's that's EVs, driver need the load the seeing get On past, are really well. of data dealerships companies central the the in that commercial big

mining but biggest mentioned. the far wide-ranging, data that I it's was the So entity by single company

as a the of expecting. and guidance, but that's to to said you XXXX a in ahead going expecting your especially don't you're trend want commercial sector? you're XXXX strong Great I year-over-year run

typically we Yes the positive residential. about will good that be public across you continued in industrial these to past in would commercial feel growth still and believe in to of at plays say how business to We we X% growth see digits rate little and years to and XXXX be then projects see ahead well look the early We authority expect a more XXXX it customers do need how I in again talking It's again. we're of fruition. too time the come double commercial. out if economy

next Thank that you. from come the with will question. And Paul moment line Salmon. for of Fremont And Ladenburg our one

open. Your is line

very Paul terms beneficial need potential that much. company you cash to question. that be of Zimbardo's shed cash thinking the on we follow to up for Wanted off cost generation? at you potential setting fuel in else Anything Thank like on Any flow. recovery would be about obviously should borrowing looks the can light flow holding cash that

fall know than just good are other back particular you've Bryan, several years to state with into Hey we here growth the X% Again going rate morning. to and any ability I general there's the at what utility the quite growth last that Paul, mentioned. a growth the over is already would in economic point don't utility. on deeply that beyond, we're come it’s of I to well both have EPS seeing our to really certainly bullish in rate so X% earn XXXX the load and expansion, utility a items

our way corporate beneficial imagine you all that's structure. as So the might including across

borrowing company especially budget? holding opportunities to And in current the being think to likely investment of your incremental at what's should as we incremental linked most CapEx

at that changed at unrelated are our the company. Paul, and our that to some holding But that flows do OG&E those all majority vast on obviously of think the cash all. that messaging have so holding messaging electric say our company about hasn't utility We other just is the businesses you company dividend are the when investments unchanged. is electric

thank you much. it, appreciate very I Right.

Thank you Paul.

question. Miller the come One from that Travis with Morningstar. you. Thank next And line for our moment will of

line Your is open.

Thank morning everyone. you. Good

Hey good Travis. morning

if i what Going the that discussion one back but at was missed either in impact quarter you the Apologies to have? storm or that the this, year-to-date storms from beginning.

yet… storm we did or the Bryan, quantify

territory our through sixty mile Many multiple good company to did us level an from an Travis unprecedented back issuances morning. and and to notice the some I’ll And while our winds eighty that hour response of just through outages. and have of late you of storms of what Sean well very certainly was June talking Hey earlier. through across hour any service about days came extraordinary We we go then operationally performed mentioned mid system of overall wind so middle our had again in mile teammates days outages and the our didn't July.

footnote proud take a and you operational really asset of at -- storms we're that on regulatory our the you on cost give need. a detail can will as far as look performance incurred So our you

more then seen of extreme issues that of hot might there get Okay. with some the that the you some that lot when a that region. kind deal weather level operational you would extreme just load? you extra related higher have Great. weather hot of in that from weather Are And on to offset that have benefit

And tell we would to and trying and we not was convey precautions. build we yes, precautions were take take some you stress more those days. like things what made terms I on the my with in like I remarks temperatures stress Travis obviously strained what heat but of were you regard extreme have additional an heat need that. to Obviously remarks we that system, design for safety in the with the higher workforce system obviously to Sure to in puts

when We that business. heat. and beautifully. managed you little different things performing periods our have bit a it's we've have prolonged do and to of That's way And manage extreme designed it

Okay, great. much. Thanks so

Travis. Thanks

Thank Sean you. the turn I'm any Trauschke the would this at no like for questions call I over back closing to showing now queue further in time. to remarks.

and for of day. Well in want your OGE call to a you I the all interest great thank and being great. Sherry, you for Have on Thank safe today.

Thank you today's This participating. all for concludes program.

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