OGE Energy (OGE) 5 Nov 242024 Q3 Earnings call transcript

Welcome to the OGE Energy Corp. Q3 2024 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 first speaker today, Jason Bailey, Director of Investor Relations. Please go ahead.

Thank you, Corinne, and good morning, everyone, and welcome to our call. have Walworth, our Interim I CEO; President today Chuck and CFO. me Sean Chairman, Trauschke, and With

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

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

the like an forward-looking and I'd remarks. to over your now for guarantee to begin this results, direct his we regarding Sean? for Before Sean forward-looking statements statement the presentation, but will cannot turn is statements. attention the to simply that financial safe opening SEC we our call harbor financial today. I states best is This requirement estimate

Thank you, update and I'll you. for you joining morning, us our with load as address you Good financial well Thank It's be regulatory Today, items great year-end as guidance, provide Jason. to everyone. growth. certainly today. on results an

of that and to tens into last as get like quarter, many I'd and recent on XX days. X the of Western most as Arkansas tornadoes, the over we the storms, thousands perhaps Oklahoma details of including Before people X reflect in confirmed impacted the

state today vote. our I'm may team property were XX% are you services were of all but than proud officials up hours, damaged more running. One hours impacted back lives has and have not customers for and homes thing energized Within to incredibly to with many election considered, response. lost, dealing countless recover. no of and and the places Fortunately, of are ensure left have to our are essential our without polling of county XX citizens ahead were team's restored XX% them worked alongside and

and down continuous time are do. automated improvement and driving reducing investments, outage they when before Our happen they efforts reliability technology outages

we a share morning, earnings reported share, this of company per loss Earlier $X.XX per company results. electric financial our including and of consolidated holding third $X.XX to turning Now $X.XX. quarter of earnings

performance operational demand all quarter technologies by solid increased outstanding customer sectors norms, with excellence this Our our due energy team. to self-service growth, and for outpacing and combined delivered digital across is historical continued robust

As share are we quarter, a of last ahead our original year the bit. share, we of to plan now more noted be in of that expect $X.XX this operating about just per Chuck to top will guidance and earnings $X.XX and at

of rate front, On the the end Oklahoma year. order by our regulatory the we in review anticipate an

on by Additionally, uncontested we efficiency end with we an expect and which settlement demand the that stakeholders read portfolio, year. order the our includes of X-year energy response,

future, As reducing requirements. role our the capacity we efficiency a and growing for overall meet energy play in will critical capacity response demand needs

As generation our XXXX. both states. Demand in gave the to invest system of plan we we And process half RFPs, first X% approval to remains reliability at forecast in capacity IRP transmission the team now RFP Together outcomes to work growth we for through through second you of the range year to quarter. the of our to and will continues expect for that top investments, continue the generation capacity in the we process. with constructive capacity strong SPP's revised file continue X% through in regulatory our the with

strong led our by future all commercial, by growth. We are creating business broad-based extraordinarily residential rates low followed growth experiencing demand. expansion, customer classes, We across that know drive

expansion our look in with drive community defense, continued sharing projects, serve recent announced with unemployment for most that on including near you local a in bright Oklahoma supply and on of a remains data project working the Arkansas forward the expansions state. number rates in I new a center electrification across below in working include economic one the data OG&E and business The Some franchise to manufacturing sectors. picture today We've well future. We're of handful solidify the of a national a and been to chain to center election average.

to line growth, continue top costs, industry. some cost our hour per best manage delivering O&M the addition in In we to the megawatt of

Our relentless our affordability self-service do increased customers focus XX/X. business us results digital to on in tools for with

and to Before anniversaries ago, A plants century X I last electrify. milestone our generation power for company sites, beginning close, were X centennials communities I'd for month: these generating celebrated recognize to began Muskogee that our Horseshoe power like that just of Lake.

Hurricanes is happy of Georgia, our the economic across a few because out team extreme I the the and power we helps demand to years XX retired, weather, industry, most Units has with broke from group similar-sized serve original rebuild to just purpose-driven weeks to in today, the generation invest help volunteer and the And where for to another long sites power as returned minutes only mentioned could then. that Horseshoe not sites so just on of the we've growing not and another and units be homes, Lake drive from workplaces keep hydrogen-capable serve and to I'm the our they as of customers back have for before that incredible aspects low of away returned $XXX after These demand ground go an expected customer Investing it's of one knocked assistance helped costs Helene to investment. Recently, We're from XX, for millions to subsided, we our lives in million continued existing of share family Milton increased While growing. And electricity ago. employees And economy through these of natural impact over proud of Mutual we at local a spend are since Southeast. who that, Lake imagined demand the our transportation, Florida. folks base. growing XXX megawatts also readily gas units. Horseshoe investments businesses, our others. XXX also

want of my a couple leave to with you I on As I remarks, election this thoughts day. close

we and the hold haven't level. voting Americans, we voted, I national and hope are already employees the vote sense and made you mind, voices and duty with state leaders responsibility for to to know As remind good incredible in their to if your that -- that reminder serve it's set encourage elect right of today they've local, plans heard. And all. at our us we

our without every Our to equally and every serve person, drives obligation in decision customer every project company. favor

Lake, remain we'll do electricity next are flexible customers Muskogee Star. And century. to at economic our will And the success Second, the what building the for business for system stability. we as we future and the Western to priorities nimble Whether And reliability company Horseshoe our for We future. Centennials opportunities very whether is is distribution, transmission finally, for generation are Arkansas. or the and affordable driving do, and how of the manage prosperity and in North our company celebrate with Oklahoma communities. our long-term I'm reliable, we investment growth capacity, resilient say and and for mind, with in we're and Delivering we positioned these safe, numerous. pleased

'XX, a consistently this not foundation, a foundation thereafter. not for year, execution many Our years only lays solid only for only not but 'XX a foundation

Chuck? call turn now and much, I'll Chuck. very you thank to over the So

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

weather net million diluted or third $XXX same net operation basis, the electric per third period offset achieved core compared of higher discuss maintenance per Slide expense. These XXXX on and million the income compared to $XXX impact was and or a approximately in income business, $X.XX higher XXXX. interest to per were depreciation results. compared to same or $X.XX to income consolidated last of quarter continued driven $XXX share capital company in expense tax XXXX. In share was our On drivers or our quarter million primarily $XXX expense investments, start decrease the offset Let's The per approximately year. growth, share diluted exceptional which million $X.XX approximately share related period load the $X.XX X partially by and and by milder

diluted primarily will began for approximately million with holding the due have a was a we final X, $X or approximately impact or of the loss in benefit. to in loss share interim same offset recognize million XXXX We moment. expense, per the the our earnings higher the loss $X.XX of will consistent that earnings expectations reported the earnings received in per in Oklahoma consolidated period diluted July net interest our the compared including operations, share $X.XX reserved to partially and I a quarter third increase full year income of in discuss on The commission. Other $X we company, tax rates higher from XXXX. order by

X. Let's load by to review our Slide results turning

during seen which X.X%, largest growth the I've Our the I my with ever that believe weather-normalized at quarter-over-quarter is XX load growth company. was years exceptional

growth count strong customer its continued our year-over-year Additionally, X.X%. at

attract communities, customers new and business our to our service and business in for shareholders. area continue deliver expansions results We and

we've we've you of As in highlighted activities, those got moment said the a great with past, and a Sean of some development ago. pipeline

enterprises, also energy. to in care expansions tribal addition health we In that, are and seeing

X.X%. strength growth across at very to and the expect top Year-to-date, guidance commercial showings all at closer XX.X% this customer X.X%, quarter, with an growing and was extraordinary for residential an for Looking had weather-normalized strong load the classes at oilfield X.X% our weather-normalized X% XXXX and finish X.X% of at growth to load experienced of industrials of at we've X%. load impressive

assuming Oklahoma as on Slide as settlement $X.XX per X. year consolidated to full per warmer-than-normal diluted well expect load the to be $X.XX summer, rate our in average address review year-to-date a XXXX. earnings to share, top range let's uncontested at expectations Due Now guidance we growth share earnings of XXXX's of the of approval excellent

to Turning Slide XX.

completed financings year. the We our have planned for

in strong the consolidated in range. a the no reflect approximately fundamentals described XX% XXXX believe we guidance ratings, third of of external operational plan. In of achieve maturities I summer, are our year and top strongest forecasted the one Based continued excellence. each until excellent quarter warmer-than-normal load rate through and with industry, the no the for we will results EPS need earlier 'XX, FFO-to-debt equity sheets strong at current the current a issuances fixed balance credit closing, Our on

to year us loan on regulatory future beyond. We rates, allows by call our we on business turn bright defined investment model, low and environment constructive a this a what excellent focus growth, based execution our customer-centric believe and strong plan. our is XXXX Our sustainable

demand total low loads of original electric to time and reliable growing our a competitive shareholder affordable and the guidance maintaining return customers' address attracting our our while combined bedrock of to our believe Our compelling eye consistent required new expectation flexibility a will the our continue X% advantage keeping investments the and stable of on are plan that safe, at This and of and yearly to of system an keen rates. growth to with communities growing consolidated communities. We meet same success provides XXXX's that deliver proposition. X% in EPS expanding off in we offers based dividend a expected is

and made line confidence for Our to employees. That we'll customers based the fundamentals the strong on up now by remarks, we've questions. our to deliver our the is prepared on of open our shareholders and dedication our commitments your and backed concludes our

Nick [Operator first question Instructions] Our from Campanella from Barclays. comes

Nathan Nick. Richardson on for It's

of Just a couple questions you. for

for And plan? first, opportunity So set the be is would SPP? what that your incremental to

Yes.

announcements your notices we're and we estimates. go some here, process to finalize by to there's construct made expect they've So And December. that which see some awaiting you a in and through

we've times, yes, have and there. another to a And all of lever We plants. that as lot will down, like pursue the stuff, and invest, -- do with mentioned to we we like we'll many just And generation some nail -- we'll around move our of that's But got we but there's Chuck opportunities just layer do into flexibility kind that that. once that. our of things

thinking Got materially, load in it. some base are environment utilities earnings CAGR, seen to load in And How things then X% about growing future taking the like potential based we've and X% given these CapEx, revisions. off things the increase bill the current headroom you raise the guidance to account rate that, EPS Oklahoma? other recently growth of into

Yes.

think pipeline I me drive And you the kind there. already we've load of growth. going really out, what's experienced. what blessed And question, Nathan. Good really think many the help in waning. to question I what that we've is it's for with years for us But not we answer been see

is rise to about our I of more it's to more in of going year materialize, going And any see than to And And so and capital. with to in terms as over specificity our grows we focused going it capital. as kind more just deploy to a of it, on investment many, it many as terms about drive on refer comes and continue the continue difficult model. online. But and keep capital focus runway the it this that what the going We're when not X-year very here what of this -- spread to ability think think to very really customers, it's focused we're we intention our sustainable more years. as blip. out to my to long it's materialize. deploy kind of think we're as to we system that But number that's on business to growth intuitive a for We're a is customers, add -- very, forecast

next question Our Shar Pourreza from of comes Guggenheim Partners.

quarter. here on a Constantine for Shar. Congrats great actually It's

to Good hear you. from

update update? RFP to Will given the with CapEx updates? financing you update. at the kind hear time further be Maybe about expectation year-end to generation an expectations can all a CapEx for fully in the out does as Great Thanks of position a upside for you from needs talk well. opportunity you of kind frame? those kind remain Or the of pushed that for

Yes.

I think exactly that's right.

the we for yet commission approval to February, of generation think with not have time around filed decision I we the the RFP. get will our by

and Lake, we'll with to like that that we'll is if there's order. our what with get Horseshoe do will adjustments as financing, regulatory on did Constantine, well. you any And in that we you show Just We'll that the we table. tell CapEx compact approval file

Perfect. a Okay. then And quick maybe follow-up.

turbine term, the constraints? the that generation more some mix there in kind lieu near-term change is availability going forward? view of some does of conventional your near seeing of kind we're an the resource around in maybe And projects on opportunity As constraints for and of of some upgrade

Yes.

bit, our for a share... at little you opportunity an would availability of plants? You're upgrades I around heard turbine think the breaking some what say up constraints but I create certain I does

resource on mix? thoughts Any Yes.

Yes.

important, certainly, service. think when I availability get assets into are available these is and can

already, is upgrades we're XX We a a at per got about our upgrades at. underway. number that you up done always pick where plants, point We've that. megawatts XX, to look We've Your continually continuous of XX, studies looking unit. some effort

a things our that So at. just of of always new kind development. that's in bucket we're That's not looking

these resource for of our to customers. we're look the for our be we bridge serves do something said terms it's and still as construction long Depending intention on In the of have our And times, to customers. short-term capacity, value going at a I've best some own mix, many to where availability assets but time kind lines, going may with scenario there term. we're to and what's right

So I change of to ready asset in don't commit think yet. a the kind -- to mix I'm

Okay. a one And on maybe load growth. then last

about? we envision guidance RFPs exceeding growth? incremental XXXX to basis? range there is this of executing for just trending of kind the your focus near-term You're Or talked support a you of pull-forwards Do load more or CapEx -- year-to-date on kind that in or any on higher assumption

want do you that do to Chuck, one?

think take the years, we've is step related experiencing you of this now a X are so XXXX. phenomenon new -- Yes. for us I a load for back, in this since that. out Sure. really And not growth really Constantine, been coming for multiple that

multiple mentioned So large-load needed as we'll conversations we've But that comes. a Sean we're it that and clearly, all for in address as customers. working we along, there's with planning in that remarks, through. remain his been time RFP the in as And component definitely the of

question of Julien comes Dumoulin-Smith next Our from Jefferies.

for on Russo Brian It's Julien.

based going might is on point capacity need IRP scenario more what's capacity load than the are to RFP have on, and/or the a that is there where projections to the put might the accelerating you investment? any the each meaning what shortfall quarter. greater with and you on -- seems be identified At pressure Just growth you in i.e., more

question. Brian, Yes. great

every And states. X so this in is -- we IRP file the both years

we at in last of there there. As IRP, were the look lot in this a assumptions

Some were too aggressive, some conservative. were

reevaluate that. out, washes have we as it all so to And

the that XX%. was be capacity to of is for I think there the big it's turned there I an out chain a assumption reserve actually -- It in XX%. margin and think assumption in SPP

some look file we right is numbers Notwithstanding we're So changes right. expected. And now you're whether the we that new IRP a considering those availability That's exactly just of the and Growth as should some developing that at to we do, and is assumptions, some of all evaluating ability there. that. update factors. increasing. have of at of looking other something to sorts But it

we've for the load share the the growth been historical either. is for linear other we're I think I with bullish -- to just it's still number of the bullish but we a know around, growth but be isn't growth, future. It about would from levels. point kind of on the And going years moves and you outsized

that's going right. to we're And quarter what large we service. exactly the the contemplating is some what to that of we're make all considering results pinpoint is But year, into really We're of as these around our of trying right here so other really variable now, thesis your managing RFP. and determination that are final loads come the

then the And SPP a follow-up Great. projects. on ITP just Okay.

preliminary, OGE that be CapEx rates and rate suppose these Just while over looks retail has right? SPP it while also into its over it's managing projects. of the projects, are transmission out customer as kind also I of million -- in So allocation. could terms if potential your CapEx because this entire of incremental being your region accurate? spread Is cost $XXX layered on own

accurate. Yes, that is

that. pay is allocated a large to portion of So would that that others for

referring you're I project is be slated in service to The you're right. So in exactly think, that tentatively -- to, 'XX.

And and update our our we'll month. the NTC, and work we'll accordingly. estimates wait, NTC numbers to that so we'll next committing through probably then And receive refining

Inc. of question comes next Morningstar from Your Travis Miller

large those around in with you large a what other data structure a more experience or the about contracts. load, of to interest There's in you on lot how What spread you contract that. debate across wondering data costs, terms to the centers thinking of industry from make centers' loads it's lot of are are you have Just how the get seeing area? large load, your as whether been

this base, aren't it to residential the is sure particular, make customers we want thinking want in large by We existing is to these some think that, about our debt, customers. loads. we're asset sure that low accretive way to make impacted our to I our is of

-- you -- up people lot we'll cost so it being it. think or through to working sure the tariff, I our of comes work sure Whether ends That's to that And that make we're allocation contract with get right. commission. specific make allocation, of thinking a cost special a about you how we're really with a down the you rate

Okay.

So It's not bilateral? go that's has the through that commission. something can something you to do

Well, we special contract. could do with that a

Yes.

commercial okay, side, you more then is most Okay, what just class? any commercial that what give there type customers of on okay. is the customer around quick, seeing growth And or detail real the could you're sector

Yes.

So load as a been including smaller across that mining has pretty really load it clearly, we've that growth the time. within some But spurs lot all crypto of sector. driver for sectors, the across that residential, again, commercial-type well. But And the industrial. we're is seeing broad-based the had quite now

So seeing a really nice we're quite mix.

Okay.

still you're that growth seeing area in So crypto then?

are. we Yes,

Inc. of from next Ladenburg Instructions] Co. Thalmann Fremont Our & question [Operator Paul comes

be if if quarter. required the Stillwater great on were I size to could the you a center generation data move that wondering forward? Congratulations of was would amount

at wish disclose I I'm now. we're right I to but not that sorry. Paul, could, liberty

square feet project? of you an can many is how And Okay. the indication in involved give

time down We're little about Paul, bit okay? to locked allowed I okay? of not one, just much it, here, kind we're sorry. on us this -- I'm talk sorry. a Paul. Give of I'm really

the settlement? you do When to it. OCC take your Got up expect

Yes.

have still As and this the like allocation to to anything that I we has we cost recovery loads prepared rates The is remarks, my is of with the settlement that. the us mentioned that there expect out do larger to in customers serve. issue some or want and come serve -- year. us around think I issue The it of that nothing

that on as all be this so Chuck we've and and the be still done July ready And we'll and move X, to we'll I so rates to the expect road. reserved And implemented go. down mentioned, year, we that,

If with CapEx, additional should me. about for of question being potential for we CapEx last financed of then what And think we think as the equity? percent that

Yes.

question. -- think I good

We haven't Paul. there got yet, right,

I to don't pretty want to we down sure here And making ahead so start that we'll explain our regulatory then are important our intentional compact the first put ratings in We're But it plans, forward, terms and we thinking we about longer before of recognize we in have ourselves get financing. financing. the of go as term, about us.

something to And probably about think a is supports so ought it. way that FFO-to-debt XX% the you

concludes now This back it Trauschke for question-and-answer to remarks. the would to closing like Sean turn session. I

and Thank Thank and you wonderful thank you, you for interest all have a today Hope you. OGE in your all Corinne, time day. your Energy Corp.

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

may now You disconnect.