OGE - Earnings call transcript Q3 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to the OGE Energy Corp.

Third Quarter 2021 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 Instructions] Please be advised that today's conference is being recorded. now today, hand Mr. would to conference I speaker your Instructions] like the to over [Operator Jason Director Bailey, of Investor Relations. Thank you. sir. Please ahead, go

Jason Bailey

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

I'm of Third Quarter With today, OGE Corp; CEO Energy have I and Bailey, and of Trauschke, President OGE Investor Corp. me Chairman, Jay Sean of XXXX Relations. Director Bryan Call. Earnings Energy Buckler, CFO

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

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

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

Sean Trauschke

customers after per Jason. Good you this and joining share It's per call our just $X.XX for and earnings consolidated operations to $X.XX. to hard of and share And and of our associated and you narrowed on guidance share will Uri, done includes to of I morning, discuss to great encouraged morning, our going original on to worked per few And get which again range they want all financial our earnings energizing this our have a holding and by The We announce a our communities. to I guidance. storm customers for Bryan call our were with be detail. utility as we of in us reported in pleased to focus I'm thank remain company $X.XX $X.XX behalf winter of on our that then earnings to with you teams external today. investment employees back $X.XX. our we provide Enable our told the February quarter shareholders. This loss results third everyone. and utility morning life on Earlier you, we and Thank updates morning, of more $X.XX work

significant the enhancement of other our and continue on and grid grid our reliability on The circuits have substations, programs benefit First, pace. our resilience in portions Oklahoma work of the and on we're positive distribution impact our had a the grid Arkansas already customers. undertaking of for

the program customers in Oklahoma opportunity additional to the XXXX, solar our in total solar farm the solar capacity subscription stages. projects continues weeks grow. completed Billings, to in solar an now solar X-megawatt Branch, The purchase for farm X-megawatt X-megawatt an additional Nation In will from electricity this planning solar will Arkansas megawatts. to have increase plans facility. we be with expansion Construction have soon of on in two is farms XX Choctaw the Our two farm and complete. coming These

combustion report We Our power to the the benefit we and with purchase fourth quite well our resiliency cleaner At XXX with securitization the be turbines. the February's filed regulatory rate resource the annually Oklahoma through month, the in our we maintaining costs effect October, detailing end fuel resiliency, We a and This and in of with from same is we associated customers. rates. X-year expected Arkansas filing next rate XXXX. is work continue of is formula statute with with In this the resource of several enhance and the working by we to expected of end Oklahoma is our towards over of over our add extension nearly and meet significant year. reliability XXXX Key the track, is plan settlement case rates every hydrogen plan components a continue submitted integrated of Arkansas our diversity our order both of plan. of storm, final significant Arkansas file objectives winter parties in the process is will the enhancement to of solar reliability, process to rate plan filed an next involve work customers of Earlier the this established portion include grid statute, as The our the all Oklahoma combination valuation for for recovery filed want a the the of Arkansas, we April mechanism. key year. to grid while needs years. expectation commissions, solutions into going review positive investments time, and also of formula A to We retired affordable step several Oklahoma a provide in that covering this outcome. different XXX of early replacing somewhat to continuation future a in securitization solar to and on generation the Uri. with a years. fuel reached with megawatts joint a plan capable

third Our of markets. service compared our to strong to commercial expansion reflecting ability highly and quarter at rates of continues the the customer X.X% in the our growth affordable XXXX, combination

pandemic, to growth You we rate. the our growth may than load that prior higher historical X% recall are to pointing

expect estimate economic the XXXX XXXX trends and will now of continuing load to XXX this behind level year again, load expect addition XXXX. We Last pace quarter, our new With to load we X.X% also the levels the into megawatts time. growth of at first add XXXX. continues to to continue X us, discussed with of to that megawatts the by the activities XX above of these end say of end slate now into pleased and due that activities XXXX, I'm months of connections of be business approximately by development weather-normalized of increase. the these the of we we year

addition to bring year, activity our development have this also development In increased $XX to our Affordability service which in business will to XX remains jobs on capital area OG&E nearly for key and date secured growth X,XXX new investments. advantage and load for in turning economic our billion and sustained growth, and economic add new and growth. jobs by partnerships, these customer our activity evident load combined the communities. projects projects competitive track To is Quickly us a Enable. across economic new the

year to satisfaction clearance. the closing customary to conditions, that subject including the transaction close of expect HSR We this

of Our business intention to the closing. will ability we will earnings impact our same to dividends provide positively prudently exit our midstream upon our and into future. investment exit information And grow remains the this and

key stronger. on stakeholders our and has focus customers never been Our

social need tell to our navigate story to to way through both much and deliver media, and And last stakeholders continue us allows directly they and compelling directly engage telling need customers to customers and to deliver. engagement. story customers The information We just site refreshed continue easier at we the is stakeholders. media week, community us the in We'll to our website oge.com. our

accomplishing of a things is I've on efforts our ESG around discussed of front. the specifically disclosures, you the all number with One the we're of great

the of in watch story, month TCFD upcoming XXXX. to the continue for end OG&E report tell latest our we the SASB and early As at report

Before the I points. touch to over to I important Bryan, hand a want call few just on

largest was service September Oklahoma's compared X% a of The first national across unemployment area metro the service rate economies rate in X.X%. City, metropolitan our the our is best large the the territory territory. just the rate X.X%, in of strength among Oklahoma of to areas. has In

City in cities by to city country. XXXX, X residents XXX,XXX so, more the of grew do to XX of the than in XXnd hometown Our Oklahoma jumping largest only

had Arkansas, In strong, economies City, addition X.X%. to and rate of These Oklahoma growing are to stronger. an unemployment Fort grow continue Smith,

and business turn, business development expenses more by of to final utilizing in And by this the which of with growth rates are third technology helps attracts this affordable growing us new sustainable our all managing of load most and the the greater nation some maintain our in Secondly, revenues attracting of customers. model customers, leads ahead. economic point efforts and potential even driving

I'll Bryan. Bryan? with the that, to turn call over So

Bryan Buckler

you, Thank morning, and right. Sean good everyone. All

of summary, a consolidated the income our quarter natural with driven the by to a per XXXX, our higher natural utility recovery by weather XXXX. third gathering of performed compared third basis investments, $X.XX and million $X.XX increase and XXXX. to of capital segment, per and $X.XX Let share asset quarter increased favorable focus me our on to higher during core share depreciation OG&E's compared offset In in our start a income for midstream base. operations operations. utility prior very than $XXX share or $X.XX from $X.XX were year third volumes we revenues the primarily net margins the processing XXXX results the On as our load per compared inclusive $XXX in Enable. was gas improved results results Midstream result at third quarter quarter. from in gas of well The strong quarter, growing million of were or in achieved higher partially and

load update our again experienced up third quarter Let's growth X. turn economic in the to strong retail load total Slide We on with X.X%.

and year-over-year is year-to-date. growth load X.X% class X% the with Our quarter commercial customer of especially third healthy, in

For year XXXX we weather XXXX, normal be results levels. load full approximately the total expect X.X% to continue above to

signed our customers a year. of rates. to C&I by Sean team has has or This online expected affordability is and strategic that of come contracts year, end total approximately for this mentioned, company of the as with new XXX our advantage megawatts our expanding the load that Importantly, is

recent the trends XXXX. continue believe total As future, load we we will look in growth the retail to in

like move XX, our to utility I'd full where year forecast. you Slide to Let's update EPS XXXX now on

from across achieve banded we commitments share. year per on operations, but EPS our discussed to during a faced the our target the of $X.XX initiatives began per excellence to calls, shareholders. our in prior with to that while of together share driving headwind our midpoint Since benefit allowing weather customers, $X.XX the net immediately event As us February have company employees deliver February, our the

moderate including are future customers customer Our XXXX and for outstanding will efforts $X.XX and The benefits from Arkansas. and and of Oklahoma cost to XXXX help in our our in in rate to favorability, our O&M increases efforts proceedings rate reduction discipline expected programs. result company's upcoming $X.XX

raising guidance XXXX year range $X.XX to to our EPS narrowing We OG&E and our full for $X.XX per share are utility for thus expectations XXXX.

As great that guidance. original of it to a we to $X.XX of employees have arrive to the testament in the of negative the is been midpoint overcome year stated, weather able at our performance Sean back

company our well along the making sustained into are ahead, in beyond. with for solid earnings we performance growth our for investments and position Looking capital and customers XXXX XXXX, the communities,

and rate in fundamentals great continue business to have a at are through Our we grow EPS strong X% XXXX. to OG&E confidence growth our long-term ability

a line update questions, financing shown XX. the like open on quick I'd for we Before to plan, your on as provide Slide our

We to expect costs credit our the of restoring mid-XXXX, the in levels. weather February securitization pre-Uri of event to Oklahoma fuel portion the occur metrics their

strength As issue the a the have to we investments support financial equity. infrastructure without need to reminder, substantial

forward Additionally, look providing our quarter we as infrastructure our plan fourth during capital updated investment call. opportunities an X-year to expand, continue to

finish me stand. by summarizing Let we where

are a very third EPS on our after on operations utility plan deliver quarter. target Our to XXXX strong

strongest and Arkansas industry. the investments balance support to the make necessary these we territories and communities infrastructure in growing the Oklahoma will in sheets backed one service by Our of are

All total provides That coupled X% questions. for based and of now concludes long-term offers us growing return our off XXXX and growth remarks of open of EPS prepared line OG&E the we midpoint a guidance your drive attractive ability confidence $X.XX dividend, when of the with stable proposition. this investors an great in which our to will

Operator

Partners. [Operator from the of Guggenheim line Pourreza first Instructions].Your with is Shar question

Constantine Lednev

Congrats Hi, here. on quarter. good morning, guys. It's good actually Constantine

Sean Trauschke

Hey, Constantine. you. Thank morning, good

Constantine Lednev

Is kind we 'XX? 'XX and you of just terms cost into end kind of planning and of customer closer guidance end, As are inputs narrowed in reductions the thinking targets X% and for being 'XX of of the trend from we're tail in get to about kind kind how kind implied you've there? of moving the level? 'XX of the the it trajectory any And maintaining load connections repeatable and towards

Sean Trauschke

Yes.

the In think don't - Bryan's expect about we great talked We see - grow. continue declining. and I continue to growth to question. we it remarks we well, actually as load my

original to this XX transpired estimate to year You saw what's new in megawatts our load just where was of the quarter XXX. we and past moved for add it

returned positive are about February in is And and growing by that of so update connecting the quarter. we certainly the very growth it's that future. has the load cusp on We'll in but the

will because think come. be our I said are updated anything it's grow. February continue that we today to So expectations to more going in And to just that's

continue. as As impact and mean, to far O&M we us investments mitigate that I customers view reductions, our business our work going to benefits our redeploy customers. the that's in of and helps more do the

for future. do anything So those I Bryan, that? Constantine I specifics continue you the you, on don't us have expect to have should any both into you to fronts going know, to add don't but

Bryan Buckler

Hey, Constantine, good morning.

playing for and state Just in intertwines to cases speaks it's what that well things Load spoke helps just our and Arkansas of all doing region business sustainable plays to the Western broad of out customers. with load factors and kind it's this lot this growth. us for the growth out commerce there's And our That to. going in more investment only amazing and and but to pretty model these also are very our really add on this state all economic at in pride the chamber point Mayor Sean invest to rates very said, here the a economy state. rate week not the higher affordable O&M able help Sean were event just the to well. load a in of where into reductions which revenue great it's in across requirement is We brings keep to Oklahoma spreading you're

of in really Oklahoma. are a good the we it's right So place state now

Constantine Lednev

that's a factor kind and that question of That through bill running just and kind seeing increases the on cost headroom me customer to commodity the of helps potentially my bill. obviously that customer actually second takes

you pressure a CapEx? other that to build like you? potential of for And how affordability governing do Just is Do the see you aspect? of the on - kind else balance pressure? offsets that put you does where And side factor any

Sean Trauschke

But ought worked really affordability repeatedly, ability the part of to fortunate said be to something service and think we a are always your businesses economy. area aware as and of we've is I to growing Well, be thinking. you to ought And to it in be in the spread hard our we've us just reduce that, actually in our done that drive bill. costs, costs headroom business And those over combination people, for company more headroom. efficiencies of continue a we've to drive creates for in and just our to work with - to more our lot out creates attract

that mean So and we combination our we've are growing territory. wanting They a just That's them these of in. are the actively bringing creating last think here. are of recruiting headroom. the operating here demonstrated excellence be of I number service the over to I at the a years we lot in front, that service territory businesses, engaged

us. think I those - So catalysts very very for two are big

Constantine Lednev

pressure assume? no CapEx, So on I

Sean Trauschke

correct. That's No. Yes.

Constantine Lednev

I'll Thanks, back move Congrats queue. in great quarter the on guys.

Sean Trauschke

Constantine. Thanks,

Constantine Lednev

Thank you.

Operator

America. the from is Bank question of with next Julien Your line of Dumoulin-Smith

Cody Clark

Cody on on congrats actually update. it's questions Hey, taking Thanks Julien. my and Clark the for for

Sean Trauschke

Cody morning, good Hey,

Cody Clark

clear Energy has on fully faster How announcement exit by contemplating? And the your previously of state get I to cadence changed? exit? the more 'XX we'll exit the soon understand clarity thinking you I'm end can, perhaps of kind wondering but wondering you here if way that I about it first, of Transfer. if than Does for CenterPoint's you're have any thoughts. some So were if

Sean Trauschke

I but that would think and that announced, way anything in see have happen. the removes been to they the certainly headwind so to the don't comment necessarily glad that cadence I our on Yes. transaction have

Cody Clark

Got it.

mentioned your enhancement long-term target and some mod filed then Obviously, about to thinking the And in just we around and remarks how as you X% CapEx? IRP about a you're there. growth upside grid prepared that's of the on program EPS been the grid second the Okay. question think

no and thinking strong there's some you that pairing Just needs, about load that that provide? you're it growth as can seeing with of the if any well as color equity

Sean Trauschke

Yes.

good terms our But we're we that's of the of - have. for it forecast prepared watching the a think taking closely investment. bullish guidance I our on and remarks, really company [ph]. drives I and growing in from hope very us that our And a and this prospects capital to very update we're certainly indicator good question load. lot we're you're investment opportunities And because going

lever good, we've feel to we - continuing we're pretty and So, Cody.

as leave update that I'll it get this closer. I think just all at we we'll and

Cody Clark

Got it. questions. Thanks taking so my much for

Sean Trauschke

Thanks Cody, reports seeing you guys down in Florida.

Cody Clark

Converts. guys in You

Operator

Your next of with question from Goldman is in the line Insoo Sachs. Kim

Insoo Kim

in there, the you version of at the when items infrastructure and Yes, - thank clean in first relates cadence that when has long-term go when question, and Biden the proposed bond the knows My package, the look timing you've the that that will through. you. some Sean, or renewables who as or reconciliation to plan if changed of we laid energy recent RFP? and anything it generation But potentially out

Sean Trauschke

in you or Well, when. for PTCs, some this while going storage. accelerate We're term, for the they waiting got there that X expire, make transmission I going I that they around you it and something, anything you good you around get But or term. were maximize would about investments. the some all the assessment years of changes certainly think to potential love opportunities. those the the things you've back would the - only your end want all be were I near I to as of particularly if necessarily for cognizant say, think now. end there if towards But of if we're you sure of don't solar pleased Obviously, XX and way to would years the extension a We've those. potential of Obviously, been

Insoo Kim

a tackling rate give expect that on? anything, you've of money more be of spending of is just we items just you been the should? us should that that, the Or of could then that Oklahoma case? we And sense. it blocking bit makes a of we may some items in not and I guess, That the it. preview Got that little Is thinking there

Sean Trauschke

Yes.

will to load savings two investments say to really - Bryan our that got to Arkansas. certainly be some investments quick this the the of this going made, around and the the offset mechanism we've by component case We we've issues and in Oklahoma. set primary in But have program of in key results. We already to up going forward. growth all there this that's So we've that are this created. of we're delivering O&M have the grid and recover go continue already and these enhancement will in we investments started mechanism to be the making. we there huge They We had those recovery done continuing the are be

Insoo Kim

is And we other it. me, you that terms any seems the - updates It as lastly language major see in we for items to capital expect look the like of Florida, Got in time for frame EEI. items. in more just or any February any down at should

Sean Trauschke

Yes, be do that's February And growth this load watching Again, correct. by we we're we're the will watching that. the day. this. time

Insoo Kim

I'm in to it transitory but seems that of not, curious terms like of it you portion will much so thank a the is is how more right, Definitely. past going how much. All Yes, that in of so that months - very interesting just what's monitor. be on XX definitely been

Sean Trauschke

Thank Insoo. care, Take Insoo. you,

Operator

of Morningstar. next Miller question the with Your from Travis is line

Travis Miller

questions. taking for my Good thanks morning,

Sean Trauschke

Good morning.

Travis Miller

of it's package to grid something program. rate that, enhancement do program settling be on the more high-level you that that I you You being thoughts elements enough that buy-in Or that. think contentious, could settlement come on the my gotten year? parties Obviously, The a next a case Is from question, the guess, opposite? going be history here have a part you've cases. one I'll but just Oklahoma continue answered of

Sean Trauschke

an would interested people can agreement the in parties. see results that the You could hope doing we pretty reliability of with benefits I what mean, are and you're reach and terms resiliency. really obvious of

really benefit purposes, lot one X,XXX megawatts. to that see that. of you were building touching was different for the take customers this this is if for than comparison I really so each here, But and and generation every of It's a And think new a is hard them. facility constituents

be around. So could should I their think this arms everybody something get

Travis Miller

upside? investments. And points upside Great. the of about just your two or budget Okay. additional What's or your that base for upside of in bullet here then upside of put there magnitude involved X% What's on talking last thinking grid for and the IRP out that the of the We're kind XX% like you would. of something terms CapEx sense potential? XX% plan, in off that

Bryan Buckler

XXX Hey, October. some that future data And investments X-year generation at megawatts call second through and Travis, needed still of is in XXXX. were couple XXXXs. looking of that pointed legacy addressing A which in this, call, year update was XXs which and solar on XXX built gas the per to look points mentioned this And keep system our the we'll we've XXXXs the plants to that here us February. We're grid it's reliable. capital into Bryan. are finalized of working in here the plan investments IRP in quarter really were to we're in Sean to you've retirements - also seen our of course, deploy

of of into intense. by work year the customers large state years that grid has ice past reliability grid have and look hit in year of also major really several address to driven at being we're the storms additional customers You where the ending kind state the investments, becoming coming the but and some on we started and our more seen where the expansion can

that like forward. work on So grid going there's additional we'd front reliability to do

we're number So to something you course. an continuing it's but always up to exact service, but the planning with directionally early too of eye customer give

Travis Miller

that's much, had. all so I I sure. Okay, understand. Thanks

Bryan Buckler

you. Thank

Operator

Your from Mizuho. with Brandon of line the Lee next question is

Wayne Lee

Bryan, and quarter. the congrats on great Sean Hey,

Sean Trauschke

morning. Good

Wayne Lee

Good morning.

way Is for closes? run-up Enable in before transaction Transfer. the a have on you there or question quick monetize hedge to Just price and the Energy a

Sean Trauschke

Well, you certainly could.

a this this to I that want And I exit think expect mentioned, close is of very in we to sure as our optimize year. view of make the way. we this prudent we all

months left two year. there's in - the we So

Wayne Lee

Can Okay. relation or I it does you another question. I growth pre-pandemic your quick guess year? how Yes. load compare that And today guess, to XXXX, then, to, fare in

Sean Trauschke

do you take to one? want Bryan, that

Bryan Buckler

Yes, therefore, Bailey And bumping years to the the year did we the XXXX. first X%. with absolutely. load numbers the load coming around to my run of you were And out for got But end seeing company. Brandon, thanks X.X%. through X.X% But is ago this question. as towards my back Jason while then start XXXX, more you XX growth around growth XXXX,

XX-year it coaster And So load was of almost a load roller before line, the over CAGR. a growth period, but a months little a load to has gentleman over X% it's I the growth steady back pace. the XX - right, mentioning think last it's kind like made being you're following

you're XXXX the seeing - now. fully levels to us we recovered So

on year-to-date here is XXXX, our XXXX, total a in basis where it cumulatively. on right So in was load

two customers continue really XXXX we're seeing it's rates. expect do low. of the we're for passing in the looking here are at So - back by a States really And Arkansas. rates good live Oklahoma or and the their and where that finger map of on And lot to it's a where beyond XXXX, often - a out lands that place is pulling XXXX and are into commercial where in across a affordability industries, lot these A utility raise families they're different years driven United they're that to and growth line large customer we later. while. of But of

you're commercial a that getting from and of come us for out large as interest the for lot these load state. the exciting to we're see customers starting and so it's state a into numbers company. that play our And in And

Sean Trauschke

of - there's but our also at who to to from come I'd pre-pandemic. a demand new lot one existing pent-up that, lot entrants expansions as of we're and do that that were like well. things is see a of back add beginning And Brandon, we piece have interest looking customers

the Bryan pretty the as we've got over opportunities community. - XXXX. from about we've So growth future we're in excited again, And mentioned, crossed we're

Bryan Buckler

And you there. it at leave see to look EES. I'll week Great, forward next

Sean Trauschke

Take Thank care, Bryan. Bryan. you,

Operator

for There are over closing will turn further call no the Sean questions. I to remarks.

Sean Trauschke

Thanks you, of the in operating Natalia. the area our and Thank thriving team. excellence economies to service our

Our Corp to very with future a call seeing week. the next in forward take ahead us. bright today. many growth for of the on interest yourselves Energy and track of your is All you thank for of you and do Please want best. I I trajectory all OGE being care to on look of

Operator

This quarter concludes XXXX earnings participation. third Thank for Corp. Energy call. the conference you OGE your

You disconnect. may now

OGE Energy (OGE) 4 Nov 212021 Q3 Earnings call transcript