Thank you for standing by and welcome to EVRG Inc.'s Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator instructions] I would now like to hand the call over to Lori Wright, Vice President of Investor Relations and Treasurer. Please go ahead.

Thank you, Richie. Good morning, everyone and welcome to Evergy’s Fourth Quarter Call. Thank you for joining us this morning. Today's discussion will include forward-looking information. Slide two and the disclosure in our SEC filings contain with some of the factors that could cause future results to differ materially from our expectations and include additional information on our non-GAAP financial measures. The releases issued today along with today’s webcast slides and supplemental financial information for the quarter and full year are available on the main page of our website at investors.evergy.com. On the call today, we have David Campbell, Evergy's President and Chief Executive Officer, and Kirk Andrews, Executive Vice President and Chief Financial Officer. David will cover our 2021 highlights, an overview of our recently filed Missouri rate cases, along with other regulatory and legislative priorities. Kirk will cover in more detail the fourth quarter and full year financial results, information on sales trends, and provide an outlook of our 2022 objectives. Other members of our management are with us and will be available during the question-and-answer portion of the call. I will now turn the call over to David.

Thanks, Lori, and good morning, everyone. I'll begin on Slide 5. This morning, we reported full year 2021 GAAP earnings of $3.83 per share compared to a $2.72 per share in 2020. Adjusted earnings per share were $3.54 in 2021, compared to $3.10 in 2020. These results reflect strong execution relative to our objectives for the year. We entered 2021 with a midpoint guidance of $3.30 per share, in line with our 6% to 8% target growth rate range. We were able to deliver $3.54 per share representing a 14% increase over 2020 and a 7% increase over our initial guidance midpoint. Kirk will discuss the drivers of this year’s results as part of his remarks. A critical part of the company’s five year sustainability transformation plan involves a comprehensive program to modernize our grid and invest in infrastructure. We advanced this capital plan in 2021 deploying $2.05 billion or $100 million higher than our Investor Day estimate to replace ageing equipment and improve reliability, resiliency and security. We also maintain our focus on advancing affordability and regional rate competitiveness. Since 2017, we have delivered a 4.2% overall rate reduction to our customers. At the same time, we have reduced our total operating and maintenance expenses by 18% since 2018, enabling us to pass on these cost savings in our upcoming Missouri and Kansas rate cases. In 2021, our total CO2 emissions were 46% below 2005 levels reflecting strong progress relative to our long-term emissions reduction targets. And last but certainly not least, we continue to prioritize constructive interactions with our key regulatory and legislative stakeholders. In 2021, we wrapped up STP dockets in both Missouri and Canada and securitization legislation was enacted in both states. We expect that securitization will serve as a helpful tool in managing the company’s…

Thanks, David, and good morning, everyone. I’ll start with the results for the quarter on Slide 15. For the fourth quarter of 2021, Evergy delivered adjusted earnings of $37 million or $0.16 per share, compared to $64 million or $0.28 per share in the fourth quarter of 2020. Fourth quarter adjusted EPS was driven by the following items as shown on the chart from left to right. First, we had a seasonally warm weather across the end of the quarter, particularly in December, resulting in significantly fewer heating days as compared to the fourth quarter of 2020 and driving $0.07 of unfavorable contribution from weather. When compared to normal weather assumed in our original plan, the mild weather negatively impacted our results by $0.10. The unfavorable weather was offset by a 4% increase in weather normalized demand or approximately $0.08 per share relative to our expectations for the quarter, weather normalized demand was approximately $0.04 favorable as we began to see demand recovery which we had previously forecasted to be delayed into 2022. Stronger performance in our Evergy Ventures in Power Marketing businesses drove $0.03 of EPS versus the fourth quarter of 2020, which offset $0.03 of lower EPS from COLI as we did not received proceeds during the fourth quarter of 2021, while the prior fourth quarter included the majority of our COLI in 2020. Income tax-related items drove a net decrease of $0.04 per share. This was primarily due to the impact of the Kansas income tax rate exemption, which led to a lower tax yield in the fourth quarter as well as the expiry of certain tax credits in November of 2020. Finally, shown in the final two bars, adjusted EPS for the quarter was $0.09 lower due to the expected timing and phasing of certain cost…

Thank you, Kirk. So, for those on the call, we appreciate your time today and we’d like to open it up to questions.

[Operator Instructions] Our first question comes from the line of Shar Pourreza of Guggenheim. Your line is open.

Hey, good morning, guys.

Good morning, Shar.

Morning. David, Kansas seems like it has been a little bit noisier maybe even somewhat hostel to actually both you and the KCC. We saw One Republic and others demoted from a committee because of an off paddy road. There was obviously recently legislation for in – for price cap some lawmakers have been really hounding on the KCC. I guess, could we just get any color on your conversations in recent weeks there? Any efforts to sort of pivot the conversation? It’s just been a little bit more noisier than we are used to.

Shar, it’s good question. We are in the legislative session, which is always active. Look, I think in Kansas, I think there is an active dialogue and we appreciate that. And part of why you see us feature the rate reductions that we’ve been able to deliver and our improving rate competitiveness and I would describe it as a lively conversation, but there is balanced inputs from all sides. There was a presentation for example that KCC’s staff gave in one of the committees, in a senate committee that highlighted how are rates over the last ten years in Kansas Central have been flat to declining over ten years. So well below the rate of inflation and now it’s certainly noted and of course, you will recall how securitization legislation was passed last year with overwhelming majorities in both houses. So, we are very focused on regional rate competitiveness. We know how important that is. There are some sickles in the stay as a variety of opinions around renewable and others as reflected in a variety of opinions around our country. But we think it’s a constructive dialogue overall and we are certainly – and we are very focused on the same priorities that our key stakeholders have in the stake.

Got it. Thank you for that. And just last maybe for Kirk, just maybe – just on the buy-in, how does that interact with the IRP update process? And just remind us or any buy-ins in the CapEx plan or is it sort of an opportunity that’s incremental?

Sure, sure. So, first, I’ll answer the second part of that question is, we know those buys are included in our capital expenditure forecast that would be flexing up if you will. In terms of the overall process around the IRP, as the PPAs that underpin those buy-ins already support our renewable and our ability to serve loads, this would simply be a shift in perspective of how we deliver that in the near-term if you will, right? So we be replacing an existing resource that we avail ourselves through a PPA within owned resource for the same number of megawatts. It’s the really repowering on the back end of that and the extension potential for it which is obviously beyond the scope of our, at least our five year plan that would have that impact, that makes sense.

Got it. No, no, that’s helpful. Very clear cut quarter. Thanks guys. I appreciate it.

Thanks, Shar.

Thank you. Our next question comes from Durgesh Chopra of Evercore ISI. Your line is open.

Hey, good morning, team. Thank you for taking my question. Kirk, just following up on the PPA buyout opportunity, in terms of like basically I’ve understand it, right, this is basically a PPA converted to a rate base, of course, am I thinking about that correctly? And then, do you need to sort of get regulatory approvals for it to ultimately accretive and what does the time line look like?

Well, the timeline as I’ve said, we are currently actively involved in discussions with multiple PPA counterparties for a potential buy-in which is why as I indicated we feel comfortable in at least targeting one of those who occurred this year. Obviously, it’s a two party negotiation. So we’ve obviously got to get to closure on that. In terms of the regulatory process, directionally speaking, I think the way you describe it is correct. We are basically taking a PPA pass through and converting that to capital. Ultimately with the focus being for the benefit of the customer, i.e. the target and the first step of that is, if we can buy in that PPA at an attractive overall capital price, so that be associated impact on rates with that if you will, rate base investment provides customer savings, that’s the most important step. In terms of how that gets adjudicated, it would go through a similar processes, really any rate based investment. Right, if that was in Kansas, we’d go through pre-determination of those in Missouri. We’d actually pursue through different names and an ordinary rate case context. Combining that with powering, it’s just an increase in the overall capital would be well or an extension of that time line albeit rather in the pass through, it would be a rate base investment within all in savings, right. I think about that almost a blend and extend type approach if you will.

That makes ton of sense. Thank you for explaining that, Kirk and so essentially, maybe the earnings accretion comes from rate basis and the investment going through future rate cases if you will. Just maybe shifting gears, can you just talk about the O&M savings that’s been a sort of very impressive execution on that front, how are you thinking about sort of inflation pressures, supply chain constraints. Are those hurdles for you to achieve your target for 2022 and beyond and how are you tackling those? Thank you.

So, that’s a good question thus far and obviously, in the macro environment, that continues to be dynamic. So, one we are highly attentive to as does everyone. Thus far we’ve been able to manage the inflationary pressures on the O&M side. It has some impact despite – some impact on the cost and building on the capital side we’ve also been able to work through those as well. And we are confident that we can continue to manage it. In our 2022 plan as you may have seen in the waterfall that Kirk walked you from 2021 to 2022, it’s an overall $0.06 uplift in O&M. So we have some cost savings this year. We also had some impact last year from the outperformance – unusual outperformance in our unregulated business should have some impact in our O&M cost modest, but that’s part of the uplift we see going into next year. But it’s an ongoing effort that we are going to drive in 2023. 2024, and 2025. So we have, as part of our five year plan we already have teams in place that have identified the bulk of those savings and how we are going to achieve them and we’ll be in execution mode in the back half of this year and in the upcoming years. So it’s got to take the same effort, it’s been a comprehensive program across our whole company, Kevin Bryant our Chief Operating Officer is coordinating that effort on our behalf, but the company has got a great track record in this year and we know how to do it. That’s going to take sustained execution. So, we don’t want to certainly acknowledge that but we have the tools and the compliance in place to make it happen.

Got it. Thank you for taking my questions. I appreciate the time guys.

Thank you.

Thank you. Our next question comes from Michael Lapides of Goldman Sachs. Please go ahead.

Hey guys. Thank you for taking my question and congrats to a strong year. I wanted to talk about the PPA buy-ins as well as any build own transfer of loads. Congress obviously hasn’t been able to get anything across the finish line both CFA can try to do something in the Lame-Duck Session at the end of this year, it doesn’t look like anything to happen before the mid-terms. Just curious, do you think about pulling forward all of your renewable plants to capture what could be the safe harboring benefit that some of the developers who themselves maybe thinking about repowering for – thinking about building new solar. The reason toward the Safe Harbor provision benefit that would happen because they’ve got it Safe Harbor that last year or two years ago PPP or ITP level versus what this year through next year would be?

Sure, it’s good question and we certainly – we thought about that at least in the context of the buy-ins and repowerings around that safe harbor. That would obviously require us to make a capital outlay to obviously safe harbor that component of it. We’d certainly be mindful of doing that, but we’d also be reasonably cautious about that around the context of having line of sight or certainty of our ability to get that PPA buy-in and repowering negotiated. But that’s certainly something that we are looking at. At the same time, we are hopeful that ultimately, obviously in the current political environment. There is a lot of distraction and chaos, but if ultimately those provisions of back better ultimately do get passed, that obviously gives us greater flexibility. But we are certainly mindful of availing ourselves of that option in the current context from a safe harbor standpoint.

And Mike, I’ll also add is the – from, this is David, so, from the perspective of the integrated resource plan and our multiyear capital expenditure plan, we look at the overall level of capital we are spending. We look at the overall rate impacts and affordability. We do think to bring on renewable as a win-win, because it typically lower cost as well as lower emissions. But we are going to track with the program and with respect to the IRP, part of the rational for why there is some sequence in shift, wind relative to solar was in consideration of some of the factors around a safe harbor. So the category of truly new development we are sensitive to all those various factors and balancing them. Of course, we have an IRP update that we’ll do this year and it’s a dynamic market and we are going to be responsible for what we see. The PPA is a little bit different, the buy-ins and repowerings and that’s as Kirk described in existing set of resources, so that’s for complicated new issue with the initial set of counterparties obviously, but for those, we have opportunities that are sooner and we’ll certainly look for that. But it’s subject to what you can accomplish with the counterparties. They’ll of course, those are all basically wins. So, talking about the PPAs for repowering those are really on the wind side. But the safe harbor point that you made is relevant and we’ll seek to do as many others as we can, but within the constraints of what the counterparties will do with us.

Got it. And then, when we think about the buy-in and the repowering, can you just remind us how rate making for that would work, meaning if you bought the asset first, how do you get the acquisition in the rates and then if you repower it down the road, how does the capital spends and repower of the asset given the rates?

Well, first of all I could comment in two forms, right. Buy-in and repowering can be a single negotiation with the counterparty that we can contract with on both elements of that. Obviously, that would be the owner of the existing asset, that was our counterparty end of the PPA. And a potential repowering initiative, almost again the kind of bill transfer expect with that seem counterparty negotiating those in tandem, that’s sort of my blend and extend example, so it’s sort of a single view of the capital required to buy in the remaining years of the PPA combined with the capital and the repowering. That would be an overall rate base investment. And again, that would need to be viewed by us especially through the lens of affordability for our customers. It only makes sense for us to do this as a first order. If that we can substantiate that capital investment when combined to result in a savings to the customer, relative to the PPA that’s being pass through and obviously supplemented by greater certainty of what those costs are in the long run. There is the possibility that there could be a negotiating of a buy-in and a later repowering. That would really be a bifurcation of really two capital investment considerations, right. A little bit more challenging in one sense, because you’ve got to substantiate the affordability and the prudency of both of those two things individually, which is why I think it’s a cleaner path to do them combined. But there are opportunities to do both, that will mean we go through and say, here is the capital investments replaces existing PPA pass through. Here is the savings around that, that will be separately adjudicated and then we’d approach the repowering separately.

Got it. And then, finally, can you get them in your rates between rate cases or do you have to – can you remind me, I thought Kansas had a track or wider where you can put it in. But can you remind me on the Missouri rule as well?

Not a tracker on the Missouri side if I understand what your question is there.

Got it. So you just have to wait for the next ERC to get it?

Correct. Yes. That’s right.

Thanks guys. Much appreciated.

Yes, Michael, again, I want to add on that as the – you could take your pre-determinations. So you get a sense for Kansas, the weather how will be treated in the upcoming rate case and we’ve got a rate case scheduled for 2023 as you know and following a rate case you can do an abbreviated rate case six months into 2024. So there are couple different pathway if you can go down starting with the pre-determinations to get at comfort at how it will be treated and then you can do it either in the general rate case or an abbreviated rate case and nearly filing one that you complete.

Got it. Thank you, David. Looking to [Indiscernible] guys.

Thank you.

Thank you. Our next question comes from Julien Dumoulin-Smith with Bank of America. Your question please.

Excellent. Hey, good morning, thanks team for the time. Perhaps, listen I don’t want to hammer too much on this buy-in opportunity. But just, you say that you’ve got a few contracts at least one year. What’s the order of magnitude of megawatts that we are talking about here? I am not sure I pin you guys down, just curious if you can speak to that?

Yes, sure, Julien. First of all, we are focusing on that subset of those PPAs that total for us about 300 megawatts and sure I think we had that as part of our presentation in Investor Day. It’s about at little more than about 1.25 gigawatts of that where the PTCs are either already expiring or approaching expiry and that’s kind of the sweet spot. So we are really currently focusing on counterparties in that particular category. I would say, in the near term, around our objective of at least getting one of those executed this year, which is our goal. One the 200 megawatts would probably a good rule of thumb to think about.

Right. Effectively establishing a framework for how to scale that up to around that one, two or whatever if you can make it work.

I think that’s a fair way to characterize it.

Yes, it’s some level and we view that PPA base as pipeline, now it’s – some of that pipeline is near term to longer term. But that’s at least long term pipeline for us.

Absolutely. Yes, that’s turns down. I appreciate that. And then, related, I mean, I saw this by last week if I can call it that to have a larger shareholder of 15% deal to call a meeting. Admittedly, I know we’ve been through that, what drove that specific change of late if you can speak to it?

Sure, that we felt that was just an approving our [Indiscernible] process have the ability for a shareholder to call that kind of meeting. So, we are evaluating our overall governance practice. We felt – that we saw that would be an enhancement to create that ability to call a meeting. So, we looked at where the threshold work for peer companies where other companies or a lot of companies still don’t offer that. But we wanted to add that as an additional capability of the shareholder family proposal. But I view that as – I would put that in the category of our overall evaluation of our ESG policies and approaches of trying to continue to approve on those.

Got it. I know you alluded to this earlier, embrace your Kansas rate cap session. I mean, how much support does the proposed law that would – gap increase the 1% tier have, I mean, a tough question to ask, but curiously if you could provide any context of the positioning here?

We do not think that it has broad support. We don’t think that it’s going to giving it out. So it’s lots of proposals get offered. I’ve seen that over my career and all the legislative discussions that are seen in every states, but now we don’t even think that would get out a committee. I had some discussions but we don’t think it’s got large support.

Excellent, thanks for closing that.

You bet.

Have a great day.

Thank you.

Thank you. Our next question comes from Nicholas Campanella of Credit Suisse. Please go ahead.

Hey, good morning. Thanks for taking my question. I was just curious in light of the comments on the 190 megawatts of solar and you talked about looking for more clarity on tax incentives and supply chain pricing impacts. Can you just help us think about how that translates to the overall roughly $2 billion renewable CapEx program that you have outlined here? I know it’s fairly back-end loaded, but are you kind of taking a wait and see approach to this capital so far out or does the CapEx that you have in the slides today kind of reflects this supply chain and pricing pressures that you are seeing. Thanks.

So, I’ll start and then hand it over to Kirk. So, I would characterize the solar project in particular is pretty unique and that it’s got that market base structure and that’s really because of the IPC benefits that are currently in place and how to take advantage of those most effectively and working with our counterparty and we are speaking a level of certainty in that agreement and that’s part of why we decided to withdraw the docket and we will file and once we have the certainty. So it’s really related to supply chain issues in particular and we are seeking the certainty because of the importance of the affordability point that we mentioned. But because of the structure of that deals, it’s a minimal contributor to earnings in 2024 and 2025. Our wind additions that we’ve got slated in 2024 and 2025 in the end of both years, we believe we’ll be able to pursue in a more traditional way. So, there is some supply chain pressure. But obviously those are a little out further in time and those reflect our latest view in light of what we’ve seen in the RFP process that we went through. We got some pretty robust bids. So that continues to be our expectation. It’s an ongoing wildcard. It’s a macroeconomic situation that’s pretty dynamic, but that reflects our best expectation as we got. Kirk?

Yes, the only thing I’d add to that on the 190 megawatt solar project, as David characterized it I agree that’s unique around some of those supply chain issues. I think I have mentioned in my remarks. Coming out of our initial pre-determination filing, there was still some lingering uncertainty about what the administration was going to do around whether or not they were going to extend and what the scope of that extension might look like when it comes to tariffs. And there are existing, I mentioned, this as well, in terms of customs and board reduction, there these withhold release orders around, concerns around certain products from China and of course labor provisions which are kind of holding things up a little bit. So those are the best two examples of the uncertainty. And I think that's more unique to solar in this particular project. We wanted to get some clarity on that. Our counterparty wanted to as well. We've obviously seen the Biden ministration give clarity around the least around what their attentions are in terms of the tariffs. So gives us a better backdrop to do that. And we thought it was prudent to do so because we're very focused on this next step in our evolution of moving from what's been primarily a PPA dominated strategy to an own renewables dominated strategy, very important to us that first for at least in the solar side, we do so with an eye toward affordability. So we didn't want to move too fast in negotiating this for the sake of getting it done. We wanted to do it with clarity and certainty about, as I said, cost and schedule for the benefit of our customers. And the reason David mentioned the unique nature of that particular project from a structural array perspective, but it is not, as David indicated, I think, in his remarks, a major contributor in the early years of our plan due to some of the tax aspects of it. So it gives us a little bit greater flexibility to work through some of those unique issues in the near-term.

Yeah, I'll go ahead and describe just maybe a corollary or questions, even in – we've given earnings guidance, or our target growth rate ranges to 2025. In 2025, the total contribution from the new renewables in our plan is less than 2% of it. So it's a factor we'll continue to watch. We're optimistic we'll be able to make it happen and drive benefits for our customers in doing so. But it's still a relatively modest portion, even in 2025.

Got it. Yeah, that's very clear. Super helpful. Really appreciate that. Just on your comments about the higher fuel costs and inflation and trying to translate more savings to customers, obviously, you guys have already done a great job in the base plan today. But you're also going to be kind of filing an update to the IRP this July. And I'm just curious if we're going to get into a tipping point where there's just an argument to kind of further accelerate some of the fossil fleet and how you're kind of thinking about that, in terms of the closures? Thanks.

You bet. So yeah, there’s lots of intersection points. Inflation is a broader issue in the energy sector. We were happy that we've been able to manage inflation better than certainly see across other parts of the electric space, but it's still an issue. We hope it's going to be temporary. In terms of the implications for our generation fleet transition, we tried to be thoughtful in our Integrated Resource Plan, we'll do take the same approach and our update this year and beyond in terms of the pace and sequencing. New renewables do offer some very attractive features in terms of relative costs or relative emissions profile. Now, it's hard to tell that in the very near-term, given the supply chain issues, which have had some knock-on effects on pricing. So we, I would guess, as we go through our update, you're going to see a similar pacing and sequencing in our plan rather than an acceleration, again, because acceleration runs into some of the – you may not be able to achieve the same, all the same benefits in terms of lower costs, and who knows what's going to happen in Washington. But there is momentum around some features, in terms of additional incentives for renewables, of course, that would drive incremental benefits for customers. So you can't wait and depend on something that's uncertain in Washington, but same time, if there are some factors of the near-term that are raising costs, that bounces against rushing into things. And the other dynamic is, I think we'll have to make sure we have a measured pace to this approach. Yesterday, in our jurisdiction, there was very low wind and it was very cold weather and the reliability of the nuclear fleet and the fossil fleet was an important contributor. So we think we can manage over time as we have nearly half of the electricity that we provide our customers was from a free sources last year, between nuclear and wind. So we think we've got – been on a great track record. We've been able to do that while maintaining reliability, or we're going to be focusing on that balance going forward. But to your broader point, I think there's a way to drive that transition. And with lowering costs and lowering emissions while entering the liability, but it's won't happen overnight. It's got to be in a paced program.

That’s helpful. And one more if I can just, if I'm hearing you, right, the PPA buyout opportunities are upside to the capital plan. And just as we think about putting more CapEx into the model, what's your ability to just raise CapEx without additional growth equity capital?

So it's good question. One of our primary objectives, as we've said a number of times, we have the ability and we're targeting – being able to fund our capital expenditures to our five-year plan without the need for new equity. We do have some degree of flexibility. Obviously, there is – it's not unlimited from an internal generated equity capital standpoint. But I think in the context of my answer to Julian's question earlier, we have enough flexibility, at least in the near-term to get that targeted at least one PPA buy-in done within the context of our plan. So we've got enough flexibility to do that. But it's certainly not unlimited. But we're not planning on doing a significant order of magnitude of those, at least in the near-term of our five-year plan. It would be additive, obviously, not only from a capital perspective, but also from an earnings perspective.

Really appreciate the time today. Thank you.

You bet.

Thank you.

Thank you. Our next question comes from Travis Miller of Morningstar. Your line is open.

Good morning. Thank you.

Good morning.

I was wondering holistically if you look at that CapEx program $10 billion-plus and then you think about the regulatory activity that you have going on right now, Missouri and essentially in Kansas here coming up. How could the outcome of those kind of near-term regulatory outcomes impact that full CapEx plan? And thinking about if things go well, then you might upsize it, things go poorly by downsizing. What are your thoughts there in terms of sensitivity?

I think we try to be thoughtful in framing the capital expenditure plan that makes sense and drives benefits for customers and is a multi-year program. So it's not a program that we toggle based on the – both of these rate reviews are pretty straightforward, that are underway in Missouri and we expect it to be very similar in Kansas. In other words, you've got a set of infrastructure investments that we've had the chance to preview and review actually, as part of the STP dockets that went on last year into early this year. I think they're very consistent with public policy. Missouri has reflected in the legislation which enacted in 2018 and will drive similar benefits in Kansas. We look at our overall program in terms of what we expect the overall rate impacts will be because we're very focused on affordability and our level of rate base growth is a little lower than a lot of our peer utilities. We think that will actually further help us in that regional rate competitiveness. But we still have a robust program. So we always look at it year-to-year in terms of driving the benefits and reacting to the market. And will – that will be the primary lens as opposed to just reacting what's in the rate case. But again, the – our expectation is that the rate reviews will be pretty straightforward in light of the benefits these can deliver and the fact that we're offering a lot of cost savings to our customers for the rate case, as I described in Missouri. So we're able to offset a lot of the – any potential increases by very sizable and reductions in costs. So net-net, we've got confidence in our program. We've got a robust backlog of additional projects we could do, that we believe will be beneficial. We've got a pretty old set of infrastructure, even just replacing aging equipment. We've got decades of runway on those, but we've calibrated our overall program what we think makes sense for customers in our overall rate trajectory.

Okay, great. That makes sense. The – you had answered my other question, so appreciate the time.

Thank you.

Thank you. Our next question comes from Paul Patterson of Glenrock Associates. Your line is open.

Hey, good morning, guys.

Hi, Paul.

Good morning.

I apologize if I missed this, but the – but for 2022 the power ventures telemarketing, what's the expectation for the contribution for that in 2022? It wasn’t fair to me, I’m sorry.

So overall – it's Kirk. The contribution to our earnings in 2022 from – I'm going to say power marketing and every event is combined, probably about $0.10 cents.

Okay. And then, again, I'm sorry, but the sales growth for 2022, you said was about 1%. And it wasn't clear to me is COVID, I mean, how far – I mean, it sounds like you're also still responding to COVID sort of longer-term, non-COVID recovery. What do you – what's your expectation for sales growth at this point?

Sure, you bet. So the $0.08 year-over-year growth I characterized in what's behind that $0.08, and that's about 1% year-over-year demand growth behind that. About half of that is just the continued recovery from COVID, almost all of which we would have originally expected to occur in 2021. And if you want to think about sort of ongoing normal way organic growth, it's the other half of that. So, call it, 50 basis points, or 0.5% of that 1% is really the kind of a long-term load growth that we perceive.

Okay. And then finally, back to the Missouri piece of case, the piece of legislation, my understanding is that, without legislation that the PSC would have the flexibility to go with PISA or not. If under the current PISA setup, and I realize it's a 3% cap on the total rate in the 2.5%, does the 3% cover fuel, or just could just give us a little bit of a flavor as to the – what life under the current PISA or the current legislation is versus what it would be vis-à-vis the proposed legislation?

Sure. So, I'll start off and we've got Chuck Caisley with us, who leads our public affairs and legislative efforts, and he can correct me where I go astray. The current legislation, as you noted, runs through 2023. But utilities can apply to the commission to continue to operate under PISA and the Commission can grant up to an additional five years, so up to 2028. And in the current legislation, the 3% capita, it applicable broadly, so it is inclusive of fuel. Now, the legislation that has been proposed to extend and expand PISA lowers the cap, but it narrows it to apply to just the investments and activities related to PISA. So it's a little more tied to cap – a lower cap to the actual investments that you're making and asking for – to be treated under the PISA legislation. And the proposed legislation also does not have a sunset provision. So we'd continue. So as I mentioned in my remarks, where we are engaging with stakeholders and he makes – it's good policy, it's consistent with the objectives that were behind the first – the legislation was first passed, and we think it was an advanced successfully. And so we're having a good dialogue with stakeholders, whether it passes, it's a busy legislative session. And other factors may sort of take all the oxygen in the room at the end of the day, but we're having good discussions, and we'll continue advancing. If it's not something we can accomplish this year, then I'll continue to be initiative next year. And as you've noted and as we discussed, it is something even without new legislation, you can just ask the public service commission to extend, that is – request we could make next year.

Okay. Just in terms of with the increase in fuel prices that we're seeing in everything, is there a significant amount of deferred fuel recovery? Or are you projecting potentially? How does the outlook for fuel recovery, or any other I guess, cost recovery mean? Is there a big – are there are significant deferrals? Let me ask it this way. Are you seeing significant levels of deferred expenses accumulating here? Or what's the outlook for that under the current setup?

Yeah, we have seen some increase in deferrals. It varies by jurisdiction for us. So our metro jurisdiction, which is in both Missouri and Kansas, has the most significant amount of generation relative to load. So we've not seen significant deferrals in Metro. Metro is actually a jurisdiction also where we're able to return benefits from winter storm Uri and as a result of that deposition. In Kansas Central, we've got a sizable baseload fleet, sizable wind fleet. There were some cost pressures, particularly in the back half of the year. So we've had some deferrals that we'll be seeking to recover this year. In total, our fuel and purchase power expense in 2021, I think, it was about $70 million higher than it was in 2020. Now we actually collected less than revenue in 2021 and 2020. So our deferral is a little bit higher than that, but we'll be seeking recovery for that in the normal course, as we do under the fuel clause. And then in Missouri West, Missouri West is a jurisdiction that is – has a monogeneration that is less than its load, so it is more exposure to market prices. So again, in the back half of the year, we did see some fuel costs increases in Missouri West. We file twice a year for recovery of any deferrals and then those are recovered in over a 12-month period. So we made a filing in Missouri West in December related to that. So we did see some increase amounts, again, relative to other jurisdictions that have higher amounts of natural gas generation relative to the other elements of the energy complex is relatively lower, but you see those deferral amounts in both two of our three jurisdictions.

Okay, thanks so much. I appreciate.

You bet. Thank you.

Thank you. At this time, I'd like to turn the call back over to President and CEO, David Campbell for closing remarks. Sir?

Great, thank you. We appreciate all of you joining us this morning, particularly as this is the last day of a long earnings season. Thanks, and have a great day. Operator This concludes today's conference call. Thank you for participating. You may now disconnect.