Good day and thank you for standing by. Welcome to the Third Quarter 2022 Evergy 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. I would now like to hand the conference over to your speaker today, Lori Wright, Vice President of Investor Relations and Treasurer. Please go ahead.

Thank you, Elizabeth. Good morning everyone and welcome to Evergy's third quarter call. Thank you for joining us this morning. Today's discussion will include forward-looking information. Slide 2 and the disclosure in our SEC filings contain a list of some of the factors that could cause future results to differ materially from our expectations and include additional information on non-GAAP financial measures. The releases issued this morning, along with today's webcast slides and supplemental financial information for the quarter, are available on the main page of our Web site 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 third quarter highlights, provide an update on ongoing and upcoming regulatory proceedings and our recent sales trends as well as an update on our resource planning and the Inflation Reduction Act. Kirk will cover in more detail the third quarter and year-to-date results and our financial outlook for the remainder of the year. Other members of 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, and I'm pleased to report that we had another solid quarter as we delivered adjusted earnings of $2.01 per share compared to $1.97 per share in 2021. The increase in adjusted earnings over last year was driven primarily by favorable demand, above normal weather and higher transmission margin, partially offset by higher D&A and interest expense. For year-to-date, September 30, adjusted earnings were $3.43 per share compared to $3.35 per share a year ago. With these strong results, we are raising the midpoint of our guidance from $3.53 per share to $3.58 per share and revising our adjusted EPS guidance range to $3.53 to $3.63 per share from $3.43 to $3.63 per share. Kirk will detail the drivers of our third quarter performance and upward guidance revision. I would also like to call out and compliment the strong work of the entire Evergy team in providing safe and reliable power to our customers and communities through a hot summer and early fall. In particular, I'll call out our team's strong safety performance with a 66% reduction in DART events and a 62% reduction in OSHA recordables compared to the first nine months of 2021. On August 9, we announced an agreement to acquire Persimmon Creek Wind Farm, a 199 megawatt operating wind farm in western Oklahoma, for $250 million. This investment satisfies two thirds of our planned 300 megawatts of renewable additions in 2024. Persimmon Creek will deliver low cost power to our Missouri West customers, subject to approval from Missouri Public Service Commission, and supports our carbon reduction and net zero emission targets. We also announced the 7% increase in our quarterly dividend to $0.6125 per share, or $2.45 per share on an annualized basis. This increase is…

Thanks, David, and good morning, everyone. I'll start with the results for the quarter on Slide 11. But before I turn to the drivers behind our third quarter adjusted EPS, I'd like to summarize one item in our GAAP results for the quarter related to the deferral of certain revenues from our retired Sibley coal plant in Missouri. Although rate treatment for Sibley is among the items the Missouri Public Service Commission will resolve in the coming weeks, a decision by the Commission issued in August related to a plant retirement by another Missouri utility established a regulatory precedent which led us to change the accounting for Sibley. Since retiring Sibley in 2018, we've collected approximately 3.1 million in revenues each quarter associated with the return on the Sibley rate base. Based on the regulatory precedent in the third quarter, we deferred the cumulative amount of these revenues collected in rates since the plant retirement totaling 47.5 million to a regulatory liability with a corresponding reduction to operating revenues in the quarter. In order to allow our adjusted EPS to reflect the impact of the accounting change in the periods in which revenues were collected, we've excluded the amount of the deferral associated with the revenues collected prior to the third quarter and prior to 2022 from our third quarter and year-to-date adjusted EPS, respectively. As a result, within the quarter and year-to-date, the net impact of the change in Sibley accounting reflected in our adjusted EPS was approximately $0.01 for the quarter and $0.03 year-to-date. For comparative purposes, we've also recast the adjusted EPS for 2021 to reflect the $0.01 per quarter impact. Notwithstanding this change in accounting, we remain confident that the retirement of Sibley was prudent as reflected in the Commission order in the Missouri West securitization…

[Operator Instructions]. Our first question comes from the line of Angelique Aiello with Bank of America. Your line is now open.

Hi. Good morning. This is Dariusz on for Julien. Thank you for taking the question.

Hi, Dariusz.

Good morning. First one is, I just wanted to maybe check in on status or progress thus far on wind PPA buy-ins. I think earlier in the year, you guys expected to do at least one of those. Just curious if you could give an update or maybe any kind of updated expectations as that process moved along?

Sure. I'll hand that over to Kirk. This is David. I appreciate the question, Dariusz. As you would expect, the evolution of the Inflation Reduction Act has created some uncertainty in the marketplace, both around what the subsidies would be and whether they would occur. And that has created some dynamics with respect to both considering what valuation is and what the future potential could be. We now have clarity around that, of course, but folks are still settling on respective values. We think that on balance, it further enhances the value proposition where we're proposing in terms of the benefits to potential sellers and for us to potential buyers and what we can offer to customers, but has impacted time. But I'll hand it over to Kirk who's driving that process.

Sure. I'd just add to that. We haven't changed that objective and we're still focused on getting at least one of those done. We're still in active dialogue with counterparties on that front. Can't absolutely predict the timing. Obviously, we're within a couple of months of the year end, but we are laser focused on that objective. And if the time extends a little beyond the year end, that doesn't change that focus on at least getting one of those done. And that again is incremental to our plan both from a capital and EPS perspective.

And we've been pleased with -- Kirk and his team were able to negotiate and agree to the acquisition of Persimmon Creek. That's an operating wind farm. We hope to get approval on that by year end and certainly have that in the system next year. As an operating wind farm, it's added a portfolio earlier than what was in our IRP that was initially part of our 2024 plan.

Okay, great. Thank you very much for that clarity. And maybe just a follow up on the Sibley change in accounting treatment. Can you maybe just discuss a little bit sort of like prospectively what is included in forward guidance relative to that change in the accounting treatment? And also how I guess the pending order from the PSC in Missouri can affect the range of outcomes there?

Sure, Dariusz. First of all, in terms of in our forward expectations, as you know and as I indicated, a part of our rate filing in Missouri included the ongoing return on Sibley. That's something we've discussed before. So that is obviously pending and for the Commission and that's in our expectations. We've kind of talked about the order of magnitude of what that means from an EPS perspective on a go-forward, about $0.03. Drawing the distinction between that and the accounting change, however, as I indicated in my remarks, the deferral to the regulatory liability, although that does change in hindsight as well, we recast our adjusted EPS by that $0.01 a quarter. Looking forward, as I also indicated, that does not change our expected earnings on a go forward basis. The accounting change does not change our expected earnings.

Yes, so the Sibley item remains open. We'll expect a Commission ruling. Really it could be as soon as this week or in the coming weeks certainly, because our rates go in effect December 6. As Kirk described, it's about $0.03 of exposure going forward. And you may say, well gosh, it's if it's $0.01 a quarter this year, why is it lower? It's because of the -- that's the amount that was set in rates in the last rate case. It's a lower balance. Going forward, that's under review. And there are a couple of items that the Missouri Commission will review, and Sibley is one. We always expected that would get a lot of attention in the rate case. It was in a complicated situation. But we were pleased to get constructive settlement of the main issues in the rate case, and we'll have resolution on the remaining couple in the coming weeks.

Okay. Excellent. Thank you for clarifying. I'll pass it along here.

Great. Thank you.

That concludes today's question-and-answer session. I'd like to turn the call back to David Campbell for closing remarks.

Well, that was efficient. So I'll wrap up by starting with a special thanks to Lori Wright who will be retiring from Evergy this year after 21 years with the company and its predecessors and nearly four decades in the industry. Lori, we greatly appreciate your outstanding service and contributions. And we know that Pete Flynn has large shoes to fill. For everyone on the call, we appreciate your time with us today and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.