Q2 2023 Evergy Inc Earnings Call
Session, you will need to press star one one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question. Please press star one one again please.
Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Pete Flynn Director of Investor Relations. Please go ahead.
Thank you Judy and good morning, everyone welcome to <unk> second quarter 2023 earnings Conference call.
Our webcast slides and supplemental financial information are available on our Investor Relations website.
Investors don't ever T Dot com.
Today's discussion will include forward looking information.
Slide two and the disclosures in our SEC filings contain a list of some of the factors that could cause future results to differ materially from our expectations.
They also include additional information on our non-GAAP financial measures.
Yeah.
Joining us on today's call are David Campbell, President and Chief Executive Officer.
Kirk Andrews Executive Vice President and Chief Financial Officer.
David will cover our second quarter highlights our integrated resource plan and.
And regulatory and legislative priorities.
Kirk will cover in more detail, our second quarter results retail sales trends.
Our financial outlook for the year.
Other members of management are with us and will be available during the question and answer portion of the call.
I'll now turn the call over to David.
Thanks, Pete and good morning, everyone I will begin on slide five and I'm pleased to report that <unk>.
Had a solid second quarter as we delivered adjusted earnings of 81 per share compared to 84 cents per share a year ago.
Kris was driven by less favorable weather as well as higher depreciation and amortization interest expense, partially offset by growth in weather normalized sales transmission margins and lower O&M expenses.
Kirk will discuss these earnings drivers in more detail in his remarks.
Our reliability metrics were strong for the year.
June average outage duration and frequency otherwise known as stadium safety were favorable relative to our target.
Like to call out the work of our distribution and transmission teams for the improvements in system resiliency that we're seeing.
Weather has been less cooperative to start the third quarter and in July 14th our service territory experienced a severe storm.
The storm produced 80 to 100 mile per hour winds, resulting in our most impactful store in recent history.
At the storms peak nearly 200000 energy customers were without power is high winds down countless tree limbs and damaged or destroyed nearly 500 power poles.
We estimate total O&M costs of $6 $5 million for the storm recovery efforts.
I'd like to thank the nearly 3500 evergreen employees contractors and personnel from neighboring utilities that assisted in making repairs working with customers and restoring power.
Our crews worked 16 hour shifts are hot and humid conditions as well as follow on storms that disrupted the restoration efforts and our customer teams also worked overtime to field calls and support our customers.
Our frontline workers are the bedrock of safely delivering affordable and reliable power to our customers and communities.
Extremely proud of and grateful for their contributions to these challenging conditions.
Our teams consistent execution has resulted in a solid start to the year and we are reaffirming our 2023 adjusted EPS guidance range of $3 55 to $3 70, 75 cents per share as well as our target long term annual adjusted EPS growth of 6% to 8% from 2021 to 2025.
Slide six highlights our annual integrated resource plan updates, which were filed on June 15th in both Kansas and Missouri.
This year's updates reflect the impacts of the renewable support provided by the inflation reduction act revise load forecast increase our southwest power pool capacity margin requirements potential changes to environmental regulations and updated commodity price forecast.
As a reminder, in 2020 to nearly half of the energy that we generated for our retail customers came from carbon free resources.
Reflecting the contributions of our Wolf Creek nuclear plant and the 4400 megawatt portfolio.
Our renewable resources that we own are contracted long term power purchase agreements.
Over the next 10 years, taking advantage of the ample resource potential of our region as well as substantial federal subsidies, we plan to add more than 3000 megawatts of new wind and solar resources.
The timing of these additions reflects the outputs of our recent all resource request for proposal, which was no doubt affected by global supply chain challenges impacting solar wind and battery project availability and costs.
Tightening capacity conditions in the southwest power pool, and higher demand also factored in to the annual ERP update.
Reflecting higher capacity needs. This year's preferred plan includes the introduction hydrogen capable hydrogen capable combined cycle gas turbines in the latter half of the decade.
We now expect to cease all cooperations that Laurent units, four and five and convert Lawrence unit five to natural gas in 2028.
In aggregate. The 2023 preferred plan includes 4800 megawatts of new resource additions through 2032, an increase of 1200 megawatts when compared to the 2022 integrated resource plan update.
As our generation fleet evolves, we are focused on achieving a responsible balance between non carbon emitting intermittent resources.
With low or negative marginal costs and older firm dispatch will generation with higher marginal cost.
All while ensuring reliability and affordability for our customers and communities.
We're excited about the potential investment opportunities ahead of us as we continue to transition our portfolio over the coming years.
Moving to slide seven I'll provide an update on our regulatory and legislative priorities.
In Kansas, we are awaiting intervenor testimony, which is due to be filed by August 29, and our pending Kansas Central Kansas Metro rate cases.
Activity at September picks up with rebuttal testimony due September 18th and the settlement conference scheduled for September 21.
Should an agreement would be reached we'd be required to file it by September 29.
Otherwise hearings would run from October 9th to the 13th.
We look forward to working with all parties to achieve a constructive outcome in advanced regionally competitive rates for our Kansas customers and communities.
Shifting to Missouri, the order approving our request to securitize extraordinary costs from winter storm Uri remains in a state appellate process with oral arguments to be held September 7th.
We believe the Missouri Commission decision in support of securitization as well supported by the record as a reminder, we will complete the securitization financing after the appeal plays out incremental carrying costs incurred prior to approval will ultimately be recovered when we issued the debt we.
We anticipate resolution later this year.
I'll conclude my remarks, with slide eight which highlights the core tenants of our strategy affordability reliability and sustainability.
On the affordability front advancing recalibrate competitiveness, it's one of our primary objectives.
Our focus on delivering benefits to our customers. So it's a 2018 merger is reflected and demonstrated in the EIA data on rate trends across straights or cross states in the central United States over the past five years.
In addition, direct market evidenced as provided by ongoing wins and economic development in our territory.
We're pleased by our progress in improving renal rate competitiveness, and keeping our rate trajectory well below the rate of inflation.
Affordability is and will always be an area of focus.
Ensuring reliability is also a core element of our strategy along with safety and safety. This includes a focus on metrics relating to customer service the commercial availability of our fleet safety and all elements of our operations, including infrastructure investment.
This summer has brought resiliency and reliability at the forefront of <unk>.
Activity in our service territory has been more prevalent in the normal including the July 14th storms of straight line winds in excess of 80 miles an hour. These types of conditions reinforce the importance of our ongoing transmission and distribution investments.
And with respect to sustainability, we continue to advance the transition of our generation fleet as detailed in our 2023, RFP update and continuing to progress over the last two decades.
Since 2005, we significantly and cost effectively transformed our generation fleet, reducing carbon emissions by nearly half are reducing sulfur dioxide and nox emissions by 98% and 88%, respectively, and we look forward to the ongoing portfolio transition.
Our mission is to empower a better future and our vision is to lead the responsible energy transition in our region.
With an eye on affordability and reliability as well as sustainability.
With that I will now turn the call over to Kirk.
Thanks, David and good morning, everyone.
Turning to slide 10, I will start with a review of our results for the quarter.
For the second quarter of 2023 average delivered adjusted earnings of $186 1 million or <unk> 81 per share and that's compared to $194 $5 million or <unk> 84 per share in the second quarter of 2022.
As shown on the slide from left to right the year over year increase in the second quarter adjusted EPS was driven by the following.
First a 13% decrease in cooling degree days compared to last year drove an 8% decrease in EPS.
Compared to normal weather for the second quarter was favorable by approximately <unk> <unk> per share.
Weather normalized demand growth of one 1% driven by the residential and commercial sectors contributed <unk> <unk> per share.
Higher transmission margin, resulting from our ongoing investments to enhance our transmission infrastructure drove a <unk> increase.
A $53 million decrease in adjusted O&M drove a positive 17% variance year over year.
This was partially due to the continued execution on operational efficiencies and partially the result of timing of O&M expenditures within 2023.
The net impact of higher depreciation and amortization was seven for the quarter, which includes the offsetting impact of new retail rates.
The combination of higher interest expense and lower <unk> drove a 13% decrease with interest expense representing about 12 cents of that variance.
The increase in interest expense also reflects the lower rate environment comparatively in early 2022.
And finally other items, both positive and negative drove a net increase of two <unk>.
<unk> to the year to date results, which you'll find on slide <unk>.
Through the first six months of 2023 adjusted earnings were $322 million or $1 40 per share.
Compared to $324 million or $1 41 per share for the same period last year.
Again, moving from left to right our year to date EPS versus drivers that is versus 2022 include the following.
When combined with the mild winter weather in the first quarter of this year.
Our year to date results reflect an approximate 13% decrease in heating degree days and cooling degree days driving a 16th <unk> decrease in EPS versus the first half of 2022.
And as compared to normal weather was approximately <unk> <unk> unfavorable through the first half of 2023.
Solid weather normalized demand growth of one 6% year to date in line with our annual estimate driven by the residential and commercial sectors contributed nine cents per share.
Higher transmission margin, resulting from our ongoing investments.
<unk> increase.
Decreased O&M drove a positive 29% variance year over year.
As I mentioned earlier the decrease was partially a result of timing of O&M expenditures within 2023.
A 13% decrease from higher depreciation expense due to increased infrastructure investment.
Which again is net of the offsetting impact of new retail rates.
<unk> year to date proceeds from company owned life insurance.
And higher interest expense and lower <unk>, which drove a 26% decrease with interest expense, representing 22 cents of that variance.
The increase in entry expect expense again reflects both a higher carrying balance and the lower rate environment in the first half of 2022.
We expect rate driven variances to decrease in magnitude as we move through the year consistent with the original assumptions in our guidance.
And finally other items, both positive and negative drove a net increase of <unk> <unk>, which was primarily driven by other income and income tax items.
Turning to slide 12, I'll provide a brief update on the recent sales trends.
Weather normalized retail sales increased one 1% in the second quarter as compared to last year. This was primarily driven by increases in both residential and commercial usage.
While year to date weather normalized demand is up by approximately one 6%.
Lower industrial demand continues to be driven primarily by two refining customers.
Excluding these two customers remaining industrial weather normalized demand would've increased during the first half of this year.
<unk> growth continues to be supported by a strong local labor market with Kansas, and Kansas City Metro area unemployment rates.
Two 8%, each which continue to remain below the national average of three 6%.
And finally on slide 13, I'll wrap up with an overview of our long term financial expectations.
With a solid start to the year, we are reaffirming our adjusted EPS guidance range of $3 55 to $3 75 for 2023. We are also reaffirming our long term compounded annual EPS growth rate target of 6% to 8% from 2021 and 2025.
And we expect to address our outlook for earnings growth beyond 2025 on our year end call in February .
Our $11 6 billion five year capital plan through 2027 is focused on new infrastructure investments to improve customer service enhance reliability and resiliency as we transition our generation fleet, while continuing to advance retail rate competitiveness and meet the evolving needs of our customers and our communities.
That will open up the call for questions.
Thank you as a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again please.
Please standby, while we compile the Q&A roster.
Our first question comes from the line of <unk> Chopra from Evercore ISI.
Hey, good morning team. Thanks for giving me time I have two questions.
Hey, Good morning, David Hey, guys I appreciate the hey, good morning, I. Appreciate the fact, you know would be.
With the ERP moves.
You guys reaffirmed your Capex and rate base outlook, maybe can you just get a little bit more granular and quantify how much capex was there associated with renewables in the current plan and then.
What are the opportunities on the grid mod side or other opportunities.
That you think that as a result of those moves that capex and rate base growth profile is still intact any color there.
Sure so thanks.
Thanks for the question, it's a good one when we put out our integrated resource plan.
You'll recall that we also released the slide at the time, saying that our overall.
Capital investment plan for 2023, 2009 to 223 to 2027.
It was in line with our update last quarter now there is some mix shift in that we haven't published that overall change yet we're going through that process as we typically will stay the.
The course of the year.
The integrated resource plan has.
Higher overall total level of resource additions, but there is some phasing shifts over the near term, particularly there was a drop in window in the near term and that reflects.
To a large degree supply chain constraints and the impact of product availability and costs.
And why we reaffirmed our overall capital plans as for the factors that you highlighted we have.
A wide range of beneficial infrastructure investments, particularly in the grid grid modernization and grid resiliency side.
That are the element that we expect will be a little bit higher and will contribute to an overall capital plan is consistent again over the 10 year timeframe.
We have a relatively significant addition of new resources. So in that time period, you can expect that they'll all else equal be an uptick in capital expenditures, we only give a five year plan update but youll see some elements of that when we get to year end, because we'll add 2028 to our public disclosures and you'll start seeing that.
Can we start some of those resource additions that I mentioned in particular relating to hydrogen capable new natural gas units.
That capital expenditure Youll see showing up in the latter part of our capital plan, our five year plan.
Got it okay. So you remain confident in your Capex and rate base outlook, and we will look for more color on the Q4 call as the key takeaway there okay.
<unk>.
On the on the Kansas rate cases.
Can you give us any incremental data points, what's the feedback been from various stakeholders and the potential for a settlement I know you put out some data there, but just looking for any additional color that you can share.
And our guests for better worse the way the process plays out we don't have a lot to share while CV. We're still in the process of sort of a rigorous back and forth in terms of are receiving a lot of questions as capital typically happens in all rate cases, so we will have a good sense.
You can get some feel for where parties are focusing today.
So you really get a sense of things when they're when the first round of testimony filed so August 29th is going to be a day that.
People will be doing a lot of reading certainly on our side, so you'll see staff and intervenor testimony on that day. So you get a lot more color on things as we head into <unk>.
In August and September .
We will certainly look forward to the opportunity to work constructively with all parties and seeking a settlement.
<unk> five year since a lot last rate case, but otherwise at least in our view, it's a pretty straightforward rate case in terms of.
The elements that are included.
It's primarily related to the infrastructure investments that have been made over that time period, plus the amount of cost savings that we've been able achieve as a result of the merger.
With a couple of.
Items that I think are pretty clearly described and laid out so it's a little less complicated.
And some elements of our Missouri West case last year that together product. Many years. So we look forward to constructively engaging with the parties.
But you'll learn more about that.
Later this month, and then particularly as we head into September and October .
Got it guys. Thanks, so much again.
Thank you.
Thank you one moment for our next question.
Our next question comes from the line of sharp Lorenzo from Guggenheim Partners.
Hey, guys good morning.
Good morning Shar.
Good morning, Good morning, I, just wanted to be crystal clear on on their response that you gave to <unk> guests because I mean, obviously this was a very deep IRB update a few weeks ago.
Is the messaging that it is status quo from just a capital perspective to the current trajectory, but there could be some step function increases as we shift forward I just wanted to get a bit of a sense there.
So.
As of my to sharpen My response I'll have Kurt go first so Kirk go ahead and I'll follow up sure. Thanks, David Hey, sharp.
I would think about it is first of all I think <unk>.
I asked this question as well I think our overall and we put this in a broad category new generation slash renewables either.
Our fourth quarter update the cumulative amount of that was a little over $2 1 billion.
And Thats, obviously contributes to the aggregate 11 6 billion the way to think about that is yes. Our overall magnitude of capital expenditures is in line. We also expect to magnitude capital expense for our new generation of renewables to be aligned.
We do expect some probably some timing shifts we also expect the.
The annual cadence of that capital expenditures to accumulate up to that $11 6 billion to also became system that will probably be a little bit of a mix shift because if you look at the magnitude.
The cadence, specifically renewables and new generation year over year informed by the RFP kind of plan over plan that would probably imply a little bit of variation in the implied capital expenditure space over that period of time, where we have an abundance of very necessary and beneficial grid modernization projects. It makes me a little shift between those two categories year over year.
But overall the aggregate magnitude the amount of generation as well as the annual magnitudes will be in line that helps you.
Yes, it does and thank you for that.
So Kirk thank you for the.
Clarity I'll add in an official point is yes.
And we're very focused on affordability and as we think about our capital planning.
We have and we were able to have the opportunity to go through this with.
Our Kansas Commissioners, and we have a similar dialogue of course misery.
We were able to go through we've got an old system. We've got a lot of very wide range of beneficial projects that are available to us we calibrate our level of expenditure with an eye towards affordability. There is no doubt around that so we will continue to shape that but we've got a really robust capital plan informed by parts of our system are still very old. So we've got a we've got if you will.
Our backlog of beneficial projects. So we're always going to keep an eye on affordability as well.
Got it and Kevin can you just speak a little bit more broadly to sort of that transmission expansion backdrop in SPP and MISO.
Now looking at tranche two and three you are spending billions in moving powered through your neighboring systems do you see the RTL picking up the pace here in the years ahead, just any color on on the backdrop, especially as you guys continue to evaluate on the generation side.
Yes.
Question Shar that I think it's fair to say that the southwest power pool, certainly if you look at their strategic plan the grid of the future and the future evolution of the long term transmission plan is on their agenda.
But it's also fair to say that what's on their agenda as a process that will lead to kind of tranche one tranches, one two and three so in that sense.
They're not at the same stage as MISO.
In the southwest power pool in other words it's.
Still some time away now we as a big player in the southwest power pool are certainly an advocate for going through that process.
We know how important that's going to be as you look at our integrated resource plan, especially as you get to the latter part of this decade and the 2000 <unk> and this is true across all of the players really in our space and that will be impacted by things like the evolving.
Federal EPA rules, there is a lot of changes in our resource plan that are coming in.
And the transmission grid is going to have to be ready for that so I think we as a participant in SPP.
We will continue to be an advocate for moving down the path I think it's fair to say that the where do you see tranches one two to three months. So you don't yet see those in SPP, but on their strategic agenda, and we will be working with them to try to advance it because it is.
Evolving further evolving the transmission grid is can be very important for our region to keep rates affordable as we transition our fleet.
Alright, I think that is fantastic you guys covered everything I appreciate it.
Thank you very much thanks sure.
Thank you one moment for our next question.
Our next question comes from the line of Julien Dumoulin Smith from Bank of America.
Okay.
Hey, good morning team how are you guys doing.
Good morning, Julien can you guys hear me.
Okay excellent.
So much.
Wonderful Hey look just following up on the last question, let me just jump to this.
Do you see the updated RFP had a fairly modest if not flattish outlook on load.
Lot of the commentary that you're making here would kind of perhaps suggest that that certainly is an upside bias to it we've seen that in other jurisdictions. How do you think about the evolution of your load forecast itself. What's in that plan, what's not in that plan again, obviously, you just filed there. So obviously there is a certain element of.
Of it being still relevant but maybe you could talk about some of the pivots in it and as you think about this RFP.
Just at the outset.
Yes, it's a great question Julian because it's a I think it is an upside factor for our sector and for our region as well, we do have a low medium and high demand case in the integrated resource plan.
Typically in the long term planning elements thinking the mid range of the 5% rate of growth, we had a higher level of growth we expected in our.
Embedded in our plan in 2023, which we've seen tracking with that was also used in the first half of the year over the long term. They are certainly structural factors that I would argue could take us more towards the higher end rather than that 5% per year, and that's going to be from electrification and some of the large new loads that are coming in as we effectively are re shoring. If you will here in the United.
So the and then the last element, which gets more and more focus as the.
Transformation of electricity demand driven by.
AI and the need for more and more data centers. So I do think there is some upside factors those three electrification.
Onshoring and proliferation of data centers I think it's also fair to say that that could be upside to the long term plans that a lot of that will manifest itself. The latter part of this decade and into the 2030, but I think those long term fundamentals are strong and should presents.
We will bias towards the higher by 10, the IOP, but it's more on the high case post the MIT.
And I think for our region. The additional piece that we have relative to some others of course, a lot of our portfolio transition does occur in the 2000 <unk> as well right.
We know we've got a.
We have an interesting mix in our generation portfolio. We've got half basically has its emissions free and has.
That's a fossil based and.
Relatively higher share of coal or several utilities have a similar share, but a lot of that transition for us will happen in the 'twenty three so I think the long term fundamentals from a resource planning perspective from a demand perspective are strong and as we know when there is demand growth that helps with affordability because youre spreading across <unk>.
Cost across a bigger a bigger pipe. So it's a great question I think it's Ed.
That leaves us to have.
A bullish outlook and long term.
Awesome, Hey, guys, just a pivoting here to the guidance and just year to date results. If you will.
I know you guys have a cost legacy and kudos on that front 'twenty nine.
Impressive as a headline number year on O&M.
Can you talk a little bit about.
What those items are the sustainability of them into 'twenty for maybe some of the puts and takes with in guidance that you contemplated at the start of the year I E. How are you tracking against those guidance items, because it would seem as if with whether it's still fairly modest as a headwind 2009 I know you have said.
The persimmons here, but like it's it's certainly a nice showing on the cost front year to date.
So Julien there's a lot there I think.
Curt to supplement its.
We like our peer utilities try to manage our business and our raw perspective based on managing as best we can the things in our control as things outside of our control move where there has been a.
A headwind this year.
July was on the mild side at least how region I know, it's been quite variable across the U S. We are on the milder side in July .
Even vary across our service territory.
So proud of the team and how we manage costs you asked about which elements that really is that we.
We review this on a rigorous basis across our entire part of our business from us.
<unk> to our generation.
Generation side transmission distribution, our customer operation into corporate center. So some of this is timing and phasing as Kirk mentioned in his remarks.
But we are going to be managing the business dynamically.
Just as our peer utilities do because we we reaffirmed our annual guidance this year and we seek to again manage the things that are within our control. So we are in a position that offset.
Factors that are outside of our control so proud of the team for their cost management, we've laid out as you know ongoing cost savings as part of our plan.
I think that Thats continues to be our plan as we look through to 2025.
But it's a it's a testament to the work of the team and.
The efforts of our enterprise to drive affordability benefits for our customers and manage our business. So that we can.
We hit our plan and deliver results.
Got it so it sounds like.
There could be some items here, but.
Not ready necessarily to say that.
Yes.
Our guidance is that right, yes, yes, we're sticking with our guidance for the year Julian in it.
Yes.
We'll manage the business dynamically just as you've seen us doing the first part of the year ended prior year without.
Without quantification Julian just to add onto that I mean youre correct.
Keen observer.
Got that.
A large number of year to date I, even said in my remarks was partially due to end of year timing, partially doesn't mean all of it and.
And thats, our job through the year right.
Making sure that we stay vigilant around our costs.
So we've got that cushion to be able to offset some of the unknown variables right, we can't control weather.
David mentioned, we had a little bit of storm cost past the first half of the year that storm related costs that gives us a cushion to absorb that and obviously the the variability that we're all experiencing on interest rates. So staying ahead of the game and being vigilant around those costs away from that intra year timing. Some of it you can't really extrapolate that over the best at the balance of the year.
But having that in our pocket to look towards the back half of the year allows us to maintain our commit because as we've said one of the things that we are very focused on here is making sure we deliver on those commitments the means by which we do that is dynamic during the year because there is anything but a static environment because of some of the elements I've addressed.
Got it alright, I got more I'll leave them offline. Thank you very much have a great day.
Thanks Julien.
Thank you one moment for our next question.
Our next question comes from the line of Michael Sullivan from Wolfe.
Hey, good morning.
Morning, Michael at this point, Hey, guys I just wanted to put a finer point on that last line of questioning so the.
The mild July weather, and then that storm impact as are both of those factored into that 23 guidance reaffirmation.
So Michael obviously, we don't have our full results for July yet, we are able to quantify the storm cost and including that in the script.
But we did affirm we are affirming our annual guidance range today. So we will so some of the answer to your question is yes based on the information. We have now we are affirming our guidance for the year.
It's Curt described very important for us.
We will stay focused on that and keep working those things that we are in our control to help offset if there.
Asia can shift day to day.
Factors that are outside our control, but yes, we're affirming our guidance for 2023 today.
Okay, Great that's helpful and then.
A lot of what you updated in the ERP I think you mentioned and was formed by the recent RFP process. When when will we see the results or more detail on that RFP.
Hey, Mike It's Curt I think you would expect to see that from US later on.
Can't discount the possibility we may have some more information once we get to the.
Third quarter call in November , but as we move through the back half of the year. We will certainly have some more information about that and part of it Michael as you can appreciate it relates to ongoing negotiations that are currently that's the main driver as to why you are not here anymore.
Understood. Okay that was all for me. Thank you.
Thank you.
Thank you one moment far next question.
Yes.
Our next question comes from the line of Paul Patterson from Glen Rock Associates.
Yes.
Hey, good morning.
Morning, Paul.
I think that one question at this point.
And that is.
There is a rate design.
With time of use.
That's coming up here I guess.
And is there room for you guys.
I'm just wondering.
It looks like there is a potential for some significant changes.
And.
Is there any.
I guess.
Is there any risk that.
Customers might be.
Some customers might be.
I'm pleasantly surprised by the change even though it's a rate design issue people don't necessarily.
Now, what's going on and they have time of use.
Not prepared for it and sometimes in certain jurisdictions, we have seen.
It happens from time to time, where people are.
Very upset by.
Something that.
So that kind of a change in the format.
So Paul it's a good question again, you are correct its firm, Missouri jurisdictions only.
And as a result of the last rate cases.
Missouri Commission.
<unk>.
Feels strongly about this topic.
Included in their order a move towards time of use rates.
For all customers in Missouri, now Fortunately, partially the result of that.
Okay.
The provision that was made to the order that's being implemented in the fall. So it is being implemented.
Later this year when we're out of the hot weather season.
We've had time and we've put out a lot of communications around the time of use our transition. We will continue to have a lot of communications theres several different options one of which is a relatively modest change relative to the historical rate plans. So we think with the level of communication tools. We now have a number of folks who have online accounts.
The level of information will be high.
So a big part of what we'll need to do and adhering to the Commission's order on this is just having a high level of communication.
Fortunately again with it being implemented in the fall and a milder weather time, I think that it will be a little more explainable to customers.
And it primarily relates to the hours of four to APM weekdays. So it's it's a concentrated approach so.
Even though it is as you know our rate design is not intuitive to many customers I think our team's done a nice job laying out what it entails what it means.
And how customers can can work with it so.
We're gonna be commissions order and we think will work be able to communicate with our customers to make sure we work with them as they go through the transition and select a plan that's best for them.
Awesome. Thanks, so much really appreciate it.
Thank you.
Thank you at this time I would now like to turn the conference back over to David Campbell for closing remarks.
Great. Thank you I would like to thank everyone for your interest in <unk>. This morning, and hope you have a great day that concludes the call.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
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