Stephen D’Ambrisi

Stephen D’Ambrisi inquired about OGE Energy's strategy to meet the 850 MW capacity shortfall by 2030, specifically asking if material capacity could be secured from prior RFPs or if new RFPs would be necessary. He also asked about the timing for new RFP announcements and how delayed customer load growth might impact 2026 sales growth.

Answer

Sean Trauschke, Chairman, President, and CEO, confirmed that OGE Energy expects to secure some capacity from the last RFP and will also file a new RFP, anticipating a quicker pace for the latter. He noted the 800 MW figure is dependent on the ramp rate of a specific customer. Chuck Walworth, CFO, acknowledged that chunky growth and customer delays could impact future years' sales growth and promised a full discussion on the next call.

Stephen D’Ambrisi of Ladenburg Thalmann inquired about the durability of the strong 3% residential load growth and asked if the company could provide an EPS sensitivity for this growth.

Answer

CFO and Treasurer Charles Walworth described the 3% growth as a 'fantastic number' and noted that while it may not be sustained at that exact level, the underlying trend is clearly positive, supported by consistent customer growth and a strong regional economy. He stated that the company has not provided a specific EPS sensitivity for residential growth due to the variability of customer mix.

Stephen D'Ambrisi of Ladenburg Thalmann asked for clarity on the decline in residential usage per customer and the timing of a potential first formula rate adjustment following the general rate case.

Answer

CFO Andrew Cooper explained the reported residential sales were impacted by a one-time procedural change in accounting for unbilled revenues, and underlying trends remain consistent with guidance. CEO Ted Geisler stated the intent of the formula rate plan is to allow for an annual adjustment, meaning the first adjustment could theoretically occur in 2027 after the case concludes in 2026, though details depend on the case outcome.

Stephen D’Ambrisi of Ladenburg Thalmann sought confirmation that the revised guidance implies the utility's core earnings power is intact, pending a weather mechanism fix, while the marketing and midstream segments are seeing a structural uplift. He also asked about the regulatory process for implementing Senate Bill 4.

Answer

CFO Adam Woodard affirmed this interpretation was fair, expecting a constructive outcome on the weather mechanism and seeing some structural uplift in Midstream. CEO Scott Doyle added that momentum is building from cost management, capital pull-through, and the upcoming rate case resolution. Regarding SB4, Doyle noted the bill allows for a filing in July 2026 and mentions a rulemaking process, in which Spire will be an active participant.

Stephen D’Ambrisi asked if the updated utility net income CAGR guidance includes any impact from the pending SIM mechanism or a future formula rate filing, and questioned how the company expects to improve its earned ROE given that the net income and rate base CAGRs are aligned.

Answer

CFO Rob Stefani clarified that the guidance range does not include potential impacts from the SIM tracker or a formula rate plan. He also explained that favorable regulatory outcomes, such as the approval of a tracker or formula rate, would be the primary drivers for improving the ROE and achieving a higher implied growth rate. Justin Brown, President of Southwest Gas Corporation, noted that a formula rate filing would be considered in the next rate case.