Oge Energy Corp · NYSE:OGE
Oge Energy — Q3 2021 Earnings Presentation
20 slides from Oge Energy's earnings presentation, Nov 4, 2021
Slide 1: Q3 2021 Earnings and Business Update Conference Call
Q3 2021 Earnings and Business Update Conference Call November 4, 2021
Slide 2: Safe Harbor
Safe Harbor Some of the matters discussed in this news release may contain forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements are intended to be identified in this document by the words "anticipate", "believe", "estimate", "ex
Slide 3: Q3 Financial Results
Q3 Financial Results $1.12 $0.15 Strong execution places utility on $1.00 $0.05 track to deliver Q3 2020 Q3 2021 Q3 2020 Q3 2021 on original OG&E 1 Natural Gas Midstream Operations guidance within the narrowed Q3 2020 Q3 2021 $1.26 range of $1.79 - -$0.01 $1.83 per share. $0.89 Q3 2020 Q3 2021 -$0.1
Slide 4: Q3 Operational Highlights
Q3 Operational Highlights ✓ Substation enhancements, transmission upgrades, grid enhancement, and projects at Tinker Air Force Base drive capital investment for the year. ✓ Execution of the OK and AR Grid Enhancement programs are on track. ✓ Construction of solar farm in Branch, Arkansas is now comp
Slide 5: 2021 Regulatory Focus
2021 Regulatory Focus • Reached a settlement in the Oklahoma securitization case, which allows recovery of 99% of the fuel and purchased power costs incurred during winter storm URI • Submitted final Integrated Resource Plans in Oklahoma and Arkansas which outline the retirement of 850 MW of legacy
Slide 6: Solid Economic Indicators & Load Results
Solid Economic Indicators & Load Results Load Growth1 Customer Growth 1.3% 2.2% 2020 2021F Q3 2020 Q3 2021 • Achieving economic development success by attracting new customers to our service territories with our nation-leading lowest electric rates2 • Oklahoma City ranked #1 for lowest unemployment
Slide 7: New OGE.com experience
New OGE.com experience © 2021 OGE Energy Corp. | 7
Slide 8: Third Quarter EPS Results
Third Quarter EPS Results • OGE had a strong third quarter as utility load results and midstream operations continue to rebound from the pandemic 3Q 2021 3Q 2020 Drivers Favorable weather and load h OG&E $1.12 $1.00 Recovery of infrastructure investments h Higher depreciation on growing asset base i
Slide 9: Economic and Load Results
Economic and Load Results Q3 Weather Normalized 2021 Load vs 2020 KEY TAKEAWAYS 4.7% 4.5% 3.3% 1.7% 2.3% • Load is supported by customer 0.1% growth that continues to exceed 1% driven by increases in Residential Residential Commercial Industrial Oilfield Public Total Retail and Commercial customers
Slide 10: 2021 Guidance Update
2021 Guidance Update • Strong execution allows us to narrow our guidance range to $1.79 - $1.83 Long term OG&E 2022 – • Expect to deliver on our plan to overcome winter storm Uri with results at 2025 EPS growth rate of 5% the midpoint of the narrowed range off the midpoint of 2021 • Guidance update
Slide 11: Financing Plan Update
Financing Plan Update • Balance sheet strength supports our long-term growth plan and dividend1 • Consolidated FFO/Debt of 18% to 20% originally forecasted for 2021 - 2023 • Target metrics are before the effects of fuel costs incurred during winter storm Uri • Securitizations of fuel and purchased p
Slide 12: Long Term Vision for Customers and Shareholders
Long Term Vision for Customers and Shareholders • We energize life, providing life-sustaining and life-enhancing products and services, while honoring our commitment to strengthen our communities • Reposition as a pure-play electric utility by responsibly exiting the midstream investment • Grow OG&E
Slide 13: Appendix
Appendix © 2021 OGE Energy Corp. | 13
Slide 14: Investing in our Communities
Investing in our Communities 5% targeted • 5-year capital plan of $4.2 billion utility EPS • Approximately $100M added to the 2021 capital plan this year growth rate • Strong customer growth drives incremental grid investment needs through 2025, • Over 75% of 5-year capital plan is lower-risk, T&D s
Slide 15: Customer Value
Customer Value • OG&E’s efforts to keep rates low provides a Low Residential Rates Stable Residential Bills platform for economic growth in our ¢/KWh communities 16 $160 • New fuel factors 15 $150 approved in Oklahoma 14 $140 • Residential rates increased 13 $130 ~7.5% in October 12 $117 $114 11 $12
Slide 16: Integrated Resource Plan: Generation Retirements and Capacity Needs
Integrated Resource Plan: Generation Retirements and Capacity Needs 2021 IRP Timeline Retirements and Capacity • Draft IRP submitted on August 2, 2021 • Approximately 850 MW retiring over the • Stakeholder meetings in August and next 5 to 6 years September • Replacing capacity, beginning with solar
Slide 17: Oklahoma Securitization: Key Dates
Oklahoma Securitization: Key Dates Filed testimony Estimated date of supporting the Hearing on securitization application Exceptions proceeds April June October December December Mid Late Mid Late 2021 2021 2021 2021 2021 2022 2022 2023 2023 Filed Settlement Estimated Estimated Application agreement
Slide 18: Securitization provides path to timely recovery of fuel and purchased power costs
Securitization provides path to timely recovery of fuel and purchased power costs Oklahoma law provisions • An application must be filed with OCC for securitization • OCC has 180 days to issue a financing order • Oklahoma Development Finance Authority issues the bonds • Bonds must be issued within 2
Slide 19: Oklahoma Securitization Procedural Schedule
Oklahoma Securitization Procedural Schedule Date Action Date Action July 19, 2021 Deadline for Intervention October 8, 2021 Pre-trial Conference Hearing on the Merits begins, continuing until August 23, 2021 Deadline for filing Responsive Testimony October 11, 2021 completed Proposed Findings of Fac
Slide 20: Third Quarter 2021 Results – Natural Gas Midstream Operations
Third Quarter 2021 Results – Natural Gas Midstream Operations • Natural Gas Midstream Operations received cash distributions from Enable Midstream of $18 million in Q3 2021 compared to $18 million in Q3 2020 • Natural Gas Midstream Operations contributed earnings to OGE Energy Corp. of $31 million f