Earnings Call Transcript - EVRG Q2 2025

Peter Francis Flynn, Senior Director of Investor Relations and Insurance

Thank you, Shannon. Good morning, everyone. Welcome to Evergy's Second Quarter 2025 Earnings Conference Call. Our webcast slides and supplemental financial information are available on our Investor Relations website at investors.evergy.com. Today's discussion will include forward-looking information. Slide 2 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. Joining us on today's call are David Campbell, Chairman and Chief Executive Officer; and Bryan Buckler, Executive Vice President and Chief Financial Officer. David will cover second quarter highlights and provide updates on economic development activities, recent regulatory outcomes, and our generation plans. Bryan will cover in more detail our second quarter results, retail sales trends, and our financial outlook. Other members of management are with us and will be available during the Q&A portion of the call. I will now turn the call over to David.

David A. Campbell, Chairman and Chief Executive Officer

Thanks, Pete, and good morning, everyone. I will begin on Slide 5. This morning, we are pleased to report second quarter adjusted earnings of $0.82 per share, exceeding our internal budget for the quarter and overcoming approximately $0.09 of unfavorable weather. Our results through June put us on target for the midpoint of full year 2025 adjusted EPS guidance of $3.92 to $4.12 per share. Bryan will discuss the year-over-year quarterly earnings drivers in more detail in his remarks. In terms of reliability, we've demonstrated strong performance through the first half of the year. Our average outage duration and frequency as measured by SAIDI and SAIFI, are trending favorably relative to our targets, demonstrating the benefits of our continued grid investments and the hard work of our transmission and distribution teams. I'd also like to recognize our generation team for the strong operational performance of the nuclear, fossil and renewables fleet during the first six months of the year. We achieved several important regulatory milestones in the second quarter, demonstrating the collaborative regulatory environments in which we operate. In Kansas, the Kansas Corporation Commission approved settlement agreements and our predetermination requests to construct new natural gas plants and a solar farm, and we filed a unanimous settlement agreement in our Kansas Central rate case. In Missouri, the Missouri Public Service Commission approved settlement agreements for our Certificates of Convenience and Necessity, or CCNs, for new natural gas plants and two solar farms. These outcomes reflect continued success in finding broad-based alignment with stakeholders to support economic development and advance our all-of-the-above generation strategy, always with a focus on our strategic pillars of affordability, reliability, and sustainability for our customers and communities. We are reaffirming our long-term growth target of 4% to 6% through 2029 based on the 2025 midpoint of $4.02 per share. From 2026 to 2029, we anticipate being in the top half of this guidance range relative to the 2025 baseline with significant additional tailwinds from potential large new customers and investments to serve them. Moving on to Slide 6. We were pleased to reach a unanimous settlement agreement with stakeholders in our pending Kansas Central rate case, which, if approved by the KCC, would provide a balanced outcome for customers and for all parties. The settlement provides for a net revenue increase of $128 million. While the black box settlement does not explicitly address return on equity or capital structure, it specifies a 9.7% return on equity to be utilized in transmission delivery charge filings. The settlement also includes a provision implementing earnings review surveillance reports. Beginning in March of next year and until the next rate case, Evergy will file annually a surveillance report detailing Kansas Central's earned return. Similar to the mechanism in place after the 2018 merger, if our earned return is higher than authorized, excess earnings will be shared 50-50 between customers and the company. While the returns at Kansas Central have historically been below authorized levels, this provision reflects the potential for improvement in earned ROEs as Panasonic ramps up its production. If approved, we believe this settlement achieves a balanced outcome. And as we enter a new era of growth and investment, we remain committed to affordability and reliability. There is a clear need to invest in grid modernization to replace aging infrastructure and support reliability as well as in new generation resources that support higher capacity margin requirements in the Southwest Power Pool and coincide with load ramps from potential large new customers. Those load profiles will allow us to spread system costs over a broader base. Appropriately timing our requests to recover our investments remains critical to our success as a company, and we will continue to be thoughtful in our pace of capital expenditures relative to our peers and in relation to the load growth coming onto our system. We'd like to thank KCC staff, CURB, industrial customers, and many others for their participation and willingness to work toward this agreement. We anticipate an order from the KCC by September 29. Slide 7 describes our expanding 15 gigawatt plus economic development pipeline in greater detail. Reflecting the geographic advantages of our region, the overall pipeline is strong in both Kansas and Missouri, and we are well positioned to continue to attract economic development. Relative to our size, our backlog is one of the most robust in the country, a testament to the competitiveness and vitality of our states. Focusing on the top three categories from the pipeline, we outlined a 4 to 6 gigawatt opportunity of new large customer load that represents the most active part of our queue. Serving these customers will provide regional and community benefits in Kansas and Missouri through a robust digital economy, construction jobs, permanent jobs, and a significantly expanded tax base. And by attracting and serving these large load customers, we can further enhance affordability by distributing system costs across a broader load base. Our team is working closely with these customers to develop and implement transmission and generation solutions to serve their expected ramp rates over the coming years. We are confident that we'll be successful in winning and serving a large portion of this queue, which will in turn, transform the size and growth of our company and enhance the economic prosperity of our region. The remaining balance of our pipeline of over 10 additional gigawatts demonstrates the significant activity and continued strong interest in Kansas and Missouri. Many of these customers have acquired land or land rights, completed their site plans, and are engaging in capacity studies with our utility companies and are eager to move up in our queue. Slide 8 takes a closer look at the 4 to 6 gigawatts in our Tier 1 large customer load pipeline. Beginning with the actively building category, two of these customers, Panasonic and Meta, have now completed construction and are ramping up their facilities. The third customer is making steady progress through a heavy construction phase and expects to commence operations in the first half of 2026. Based on the latest schedules from these customers, we continue to anticipate peak demand of 1.1 gigawatts with 500 megawatts online by 2029, supporting our estimated demand forecast of 2% to 3% through 2029. Regarding Panasonic, we are excited to attend their grand opening in July in De Soto, Kansas. Their facility stands as the largest EV battery factory in the world. Many of you may have seen headlines from various news outlets regarding production targets and timelines for Panasonic. Importantly, Panasonic's latest schedule is substantially consistent with the load ramp reflected in our existing five-year forecast. Moving to the finalizing agreements category. We are in the final stages of negotiations with large customers for two data center projects representing 1 to 1.5 gigawatts of peak load. In the first half of 2025, we executed various service agreements with significant financial commitments and credit support from these customers. We are very excited about the economic development that these customers will deliver to our region and remain on track to share announcements regarding their plans later this year. Subject to final agreements and project announcements, we expect to see an impact on our demand growth from these customers in 2027 and 2028 and into the next decade, potentially raising the overall company demand forecast to 4% to 5% through 2029. We also remain in advanced discussions with multiple customers whose load would represent approximately 2 to 3.5 gigawatts of peak demand. Although these customer projects aren't as far along as others in the pipeline, they have already secured land or land rights, shared site plans, and in some cases, reached letters of agreement and provided financial commitments to move the evaluation forward. Overall, we see an incredible level of interest in our service territories, and we are making progress with potential new large customers across all stages of discussions. Each category reflects strong customer interest and increasing commitments that will empower growth, investment, and drive prosperity and affordability for our region. We achieved several important regulatory milestones that I'll describe in more detail on Slide 9. As previously discussed, we anticipate an order on our unanimous Kansas Central rate case settlement by September 29. On July 7, the KCC approved settlement agreements in our predetermination requests to own partial shares of two new combined cycle natural gas units and a solar farm at Kansas Central. These projects were identified in our IRP preferred plan and reflect our all-of-the-above approach to meeting growing customer demand and capacity margin requirements in the SPP. We're excited to advance the construction phase and appreciate the feedback and dialogue with interveners throughout the approval process. In our Kansas large load power service tariff proceeding, we continue to advance settlement discussions. Staff recently requested an extension for several dates on the procedural schedule to facilitate continued dialogue. If the new schedule is approved, KCC staff and intervenor testimony would be due on August 25, with a second settlement agreement date of September 22, followed by hearings running October 8 and 9. Pivoting to Missouri, the Missouri Public Service Commission approved settlements for our CCN requests related to two solar farms, partial ownership in two combined cycle natural gas units, and full ownership of a simple cycle natural gas plant. We'd like to thank MPSC staff, OPC, and other interveners for their collaboration. We believe these projects form a cost-effective package of reliable energy solutions for our customers, and this positive outcome demonstrates alignment with the Public Service Commission's interest in securing additional generation resources for our Missouri utilities. Similar to Kansas, the large load power service tariff proceeding in Missouri continues to progress. Rebuttal testimony is due by September 12, followed by a settlement conference on September 23 and hearings from September 29 to October 3. We look forward to ongoing collaboration with the parties as we work toward a solution that supports economic development and is fair and reasonable for all customers. On Slide 10, we highlight legislation and regulatory mechanisms that firmly position Kansas and Missouri as premier destinations for infrastructure investment in support of new advanced manufacturing facilities and data centers. The PISA natural gas CWIP provisions serve to mitigate regulatory lag and support our strong credit profile as we execute on our long-term capital investment plan, while data center incentives packages bolster the business-friendly environments for which Kansas and Missouri are already known, which have been instrumental in attracting new customers. All told, the supportive backdrop will continue to attract investment of major industry players and prove that Kansas and Missouri are top destinations for new business and growth. For our part, Evergy remains committed to investing to provide safe, affordable, and reliable electric service to our 1.7 million existing customers and the new customers we are bringing online. All of our stakeholders stand to benefit from this unprecedented economic development and investment opportunity. On Slide 11, we provide a summary of our new generation resources under development in Kansas and Missouri. Overall, our approach is aligned with our 2025 IRP preferred plan. It reflects an all-of-the-above strategy for new generation development that will allow Evergy to take advantage of best-in-class efficiency and ensure a balanced generation portfolio for current and future generations of Kansas and Missouri customers. These projects will expand the tax base of our communities and bring both construction and permanent jobs in our local economies. These investments are critical to ensuring we can affordably and reliably serve our customers and support growth in our region. Regarding impacts of the One Big Beautiful Bill Act, we believe that we are well positioned to realize the solar tax credits for the benefit of our customers in all three of our approved solar farms. For future unannounced renewables projects that were identified in our 2025 IRP, over the balance of the year, we will continue to evaluate a robust set of options, including the results of our pending all-source RFP. As part of this review, we will also assess the additional natural gas and storage additions that were identified in the most recent IRP as well as retirement timelines. Our expectations for the go-forward plan will be reflected in the capital plan update that we will provide during the year-end call in February and in future IRP updates. As we develop solutions to meet the generation capacity needs of our customers, we are committed to a flexible approach that evaluates multiple scenarios and incorporates stakeholder feedback with an ultimate goal of ensuring reliability and affordability for our customers. I'll conclude my remarks with Slide 12, which highlights the core tenets of our strategy. By prioritizing affordability, we contribute to a robust economic development pipeline ahead of us and lay the groundwork for continued support of the substantial economic potential within our states. Ensuring reliability is also a core element of our strategy as reflected by SAIDI, SAIFI, grid resiliency, and generation fleet availability. This also includes a focus on metrics relating to customer service and safety in all facets of our operations and infrastructure investment. With respect to sustainability, about half the power generated by Evergy comes from emission-free resources. Since 2005, we have reduced carbon emissions by 57% and reduced sulfur dioxide and nitrogen oxide emissions by 98% and 90%, respectively. Our integrated resource plan embraces an all-the-above strategy for future resource additions, supporting a responsible transition of our generation portfolio. We look forward to continuing to advance a balanced mix of resource additions over the coming years as part of our constant focus on affordability, reliability, and sustainability. I will now turn the call over to Bryan.

W. Bryan Buckler, Executive Vice President and Chief Financial Officer

Thank you, David. Thank you, Pete, and good morning, everyone. I'll start by saying this was a quarter of strong execution. And given our results through June, we are firmly on plan and forecasting to be at the midpoint of our $3.92 to $4.12 of adjusted EPS guidance. Let's now begin on Slide 14 with a review of our results for the quarter. For the second quarter 2025, Evergy delivered adjusted earnings of $191 million or $0.82 per share compared to $207 million or $0.90 per share in the second quarter of 2024. As we disclosed in our first quarter slides, we had forecasted approximately $0.76 to $0.84 of adjusted EPS for the second quarter of 2025. And thus, our results for this quarter came in a bit higher than the midpoint of our forecast, overcoming the mild weather. As shown on the slide from left to right, the year-over-year drivers are as follows: first, a cooler start to the summer led to a 26% decrease in cooling degree days which drove a $0.15 decrease in EPS when compared to the prior year. Normalizing weather in both Q2 2024 and Q2 2025, you can see we experienced solid year-over-year total company earnings growth in second quarter 2025. Next, the net impact of pricing and weather-normalized demand, which grew 1.4% and a $0.08 per share. Recovery of and return on regulated investments contributed $0.09 of EPS driven by new rates in Missouri West that were effective in January of this year. Higher O&M drove a $0.05 negative variance in EPS compared to Q2 2024. It is important to note that O&M came in on plan in the second quarter, and we expect to come in under budget for O&M for the full year 2025. Infrastructure investment resulted in higher depreciation and interest expense, leading to a $0.07 decrease in EPS. And finally, other items netted to a positive $0.02 variance. I'd also like to touch on our decision to exit our Evergy Ventures business that holds small nonregulated investments in early-stage clean energy and energy solution companies. This business was launched in 2015, and the majority of investment commitments were made in the first five years. Given Evergy's focus on our regulated utilities, we have made limited new investments in recent years. And in the second quarter, we initiated a process to sell the portfolio. We recorded losses related to these investments of approximately $0.08 in the second quarter, which are excluded from adjusted earnings. The remaining book value of these investments was approximately $100 million as of June 30, and cash proceeds from the sale of this portfolio will be used to reduce holding company debt. Importantly, we assume no annual earnings contributions from these investments in our five-year plan. Turning to Slide 15, I'll provide more detail on our sales trends. On the left-hand side of the screen, you'll see weather-normalized demand increased by 1.4% in the second quarter as compared to last year, this growth was primarily driven by increases in both residential and commercial usage. Looking ahead, we continue to expect strong commercial load growth for the remainder of the year, supported by Meta's data center ramping its operations. Additionally, as David mentioned earlier, Panasonic's latest slowed ramp schedule remains largely consistent with our assumptions in our five-year forecast, which should support a pickup in industrial demand through the balance of the year. In fact, for the month of June, we saw a year-over-year increase in industrial sales, which we hope portends well for the rest of 2025. I will close on Slide 16 with a recap of our long-term financial expectations. As I previously mentioned, with solid second quarter results and strong operational execution through the first half of the year, we are reaffirming our 2025 adjusted EPS guidance range of $3.92 to $4.12. And with normal weather, the remainder of the year, we believe we are on track to achieve the midpoint of that range. We are also reaffirming our long-term adjusted EPS growth target of 4% to 6% through 2029, and we continue to expect to grow in the top half of that range off of the 2025 adjusted midpoint of $4.02. And I want to reiterate that we continue to see strong tailwinds to our forecast, including potential additional large customer announcements. Lastly, we expect to provide an update on our five-year load forecast, capital and financing plans and earnings outlook on our year-end call in February. Evergy's employees and leaders remain focused on consistent business execution of our operational and financial goals as we advance our strategic objectives of affordability, reliability, and sustainability for our customers. And with that, we will open up the call for your questions.

Operator, Operator

Our first question comes from Nicholas Campanella from Barclays.

Nathan Joseph Richardson, Analyst

It's Nathan Richardson on for Nick. Can you hear me?

Operator, Operator

I can hear you. Please stand by, one second. Please stand by.

Nathan Joseph Richardson, Analyst

No worries.

David A. Campbell, Chairman and Chief Executive Officer

Shannon, can you test the microphone, please?

Operator, Operator

Yes. Can you hear me?

David A. Campbell, Chairman and Chief Executive Officer

We hear you now. Thank you.

Nathan Joseph Richardson, Analyst

It's Nathan Richardson on for Nick. So I was just wondering if you could expand a little bit on how you're thinking about the timing to derisk equity needs beyond '25? And would you do something this year like a forward or something along those lines if you saw the opportunity?

David A. Campbell, Chairman and Chief Executive Officer

Sure. I'll open and hand it to Bryan. You'll recall from our last quarter call that we described that no planned equity raise in 2025 and roughly $600 million per year in '26 and '27. And we laid out in this slide deck, again, the anticipated cumulative $2.8 billion need. Obviously, we've seen that our peers have used a variety of tools, including ATMs and other. So we think we have a lot of flexibility in how we approach it. We probably continue to think about in terms of that size and timeline. But Bryan, anything you'd add?

W. Bryan Buckler, Executive Vice President and Chief Financial Officer

Yes. No, I think that's absolutely right. We have been patient accessing the equity markets until we made progress on our 2025 initiatives. And continue to feel confident in the tailwinds for our stock valuation. But as David said, all that being said, we'll consider chipping away at our equity needs in the months ahead kind of under our preferred ratable ATM program that would have forward sales. And as David mentioned, just as a reminder, we have no need to settle equity here in 2025.

Nathan Joseph Richardson, Analyst

That's helpful. And then on Panasonic, you mentioned in the prepared remarks that the schedule is on track with your expectations. But if they were to not ramp within your expectations, how could that impact 4% to 5% load growth? And is that still achievable if they were to ramp at a lower level than you expect currently?

David A. Campbell, Chairman and Chief Executive Officer

I attended the grand opening of Panasonic in July, and it’s an impressive facility that represents the largest EV battery plant in the world. After seeing it, I believe in its potential. Our forecast aligns with what they have recently communicated to us. They’ve made a significant investment and are eager to start generating from this facility. Regarding your question, we have a strong economic development pipeline. When we review our customer base, we have only factored in a 2% to 3% load growth in our forward outlook and guidance through 2029. If we include customers currently finalizing agreements, this could increase to 4% to 5%, but they have not yet been counted in our outlook. Overall, we see strong demand growth potential. Each customer may experience different ramp rates, but we have a substantial portfolio and many customers ready to engage. This indicates positive trends for our overall load forecast, though our current estimate is limited to 2% to 3% load growth through 2029.

Operator, Operator

Our next question comes from Julien Smith from Jefferies.

Unidentified Analyst, Analyst

This is Tanner on for Julien. Just a question here on the balance of the large load customer pipeline. You point to the potential to address a portion of that 10 gig before 2030. Is the governing factor here the expected development timelines of the customers within this portion of the pipeline? Or is it your ability to process and serve?

David A. Campbell, Chairman and Chief Executive Officer

It's a combination of both aspects I mentioned because several of these customers are involved. First, our primary focus is on the 4 to 6 gigawatts we outlined for the Tier 1 large customers. These are complex, multibillion-dollar facilities, so there's extensive work being done on both sides to move these projects forward. This situation reflects the various stages of development we are in and is influenced by the customers that we've been able to progress further in the queue. Some customers might be bringing along potential generation resources, and the more flexibility they offer, the greater the potential we see. The first 4 to 6 gigawatts involve the most advanced discussions, with agreements already reached. They are enhancing their infrastructure, and we are doing the same. They've made substantial financial commitments to us with considerable credit support. The remainder of the pipeline consists of customers who are prepared to step in if, for any reason, we don't anticipate any delays with those who are currently moving forward. The greater the flexibility they provide, the more resource potential accompanies that, leading to added opportunities.

Unidentified Analyst, Analyst

Great. And then just lastly, on the earnings review surveillance with the Kansas Central rate case, as you're improving your earned return profile in the state, prospectively, should we view this kind of 50-50 proportionate share for overearnings as precedent-setting for future proceedings? Or is this a near-term mechanism for this very current high load growth phase you're in?

David A. Campbell, Chairman and Chief Executive Officer

That's a good question. The way the mechanism works is that it is established between now and the next rate case, and it applies within the terms of the agreement until then. It can be considered a settlement and sets a precedent, but it doesn't necessarily dictate future outcomes. A positive aspect is that historically, Kansas Central has struggled to meet its authorized return, experiencing some delays. In the post-merger phase, we had a similar mechanism that didn't function for Kansas Central because there were no earnings. It would be very beneficial for that jurisdiction to meet its authorized levels. A 50-50 sharing agreement would be advantageous for everyone involved.

Operator, Operator

Our next question comes from Travis Miller from Morningstar.

Travis Miller, Analyst

Just a quick one, I think, in terms of the numbers. The 8.5% rate base growth, does that now include those gas plants in solar? Or is there upside to 8.5%?

David A. Campbell, Chairman and Chief Executive Officer

That's a great question. The 8.5% rate base growth is tied to the $17.5 billion capital plan we've outlined, with further details provided in the appendix. You'll notice that a larger portion of this capital plan is allocated to the later years as we increase our investments. However, compared to our latest integrated resource plan, it only encompasses a specific set of investments. We've made this clear on Slide 21, which details various generation projects in our IRP and indicates which are included in the capital plan. As I mentioned and Bryan noted, once we close the year and finalize agreements with additional customers, we'll also determine the necessary investments to serve them. We'll assess the retirement scenarios included in the last IRP, as some of those assumptions may differ in the current environment. Overall, we anticipate discussing our new load forecast and the additional investments needed during our year-end call in February, along with an updated five-year capital plan and its earnings impact. While some aspects may change from what's shown on Slide 21 as we consider all inputs, Bryan highlighted that there are substantial additional advantages regarding load growth, which will necessitate investments to meet that demand. In summary, we believe this is a positive development for our region, our company's growth, and the advancement of our communities.

Travis Miller, Analyst

Okay. So just to summarize here, if I'm looking at those two slides, the gas plants and the solar plants are included...

David A. Campbell, Chairman and Chief Executive Officer

Yes, the plants for which we received a favorable outcome are included. Some other plants that have not yet gone through the proceedings are also part of the plan, but the majority of the sources that are yet to receive approvals are not included in the plan.

Travis Miller, Analyst

Okay. Very good. And then just conceptually, I know you're going to said multiple times here that you'll update all this. But just conceptually, the difference between that 8.5% rate base growth and of 4% to 6% EPS growth. Is there a big piece missing? And obviously, there's a finance drag, but should we anticipate an update that brings those closer? Obviously, the earnings going up?

David A. Campbell, Chairman and Chief Executive Officer

Yes. Starting this year, we anticipate being in the upper range of 4% to 6%. In our capital plan, which I referred to, you will notice that capital investments will increase notably in 2027, 2028, and 2029, with details provided year-by-year in the appendix on Slide 22. Our overall average rate base growth is 8.5%, which is higher on average, though it is lower in the initial years and increases later on. This reflects our earnings growth target. We have not indicated any specific fluctuations, but as Bryan mentioned, the growing customer base will require investments to accommodate them. We are optimistic about potential benefits that we hope to share in our year-end call, all of which indicate growth opportunities for our customers and communities. This situation illustrates the timing and planning of our capital investments, and we want to ensure we have high confidence in achieving them. We have presented a cohesive growth rate and look forward to providing an update on this during the year-end call.

Travis Miller, Analyst

I appreciate your insights. Regarding the various factors at play with the load coming on, now that we have a clearer view of the generation build, can you tell me when the system will reach balance? You've mentioned potential generation shortages, as well as demand increasing more quickly than anticipated. Do you foresee the system achieving balance in the next three to four years?

David A. Campbell, Chairman and Chief Executive Officer

We are currently in a very dynamic environment. Even though we operate within a range of 4 to 6 gigawatts and our total peak demand during the summer reaches around 10.5 gigawatts, even having two gigawatts in play is quite significant. We have a comprehensive process to consider the long-term factors that are crucial for maintaining balance, including total customer load, the generation needed to meet that load, and the transmission and distribution infrastructure. These three elements need to be aligned over the long term. We have a solid system in place to evaluate these factors. We expect, as we mentioned during the year-end call, to maintain a balanced approach in serving our announced customers. We have also incorporated flexibility into our system to manage potential variations, which is essential in our field. When load growth was previously around 0.5% to 1% annually, the process was simpler, but we now face a more dynamic environment with the current growth rates. Nevertheless, we are confident we can find the right balance. We understand the importance of remaining agile and collaborating with our customers, especially since some have made significant investments in renewable energy. Aligning capacity in advance helps maintain this balance as we engage with our customers. This will be essential for those in the latter part of our pipeline as we consider different options. We believe our system can achieve balance, even in this dynamic environment, and we are convinced that our robust plan will allow us to meet the needs of new customers coming on board.

Operator, Operator

Our next question comes from Paul Patterson from Glenrock Associates.

Paul Patterson, Analyst

On the large load slide that you provided, I'm just sort of wondering in the finalizing agreements, I guess, in advanced discussions, how much do these large loads look at this thing as sort of a gating factor? And then, how do you think about the pipeline and the potential impact? I noticed the staff, and I think it was Missouri, wasn't completely on board. I know you guys are in discussions, it sounds like you guys are. So my question sort of is, a, how much do these large loads look at this thing as sort of a gating factor? And then, b, how do you think about the settlement discussions that are underway in the respect of commissions?

David A. Campbell, Chairman and Chief Executive Officer

That's a great question, Paul. We are well into discussions with customers who are actively building as well as those finalizing agreements. We've already disclosed $200 million in financial commitments from customers in the finalizing agreements category. This means they are making significant progress with support from their side, so it isn't a barrier to starting any projects. It's an important factor, and we've communicated that in our recent calls. We expected to make announcements about some of these additional customers by year-end since one of the factors they're considering is a large load power service tariff proceeding. However, due to the high demand for power infrastructure to support data centers in the U.S., they're not delaying and are moving ahead with substantial activity and financial support for our work. This input is significant for any customer, but work is progressing simultaneously. We still anticipate announcements by year-end, and the proceeding is one of the factors influencing that timeline. We're actively engaged in settlement discussions in Kansas, and these discussions have been encouraging. We have also outlined the schedule in the script and slides regarding when these discussions will take place. We believe the conversations have been productive, and we are committed to moving forward and finding a settlement.

Paul Patterson, Analyst

Okay. And Missouri is pretty similar?

David A. Campbell, Chairman and Chief Executive Officer

It is. Kansas is a little ahead in the settlement discussion timeline. If neither side reaches settlements, then the hearings will start getting on a pretty parallel path. But Kansas is first in terms of the settlement discussion timeline.

Paul Patterson, Analyst

Okay. Regarding renewables, I've noticed a lot of activity from the new administration in various agencies. I'm curious if any of the approved projects still require additional federal permitting or approvals, such as from the Department of Interior or Transportation. It appears there's a significant effort from the administration that could be questioning some of these projects, which seems quite aggressive. Could you provide insight on how your projects relate to that?

David A. Campbell, Chairman and Chief Executive Officer

Sure. Vis-a-vis the OBBBA and Federal.

Paul Patterson, Analyst

Regarding the federal activity we are observing, particularly in terms of any required permitting or approval processes at relevant agencies, we will have to see the guidance from the treasury. I'm sure you are aware of this as well. How should we view this in relation to your pipeline? It appears that the projects currently in the RFP process are quite flexible. If circumstances change, you will adapt accordingly. I'm curious about the projects that are still in the early stages of development.

David A. Campbell, Chairman and Chief Executive Officer

We believe that the three solar projects approved in the Kansas and Missouri proceedings will meet the criteria for the OBBBA due to the progress that has already been made. The other projects listed in the renewables category are also promising, and we have a solid array of options. We will adapt to the changing regulations, as the executive order requires a follow-up later this summer, so we are waiting to see the federal government's announcements regarding eligibility. We have various products that we believe will qualify, and we are prepared with alternatives. For instance, storage may face stricter qualification criteria, so the final rules might lean more towards storage. Our plan includes a diverse mix, and we will adjust according to the new rules. We feel confident about the approved solar projects and have a strong set of options to adapt. Despite uncertainties in the renewables sector, we are optimistic about serving large new customers and the potential investments needed for those customers, which will positively impact our plan.

Paul Patterson, Analyst

Okay. So regarding the approved solar projects, there are no more federal approvals or permitting needed for them, is that correct?

David A. Campbell, Chairman and Chief Executive Officer

We believe that those three products qualify based on the terms of the OBBBA and the executive order, although there is potential for further developments. We are closely monitoring the environment related to these projects and remain optimistic about them. For the other products, we will adapt to the regulations as they arise, and we have many options available to us.

Operator, Operator

This concludes the question-and-answer session. I would now like to turn it back to David Campbell for closing remarks.

David A. Campbell, Chairman and Chief Executive Officer

Thank you for your interest in Evergy, and have a great day. This concludes our call.

Operator, Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.