Evergy confirmed Wednesday that it will remain independent and released details of the standalone plan that helped guide its decision.
CEO Terry Bassham told financial analysts during the company quarterly earnings call that Evergy’s Sustainability Transformation Plan “sets the stage for significant value creation and a strong future for Evergy and our stakeholders.”
The plan follows a “comprehensive, independent review” that began earlier this year and calls for $8.9 billion of capital investments in facility upgrades, grid modernization technologies and clean energy initiatives through 2024 in the company’s Kansas and Missouri service territory.
“Our plan creates a compelling value proposition for shareholders,” Bassham said. “Throughout the review, we were focused on three core objectives: maximizing long-term value for our shareholders, serving the best interests of all Evergy stakeholders, including our customers, employees and communities, and continuing to advance our work to successfully create a forward-thinking sustainable energy company.”
The Kansas City-based company had explored possible purchases by a number of other companies. It called off the effort to remain a standalone company. (See Report: Evergy Calls Off Sale, Stock Slides.)
Bassham said Evergy considered a potential strategic combination and a “modified, improved” standalone operating plan and strategy. The board of directors and its strategic review committee each retained independent financial advisors and consultants to assist in the review.
Asked by an analyst whether Evergy received any purchase offers, Bassham only said the company did “engage with a number of third parties” during a “robust and comprehensive process.”
“Without getting into a lot of the detail, in the end, the committee and the board both agreed that, based on that work and that review, our standalone plan produced a better long-term shareholder return profile and that was absolutely the best way to move forward,” he said.
Evergy has become the nation’s second-largest generator of wind energy as a percentage of total generation since 2005. The company has added or contracted for more than 4.6 GW of renewables and retired more than 2.4 GW of fossil generation. It said it can reduce CO2 emissions by 85% before 2030, compared with 2005 levels.
The company will benefit from recent Kansas legislation that eliminates the state income tax for public electric utilities, effective Jan. 1. Bassham called the legislation “very positive” for Evergy’s customers and communities.
Evergy reported second-quarter earnings of $133 million ($0.59/share), compared with $140 million ($0.57/share) a year ago. The company’s operating earnings of $0.68/share just missed the Zacks consensus estimate of $0.70/share.
Evergy’s stock price lost 3.38% Wednesday, falling $1.87 before closing at $53.53.
