The Evergy Companies face risks from fluctuating energy markets (electricity, natural gas prices), interest rates, and regulatory actions (rate cases, legal proceedings, environmental regulations). Potential for significant costs to comply with evolving environmental regulations (e.g., MATS, CCRs, GHG) and legal challenges (e.g., ITSIP, Regional Haze Rule) are noted. Impairment of long-lived assets or goodwill is also a risk. Counterparty credit risk exists, particularly in non-regulated energy marketing activities.
Financial Upside
The Evergy Companies anticipate increased revenues from new retail rates in Kansas, higher transmission revenues, and recovery of extraordinary fuel costs. Regulatory approvals for new generation facilities (solar and natural gas) and tax exemptions for certain generation facilities could provide future revenue streams. The PISA provision in Kansas law could defer and recover depreciation expense, potentially boosting future earnings.
