Evergy Inc.

Overview Key strengths Key risks Fully regulated, vertically integrated utility operations. Remaining coal-based generation that continues to expose the company to environmental risks. Generally supportive regulation including securitization of storm restoration costs. Revenues that depend on higher-than-average industrial sales in the company?s service territories. Securitization to help transition away from coal-fired generation. Negative discretionary cash flow (DCF) largely from high capital spending. In November 2022, the Missouri Public Service Commission authorized Evergy Missouri West to issue about $300 million of securitization bonds to recover extraordinary fuel and purchased power costs incurred during a February 2021 winter storm. However, in January 2023, the OPC appealed to the Missouri Court of Appeals, Western District, challenging the treatment of related income tax deductions,

...We are monitoring an appeal filed by the Missouri Office of Public Counsel (OPC) regarding Evergy Missouri West Inc.'s issuance of securitization bonds. In November 2022, the Missouri Public Service Commission authorized Evergy Missouri West to issue about $300 million of securitization bonds to recover extraordinary fuel and purchased power costs incurred during a February 2021 winter storm. However, in January 2023, the OPC appealed to the Missouri Court of Appeals, Western District, challenging the treatment of related income tax deductions, carrying costs, and discount rates. We expect a decision in the second half of 2023, after which the bonds could be issued. We continue to monitor pending rate cases in Kansas. In April 2023, Evergy Metro Inc. and Evergy Kansas Central Inc. filed requests for rate increases with the Kansas Corporation Commission (KCC). If authorized, they would take effect in December 2023. Evergy Metro is requesting a net increase of $14 million and Evergy Kansas...

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