Evergy Missouri West Inc.

The stable outlook on Missouri West incorporates that of parent Evergy, which reflects our base-case scenario that its regulated utility operations will continue to generate sufficient cash flow to maintain financial measures that support adjusted funds from operations (FFO) to debt of 15%-16% through 2023. This results in minimal cushion at the current rating. The outlook also reflects the continued realization of synergies that result in operational improvements and cost savings. We could lower the rating if parent Evergy's financial risk profile weakens such that adjusted FFO to debt is consistently below 15% through 2023. This could occur if, for example, there is a significant and persistent lag in ongoing regulatory recovery of capital spending or operating expenses. This scenario

...We expect Evergy Missouri West Inc. to recover costs incurred from the February 2021 winter storm. Missouri West incurred $297.3 million in fuel and purchased power costs during the winter storm event. While the utility is deferring these costs for future rate recovery, we expect it to recover the amount in full and on a timely basis. With elevated capital spending, Missouri West's credit quality depends on timely rate increases and funding access. We expect Missouri West will spend $1.84 billion through 2025. While we believe the company's regulatory construct in Missouri provides avenues for cost recovery--including those implemented through Missouri Senate Bill 564--the ultimate determinate of credit quality depends upon timely rate recovery and funding access, including capital contributions from its parent, Evergy Inc....

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