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Evergy (EVRG) Files for Rate Hike in Missouri After 5 Years
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Evergy Inc. (EVRG - Free Report) recently announced that it has submitted an appeal for rate revision to the Missouri Public Service Commission (“MPSC”). The objective of the request is to recoup the expenses incurred by EVRG to modernize grid, improve reliability and improve customer service.
This rate appeal to the MPSC is the first base rate increase for Evergy Missouri customers in more than five years. The appeal, if approved, will result in a 5.2% and 3.85% increase in base rates for Evergy Missouri Metro and Evergy Missouri West customers, respectively.
The above rate appeal will also include an additional 0.45% and 4.46% increase for Evergy Missouri Metro and Evergy Missouri West customers, respectively, to recoup the substantially higher natural gas prices and power costs from customers.
Infrastructure Investment is Essential
Utilities need to make systematic investments to upgrade and maintain their infrastructure. Evergy plans to invest $10.4 billion in the 2021-2025 time period and expects annual earnings to witness 6-8% CAGR through the 2021-2025 period, which will have a positive impact on overall performance and earnings.
Other utilities like NextEra Energy (NEE - Free Report) and American Water Works (AWK - Free Report) , among others, are making investments in upgrading and maintaining infrastructure.
NextEra Energy has well-chalked plans to invest nearly $34.5 billion in different projects during the 2022-2025 time period. These investments will be directed to modernize and strengthen the existing infrastructure of the company, enabling it to serve the expanding customer base more effectively. NEE has a long-term (three to five years) earnings growth of 8.94% and the Zacks Consensus Estimate for NEE’s 2021 earnings has moved up 0.4% in the past 90 days.
American Water Works has plans to invest $13-$14 billion in the 2022-2026 time period and $28-$32 billion in the 2022-2031 time frame. American Water expects a five-year adjusted EPS compound annual growth rate of 7-9% for the 2022-2026 period. AWK’s long-term earnings growth is pegged at 8.1% and the Zacks Consensus Estimate for 2021 earnings has moved up 0.2% in the past 90 days.
Need for Rate Hikes
Rate hikes at regular intervals allow domestic-focused regulated utilities to recoup their expenditure and provide the necessary funds for the ongoing capital projects. In addition, maintenance and repair of the utility infrastructure is a continuous process that strengthens utilities’ ability to withstand nature’s fury and provide uninterrupted power to millions of customers.
Last year, another utility operating in Missouri filed for a rate increase to the commission. Ameren Corporation’s (AEE - Free Report) subsidiary Ameren Missouri filed a request with the Missouri Public Service Commission to adjust electric and natural gas base rates for 2022. If approved, natural gas and electric rates would increase by approximately $1.69 and $8.80 per month, respectively, for an average residential customer.
Price Performance
In the past year, shares of EVRG have gained 28.8%, outperforming the industry’s 10.1% rally.
Image: Bigstock
Evergy (EVRG) Files for Rate Hike in Missouri After 5 Years
Evergy Inc. (EVRG - Free Report) recently announced that it has submitted an appeal for rate revision to the Missouri Public Service Commission (“MPSC”). The objective of the request is to recoup the expenses incurred by EVRG to modernize grid, improve reliability and improve customer service.
This rate appeal to the MPSC is the first base rate increase for Evergy Missouri customers in more than five years. The appeal, if approved, will result in a 5.2% and 3.85% increase in base rates for Evergy Missouri Metro and Evergy Missouri West customers, respectively.
The above rate appeal will also include an additional 0.45% and 4.46% increase for Evergy Missouri Metro and Evergy Missouri West customers, respectively, to recoup the substantially higher natural gas prices and power costs from customers.
Infrastructure Investment is Essential
Utilities need to make systematic investments to upgrade and maintain their infrastructure. Evergy plans to invest $10.4 billion in the 2021-2025 time period and expects annual earnings to witness 6-8% CAGR through the 2021-2025 period, which will have a positive impact on overall performance and earnings.
Other utilities like NextEra Energy (NEE - Free Report) and American Water Works (AWK - Free Report) , among others, are making investments in upgrading and maintaining infrastructure.
NextEra Energy has well-chalked plans to invest nearly $34.5 billion in different projects during the 2022-2025 time period. These investments will be directed to modernize and strengthen the existing infrastructure of the company, enabling it to serve the expanding customer base more effectively. NEE has a long-term (three to five years) earnings growth of 8.94% and the Zacks Consensus Estimate for NEE’s 2021 earnings has moved up 0.4% in the past 90 days.
American Water Works has plans to invest $13-$14 billion in the 2022-2026 time period and $28-$32 billion in the 2022-2031 time frame. American Water expects a five-year adjusted EPS compound annual growth rate of 7-9% for the 2022-2026 period. AWK’s long-term earnings growth is pegged at 8.1% and the Zacks Consensus Estimate for 2021 earnings has moved up 0.2% in the past 90 days.
Need for Rate Hikes
Rate hikes at regular intervals allow domestic-focused regulated utilities to recoup their expenditure and provide the necessary funds for the ongoing capital projects. In addition, maintenance and repair of the utility infrastructure is a continuous process that strengthens utilities’ ability to withstand nature’s fury and provide uninterrupted power to millions of customers.
Last year, another utility operating in Missouri filed for a rate increase to the commission. Ameren Corporation’s (AEE - Free Report) subsidiary Ameren Missouri filed a request with the Missouri Public Service Commission to adjust electric and natural gas base rates for 2022. If approved, natural gas and electric rates would increase by approximately $1.69 and $8.80 per month, respectively, for an average residential customer.
Price Performance
In the past year, shares of EVRG have gained 28.8%, outperforming the industry’s 10.1% rally.
Image Source: Zacks Investment Research
Zacks Rank
Evergy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.