David Campbell
President and Chief Executive Officer at Evergy
Thanks, Pete, and good morning, everyone. I'll begin on slide five. I'm pleased to report that Evergy had a solid first quarter as we delivered adjusted earnings of $0.59 per share compared to $0.56 per share a year ago. The increase was driven by weather-normalized sales growth, transmission margin and lower O&M expenses, partially offset by the impact of a mild winter, an increase in depreciation and amortization, and higher interest expense. Kirk will discuss these earnings drivers in more detail in a few minutes.
In 2022, we achieved our historically best safety year. And I'm pleased to report that our OSHA recordables, and days away and restricted time events are trending favorably relative to the 2022 results to the first quarter this year. These improvements are a testament to the work of the entire Evergy team. I'd like to thank my fellow employees for their unwavering commitment to safety.
With the solid start to the year, we are reaffirming our 2023 adjusted EPS guidance range of $3.55 to $3.75 per share, as well as our target long-term annual adjusted EPS growth target of 6% to 8% from 2021 to 2025.
On slide six and seven, I'll discuss our recently filed Kansas rate reviews, beginning with Kansas Central on slide six. On April 25th, we filed an application requesting a $204 million revenue increase premised on a 10.25% return-on-equity, a 52% equity ratio and a projected $6 billion rate base, as of the proposed June 30, 2023 true update.
As shown on slide seven in Kansas Metro, we requested a $14 million revenue increase premised on 10.25% return-on-equity, a 52% equity ratio and a projected $2.6 billion rate base as of the proposed June 30th true update. We believe these rate requests are straightforward and reflect the communications we've had with our Kansas regulators and stakeholders, and workshops and other settings over the past few years.
The principal items include recovery and return on our grid modernization and infrastructure investments, since our last rate reviews in 2018 as well as passing onto our customers the benefits of the substantial cost-savings we've a peeved since the merger that formed Evergy 5 years ago.
Across our two Kansas jurisdictions, these cost-savings reduce the combined revenue increase request by 31st 37%. We are pleased that the hard work of the Evergy team resulted in cost savings that are significantly higher than projected during the merger approval process. These efforts have been a major contributor to successfully advancing our regional rate competitiveness.
Since the end of 2017, our rates in Kansas have remained virtually flat while our regional peers have on average increased their rates by double-digits, and cumulative inflation has been over 20%. As a reminder, Kansas rate cases run on an eight-months schedule, so new rates will go into effect by year-end 2023. We'll provide an updated timeline when a procedural schedule had been issued. We look-forward to working with our regulators and stakeholders over the coming months to achieve a constructive outcome for our Kansas customers and communities.
Moving on to slide eight, I'll provide an update on our other regulatory and legislative priorities. In Kansas, Governor Kelly's signed House Bill 2025 into law in April, and will become effective in 2024. The bill includes provision that matches the return-on-equity for our locally planned FERC transmission projects, so the return-on-equity established by the state for our other infrastructure investments. This law. specifically to current and future transmission projects that are not subject to notice that notifications to construct from the, southwest Power Pool.
HB 2025 keeps our transmission delivery charge rider mechanism or TDC, unchanged and fully intact. This bill provides savings to customers and was a product of constructive dialog with Kansas regulators, legislators and other stakeholders.
In Missouri, the order of approving our request to securitize extraordinary costs from winter storm Yuri is in the state appellate process. We believe the Commission's decision and support of securitization is well-supported by the record. As a reminder, we will complete the securitization financing after the appeal plays out. But incremental carrying costs incurred prior to approval will ultimately be recovered when we issued the debt. We anticipate resolution later this year.
On the legislative side, we're tracking the progress of Senate Bill 275 in Missouri, which would create a state and local sales tax exemption for the production of electricity. If signed into law, these savings will be passed on to customers and our next Missouri rate case. The bill has passed out of Senate and currently awaits debate on the House floor.
Other bills relating to the energy sector may also receive attention this month. For example, a bill that enhance state oversight of transmission and improve the consistency of transmission operations and planning, referred to in short-hand as Right of First Refusal Legislation, continues to be an area of focus.
The benefits of this legislation are reflected by similar laws that are in effect in the majority of states across our region. However, as Missouri legislative session is scheduled to adjourn on May 12th, timing is tight. And we expect that the discussion of ROFR and other energy-related bills may continue into next year.
As a final note on slide eight, we remain on-track to file our annual integrated resource plan updates in both Kansas and Missouri by mid-June. This year's IRP updates will include significant changes in assumptions, most notably updated cost estimates for new generation as well as substantial subsidies in the Federal Inflation Reduction Act for carbon-free resources.
Moving to slide nine, I'll profile another element of our corporate strategy relating to environmental, social and governance measures. We continue to enhance our ESG practices and disclosures. And our efforts have been recognized and reflected in significant improvements in third-party ESG ratings for Evergy.
For example, slide nine profiles the comprehensive progress that we've made in the ESG ratings provided by ISS and by S&P Global's corporate sustainability assessment. From a disclosure perspective, 2022 marked the first year Evergy completed full CDP climate and water security questionnaires, as well as the Global Reporting Initiative report.
We've also joined the Electric Power Research Institute's Climate Ready initiative research partnership aimed at developing a collective approach to identifying and managing physical climate risks. Over-time, we expect this effort to support the optimization of our grid investment priorities, utilizing a common framework around cost-benefit analysis, risk mitigation and adaptation strategies.
Finally, we continue to integrate climate-related risks into our enterprise risk management system. This is a best practice, which will allow us to identify and mitigate the impact of current and future risks on our business, enhancing our ability to provide safe, reliable and affordable power.
I'll conclude my remarks with slide 10, which highlights the core tenants of our strategy, affordability, reliability and sustainability. On affordability front, advancing regional rate competitiveness is one of our primary objectives. Since 2017, we have reduced rates by 0.8% across our service territories while regional rates have risen by double digits and inflation rose 20% over the same time period. The impact of these efforts is reflected by ongoing wins in our region and economic development. And while we're pleased by our progress in improving regional rate competitiveness and keeping our rate trajectory far below the rate of inflation, affordability will always be an area of focus.
We target top-tier performance in reliability, customer service in generation through modernization of our transmission and distribution lines, investing in smart grid technology and developing systems capabilities that meet customer needs and enable the increasingly active customer engagement with their electric service.
Reliability also encompasses operational excellence in our generation fleet, leveraging the skills and capabilities of our high-performing team in important assets like our Wolf Creek Nuclear Plant. Reliability is all the more important, given the increasingly central role that electricity plays in so many aspects of daily life. We recognize the responsibility that comes with our role and we embrace the challenge of delivering power, the cost and service-level that our customers expect and demand.
With respect to sustainability, we continue to advance the transition of our generation fleet, a process that has been underway for two decades. Since 2005, we reduced carbon emissions by nearly half while reducing sulfur dioxide and NOx emissions by 98% and 88% respectively. Additionally, nearly half of the energy that we generated for our retail customers came from carbon-free resources in 2022. Our mission is to empower better future and our vision is to lead the responsible energy transition in our region, always with an eye on affordability and reliability as well as sustainability.
And with that, I will now turn the call over to Kirk.
