Evergy is strategically investing in its generation portfolio, with plans to construct two combined-cycle natural gas plants (approx. 705 MW each) in Kansas by 2029-2030 and a 440 MW simple-cycle natural gas plant in Missouri by 2030. Additionally, new solar facilities totaling 324 MW (Kansas Sky, Sunflower Sky, Foxtrot) are planned for operation by summer 2027.

Missouri Senate Bill 4, signed in April 2025, establishes new mechanisms for electric utilities to recover costs for natural gas-fired generating units, including the ability to include Construction Work in Progress (CWIP) in rate base and extending Plant-in-Service Accounting (PISA) provisions. These changes are scheduled to expire at the end of 2035.

Evergy has initiated a process to dispose of its non-regulated equity and debt investments in early-stage clean energy and energy solution companies, which had a total value of $95.0 million as of June 30, 2025, down from $121.4 million at December 31, 2024. This follows $29.0 million in unrealized losses and impairment losses recorded year-to-date June 30, 2025, indicating a strategic shift away from these ventures.

Evergy Kansas Central reached a unanimous settlement for a $128.0 million retail revenue increase, expected to be effective September 29, 2025. Additionally, Evergy Missouri West implemented new rates in January 2025, increasing retail revenues by approximately $55 million, demonstrating effective management of regulatory processes to secure necessary revenue adjustments.

While consolidated operating and maintenance (O&M) expenses increased by $17.9 million YTD 2025, Evergy Kansas Central saw a $4.4 million decrease in O&M, primarily due to reduced plant operating and maintenance expenses from a major maintenance outage at JEC in 2024. Conversely, Evergy Metro's O&M increased by $13.6 million, driven by higher general and administrative labor costs and a major maintenance outage at Iatan Station in 2025.

Management concluded that Evergy's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025. Furthermore, there has been no material change in Evergy's internal control over financial reporting during the quarterly period, indicating stable and reliable financial reporting processes.

The EPA's plans to reconsider and potentially repeal or restructure key environmental rules, including the 2015 Ozone NAAQS, 2024 PM2.5 NAAQS, Regional Haze Program, and GHG regulations, create substantial uncertainty. The cost to comply with potentially changing or more stringent standards could be material, as stated on pages 51-53.

Two new material lawsuits were filed in 2025: a class action regarding Montrose Station CCRs and a nuclear antitrust class action. Both are in preliminary stages, and Evergy is currently unable to assess the outcome or reasonably estimate possible damages, indicating potential unquantifiable financial and reputational risks.

In April 2025, Moody's Investor Service changed Evergy Missouri West's outlook from Negative to Stable and lowered its Corporate Credit Rating to Baa3, Senior Secured Debt to Baa1, and Commercial Paper to P-3. This could impact future borrowing costs and financial flexibility for the subsidiary.

As an integrated, regulated electric utility serving approximately 1.7 million customers in Kansas and Missouri, Evergy benefits from a natural monopoly in its service territories. Recent regulatory approvals for rate increases, such as the $128.0 million retail revenue increase for Evergy Kansas Central and $55 million for Evergy Missouri West, underscore its ability to recover costs and maintain stable revenues within its regulated framework.

Evergy's 50% ownership in Prairie Wind Transmission (a 108-mile, 345 kV line) and 13.5% ownership in Transource Energy, LLC (focused on competitive electric transmission projects) position it as a key player in regional transmission services. This allows for increased transmission revenue, as evidenced by a $24.5 million increase YTD 2025, contributing to its competitive advantage in grid infrastructure.

The Evergy Companies collectively possess approximately 15,800 MWs of owned generating capacity and renewable power purchase agreements. This substantial and diversified capacity, including planned investments in new natural gas and solar facilities, strengthens its ability to meet future energy demand and maintain reliable service, a critical competitive factor in the utility sector.

Evergy's consolidated operating and maintenance (O&M) expense increased by $17.9 million year-to-date June 30, 2025, reaching $487.1 million compared to $469.2 million in 2024. This rise was primarily attributable to an $11.4 million increase in general and administrative labor and employee benefits expense, indicating upward pressure on core operational costs.

Consolidated fuel and purchased power expenses decreased by $49.7 million year-to-date June 30, 2025, to $685.7 million from $735.4 million in 2024. This reduction positively impacts the company's cost structure, partially offsetting increases in other operating expenses and contributing to improved gross margins.

Depreciation and amortization expense increased by $20.3 million year-to-date June 30, 2025, to $576.5 million from $556.2 million in 2024. This increase is primarily due to ongoing capital additions, indicating continued investment in property, plant, and equipment to maintain and expand infrastructure.

Evergy is actively investing in advanced generation technologies, with plans to construct two combined-cycle natural gas plants (705 MW each) and a 440 MW simple-cycle natural gas plant, expected to be operational by 2029-2030. This demonstrates a commitment to modernizing its energy production capabilities.

The company is developing several new solar generation facilities, including the 159 MW Kansas Sky project and two Evergy Missouri West facilities (65 MW Sunflower Sky and 100 MW Foxtrot), all projected to begin operations by summer 2027. This highlights a strategic move towards integrating more renewable energy sources into its portfolio.

Evergy has initiated a process to dispose of its non-regulated investments in early-stage clean energy and energy solution companies, following $29.0 million in year-to-date unrealized losses and impairment losses. This suggests a re-evaluation of its innovation strategy in non-regulated ventures, potentially streamlining focus on core regulated operations.

Cash flows from financing activities decreased by $176.1 million year-to-date June 30, 2025, primarily due to a $327.3 million decrease in proceeds from long-term debt issuances ($593.4M in YTD 2025 vs $920.7M in YTD 2024). This was partially offset by a $197.7 million increase in net short-term debt borrowings, indicating a shift in financing strategy or market conditions.

Additions to property, plant and equipment remained substantial at $(1,220.1) million year-to-date June 30, 2025, only a slight decrease of $76.0 million from the prior year. This reflects ongoing capital allocation towards maintaining and expanding utility infrastructure, consistent with its regulated asset base growth strategy.

Evergy's Board of Directors declared a quarterly dividend of $0.6675 per share in August 2025, consistent with previous declarations. Cash dividends paid increased slightly to $(304.6) million YTD 2025 from $(295.4) million YTD 2024, demonstrating a continued commitment to returning value to shareholders.

Evergy is committed to increasing its renewable energy footprint, with plans to construct and own approximately 159 MW of solar generation in Kansas (Kansas Sky) and two additional solar facilities totaling 165 MW (Sunflower Sky and Foxtrot) in Kansas and Missouri, respectively, all expected to be operational by summer 2027. These projects demonstrate tangible progress towards environmental sustainability goals.

The EPA's proposed repeal of 2024 GHG emission standards and reconsideration of the 2024 PM2.5 NAAQS introduce significant regulatory uncertainty. This could lead to material costs for Evergy Companies to comply with evolving environmental requirements, impacting their ability to forecast and manage environmental commitments effectively.

The filing of class action lawsuits related to Montrose Station CCRs (alleging unlawful spreading of coal ash) and a nuclear antitrust class action (alleging wage-fixing for nuclear employees) highlights potential social responsibility and governance issues. While preliminary, these cases could impact Evergy's reputation and financial standing.

Retail electricity sales were negatively impacted by unfavorable weather conditions, with cooling degree days decreasing by 26% in Q2 2025 and 25% year-to-date compared to 2024. This led to a $13.6 million decrease in retail sales revenue year-to-date, demonstrating the company's exposure to weather-related demand fluctuations.

The ongoing judicial review and EPA's plans to reconsider various environmental regulations (Ozone NAAQS, PM2.5, GHG, CCRs) create a highly uncertain regulatory environment. This could lead to unpredictable compliance costs and operational adjustments, making long-term planning more complex.

Missouri Senate Bill 4 allows for CWIP in rate base and extends PISA for natural gas plants, while the KCC and MPSC have approved CCNs for planned natural gas and solar investments. These legislative and regulatory actions provide a supportive framework for Evergy's significant capital expenditure plans, mitigating some market risks.