Evergy Inc
For the period ended Jun 30, 2024. Filed Aug 9, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 9, 2024
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Asset Retirement Obligations
- ASSET RETIREMENT OBLIGATIONS
Asset retirement obligations (AROs) associated with tangible long-lived assets are legal obligations that exist under enacted laws, statutes and written or oral contracts, including obligations arising under the doctrine of promissory estoppel. These liabilities are recognized at estimated fair value as incurred with a corresponding amount capitalized as part of the cost of the related long-lived assets and depreciated over their useful lives. Accretion of the liabilities due to the passage of time is recorded to a regulatory asset and/or liability. Changes in the estimated fair values of the liabilities are recognized when known.
Evergy Kansas Central, Evergy Metro and Evergy Missouri West have AROs related to asbestos abatement and the closure and post-closure care of ponds and landfills containing coal combustion residuals (CCRs). In addition, Evergy Kansas Central and Evergy Metro have AROs related to decommissioning Wolf Creek Generating Station (Wolf Creek) and the retirement of wind generation facilities.
The following table summarizes the change in the Evergy Companies' AROs for the periods ending June 30, 2024 and December 31, 2023.
| Evergy | Evergy Kansas Central | Evergy Metro | ||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| (millions) | ||||||
| Beginning balance January 1 | $1,203.1 | $1,153.2 | $599.3 | $565.1 | $460.4 | $444.2 |
| Additions | 72.8 | 9.7 | 44.8 | 9.7 | 24.1 | — |
| Revision in timing and/or estimates | — | 3.2 | — | 1.6 | — | 1.6 |
| Settlements | (7.0) | (21.8) | (4.5) | (9.8) | (2.3) | (8.6) |
| Accretion | 28.4 | 58.8 | 16.4 | 32.7 | 10.3 | 23.2 |
| Ending balance | $1,297.3 | $1,203.1 | $656.0 | $599.3 | $492.5 | $460.4 |
| Less: current portion | (44.9) | (40.3) | (25.9) | (22.2) | (16.6) | (16.0) |
| Total noncurrent asset retirement obligation | $1,252.4 | $1,162.8 | $630.1 | $577.1 | $475.9 | $444.4 |
In the second quarter of 2024, Evergy, Evergy Kansas Central and Evergy Metro recorded $72.8 million, $44.8 million and $24.1 million of ARO liabilities, respectively, related to the new Environmental Protection Agency (EPA) CCR regulation focused on legacy surface impoundments and historic placements of CCR. This regulation expands applicability of the 2015 CCR regulation to inactive landfills and beneficial use sites not previously regulated. Evergy recorded an equal and offsetting regulatory asset for each ARO liability. See Note 12 for additional information regarding the regulation of CCRs.
In the second quarter of 2023, Evergy and Evergy Kansas Central became contractually obligated to retire the wind facilities and remove the foundations at Persimmon Creek Wind Farm 1, LLC (Persimmon Creek) as part of the acquisition, resulting in a $9.7 million increase to their ARO liabilities.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.