Earnings

Evergy Eyes A 1.4-Gigawatt Digital Realty Expansion Worth Around $4 Billion In Capital

Evergy also raised its 2026 earnings outlook to $4.35 to $4.50 per share and lifted its dividend 4%, with the project outside its five-year plan.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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Evergy Eyes A 1.4-Gigawatt Digital Realty Expansion Worth Around $4 Billion In Capital

Evergy, the Kansas and Missouri utility holding company, has signed a letter of intent with Digital Realty for a 1.4-gigawatt data center expansion, CEO David Campbell said on the company's third-quarter earnings call Thursday. Chief Financial Officer Bryan Buckler said the project alone could need capital investment "in the neighborhood of $4 billion".

A Former Army Ammunition Plant

Campbell, who is Evergy's chairman and CEO, said the site is the old Sunflower Army ammunition plant, a remediated tract of more than 9,000 acres that he likened to "almost 60% the size of the island of Manhattan." It sits next to a 600-megawatt Digital Realty project that already has a signed electric service agreement, announced on the first-quarter call. Together, the two projects represent two gigawatts of load.

Campbell said he expects to sign an electric service agreement for the expansion in the first half of 2027. The deal is meant to run under an enhanced version of Evergy's large-load tariff, which the company asked Kansas regulators to approve on October 29. Evergy anticipates an order by mid-2027.

Capital Outside The Five-Year Plan

Campbell said Evergy's five-year plan does not yet include the expansion, so it would add growth into the 2030s. Buckler said Evergy expects to own the vast majority of the generation serving the project. The ramp would start in 2029 and kick in "in earnest in 2030," rising each year through 2033.

Asked by a Truist analyst how much of the $4 billion might land in the next five-year period, Campbell answered, "We won't go into those details today." He said the bulk would come in 2030 and beyond.

Buckler offered a rule of thumb of about $3 billion of capital per gigawatt of customer. Several such projects over time would roughly equate to a 200-basis-point (two percentage point) increase in rate-base growth, he said. The company currently projects about 12% rate-base growth through 2030. Evergy will update its capital plan on the fourth-quarter call in February.

Higher Guidance And A Bigger Dividend

Evergy reported third-quarter adjusted earnings of $2.58 per share, up from $2.03 a year earlier. Campbell credited warmer weather, low growth, large-customer revenue and recovery of regulated investments, partly offset by higher operating and depreciation costs.

The company raised its 2026 adjusted earnings guidance to $4.35 to $4.50 per share from $4.14 to $4.34. Buckler tied the increase mainly to favorable third-quarter weather. Evergy also raised its quarterly dividend 4%, bringing the annualized payout to $2.89 per share.

Five signed large-load agreements represent about 2.6 gigawatts of steady-state peak load. With other large customers, Evergy expects roughly 3.1 gigawatts of peak load over time. Aggregate large-customer demand is about 350 to 400 megawatts today. A Missouri Metro rate order is expected in December.

Campbell said Evergy remains highly confident of reaching five to seven gigawatts of large-load customer agreements.

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