Evergy, Inc. (EVRG): Business Model Canvas [11-2024 Updated]

Evergy, Inc. (EVRG) stands at the forefront of energy innovation, combining traditional power generation with a robust commitment to renewable energy. This blog post delves into the Business Model Canvas of Evergy, highlighting their strategic partnerships, core activities, and diverse customer segments. Discover how Evergy not only delivers reliable electricity but also champions sustainability and community engagement, all while navigating a complex regulatory landscape. Read on to explore the intricate framework that drives Evergy's success in today's dynamic energy market.

Evergy, Inc. (EVRG) - Business Model: Key Partnerships

Collaborations with Local and State Governments

Evergy, Inc. actively collaborates with local and state governments to enhance its service delivery and infrastructure development. As of 2024, Evergy is involved in several projects that require regulatory approvals and partnerships with governmental bodies. For instance, the company intends to construct a 159 MW solar generation facility in Kansas, named Kansas Sky, which is subject to the Kansas Corporation Commission's (KCC) approval.

Partnerships with Renewable Energy Developers

Evergy has established strategic partnerships with renewable energy developers to expand its portfolio of clean energy projects. In 2024, Evergy Missouri West entered agreements to develop two solar facilities—Sunflower Sky (65 MW) in Kansas and Foxtrot (100 MW) in Missouri, both expected to commence operations by summer 2027. These projects are contingent on obtaining the necessary Certificates of Convenience and Necessity (CCN) from the Missouri Public Service Commission (MPSC).

Partnership Type	Project Name	Capacity (MW)	Location	Expected Operation Date	Regulatory Body
Solar Facility	Kansas Sky	159	Kansas	Summer 2027	Kansas Corporation Commission
Solar Facility	Sunflower Sky	65	Kansas	Summer 2027	Missouri Public Service Commission
Solar Facility	Foxtrot	100	Missouri	Summer 2027	Missouri Public Service Commission

Relationships with Regulatory Bodies

Evergy maintains strong relationships with various regulatory bodies to ensure compliance and facilitate its operational strategies. As of September 30, 2024, Evergy's corporate credit rating from Moody's was Baa2, with a senior secured debt rating of A3. Furthermore, in the face of changing regulatory landscapes, such as the Prohibiting Russian Uranium Imports Act, Evergy has taken proactive measures to mitigate risks related to fuel supply.

Regulatory Body	Focus Area	Current Status	Impact on Operations
Kansas Corporation Commission	Energy Infrastructure	Pending Approval	Solar Facility Development
Missouri Public Service Commission	Energy Infrastructure	Pending Approval	Solar Facility Development
Moody's Investors Service	Credit Rating	Baa2 (Stable)	Financing Costs

Evergy, Inc. (EVRG) - Business Model: Key Activities

Generation and distribution of electricity

Evergy, Inc. operates as a regulated electric utility providing electricity to approximately 1.6 million customers across Kansas and Missouri. In the third quarter of 2024, Evergy reported operating revenues of $1,811.4 million, a year-over-year increase of 142.1 million from $1,669.3 million in 2023. The total electric retail revenues for the year to date September 30, 2024, reached $3,837.2 million, up from $3,552.8 million in the same period the previous year.

Revenue Type	Q3 2024 Revenue (in millions)	Q3 2023 Revenue (in millions)	Year-to-Date 2024 Revenue (in millions)	Year-to-Date 2023 Revenue (in millions)
Residential	730.8	675.1	1,746.5	1,626.4
Commercial	615.2	528.6	1,533.7	1,419.3
Industrial	188.9	158.9	524.0	475.3
Wholesale	114.7	148.3	259.0	301.8
Total Electric Retail	1,545.8	1,374.2	3,837.2	3,552.8

Investment in renewable energy projects

Evergy is committed to increasing its renewable energy capacity. The company has plans to construct a solar generation facility named Kansas Sky, which is expected to have a capacity of approximately 159 MW and is projected to begin operations by summer 2027. In 2024, Evergy Missouri West entered into agreements for two solar generation facilities, further enhancing its renewable energy portfolio.

Maintenance of electric infrastructure

Evergy invests significantly in maintaining its electric infrastructure to ensure reliable service delivery. Operating and maintenance expenses totaled $399.8 million in Q3 2024, an increase of $29.2 million compared to the same quarter in 2023. The depreciation and amortization costs also reflect the company's ongoing commitment to maintaining and upgrading its infrastructure, amounting to $838.5 million year-to-date September 30, 2024, compared to $806.1 million in the same period in 2023.

Expense Type	Q3 2024 Expense (in millions)	Q3 2023 Expense (in millions)	Year-to-Date 2024 Expense (in millions)	Year-to-Date 2023 Expense (in millions)
Operating and Maintenance	399.8	370.6	1,072.0	1,082.1
Depreciation and Amortization	838.5	806.1	2,345.2	2,201.3

Evergy, Inc. (EVRG) - Business Model: Key Resources

Extensive electric grid network

Evergy operates a vast electric grid network that spans across Kansas and Missouri. The company's transmission and distribution systems are crucial for delivering electricity to its customer base. As of September 30, 2024, Evergy's total assets amounted to approximately $9.96 billion, which includes significant investments in infrastructure necessary for maintaining and expanding its grid capabilities.

Diverse energy generation assets (nuclear, solar, natural gas)

Evergy has a diversified portfolio of energy generation assets. This includes:

• Nuclear Energy: The Wolf Creek Nuclear Operating Corporation, which contributes significantly to Evergy’s power supply.
• Solar Energy: Plans to construct solar facilities such as the Kansas Sky solar generation facility with an expected capacity of 159 MW.
• Natural Gas: Evergy Missouri West's recent acquisition of a 22% ownership stake in the Dogwood Energy Center, a combined-cycle natural gas facility.

As of September 30, 2024, Evergy's operating revenues were reported at $4.59 billion, showcasing the financial strength derived from its diverse generation assets.

Energy Source	Capacity (MW)	Investment (millions)
Nuclear	1,190	Not disclosed
Solar	159 (Kansas Sky)	Not disclosed
Natural Gas (Dogwood)	145	$60

Skilled workforce and management team

Evergy's workforce is a key resource contributing to its operational efficiency and strategic direction. The company employs knowledgeable professionals across various sectors, including engineering, operations, and management. As of September 30, 2024, Evergy's net income attributable to the company was reported at $795.3 million, reflecting the effectiveness of its skilled workforce.

The management team's strategic initiatives focus on sustainability and innovation, which is evident from their ongoing projects aimed at enhancing renewable energy generation and grid resiliency.

Workforce Category	Number of Employees	Key Expertise
Engineering	1,200	Grid Management, Renewable Energy
Operations	2,500	Energy Generation, Maintenance
Management	150	Strategic Planning, Finance

Evergy, Inc. (EVRG) - Business Model: Value Propositions

Reliable electricity supply to residential and commercial customers

Evergy, Inc. provides a reliable electricity supply to approximately 1.6 million customers across Kansas and Missouri. The utility company reported total electric retail revenues of $1.81 billion for the third quarter of 2024, reflecting an increase from $1.67 billion in the same period of 2023. The breakdown of residential, commercial, and industrial revenues for the third quarter of 2024 is as follows:

Customer Segment	Revenue (Millions)	Change from 2023 (Millions)
Residential	$730.8	$55.7
Commercial	$615.2	$86.6
Industrial	$188.9	$30.0
Other Retail	$10.9	($0.7)
Total Electric Retail	$1,545.8	$171.6

Commitment to renewable energy and sustainability

Evergy is committed to advancing renewable energy and sustainability initiatives. The company plans to construct a 159 MW solar generation facility in Kansas, expected to begin operations by summer 2027. Additionally, Evergy Missouri West is developing two solar facilities with a combined capacity of 165 MW. This commitment is reflected in their capital expenditures for renewable generation, projected to be approximately $472 million in 2025, rising to $1.228 billion by 2029.

Competitive pricing and customer service

Evergy aims to maintain competitive pricing while enhancing customer service. The company's operating revenues for the year to date as of September 30, 2024, reached $4.59 billion, up from $4.32 billion in 2023. The company's customer service efforts include addressing rate adjustments; for instance, in April 2024, Evergy Metro's retail prices were adjusted to reflect updated transmission costs, expected to increase annual retail revenues by $7.1 million.

To support its pricing strategy, Evergy has a robust financial structure, with total equity of approximately $5.25 billion as of September 30, 2024. The company's commitment to customer service is also underscored by its net income attributable to Evergy, Inc., which was $795.3 million year to date for 2024, representing a significant increase from $673.3 million in 2023.

Evergy, Inc. (EVRG) - Business Model: Customer Relationships

Direct engagement through customer service platforms

Evergy, Inc. has established multiple customer service platforms to enhance direct engagement with its customers. The company reported a total customer accounts receivable of $386.8 million as of September 30, 2024, which includes $22.2 million for billed accounts and $199.1 million for unbilled accounts. The allowance for credit losses was $13.9 million, reflecting the company's proactive approach in managing customer relationships and ensuring service reliability.

Community outreach initiatives

Evergy engages in various community outreach initiatives aimed at fostering strong relationships with its customer base. For instance, the company has allocated approximately $2.5 million in 2024 for community development projects and energy assistance programs. These initiatives have reached over 50,000 households, providing resources and support to low-income customers.

Energy efficiency programs for customers

Evergy promotes energy efficiency through several customer programs designed to reduce energy consumption and costs. In 2024, the company reported that its energy efficiency programs resulted in savings of approximately 180 GWh for residential customers and 150 GWh for commercial customers. The participation rate in these programs was around 25%, indicating a strong customer interest in sustainable practices.

Program Type	2024 Participation Rate	Energy Saved (GWh)	Customer Impact ($)
Residential Efficiency Programs	25%	180	$15 million
Commercial Efficiency Programs	25%	150	$12 million
Total	-	330	$27 million

In addition, Evergy is investing in customer education initiatives, with over 200 workshops planned for 2024 to educate customers on energy-saving techniques and the benefits of renewable energy sources.

Evergy, Inc. (EVRG) - Business Model: Channels

Direct sales to residential and commercial customers

In the third quarter of 2024, Evergy reported substantial revenues from its residential and commercial customers. The breakdown of revenues for these segments is as follows:

Customer Segment	Q3 2024 Revenue (millions)	Q3 2023 Revenue (millions)
Residential	$730.8	$675.1
Commercial	$615.2	$528.6
Industrial	$188.9	$158.9
Total Electric Retail	$1,545.8	$1,374.2

Year-to-date revenue for the residential segment reached $1,746.5 million, while commercial revenues totaled $1,533.7 million.

Online platforms for bill payments and service requests

Evergy has enhanced its customer engagement through online platforms, facilitating bill payments and service requests. In 2024, the total operating revenues from contracts with customers were reported as $4,589.9 million, reflecting the effectiveness of these digital channels. This shift towards digital engagement is evident in the increasing number of online transactions and service interactions.

Partnerships with local businesses for energy solutions

Evergy has established partnerships with local businesses to deliver tailored energy solutions. This collaborative approach has helped expand their service offerings and customer base. In 2024, Evergy's gross margin (non-GAAP) was reported at $3,148.4 million, showing growth driven by these partnerships. Additionally, Evergy's investment in renewable energy projects, such as the planned 159 MW solar facility in Kansas, reflects their commitment to sustainable partnerships.

Evergy, Inc. (EVRG) - Business Model: Customer Segments

Residential customers across multiple states

Evergy serves a substantial residential customer base across its operating regions, primarily in Kansas and Missouri. As of September 30, 2024, residential revenues amounted to $1,746.5 million, reflecting an increase of $120.1 million from the previous year. The number of residential customers served was approximately 4.8 million in total, with average monthly consumption per customer of about 1,000 kWh.

Customer Segment	Revenue (2024)	Revenue Change (YoY)	Number of Customers	Average Monthly Consumption (kWh)
Residential	$1,746.5 million	$120.1 million	4.8 million	1,000

Commercial and industrial clients

Evergy's commercial and industrial segments contribute significantly to its revenue. For the year-to-date ending September 30, 2024, commercial revenues were $1,533.7 million, a year-over-year increase of $114.4 million. Industrial revenues reached $524.0 million, up $48.7 million compared to the previous year. The total number of commercial and industrial clients served is estimated to be around 70,000.

Customer Segment	Revenue (2024)	Revenue Change (YoY)	Number of Clients
Commercial	$1,533.7 million	$114.4 million	60,000
Industrial	$524.0 million	$48.7 million	10,000

Government and municipal entities

Evergy also serves various government and municipal entities, which make up a smaller yet significant portion of its customer segments. Revenue from government and municipal clients was approximately $360.9 million in 2024, with a year-over-year increase of $52.7 million. This segment benefits from long-term contracts and stable consumption patterns, contributing to Evergy's overall revenue stability.

Customer Segment	Revenue (2024)	Revenue Change (YoY)	Number of Entities
Government & Municipal	$360.9 million	$52.7 million	1,500

Evergy, Inc. (EVRG) - Business Model: Cost Structure

Significant capital expenditures for infrastructure upgrades

In 2024, Evergy has committed substantial capital expenditures for infrastructure upgrades, amounting to approximately $178.7 million year-to-date as of September 30, 2024. The company has focused on enhancing its power generation capacity and modernizing its transmission and distribution systems.

Specific investments include:

• Acquisition of Dogwood Energy Center: Evergy Missouri West purchased a 22% ownership interest for about $60 million.
• Infrastructure improvements: Ongoing projects are expected to increase operational efficiency and reliability across its service areas.

Operating costs associated with power generation and maintenance

Evergy's operating costs for the year ended September 30, 2024, reflect significant expenditures in power generation, maintenance, and operational efficiency initiatives. The total operating and maintenance expenses were reported at $399.8 million. Breakdown of these costs includes:

Cost Category	Amount (Million $)
Fuel and purchased power	(1,169.1)
SPP network transmission costs	(272.4)
Operating and maintenance expenses	(399.8)
Depreciation and amortization	(838.5)
Taxes other than income tax	(343.3)

These costs are critical for maintaining Evergy's operational capabilities and ensuring compliance with regulatory standards.

Regulatory compliance costs and taxes

Regulatory compliance costs have increased significantly, with taxes other than income tax reaching $343.3 million for the year-to-date period. These costs are primarily driven by:

• Rebasing of property taxes: Adjustments due to new rate cases effective December 2023 have contributed to increased tax liabilities.
• Regulatory fees: Ongoing compliance with state and federal regulations, which involve substantial assessments and contributions to the regulatory bodies.

Overall, these compliance-related expenses reflect Evergy's commitment to upholding industry standards while navigating the complexities of regulatory frameworks in the energy sector.

Evergy, Inc. (EVRG) - Business Model: Revenue Streams

Electric utility sales to residential, commercial, and industrial customers

For the year-to-date ending September 30, 2024, Evergy reported the following revenues from electric utility sales:

Customer Segment	Revenue (millions)	Change from 2023 (millions)
Residential	$1,746.5	$120.1
Commercial	$1,533.7	$114.4
Industrial	$524.0	$48.7
Other Retail	$33.0	$1.2
Total Electric Retail	$3,837.2	$284.4

In total, Evergy's electric retail revenues increased by 8% year-over-year, primarily driven by new retail rates implemented in December 2023 and higher demand levels despite some adverse weather conditions.

Wholesale electricity sales to other utilities

Evergy's wholesale electricity sales generated substantial revenue as well:

Revenue Type	Revenue (millions)	Change from 2023 (millions)
Wholesale Sales	$259.0	($42.8)
Total Wholesale Revenues	$259.0	($42.8)

This decline in wholesale revenues can be attributed to fluctuating market conditions and reduced demand from other utilities.

Renewable energy credits and incentives

Evergy also benefits from renewable energy credits and various incentives:

Revenue Source	Revenue (millions)	Change from 2023 (millions)
Renewable Energy Credits	$132.8	($24.7)
Other Incentives	$21.3	($16.5)
Total Renewable Energy Revenues	$154.1	($41.2)

These revenues reflect ongoing investments in renewable energy projects and compliance with state and federal renewable energy mandates.

Updated on 16 Nov 2024

Resources:

1. Evergy, Inc. (EVRG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Evergy, Inc. (EVRG)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Evergy, Inc. (EVRG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.