WEC Energy Group, Inc.

Good afternoon and welcome to WEC Energy Group's conference call for first quarter 2019 results. This call is being recorded for rebroadcast and all participants are in a listen-only mode at this time. Before the conference call begins, I remind you that all statements in the presentation, other than historical facts, are forward-looking statements that involve risks and uncertainties that are subject to change at any time. Such statements are based on management's expectations at the time they are made. In addition to the assumptions and other factors referred to in connection with the statements, factors described in WEC Energy Group's latest Form 10-K and subsequent reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those contemplated. During the discussions, referenced earnings per share will be based on diluted earnings per share unless otherwise noted. After the presentation, the conference will be open to analysts for questions and answers. In conjunction with this call, a package of detailed financial information is posted at wecenergygroup.com. A replay will be available approximately two hours after the conclusion of this call. And now it's my pleasure to introduce Gail Klapa, Executive Chairman of WEC Energy Group.

Good afternoon, everyone. Thank you for joining us today as we review our results for the opening quarter of 2019. First, as always, I'd like to introduce the members of our management team who are here with me today. We have Kevin Fletcher, President and CEO of WEC Energy Group, Scott Lauber, our Chief Financial Officer, Bill Duck, our Controller, Peggy Kelsey, Executive Vice President and General Counsel, and Beth Straka, Senior Vice President, Corporate Communications and Investor Relations. Scott will discuss our financial results in detail a bit later in the call. As you saw from our news release this morning, we reported first quarter 2019 earnings of $1.33 a share. Our performance was driven by colder-than-normal weather, a strong economy, and a continuing focus on operating efficiency across our system of companies. I might add that our people and our technology performed exceptionally well during the polar vortex cold snap that gripped the region during January. As wind chills in late January dropped to near 50 degrees below zero, customer demand for natural gas hit new all-time records across our service areas in Wisconsin, Michigan, and Minnesota. Our gas distribution networks were truly put to the test, and when it counted most, we delivered. We also made real progress on a number of other important initiatives during the quarter. We completed our new natural gas-fired power plants in Michigan's Upper Peninsula on time and on budget. With the new units online, we were able to retire our older, less efficient coal-fired plant at Presque Isle. And here in Wisconsin, we received approval from the Wisconsin Public Service Commission for two major solar farms. These facilities will be among the largest solar installations in the Midwest and will support our effort to reduce greenhouse gas emissions while maintaining reliable and cost-effective infrastructure. You can learn more about our Generation Reshaping Plan in the Climate Report that we just published just this last week. In addition, our regulatory calendar is on track with rate filings in Wisconsin during the quarter. Kevin will provide you with an update on that front in just a moment. And as I mentioned earlier, we're benefiting from a thriving economy here in Wisconsin. The state's unemployment rate came in at 3% or less during each month of this year's first quarter. And new proposed investments are promising additional development and jobs. For example, global health care firm Presanius Cabee recently announced that it will build a flagship facility for its U.S. distribution operations in the southeastern corner of our state. Closer to Milwaukee, Foxconn plans to restart construction as planned after the winter break on Phase 1 of its high-tech manufacturing and research campus in Racine County. Foxconn announced during the quarter that a centerpiece of Phase 1 will be a Gen 6 fabrication plant. That Gen 6 plant will produce liquid crystal display panels in various sizes, up to perhaps 90 inches. Production is expected to begin by the end of 2020. And in a matter of weeks, the company plans to issue initial bid packages for that Gen 6 facility and for construction of a new data center, as well as research and development labs. We're already seeing the positive ripple effect of Foxconn's commitment to Wisconsin. More than 30 additional investment projects have been announced in the vicinity of the Foxconn campus, including hotels, medical centers, and more than 2,700 housing units. These 30-plus projects should result in more than $900 million of new private capital investment. And now I'll turn the call over to Kevin for details on our operations and our regulatory calendar for 2019. Kevin, all yours.

Thank you, Gail. I'd like to start by highlighting the work our employees are doing to provide excellent customer care and reliable service. Just last month, our WEC Energy Group companies placed in the top quartile in the American Customer Satisfaction Index for energy utilities. And as Gail mentioned, we're making progress across our companies on key initiatives. I'll review where we stand in our four state jurisdictions. Here in Wisconsin, we're now on track to add utility-scale solar generation to our portfolio of regulated assets. You'll recall that on May 31st of last year, our Wisconsin Public Service subsidiary, along with Madison Gas and Electric, filed a joint application with the Wisconsin Commission to purchase 300 megawatts of solar generation at two locations. Earlier this month, the Commission approved our proposal, and we received a written order on April 18th. The Badger Hollow Solar Farm will be located in the southwestern part of the state in Iowa County and will be developed and constructed by Invenergy. The Two Creeks solar project is being developed and constructed by NextEra in northeastern Wisconsin. Wisconsin Public Service will own a total of 200 megawatts, 100 megawatt at each site, with an expected investment of approximately $260 million. We expect these projects to enter commercial service by the end of 2020. Now I'll touch on our rate filings. On March 28, we filed a proposal with the Wisconsin Public Service Commission to set customer rates for our Wisconsin utilities. The request comes after a four-year base rate freeze, a freeze that has resulted in lower customer bills while maintaining world-class reliability and shaping a cleaner energy future. First, I'll discuss the request we're making to set WE Energy's customer rates for electricity for 2020 and 2021. You can refer to the last two pages of the earnings packet for details on our natural gas and steam filings. Using savings from tax reform, we are targeting an increase in the typical monthly electric bill of approximately 2.9% in 2020 and an additional 2.9% in 2021. There are three primary cost drivers for our proposed WE Energies electric increases. Number one, higher transmission charges. Remember, the amounts collected in rates have been capped since 2010. Number two, revenue the Commission assumed WE Energies would receive from MISO starting in 2015 that was not received. And number three, increased cost associated with the agreement to purchase energy from the Point Beach Nuclear Plant. This agreement was approved by the Commission in 2007 when we sold Point Beach and credited customers a total of $670 million over a three-year period. Now on to Wisconsin Public Service. The rate proposal includes our acquisition of approximately 60 megawatts of the Forward Wind Energy Center in 2018, as well as our investment in the two solar facilities. It also includes the ongoing modernization of the electric system by upgrading and moving underground 2,000 miles of electric distribution lines. We've already seen higher reliability in northern Wisconsin as a result of these upgrades. With the tax savings and other credits applied, the typical electric bill would increase by approximately 4.9% in 2020 and an additional 4.9% in 2021. Even with the increases, Wisconsin Public Service average bills would remain well below the current state and national averages. To support our strong balance sheet, we are seeking a slightly higher equity component in these rate reviews consistent with Wisconsin Commission's prior decisions. We expect final orders by the end of the year with new rates effective in January of 2020. Turning to Michigan, Upper Michigan Energy Resources has begun commercial operations of its new gas-powered generation stations on March 31. We've invested approximately $255 million in these new facilities. Half of the investment will be covered by a 20-year agreement with Cliffs Natural Resources, and the other half will be covered in retail rates. This generation solution is expected to save customers nearly $600 million over the next 30 years. Looking to Illinois, the People's Gas System Modernization Program is roughly a quarter complete. As we improve safety and reliability, we continue to focus on efficiency and excellent customer care. Earlier this month, a national customer study found People's Gas to be one of the energy companies that's easiest to do business with in America. And finally, an update on Minnesota energy resources. As you may remember from our last call, the Minnesota Attorney General requested a review of the return on equity that the Public Utilities Commission had approved in December. The Commission has chosen not to take up this request, so our Minnesota ROE stands at 9.7 percent. And with that, I'll turn it back to Gail.