WEC Energy Group, Inc.

Good afternoon and welcome to WEC Energy Group's conference call for second 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 is my pleasure to introduce Gil Klapa, Executive Chairman of WEC Energy Group.

Good afternoon, everyone. Thank you for joining us today as we review our second quarter 2019 results. 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, Scott Lauber, our Chief Financial Officer, Bill Duff, Controller, Peggy Kelsey, Executive Vice President of General Counsel, and Beth Straca, Senior Vice President of Corporate Communications and Investor Relations. Now, before we dive into our quarter, I'd like to take just a moment to acknowledge the tremendous effort of our field personnel and support staff in the wake of the most severe storms to hit central and northern Wisconsin in at least 20 years. On July 19 and 20, eight confirmed tornadoes wreaked havoc across the area and literally tore apart portions of our system. Both Kevin and I want to thank Governor Evers and his staff, the National Guard, and the local emergency management teams for their outstanding support and cooperation. This was a textbook example of the public and private sectors pulling together for the common good. And now on to the quarter. Scott will discuss our financial results in detail in just a few minutes. As you saw from our news release this morning, we reported second quarter 2019 earnings of 74 cents a share. During the quarter, we continued to see the benefit of operating efficiencies across our system. And the infrastructure investments we've made outside our traditional footprint also had a positive impact. These factors helped us to overcome an unusually cool start to summer in the Midwest. Turning now to our power generation portfolio in Wisconsin. As we look ahead, we've identified the need for additional capacity at WE Energies, capacity that can deliver carbon-free energy. So just last week, we filed with the Wisconsin Public Service Commission for approval to invest in the Badger Hollow 2 solar park, which will be located in the southwestern part of the state. As you may recall, we've already received approval for Wisconsin Public Service to invest in Badger Hollow 1. We expect this next phase of development at Badger Hollow to expand our solar capacity by approximately 100 megawatts. This investment will support our effort to reduce CO2 emissions and maintain reliable, affordable service for our customers. In the meantime, we continue to see a very healthy economy here in Wisconsin. The unemployment rate for June came in at 2.9%. In fact, Wisconsin's unemployment rate has stood at 3% or lower since July of last year. This marks the longest period on record in the state, with unemployment at or below 3%. And based on data just released literally last week, more people are working in the Milwaukee region than at any time in history. Also, we see continued momentum with a wide range of economic development projects. In May, for example, site and operational plans were approved for Haribo's first North American plant. Haribo is moving forward here in Wisconsin on what will be one of America's largest confectionary plants. Groundbreaking is scheduled for phase one of construction by spring 2020. At full build-out, the Haribo manufacturing campus can employ as many as 1,250 workers. So folks, the gummy bears are coming. Last quarter, I also mentioned that international healthcare firm Presenius Kabi announced plans for a production facility in the region. Now presenting us will be joined by another pharmaceutical company, Nexus Pharmaceuticals. A few weeks ago, Nexus unveiled plans to develop a therapeutic drug manufacturing facility in multiple phases over the next 10 years. Nexus expects to invest $250 million in the project. First phase of commercial production is slated to begin in 2022. The decision by Nexus to invest here highlights our ongoing success in attracting companies that require skilled knowledge and production workers. And I know all of you are interested in an update on Foxconn. In June, Foxconn began pouring the footings and the concrete foundations for its Gen 6 LCD fabrication plant. Initial production is expected to begin late next year. Foxconn has also announced plans to diversify its Wisconsin output, potentially including servers, networking products, and automotive controls in addition to display panels for a range of industries. And a high-capacity data center is being designed to support Foxconn's research activities as its campus expands in Wisconsin. This kind of growth in manufacturing in our region is spawning a very significant ripple effect. Nearly $1 billion of additional private investment has already been announced in the vicinity of the Foxconn campus. Now I'll turn it over to Kevin for some key details on our operations and an update on our regulatory calendar.

Kevin, all yours. Thank you, Gail. I'd like to start by reviewing where we stand in Wisconsin. As Gail mentioned, on July 19th, more than 290,000 customers in our Wisconsin service area were impacted as winds in excess of 80 miles per hour caused extensive damage to our network. Despite very difficult conditions, we were able to restore service to nearly all customers within a week. We also appreciate the patience and support of our customers in the wake of this historic weather event. Now I'll fill in a few details on the solar investment Gail mentioned. Just last week on August the 1st, WE Energies partnered with Madison Gas and Electric in filing for approval to purchase an additional 150 megawatts of solar capacity at Badger Hollow. WE Energies would own 100 megawatts of the solar park with an estimated investment of $130 million. Subject to approval by the Wisconsin Commission, we expect the second phase of development at Badger Hollow to be completed by the end of 2021. Now, an update on the rate review process. You may recall on March 28, we filed a proposal with the Public Service Commission of Wisconsin to set customer rates for our Wisconsin utilities. The request follows a four-year freeze of base rates A freeze that has resulted in lower customer bills while maintaining world-class reliability. After applying savings from tax reform, we have filed for an increase in the typical WeEnergy's 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 WeEnergy's 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 the Midwest grid operator 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. Of course, there will also be discussion during the case about the recovery of the remaining investment balance at the Pleasant Prairie Power Plant, which we retired last year. Moving to Wisconsin Public Service, our rate proposal includes our investment in the Forward Wind Energy Center and the two Wisconsin solar facilities. It also includes the ongoing modernization of our electric system to improve reliability in northeastern Wisconsin. With the tax savings and other credits applied, the typical Wisconsin Public Service electric bill would increase by approximately 4.9% in 2020 and an additional 4.9% in 2021. Even with these increases, typical bills for Wisconsin Public Service customers 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 recent decisions made by Wisconsin Commission. We received a procedural schedule from the Commission on June the 10th. The first key date in the process is August the 23rd, when Commission staff and intervenors will file their direct testimony. We expect a Commission decision in the fourth quarter for new rates effective January the 1st, 2020. Turning now to Illinois, the People's Gas System Modernization Program is progressing well. We just retired Chicago's oldest natural gas main, a cast iron pipe that was placed into service in 1859, before the Civil War. This long-term effort to provide Chicago with a safe, modern natural gas delivery network is approximately 26% complete. On a final note, others are recognizing our focus on safety and reliability of people's gas. Escalant, an analytics firm, recently surveyed more than 50,000 residential customers across the country about their energy companies. Through this survey, Peoples Gas was ranked among the top 10 most trusted natural gas utility brands in the nation and number one in the Midwest. With that, I'll turn it back to Gail.