WEC Energy Group, Inc.

Good afternoon and welcome to WEC Energy Group's conference call for fourth quarter and year-end 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 Gail Klapa, Executive Chairman of WEC Energy Group.

Good afternoon, everyone. Thank you for joining us today as we review our results for calendar year 2019. First, 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, Chief Financial Officer, Bill Gutt, our Comptroller, Peggy Kelsey, Executive Vice President and General Counsel, Tony Reese, Treasurer, and Wes Straka, Senior Vice President of Corporate Communications and Investor Relations. Scott will discuss our financial results in detail in just a moment, but as you saw from our news release this morning, we reported full-year 2019 earnings of $3.58 a share. And I'm pleased to report that we delivered a record year on virtually every meaningful measure of performance, from customer satisfaction to a swift recovery from severe July storms that caused extensive damage to our system. As we review our financial results, our balance sheet continues to strengthen. In fact, our ratio of holding company debt to total debt now stands at 28%. That beats our 30% goal. In 2019, we also eliminated a regulatory asset for transmission costs, and we continue to leverage the benefits of tax reform for both customers and shareholders. In addition, we worked effectively to settle our Wisconsin rate reviews. which represent approximately 70% of our regulated assets. We also took our environmental efforts a step further. We set a new goal in 2019 to reduce the rate of methane emissions from our natural gas distribution system by 30% per mile by the year 2030. Our ongoing work to modernize Chicago's natural gas delivery network is key to achieving this goal. And we continue to analyze our climate-related risks and opportunities. In fact, a recent Moody's report focused on the risk exposure of regulated utilities to heat stress, water stress, and extreme rainfall. I'm pleased to note that WEC Energy ranked among the lowest risk companies in our sector. During 2019, we also reached a number of significant milestones in our infrastructure segment. The Coyote Ridge Wind Farm is now in service in South Dakota and will contribute a full year of earnings in 2020. As you may recall, Coyote Ridge consists of 39 turbines with a capacity of roughly 97 megawatts. We invested approximately $145 million for our 80% share of the wind farm, and we're entitled to 99% of the tax benefits. As you know, a significant portion of our earnings from this facility come in the form of production tax credits. This project has a 12-year offtake agreement with Google Energy LLC for all of the energy produced. We also announced back in September that we will acquire an 80% ownership interest in the Thunderhead Wind Energy Center for $338 million. Invenergy is developing this project in Nebraska, and we expect it to be in service at the end of 2020. The site will consist of 108 GE wind turbines with a combined capacity of 300 megawatts. The project has a long-term offtake agreement with AT&T, for 100% of the energy produced. We expect Hunterhead will qualify for production tax credits and 100% bonus depreciation. Then earlier this week, folks, we announced plans for another new development. We've agreed to acquire an 80% ownership interest in the Blooming Grove wind farm for $345 million. Invenergy is developing this project in Illinois, with commercial operation expected to begin by the end of this year. The site will host 94 wind turbines with a total capacity of 250 megawatts. Blooming Grove has a 12-year offtake agreement with affiliates of two multinational companies that are investment grade. We expect that Blooming Grove will be eligible for 100% bonus depreciation as well as production tax credits. Overall, we're very encouraged about these investments in renewable energy, which will serve strong businesses for years to come. We expect the return on these investments to be higher than our regulated returns. Of course, we're being very selective as we vet future projects. We're only interested in projects that achieve our financial return metrics and do not change our risk profile. Now let's take a brief look at the regional economy that's supporting our company's longer-term growth. Wisconsin's unemployment remains near record lows for the state, and we continue to see strong economic development projects in the pipeline. Foxconn is moving forward with its plan to create a high-tech campus in Racine County, south of Milwaukee. Work on a Generation 6 fabrication plant for liquid crystal display screens is progressing. The fab, which spans about 1 million square feet, is now enclosed and work is beginning on the internal structures. Foundations are also in place for a high-capacity data center. In addition, Foxconn has announced plans for a smart manufacturing facility. construction crews began lifting the exterior walls into place for the smart manufacturing plant earlier this week. Based on public data, we estimate that Foxconn's investment in Wisconsin over the past two years has risen to approximately $500 million. Turning a bit further south in the Kenosha area, Uline has announced plans to invest $130 million in two new facilities and bring approximately 350 new jobs to the area. Uline, as you may know, is a leading distributor of shipping, industrial, and packaging supplies with headquarters here in Wisconsin. In addition, Milwaukee Tool has announced another expansion. Milwaukee Tool will invest $100 million in a large multi-purpose campus northwest of the city in Menomonee Falls. The company also committed to adding 870 jobs in Wisconsin by the year 2025. These are exciting times. We look forward to more economic development and opportunity across the region. Now I'll turn the call over to Kevin for more insight on our operations and our regulatory calendar. Kevin, all yours.

Thank you, Gail. First, I'd like to share some good news. Our largest subsidiary, WeEnergies, was named the most reliable electric utility in the Midwest for the ninth year running. Wisconsin Public Service also was recognized for the first time for outstanding reliability performance. Now I'll briefly review where we stand in our four state jurisdictions. As you'll recall, in March of last year, we filed a proposal with the Public Service Commission of Wisconsin to set customer rates for We Energy's and Wisconsin Public Service. And in August, we entered into settlement agreements with the Citizens Utility Board of Wisconsin, the Wisconsin Industrial Energy Group, and Clean Wisconsin. On December the 19th, the commission issued its written order affirming those settlement agreements and setting rates for the next two years. New rates went into effect on January 1st. During 2019, we also continued to make progress in developing solar generation for our regulated businesses in Wisconsin. You may recall that in Wisconsin, we're planning a total of 300 megawatts of utility-scale solar capacity, the first facilities of this size in the state. We've broken ground on two solar projects for Wisconsin Public Service, two creeks and Backer Hollow 1. Our share will total 200 megawatts with an expected investment of approximately $260 million. Both projects are scheduled to begin producing energy by the end of this year. And this past August, at WeEnergies, we filed with the Wisconsin Commission for approval to acquire 100 megawatts of capacity at the Badger Hospital 2 solar park. The projected investment would be $130 million. We expect to receive the Commission's decision this spring. We also see efficient natural gas storage, another important part of our regulated business strategy. In particular, Wisconsin needs more natural gas peaking capacity at the highest demand times on the coldest days. We're continuing to evaluate site plans for two liquefied natural gas facilities to help meet our customers' needs during the winter peak. We expect to invest approximately $370 million in these projects. If approved by the Wisconsin Commission, Construction is expected to begin in the summer of 2021. Turning to Illinois, we continue making progress on the People's Gas System Modernization Program. This program is critical to providing our Chicago customers with a natural gas delivery network that is modern, safe, and reliable. We're approximately 28% complete with our replacement of outdated, corroded natural gas piping, some of which was installed more than a century ago. We continue to project an investment of $280 to $300 million per year on average in this program. Now we'll turn to Michigan. In 2019, we completed our new natural gas-fired power plants in Michigan's Upper Peninsula on time and on budget. These plants are now providing a cost-effective, long-term power supply for our customers in the Upper Peninsula. With these new units operating, we were able to retire our older, less efficient coal-fired plant at Presque Isle. This resulted in significant operations and maintenance savings and reduced CO2 emissions. Taking a broader look across our business, we continue to focus on operating efficiency and financial discipline. As a whole, we exceeded our 2019 goal to reduce our day-to-day operation and maintenance costs. Our goal was a reduction of 4%, and we actually achieved a 7% reduction. We have set a goal to further reduce our O&M by an incremental 2% to 3% in 2020 as well. And with that, I'll turn it back to Gail.