WEC Energy Group, Inc.

Good afternoon and welcome to WEC Energy Group's conference call for first quarter 2020 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.

Well, good afternoon, everyone. Thank you for joining us today as we review our results for the opening quarter of 2020. I certainly hope that you and your families are all doing well and staying healthy. First, I'd like to introduce the members of our management team who are on the call with me today. We have Kevin Fletcher, President and CEO, and Scott Lauber, our Chief Financial Officer. Now, as you saw from our news release this morning, we reported first quarter 2020 earnings of $1.43 a share. a strong performance despite lower natural gas demand during a mild first quarter. The result underscores our focus on operating efficiently and executing our capital investment plan. Scott will discuss our metrics in more detail a bit later in the call. Of course, as we plan for the long-term success of our company, we're also focused on providing essential service throughout the COVID-19 pandemic. As you would expect, the health of our employees and communities remains our top priority. We've adopted numerous measures to minimize health risks and instilled in our employees the importance of following the CDC guidelines. Stay at home orders, as many of you know, were issued across our four states in late March. Keep in mind that the full effect of the virus hit Wisconsin and Illinois relatively late, and the hardest hit parts of Michigan are outside of our service area. Given that timing, We saw only a minimal impact from the pandemic on our first quarter results. I would also like to point out that we took action to further control costs even before the virus struck. The first quarter happened to be one of the warmest on record in the past century. When we saw mild weather at the beginning of January, we set the wheels in motion to reduce expenses in areas of our business that would not affect safety, reliability, or customer satisfaction. Stepping back, as we look more broadly at our business mix, approximately 38% of our pre-tax margin for the full year comes from our natural gas delivery business across our four-state area. Also, a third of our earnings for the full year typically come in the first quarter. So with a strong start to the year, we're about as well positioned as we can be to deal with the uncertainties ahead. Many of you have also asked about the status of the major economic development projects that have been announced in our region. The short answer is rock on. A good example is the high-tech campus that Foxconn is building south of Milwaukee. The Gen 6 fabrication plant for LCD panels is fully enclosed now, and internal build-out is underway. A smart manufacturing facility is also taking shape. production of components for enterprise servers and racks expected to begin in the fourth quarter of this year. In addition, the external structure for Foxconn's Network Operations Center is being erected as we speak. And to help fight the pandemic, Foxconn and Medtronic have announced that Foxconn will produce a line of Medtronic ventilators in our state starting this summer. Obviously, we're keeping a close eye on local economic trends and customer demand for energy. Based on what we're seeing today, I do not expect any diminution in our long-term earnings growth rate of 5% to 7% a year. With minor adjustments, our $15 billion capital plan remains on track. I'd like to highlight one area of that capital plan that is progressing well ahead of schedule. That's our energy infrastructure segment. You may have seen the announcement that we're increasing our ownership interest from 80% to 90% in the Blooming Grove, Thunderhead, and upstream wind farms. Pending all regulatory approvals, we plan to invest another $118 million for an additional 75 megawatts of capacity. Folks, for our infrastructure segment, we've now committed over 40% of the total in our five-year plan, and that plan just began in January. In short, our overall capital plan is low-risk and highly executable. We have ample liquidity, no need to issue new equity. In fact, our available liquidity at the end of April has risen to $2.6 billion. And finally, I'd like to cover one other positive development from the first quarter. Just a few weeks ago, we announced the next important steps in our succession planning process. We're very pleased that Scott Lauber will become our Chief Operating Officer, effective June 1. In his new role, Scott will have senior oversight responsibility for power generation, like infrastructure and fuels, information technology, supply chain, supplier diversity, and major projects. He also will be named President of Michigan Gas Utilities and Minnesota Energy Resources, and he will continue to serve as he has as a member of the Office of the Chair. We're also welcoming, as you have heard, a new addition to the team. Sha Liu will be joining the company as our new Chief Financial Officer, effective June 1. As I'm sure you know, Shaw most recently served in the same capacity at CenterPoint Energy. Shaw brings a tremendous amount of depth and experience to the new role. She began her industry career at Southern Company as a financial analyst back in 1998. During her career, she also served as the chief financial officer of two Southern Company subsidiaries, Gulf Power and Georgia Power, and as the senior vice president of finance and treasurer for Southern Company. I will also be a member of our Office of the Chair. These new appointments will bring additional depth and experience to an already strong leadership team, a team that, as you know, has delivered exceptional results over many, many years. And now I'll turn the call over to Kevin for details on our first quarter operations. Kevin, all yours.

Thank you, Gail. I'd like to start by highlighting the work of our dedicated employees who are providing safe and reliable service throughout this health crisis. We have sharply curtailed work inside customers' homes, and 80% of our employees are now working remotely or in the field. Our employees are adapting to these changes using technology, following health precautions, and continuing to work efficiently. The remote work that's making our companies safer would not have been possible without our recent technology investments. Although we still have a long road ahead of us, I'm encouraged by the processes and procedures we have put in place across our companies. Our incident management team and occupational health and support services employees have been instrumental in executing our business continuity plans and developing new processes to address changing conditions. We are working hard to support our customers through this crisis, and I'm grateful that we've also been able to contribute through our foundations to organizations on the front lines, including local United Ways, hospitals, domestic violence shelters, food pantries, and youth programs. Through these donations and matching gifts, we're providing more than $2 million to COVID-19 relief efforts. It's our way of thanking the people and organizations that sustain our communities. Despite these challenges, we continue to make progress on key initiatives. Importantly, we have no active rate cases at this time, which is a real positive in our current environment. As you may know, the pandemic has made it necessary to stop disconnections and place a moratorium on new late payment charges for customers. Our regulators have been supportive, and we're working through the specific mechanisms for future recovery. In Wisconsin, the Public Service Commission has made it clear that we are authorized to defer foregone late payment charges, uncollectible expense, and incremental pandemic-related costs. To be clear, this covers all related expenses in our residential, as well as our commercial and industrial sectors. Turning now to our projects, we're on track to add utility-scale solar generation to our portfolio. You may recall that we have already broken ground on two solar projects for Wisconsin Public Service, which will provide us with 200 megawatts of capacity. Our Two Creek solar project remains on time to begin producing energy by the end of this year. Our Badger Hollow 1 solar project is experiencing a modest delay but will continue to earn allowance for funds used during construction, and we expect it to be operational by the end of April 2021 in time for the MISO capacity auction. In February, the Public Service Commission of Wisconsin approved our investment in Badger Hollow 2. Once complete, the solar park will provide WE Energies with 100 megawatts of renewable capacity. We expect to invest $130 million in this project. And I'm sure that many of you have heard that the Democratic National Convention has moved from July to August. We've completed a thorough review of our network in preparation for the potential influx of delegates. And overall, we're in very good shape. And with that, I'll turn it back to Gail.