WEC Energy Group, Inc.

Good afternoon and welcome to WEC Energy Group's conference call for fourth quarter and year-end 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'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 calendar year 2020. First, I'd like to introduce the members of our management team who are here with me today. We have Kevin Fletcher, our President and CEO, Scott Lauber, our Chief Operating Officer, Sha Lu, our Chief Financial Officer, and Beth Straka, Senior Vice President of Corporate Communications and Investor Relations. As you saw from our news release this morning, we reported full-year 2020 earnings of $3.79 a share, which I will provide you in more detail on our financial metrics in just a few minutes. But first, I'm pleased to report that we delivered a record year on virtually every meaningful measure of performance, from customer service to network reliability to earnings per share, despite the challenges posed by the COVID-19 pandemic. Our focus on efficiency, on financial discipline and an encouraging rebound in energy demand during the second half of the year resulted in the highest net income from operations and the highest earnings per share in company history. And throughout the difficulties of a pandemic year, we also accelerated our support for the communities we serve. In total, our companies and foundations donated more than $20 million to nonprofits across our service area, including more than $2 million to direct COVID-19 relief efforts. We also made significant progress on diversity and inclusion. We spent a record $303 million with diverse suppliers during the year, and through our board refreshment, 46% of our board members now are women or minorities. In addition, we set new aggressive goals as we continue to improve our environmental footprint. In fact, I'm pleased to report that based on preliminary data for 2020, reduced carbon dioxide emissions by 50% before 2005 levels. And we have, as you know, a well-defined plan to achieve a 55% reduction by the end of 2025. Over the longer term, expect to reduce carbon emissions by 70% by 2030. And as we look out to the year 2050, the target for our generation fleet is net zero carbon. Our new five-year capital plan lays out a roadmap for achieving these goals. We call it our ESG progress plan, the largest five-year plan in our history. It calls for investment in efficiency, sustainability, and growth. And it drives average annual growth in our asset base of 7% with no need for additional equity. Highlights of the plan include 1,800 megawatts of wind, solar, and battery storage that would be added to our regulated asset base in Wisconsin. And we've allocated an additional $1.8 billion to our infrastructure segment, where we see a robust pipeline of high-quality renewable projects, projects that have long-term contracts with strong, creditworthy customers. All in all, our plan positions us to deliver among the very best risk-adjusted returns our industry has to offer. And now let's take a brief look at the regional economy. It was, of course, an unusual year for everyone. but many of our commercial and industrial customers proved to be quite resilient, providing essential products and services such as food, plastics, paper, packaging, and electronic controls. The latest available data show Wisconsin's unemployment rate at 5.5%. That's more than a full percentage point better than the national average. And as we look to the year ahead, we see positive signs of continued growth. For example, Green Bay Packaging is building a major expansion of its mill in northeastern Wisconsin. It's a $500 million addition and is expected to be completed later this year. The Foxconn, Kamatsu Mining, Haribo, and Milwaukee Tool projects that we've reported to you in the past are all moving forward as well. So we remain optimistic about the strength of the regional economy and our long-term sales growth. Finally, I know many of you are interested in our rate case calendar for the year ahead. As you know, under normal circumstances, our Wisconsin utilities would be filing rate reviews later this spring for energy rates that would go into effect on January 1 of 2022. Of course, we're in the middle of anything but normal times, and I can tell you that we've begun discussions with the Commission staff, and we'll be talking with other major stakeholders to determine whether a one-year delay in a filing would be in everyone's best interest. I expect the final decision on this around the end of the first quarter. And now I'll be happy to turn the call over to Scott for more detail on our sales results and our forecast for 2021, as well as an update on our infrastructure segment and our O&M performance. Scott, all yours.

Thank you, Gail. Turning now to sales, we continue to see customer growth across our systems. At the end of 2020, our utilities were serving approximately 11,000 more electric and 27,000 more natural gas customers compared to a year ago. Retail electric and natural gas sales volumes are shown beginning on page 17 of the earnings packet. Overall, retail deliveries of electricity, excluding the iron ore line, were down 2.1% compared to 2019. and on a weather normal basis, deliveries were down 2.9%. Natural gas deliveries in Wisconsin decreased 7.9% versus 2019 and by 2.4% on a weather normal basis. This excludes gas use for power generation. On the electric side, you'll note the positive trend that we've seen in residential sales has continued. Importantly, It has counterbalanced the weakness in small commercial and industrial sales caused by the pandemic. Meanwhile, large commercial industrial sales, excluding the iron ore mine, were down 7.1% for the full year compared to 2019 on a weather normal basis. However, these sales were only down 4.6% for the fourth quarter, a notable positive trend reflecting the recovery of Wisconsin's economy. Now I'd like to briefly touch on our 2021 sales forecast for our Wisconsin segment. We are using 2019 as a base for 2021 retail projections. We're using 2019 because it represents a more typical year. We are forecasting a decrease of 1.5% in weather and oil retail electric deliveries, excluding the iron ore mine, compared to 2019. This would represent a 1.4% increase compared to 2020. We expect large commercial and industrial sales to continue to improve and anticipate the same positive offsetting relationship between residential sales and small commercial industrial sales. For our natural gas business, we project weather normalized retail gas deliveries to decrease by 2.4% compared to 2019 This leads the projected sales outlook compared to 2020 relatively flat. With this in mind, we remain focused in operating efficiencies and financial discipline across our business. We lowered operations and maintenance costs by more than 3% in 2020, and we continue to adopt new technology and apply best practices. We plan to reduce our operations and maintenance expense by an additional 2 to 3% in 2021. I also have an update on our infrastructure segment. The Blooming Grove and Tatanka RIN projects are in service now and came in ahead of time and on budget. As a reminder, our Thunderhead wind investment is projected to go in service by the end of the third quarter. We expect this segment to contribute an incremental $0.08 to earnings in 2021. And now I'll turn it over to Kevin for his update on utility operations.