WEC Energy Group, Inc.

Good afternoon and welcome to WEC Energy Group's conference call for first quarter 2021 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 WEP 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 Gil Klapa, Executive Chairman of WEC Energy Group.

Well, good afternoon, everyone. Thank you for joining us today as we review our results for the first quarter of 2021. 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, Xiaolu, 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 first quarter 2021 earnings of $1.61 a share. As always, our focus on operating excellence was a major factor in our performance. In addition, we saw the positive impact of colder weather and economic recovery in our region. Joao will provide you with more details on our metrics in just a few minutes. But first, a comment about the polar vortex event that we experienced in February. Our people and our infrastructure were put to the test literally and performed remarkably during that bitter cold stretch when temperatures dropped to minus 42 degrees Fahrenheit in the northern portion of our service area. I'm pleased to report that the investments we've made in our energy grid and our diverse fuel mix kept the economy moving and our customers safe and warm. Now, as you know, just over a year has passed since we first saw the impact of the COVID-19 pandemic. Our commitment to safety, efficiency, and reliability has only been enhanced by the operational challenges we faced. Our company today stands stronger than ever. And our $16.1 billion capital plan, the largest in company history, is on track. Over the next five years, we expect our investment plan to drive average annual growth in our asset base of 7%. At the same time, it will bolster our sustainability as we continue to invest in renewable energy and state-of-the-art infrastructure. In fact, the potential we see in renewables and battery storage, the progress we've made across our system already, and supportive public policy have allowed us to step back and reassess our future environmental goals. Today, I'm pleased to announce that we're setting even more aggressive targets for the next several years. Our goal is now a 60% reduction in carbon emissions by 2025 and an 80% reduction by the end of 2030, both from a 2005 baseline. We believe we can accomplish these targets with the retirement of older, less efficient units, some operating refinements, and the use of existing technology as we continue to execute our capital plan. Of course, our long-term goal remains net zero carbon emissions from our generating fleet by 2050. In addition, on the natural gas distribution side of our business, we're now targeting net zero methane emissions by the end of 2030. Our ongoing effort to upgrade our gas delivery networks and incorporate renewable natural gas into our system will clearly help us achieve this 2030 milestone. You'll be able to read more about these goals in our updated climate report. We'll be launching that report on our website tomorrow morning. As I mentioned earlier in the call, we're making really good headway on our capital plan. We call it our ESG Progress Plan. Since our last visit with you, we've announced four renewable projects for our regulated business in Wisconsin and another wind project, the Jayhawk Wind Farm, at our WEC infrastructure segment. Scott and Kevin are on tap to fill you in on the details. But I will add two important points about the impact of our ESG Progress Plan. As we continue to reshape our asset mix, we project that less than 10% of our revenues and less than 10% of our assets will be tied to coal by the end of 2025. And we would more than triple our investment in renewables across our enterprise. You put it all together, and we expect to deliver among the best risk-adjusted returns the industry has to offer. They have strong credit quality and no need to issue equity. At the heart of it all is our ability to deliver the affordable, reliable, and clean energy that our customers depend on. Now switching gears for a moment, let's take a quick look at the regional economy. With the rollout of the COVID-19 vaccinations well underway, we're seeing more signs of economic recovery. Wisconsin's unemployment rate stands today at 3.8%. That's close to pre-pandemic levels and more than a percentage point better than the national average. In addition, a recent business survey by the University of Wisconsin confirmed that all core indicators, from productivity to income, are looking up. Also, you may have seen the announcement last week that Foxconn has reached a new agreement with the state of Wisconsin regarding Foxconn's high-tech campus south of Milwaukee. The agreement provides for up to $80 million of performance-based incentives if Foxconn hires 1,454 qualified workers and invest $672 million by 2026. It also importantly gives Foxconn the flexibility to be responsive to the marketplace. This time, the Foxconn campus is expected to focus on producing computer servers and server parts. That's one of Foxconn's specialties. In fact, we understand that Foxconn supplies approximately 40% of the worldwide market for servers. Foxconn also noted that over time, it plans to make the Wisconsin site one of the largest, if not the largest, manufacturer of data infrastructure hardware in the United States. So as business opportunities continue to arise, Foxconn will work with the state on contract changes that would incorporate additional jobs and more new investment beyond this agreement. As we look farther across our service area, we see numerous green shoots of growth. For example, Green Bay Packaging just completed a $500 million expansion of its paper mill in northeastern Wisconsin. Amazon continues to expand. The company just announced another fulfillment center. This one will be located in one of our western suburbs. And Uline is growing again, building two new distribution warehouses in the Kenosha area south of Milwaukee, with a projected investment of $130 million. If you're not familiar with the name, Uline is one of the nation's leading distributors of shipping, industrial, and packaging materials. So with all the developments we're seeing in the ground, we remain optimistic about the growth of the regional economy and our long-term sales growth. Now I'll turn the call over to Scott for more detail on our sales results for the quarter, as well as an update on our infrastructure segment. Scott, all yours. Thank you, Gail. Turning now to sales, we continue to see customer growth across our system.

At the end of March, our utilities were serving approximately 7,000 more electric customers and 25,000 more natural gas customers compared to a year ago.