WEC Energy Group, Inc.

Good afternoon and welcome to WEC Energy Group's conference call for first quarter 2022 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're 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 Krapa, Executive Chairman of WEC Energy Group.

From the home of the defending NBA champion Milwaukee Bucks, good afternoon, everybody. And thank you for joining us today as we review our results for the first quarter of 2022. First, I'd like to introduce the members of our management team who are here with me today. We have Scott Lauber, our President and Chief Executive, Sha Lu, our Chief Financial Officer, and Beth Strata, Senior Vice President, Corporate Communications and Investor Relations. Now, as you saw from our news release this morning, we reported first quarter 2022 earnings of $1.79 a share. Our results were largely driven by colder than normal weather, a strong economy, and the performance of our infrastructure segment. In light of this strong start to the year we're raising our earnings garden the guidance by five cents five cents a share for 2022. To a range of $4 34 cents to $4 and 38 cents a share with an expectation of reaching the top end of this new range this of course assumes normal weather for the remainder of 2022. Our balance sheet and cash flows remain strong and, as we discussed this allows us to fund a highly executable capital plan. without issuing equity. We're also making good headway on our $17.7 billion ESG progress plan, the largest five-year capital plan in company history. The plan is focused on efficiency, sustainability, and growth. Over the past few months, we've received regulatory approval for more than $1.1 billion of needed capital projects in Wisconsin. Scott will provide more detail in just a few minutes. And we're preparing the way for further progress ahead, as you may have seen our Wisconsin utilities file rate reviews with the public service Commission for the two year period 2023 and 2024. We provided you with details in the earnings packet that we released this morning and Scott will cover the highlights in just a moment. But the request, ladies and gentlemen, is all about the investments, we need to make to enhance reliability for customers. and continue the largest clean energy transition in our history. I would add that even with this request, the typical electric bill for our residential customers will remain below the national average. Switching gears now, many of you have asked about the solar panel investigation by the Department of Commerce. There clearly will be impacts across the industry. And at our companies, we may see some price increases and potential delays. particularly on the solar and battery projects that are still going through the regulatory approval process in Wisconsin. But the important point is that we do not expect the review by the Department of Commerce to have any material impact on our five year capital plan. In summary, we're poised to continue our strong track record, delivering among the best risk adjusted returns our industry has to offer. We expect our ESG progress plan to support average growth in our asset base of 7% a year, driving earnings growth, dividend growth, and dramatically improved environmental performance. Across our generating fleet, we're targeting a 60% reduction in carbon emissions by the end of 2025 and an 80% reduction by the end of 2030, both from a 2005 baseline. By the end of 2030, we expect our use of coal for power generation will be immaterial. and we're aiming for a complete exit from coal by the end of the year 2035. Our capital investments fully support this transition. Of course, for the longer term, we remain focused on the goal of net zero carbon emissions from power generation by 2050. We're also investing in our natural gas distribution business and developing sources of renewable natural gas. Our plan is to achieve net zero methane emissions by the end of 2030. With those goals in mind, we're working to help shape the future of clean energy. Hydrogen, for example, could be a key part of the solution in the decades ahead. So earlier this year, as you recall, we announced one of the first hydrogen power pilot programs of its kind in the United States. We're joining with the Electric Power Research Institute to test hydrogen as a fuel source at one of our natural gas-powered units in the Upper Peninsula of Michigan. Engineering specifications and testing protocols are now being developed, and we're on track for actual blending of hydrogen in the unit this fall. We look forward to sharing the results across the industry. And now let's take a brief look at the regional economy. The latest available data show Wisconsin's unemployment rate at 2.8%, of course, well below the national average. The state's economy recovered throughout 2021 with especially strong growth in the manufacturing sector and we continue to see major investments from growing companies in our region. For example, Amazon is expanding its presence in southeastern Wisconsin with plans to lease a 1 million square foot building that is now under development. This expansion could add 400 new jobs to amazon's workforce, a workforce that is already 3000 strong in the region. Uline's workforce is also on the rise. Uline, as you may know, is one of the nation's largest suppliers of packaging and shipping materials. 700 employees joined Uline's workforce in Wisconsin last year, and Uline expects to add 300 more jobs this year. So we remain optimistic about not only the strength, but the trajectory of the regional economy. And with that, I'll turn the call over to Scott for more information on our utility operations and our infrastructure segment as well. Scott, all yours.

Thank you, Gail. As Gail mentioned, across Wisconsin, we're making good progress on the transition of our generation fleet and our ESG progress plan. Work continues on our Badger Hollow 2 solar facility in the southwestern part of the state. We have a plan for delivery and acceptance of the panels, and we expect clearance from customs in a reasonable timeframe, so we still project Badger Hollow 2 to be in service in the first half of 2023. And recently, the Wisconsin Public Service Commission approved our purchase of 90% of the Paris Solar Battery Park. It's the largest investment of its kind in Wisconsin history. Located south of Milwaukee, this facility will host 200 megawatts of solar generation and 110 megawatts of battery storage, providing our customers with sunshine after sunset. Regarding the solar panels, we have a line of sight on production and delivery, and we still project commercial operation by mid-2023. The situation with battery production and delivery is more fluid, and we'll work through the details. We'll provide you with more information about potential delays in the battery installation of the Paris facility. And of course, we'll continue to examine our capacity situation in light of these developments. To put all this in perspective, it's worth noting that only 3% of our five-year capital plan is devoted to renewables and battery storage in 2023. Turning to other important projects, the Commission has approved our plans to build 128 megawatts of natural gas generation at our existing Weston Power Plant site in northern Wisconsin. The new facility will use seven reciprocating internal combustion engines or as we call them, price units. These dispatchable units will support the retirement of older, less efficient coal generation. We expect this project to go into service in 2023. As Gail noted, WEC infrastructure was a positive driver for the quarter, with the addition of Jayhawk, which entered commercial operation in mid-December. Thunderhead will be the next wind farm to go into service and we now expect that in the fall of this year. As discussed before, we remain ahead of schedule in our five-year capital investment plan for our infrastructure business. Turning to gas distribution, just last week we signed another contract to use renewable natural gas, or RNG, from a local dairy farm. This new agreement brings us halfway to our net zero methane goal for the end of 2030. Now I'll touch on the rate filings Gail mentioned. On April 28th, we filed a rate review with the Public Service Commission of Wisconsin. Our proposed plans would help us to continue to reduce emissions, strengthen key infrastructure, and provide affordable power to customers. I'll discuss the request to set rates for WE Energies and Wisconsin Public Service. You can refer to pages 14 and 15 of the earnings packet for more details. Under our plans for the two utilities, the typical electric bill for residential customers would increase approximately $5 to $6 a month in 2023, or roughly 5 to 6%. Key drivers for our proposed increase include capital investments in renewables, battery storage, natural gas generation, and LNG storage for our gas distribution systems. Many of these projects have already been approved. In addition, we are introducing grid hardening projects that are part of a 10-year plan to protect our system against severe weather. And the rate review includes other costs that have been authorized to recover in previous proceedings. In summary, this represents only the second time in eight years we have asked for a base rate increase for WE Energies. We expect final orders by the end of the year with new rates effective in January 2023. We have no other regulatory reviews pending across our companies. And with that, I'll turn it back to Gail.