WEC Energy Group, Inc.

Good afternoon and welcome to WEC Energy Group's conference call for second 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 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 material 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 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 and WEC Energy Group.

Hot Town, Summer in the City. Good afternoon, everyone. Thank you for joining us today as we review our results for the second 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, Shao Liu, our Chief Financial Officer, and Beth Straka, Senior Vice President of Corporate Communications and Investor Relations. Now as you saw from our news release this morning, we reported second quarter 2022 earnings of $0.91 a share. A warm start to the summer, solid results from our infrastructure segment, and continued execution of our capital plan were major factors that shaped yet another strong quarter. In light of this strong performance, we're again raising our earnings guidance for 2022, this time by $0.02 a share to a new range of $4.36 to $4.40 a share. We expect to reach the top end of this new range. This, of course, assumes normal weather for the remainder of the year. Our balance sheet and our cash flows remain strong, and as we've discussed, this allows us to fund a highly executable capital plan without any need for new equity. During the quarter, we continued to move forward on major initiatives across the enterprise, including investments in our $17.7 billion ESG progress plan. Our focus remains on building and maintaining a highly reliable infrastructure, delivering energy that's affordable, reliable, and clean. Scott will provide you with a project update in just a few moments. Now, you may recall our recent announcement about an adjustment that we made to our schedule of power plant retirements. We plan to extend the operating lives of the four older units at our Oak Creek site. The retirement of units five and six will be delayed by a year until May 2024. Units seven and eight will be delayed for about 18 months until late in 2025. These coal-fueled units have a total rated capacity of 1,100 megawatts. We base this decision on two critical factors. First, tight energy supply conditions in the Midwest power market and expected delays in the delivery of solar panels and batteries, delays that will clearly affect the in-service dates of renewable projects that are now going through the regulatory approval process in Wisconsin. Keeping the older units at Oak Creek Online a bit longer for capacity purposes makes great sense for our customers because we can avoid the need to purchase higher cost capacity in the MISO market. But even with the extension of the Oak Creek units, We remain committed to our aggressive environmental goals. Across our generating fleet, we're still targeting a 60% reduction in carbon emissions by the end of 2025 and an 80% reduction by the end of 2030. And by the end of 2030, we expect to use coal only as a backup fuel. And we're aiming for a complete exit from coal by the end of 2035. The capital investments we planned 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. And as you know, we're working to help shape the future of clean energy, engaging in policy discussions and on the ground, carrying out innovative projects that can drive decarbonization of the economy. For example, we've now finalized the test plans for blending hydrogen with natural gas at one of our modern gas fuel units in the Upper Peninsula of Michigan. We've teamed up with the Electric Power Research Institute for this leading-edge project. The fieldwork will take place this fall, and the results will be shared across our industry. Separately, for our natural gas distribution business, we're making great progress in securing supplies of renewable natural gas. Scott will update us shortly, but as a reminder, our plan is to achieve net-zero methane emissions from our gas distribution networks by the end of 2030. Switching gears now, let's take a brief look at the regional economy. The latest data show Wisconsin's unemployment rate at 2.9%, well, of course, below the national average. And we continue to see major investments from growing companies in our region. For example, Gulfstream Aerospace is expanding its operations at the Appleton Airport. That's in Wisconsin's Fox Valley, southwest of Green Bay. The company is planning to build a world class facility for painting and finishing aircraft exteriors. This expansion is expected to open in the third quarter of 2023 and it could add 200 new jobs to Gulfstream's existing workforce in Wisconsin. And just last month, Komatsu Mining celebrated the official grand opening of its new headquarters here in Milwaukee. The campus is already hosting about 600 employees. It includes offices, a training center, and state-of-the-art manufacturing space to build heavy mining equipment. During the second quarter, groundbreaking also took place for a major expansion of the Georgia Pacific paper mill in Green Bay. Georgia Pacific is investing $500 million in its new facility, which is expected to bring about 100 new jobs to the region. So with a wide range of developments in the pipeline, we remain very optimistic about the long-term future 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. Scott, all yours.

Thank you, Gail. As Gail mentioned, we're making good progress on our capital plan. Construction is underway on a number of regulated projects. We have started work on the reciprocating internal combustion engines, or as we call them, GRACE units, at our Weston site in northern Wisconsin. These units are expected to provide 128 megawatts of dispatchable capacity with an estimated cost of $170 million. Also, work on our liquefied natural gas storage is underway. As you recall, the Commission approved two LNG units in southeastern Wisconsin. This $370 million investment will provide needed peaking capacity for our gas distribution business. On the renewable front, We've deployed $155 million toward refurbishing projects at two of our regulated wind farms. When completed, these projects will enhance reliability and performance at these farms. These investments will qualify those sites for production tax credits for an additional 10 years. Also, we expect our Red Barn Wind Park development in southwestern Wisconsin to come online around the end of the year. It will provide about 80 megawatts of renewable energy to our Wisconsin public service customers. On the solar and battery front, work continues on the Badger Hollow 2 solar facility and the Paris solar battery park. We still expect these solar projects to go into service next year, supplying more clean energy to our Wisconsin customers. However, We've informed the Wisconsin Commission that the battery portion of the Paris project is expected to be delayed until 2024. As you may recall, we have filed for approval of two other solar battery projects, Darien and Kashkanon. We initially planned to add these to our fleet in 2023 and 2024. We now project them to enter service in 2024 and 2025, respectively. In addition, we now expect the retirement of Columbia Energy Center to take place in 2026. As you know, Alliant Energy operates the Columbia facility and we are part owner. Of course, we'll keep you updated on any further developments. As you recall, we filed a rate review last quarter with the Public Service Commission for our Wisconsin utilities. Our proposed rate increase would support important capital investments and grid hardening projects. Recently, we provided an update to our filing. We factored in the extended operating lives of the older Oak Creek units and the Columbia units. This update also reflects other variables, including higher interest rates and costs associated with the completion of our solar projects. We expect final orders by the end of the year with new rates effective in January 2023. We have no other rate reviews pending at this time. In our gas business, we've discussed plans to bring high quality, renewable natural gas to our customers. The Wisconsin Commission recently approved our pilot project for this initiative. Just last month, we signed our third RNG contract, which will connect our distribution system to a large dairy farm in northeast Wisconsin. The three contracts in place are projected to bring us 80% of the way toward our goal of net zero methane emissions. We plan to have RNG flowing in our system by the end of this year. Outside of our utilities, our WEC infrastructure segment was once again a positive driver for the quarter. The Thunderhead Wind Farm, located in Nebraska, will be the next project to go into service, scheduled for later this year. We also expect the Sapphire Sky Wind Project in Illinois to come online by year end. Together, the two projects represent approximately $800 million of investment, keeping us well ahead of our five-year capital plan. As you know, MISO, the Midwest Grid Operator, has set out a long-range plan to address transmission needs across the Midwest. And last week, the MISO Board approved the transmission projects for Tranche 1. At this time, American Transmission Company estimates that its investment opportunity in Tranche 1 is approximately $900 million. That's in today's dollars. Investment in these long-dated projects are expected to start as early as 2027. And with that, I'll turn things back to Gail.