WEC Energy Group, Inc.

Good afternoon and welcome to WEC Energy Group's conference call for fourth quarter and year-end 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 these 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. The 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.

Well, good afternoon, everyone. Thank you for joining us today as we review our results for calendar year 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 Stracha, Senior Vice President of Corporate Communications and Investor Relations. Now, as you saw from our news release this morning, we reported full-year 2022 earnings of $4.45 a share. Sha will provide you with more detail on our financial metrics in just a few minutes. But I'm pleased to report to you that we delivered an exceptional year on virtually every meaningful measure from employee safety and customer satisfaction to growth and earnings per share. Three major factors really shaped our strong results for 2022 favorable weather solid performance from our infrastructure and transmission segments. And steady execution of our capital plan as we paved the way for an energy future that's affordable reliable and clean. On the regulatory front, as you may know, we saw balanced and credit-supportive results from our Wisconsin rate reviews in December, despite a little bit of noise in the process. New rates are now in effect for all of our Wisconsin utilities. And last month, on January 6, we filed rate requests with the Illinois Commerce Commission for our gas utilities in Illinois. I would point out that home heating bills in Chicago are currently below those of other major U.S. cities. like New York, Boston, Baltimore, and Philadelphia, and we expect that to continue with this filing. Scott will provide you with more detail in just a moment. Turning now to our ESG progress plan that we updated for you in November. It's the largest five-year investment plan in our history, totaling $20.1 billion for efficiency, sustainability, and growth. We expect the plan to drive compound earnings growth of six and a half to 7% a year over the period 2023 through 2027. The key part of the plan is a major commitment to renewable projects, both in our regulated business and in our infrastructure segment. In fact, earlier this week, we announced that our infrastructure group will acquire an 80% ownership interest in phase one of the Samson Solar Energy Center. Located in Northeast Texas, SAMHSA 1 has a capacity of 250 megawatts. It entered commercial service in May of last year and has a long-term power purchase agreement with AT&T. Pending final regulatory approval, we plan to invest approximately $250 million for our portion of SAMHSA 1. We expect to close the transaction late in the first quarter of this year. SAMHSA 1, as you may know, is the first of five phases being developed by Invenergy. Overall, Samson is the largest solar project under construction in the United States today, and we're pleased to take part in Phase 1. Now, as you know, one of our goals is to help shape the future of clean energy. And today, we're announcing an important pilot project with the Electric Power Research Institute and a company called CM Blue Energy. CM Blue is a German designer of long-duration battery storage, using common, low cost, environmentally friendly materials. In simple English, it's a green battery. This one to two megawatt hour pilot project will be one of the first of its kind on the United States electric grid. Our plan is to test the durability of this battery system. We believe it can store energy for up to twice as long as the typical batteries in use today. We plan to launch the project at our Valley Power Plant near downtown Milwaukee in the fourth quarter of this year when temperatures turn cold. The results will be shared in early 2024 across the industry. And now let's switch gears and take a brief look at the regional economy. Wisconsin added 52,000 private sector jobs in 2022, and in December, the unemployment rate in the state dropped to 3.2%. That's well below the national average. We believe the current strength and remarkable diversity of the Wisconsin economy positions us well as we move forward in 2023. And with that, I'll turn the call over to Scott for more information on our regulatory developments, our operations, and our infrastructure segment. Scott, all yours.

Thank you, Gail. I'd like to start with some updates on the regulatory front. First, let's review where we stand for the Wisconsin Public Service Commission's written orders this past December. The commission authorized a return on equity of 9.8% for all our Wisconsin utilities. It approved an increase in the equity component of our capital structure to 53%. We will also continue the earning sharing mechanism to provide benefits to Wisconsin customers if our performance exceeds our forecast. And as Gail mentioned, we now have rate filings under review in Illinois for People's Gas and North Shore Gas. At People's Gas, we are not seeking an extension of the automatic bill adjustment rider known as QIP after it expires at the end of this year. We plan to return to the traditional rate-making process to recover the costs of necessary infrastructure improvements. Our rate requests would continue to support those key capital investments. People's Gas operates one of the oldest natural gas delivery networks in the United States. And as you may recall, an independent engineering study found that over 80% of the iron pipes in the system are approaching the end of their useful life. We are modernizing the system to ensure safety and reliability and to reduce methane emissions. With natural gas prices declining, we project customer bills will remain largely flat as the new rates take effect in 2024. You may also recall we filed a rate review at one of our smaller utilities, Minnesota Energy Resources, last November. We are seeking an overall increase of 8.1%, primarily driven by capital investments. Interim rates went into effect January 1st. Meanwhile, we're making good progress on a number of our regulatory capital projects. Our Red Barn wind development is on track to come online within the next few months in Wisconsin. with an expected investment of $160 million. This project will provide about 80 megawatts of renewable energy to our system. Work continues on the Badger Hollow 2 solar facility and the Paris Solar Battery Park. We still expect the solar parks to go into service this year, assuming timely release of the panels. We also receive regulatory approval for our purchase of the Darien Solar Battery Park, with plans for 225 megawatts of solar capacity and 68 megawatts of battery storage. We expect this facility to go into service in 2024. Of course, we'll keep you updated on any future developments. And just last month, with an investment of approximately $75 million, we closed our purchase of the Whitewater combined cycle plant, a 236 megawatt facility, As a reminder, we previously received energy and capacity from this natural gas unit under a purchase power agreement. In the natural gas business, we have been working to bring high-quality, renewable natural gas to our customers. We signed another contract in January, which brings us to a planned total of 1 billion cubic feet of RNG that will enter our system annually. We expect RNG to flow this year. supporting our aggressive goals to reduce methane emissions. Outside our utilities, we continue to make good progress on zero carbon projects in our WEC infrastructure segment. The Thunderhead Wind Farm in Nebraska is now in service. In addition, we expect to complete the acquisition of Sapphire Sky in Illinois in the coming weeks as commercial operations begins. And as Gail noted, we're excited about our plans to add the Sampson One solar project in our infrastructure segment before the end of the first quarter. And with that, I'll turn things back to Gail.