WEC Energy Group, Inc.

Good afternoon and welcome to WEC Energy Group's conference call for first quarter 2023 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.

Thank you very much. Live from the Heartland, good afternoon, everyone. Thank you for joining us today as we review our results for the first quarter of 2023. 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 executive vice president and chief financial officer, and Bess Straka, senior vice president of corporate communications and investor relations. Now, as you saw from our news release this morning, we reported first quarter 2023 earnings of $1.61 a share. Weather was a major factor in our lower results for the quarter. We saw one of the mildest winners in the history of the Upper Midwest. For example, it was the second warmest first quarter in Milwaukee since 1891. However, we're confident in our plan for the remainder of the year and we're reaffirming our guidance for 2023. As a reminder, we're guiding to a range of $4.58 to $4.62 a share for the full year. This assumes normal weather going forward. And as always, we remain focused on the fundamentals of our business, financial discipline, operating efficiency, and customer satisfaction. Switching gears now, the work on our ESG progress plan continues at a steady pace. It's the largest five-year investment plan in our history, totaling $20.1 billion for efficiency, sustainability, and growth. The plan is based on projects that are low-risk and highly executable. And as we look to the future, it's clear that the mega trend of decarbonization and the need for even greater reliability will drive investment plans that are long and strong. Scott will provide you with more detail on several specific projects in a moment, but I'm pleased to report that just since last December, the Wisconsin Commission has approved more than a billion dollars of new capital investment by our companies. As we've discussed, we project that our ESG progress plan will drive compound earnings growth of 6.5% to 7% a year from 2023 through 2027, and we fully expect to fund our capital plan without any need for new equity. Now let's take a brief look at the regional economy. We have good news from the latest data in Wisconsin. In March, the unemployment rate came in at 2.5%. That's a record low for the state and well below the national average. And we continue to see major developments in the area. Just a few weeks ago, in fact, Microsoft announced that it plans to create a new data center campus in our region with an initial investment of $1 billion. This data center complex will be built south of Milwaukee in the technology park that is also being developed by Foxconn. Microsoft will purchase a 315-acre parcel in Area 3 of the park. Local approvals have been received, and we expect Microsoft to close on the land purchase on or before the 31st of July. In the meantime, Microsoft is moving full speed ahead with planning and design work. The decision by Microsoft underscores the strength and the potential of the Wisconsin economy and positions us very well for more growth in the technology sector. 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 a few updates on the regulatory front. New rates have been in effect for our Wisconsin utilities since the start of the year. As expected, we're planning to file a limited re-opener for 2024 later this quarter. The filing will address the recovery of capital investments for projects going into service this year and in 2024. The return on equity and the equity layer are all set and are not up for consideration. The request will be quite modest, and we expect a decision from the Commission by the end of this year. And as you recall, we have rate filings under review in Illinois for Peoples Gas and North Shore Gas. The next step will be for the Commission staff and interveners to file their direct testimony on May 9. Hearings are scheduled for early August. After nine years without a rate case at Peoples Gas, we're making these requests for 2024 to support our investment in key infrastructure. And with lower natural gas prices, we project customer bills will be flat with 2022. We also have rate reviews in progress at Minnesota Energy Resources and Michigan Gas Utilities. We filed in Minnesota last November and interim rates went into effect January 1st. I'm pleased to announce that we received a settlement with parties that would result in a 7.1% increase in base rates. That's based on a 9.65% return on equity with an equity layer of 53%. This settlement is subject to commission approval, which we expect in the next several months. And in March, we filed for a base rate increase of 9.1% at Michigan Gas Utilities for 2024. This application is primarily driven by our capital investments supporting safety and reliability. Meanwhile, we're making good progress on a number of regulatory capital projects. Red Barn Wind Park went to service last month The project is providing 82 megawatts of clean energy capacity to our Wisconsin customers. And as Gail noted, we received three significant approvals for the Wisconsin Commission since last December, for the Darien Solar Battery Park, West Riverside Energy Center, and Kashkanaan Solar Battery Park. We discussed the Darien approval last quarter, and as you recall, the solar park is planned to go in service in 2024. West Riverside is a combined cycle natural gas plant owned by Alliant Energy. In February, we received approval for our purchase of 100 megawatts of Riverside capacity for approximately $102 million. We expect to close this purchase by the end of the month. We have an option to purchase another 100 megawatts of Riverside capacity, and we plan to exercise that option later this year. We also received approval for our purchase of Kashkanaan Solar Battery Park with plans for 300 megawatts of solar capacity and 165 megawatts of battery storage. We will own 90% of the project with an expected investment of $585 million. We project the solar portion of this facility to go into service in 2025. We also continue on the Badger Hollow solar facility and the Paris Solar Battery Park. While Badger Hollow has received some of the solar panels, the remaining panels for projects are currently in Chicago going through the customs process. Assuming timing release of the panels, we expect these solar parks to go into service late this year or early next year. For the Paris and Kashkhanan projects, we're evaluating the timing of the battery investments. Of course, we'll keep you updated on any future developments. Outside our utilities, we continue to make progress on zero carbon projects in our WEC infrastructure segment. In February, we complete our acquisition of the Sapphire Sky Wind Farm, now in service in Illinois. As a reminder, that project offers 250 megawatts of capacity in total, and we own a 90% share. Also in February, we added an 80% ownership in the Samson One Solar Project, located in Northeast Texas. The project has a capacity of 250 megawatts. As disclosed previously, Sampson One suffered storm damage at the beginning of March, but we expect no significant bottom line impact for the property losses. The project is currently producing energy at about 70% level and improving every day as we continue to restore the site. With that, I'll turn things back to Gail.