WEC Energy Group, Inc.

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

Well, good afternoon, everyone. Thank you for joining us today as we review our results for the second 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 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 second quarter 2023 earnings of 92 cents a share. After a down first quarter, marked by one of the warmest winners on record, we delivered solid results in the second quarter. and we're firmly on track for a strong 2023. Today, we're reaffirming our guidance for the year. The range is $4.58 to $4.62 a share. This, of course, assumes normal weather going forward. As always, we're focused on the fundamentals of our business, financial discipline, operating efficiency, and customer satisfaction. During the second quarter, we also continued to move forward on our major initiatives. including the investments outlined in our $20.1 billion ESG progress plan. As we've discussed, the plan is based on projects that are low-risk and highly executable. We expect to quadruple the amount of renewable generation for our regulated customers, add highly efficient gas-fueled capacity to ensure reliability, and continue to harden our delivery networks. Scott will provide you with more detail on several specific projects in just a moment. As a reminder, we project that our ESG progress plan will drive growth and earnings per share of six and a half to 7% a year and as we've discussed, there is no need to issue equity for this $20.1 billion five year plan. Now, over the past few months, many of you have asked about the trajectory of our next five year plan. Our updated plan will cover the period 2024 through 2028. Of course, if growth in demand for capacity and energy drives our next capital plan significantly higher, then we'll evaluate all our financing options. In addition to incremental debt and refinancing opportunities, our options could include accessing the equity market through our dividend reinvestment plans, employee benefit plans, and at-the-market programs. I would stress that at this point, we do not see the need for any block equity offering. Again, as a reminder, any equity need would be driven by growth and would support our long-term growth projections. As you would expect, we're on schedule with the development of our next five-year plan. And as usual, we'll share the details with you in the fall. Now let's take a brief look. We'll switch gears and take a brief look at our regional economy. We're still seeing a very strong labor market in Wisconsin. In June, the state added 7,000 private sector jobs. The unemployment rate came in at two and a half percent, well below the national average, and the labor force participation rate rose for the fourth straight month in Wisconsin to 65.3%, very solid numbers. We're also encouraged by the pipeline of economic activity in our region. Last quarter, you heard that Microsoft plans to make an initial investment of a billion dollars to create a new data center campus. This new complex will be built south of milwaukee in the Wisconsin innovation park where foxconn is located. Microsoft has purchased 315 acres in area three of the park and is moving full speed ahead, in fact earthwork at the site began just a few days ago. So, along with American transmission company we're working closely in fact on a weekly basis with Microsoft to determine the full extent of the energy infrastructure that will be needed to serve this development. We're excited about supporting Microsoft as the company moves forward with a major technology investment, and we'll update you as the planning proceeds. With that, I'll turn the call over to Scott for more information on our regulatory developments and on our operations. Scott, all yours. Thank you, Gail.

I'd like to start with a few updates on the regulatory front. In May, we filed a limited re-opener to set 2024 rates for our Wisconsin utilities. The filings address the recovery of capital investments for certain projects going into service this year and in 2024. These are renewable facilities, rice generation, and LNG reliability investments. The projects have already been approved by the Wisconsin Commission. The return on equity and the equity layer are all set and are not up for consideration as part of this proceeding. 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. After nine years without a base rate case at Peoples Gas, we're making these requests for 2024 to support our investments in critical infrastructure. In mid-July, the staff filed its rebuttal testimony recommending a 9.83% return on equity and an equity layer of 50.83% for Peoples Gas. This was consistent with the initial recommendations from the staff. We expect a final decision by the end of the year. And moving to the other states, we are very pleased that we have reached a settlement agreement at our rate reviews at both Minnesota Energy Resources and Michigan Gas Utilities. The Minnesota Commission is considering a settlement that would provide a 7.1% increase in base rates. As a quick reminder, that's based on a 9.65% return on equity with an equity layer of 53%. And we're pleased to update you that in Michigan, we have reached a unanimous settlement and the details will be made public later this week. We expect final commission approval by the end of the year. Meanwhile, we're continuing progress on a number of regulatory regulated capital projects. At the beginning of June, we closed on our first option of West Riverside Energy Center for $95 million. This adds 100 megawatt of efficient combined cycle natural gas generation to our portfolio. As you recall, this plant is in operation and the purchase price was based on book value. And in the next few weeks, we plan to file a request to purchase another 100 megawatts of Riverside capacity under our remaining option. We also put 128 megawatts of new natural gas generation online last month. As you recall, we invested $170 million to build this generation at our existing Weston Power Plant site in northern Wisconsin. The facility uses seven reciprocating internal combustion engines, or as we call them, rice units. Elsewhere in the state, work continues on the Badger Hollow II solar facility and the Paris and Darien solar battery parks. The Badger Hollow 2 site has begun receiving panels using non-Chinese polysilicon. Also, we continue to work on securing custom release of panels from a bonded warehouse in Chicago. And we're still expecting Badger Hollow 2 to go into service late this year or early next year, with Paris solar park to follow. In addition, work has begun on the Darien Solar Facility, which is planned to go into service in 2024. We'll keep you posted and update on future developments. With that, I'll turn you back to Gail.