WEC - Earnings call transcript Q3 2019

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Operator

Good afternoon, and welcome to WEC Energy Group's Conference Call for Third Quarter 2019 Results. Today's call is being recorded for rebroadcast. [Operator Instructions].

Before the conference call begins, I'll 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.

reports assumptions statements, factors Energy cause factors Form and the connection to Group's actual to Securities XX-K the the materially with described subsequent contemplated. results addition to and Commission from referred other in latest and differ In Exchange with those could filed in WEC

and the earnings unless approximately otherwise questions noted. During the share In the per analysts share, earnings answers. be conclusion will be to the of at after be this per package presentation, conference A with discussions, referenced based will open available on information replay will hours call, diluted detailed of conjunction After wecenergygroup.com. is for call. this X a posted financial

Chairman Group. And now it's my pleasure Executive WEC of to Klappa, introduce Energy Gale

Gale Klappa

today Thank review Good you we quarter results. us joining for as XXXX everyone. third our afternoon,

introduce like me of First, to management always, with the as here who today. team members are I'd our

Controller; Officer; and Beth Executive Vice Fletcher, Counsel; Lauber, and of Guc, Straka, Scott Kevin President President Relations. General Vice Communications Corporate Bill CEO; have President We and and Chief Peggy Investor Senior our Financial Kelsey,

most utilities. pleased he Controller Reese, to introduce and Treasurer. as new joined served finance Welcome, Illinois Tony. also group in for XXXX our our our the back I'm Tony Tony recently,

Anthony Reese

Thanks, Gale.

Gale Klappa

release you quarter news as share. Now saw reported from this third we morning, our of $X.XX a

Also the third milder normal drag of slightly were us straight-line hour our storms to helped discipline XXX-mile efficiency. summer for July That operating a quarter, X extensive culture, quarter damage but on the the deliver focus, in from despite and temperatures During share recovery embedded and Rebuild, and quarter, our year. the financial our is resulted deeply continued an tornadoes repair caused the in focus we solid $X.XX that which last system. than severe during to a quarter. results above winds

quick Scott But will it the just with the details more financial Unemployment as provide remains pleased at the first, performance. on front shake we conditions few the to economic the state, development put you take it lows at quarter up on company's and here a you minutes. and continue economic news let's well. when look of see consistency operating or with So record the positive and of in altogether, we're near a in Wisconsin.

construction installing For example, the to Phase builds Foxconn on nearly out foot fabrication as manufacturing high-performance where on center X continues also of month. X advanced announced Milwaukee year the its plans later roof its last begin this Foxconn's computing on south Gen Crews million began X square of it plant. campus it facility

built will As you to North LCD display be plant may know this in first the be America.

including Coors, we here Molson base positive resources IT, functions, a announcement it Milwaukee. just in Then another finance, the major few saw human support ago. beverage company, will its and legal confirmed days

find as You on can released us hear conference our when capital for the snapshot earnings for economic plan morning, X-year EEI company more horizon is our growth the will the the of next XXXX join you this at a through And about more growth week. well. XXXX. we region you packet in In period the our

X.X% We the This of expect current during years. represents $XX projects over billion an million X infrastructure plan. to next $XXX invest increase X-year or in our

investment. folks, areas for increased Now identified X we've key

in liquefied to capacity In natural peaking meet needs when gas dropped January develop the the particular, plan in back growing more became coldest especially service event days. windshields X. to to we near gas area. plan degrees at vortex polar customer XX our to times address the regulated Wisconsin the natural below facilities To demand. during clear natural demand, X expand on the This demand highest we First, our infrastructure gas

Service Public Energies our the customers subsidiary We the serve capacity plants during to most facilities. Wisconsin and state. In to to lengthy the Building We way our believe will winter into LNG natural expand build just last needs pipeline the projects approval fact projects cost-effective these an differ costly to are Commission gas week, for filed LNG the application peak.

for We're also increasing electric network our our distribution Wisconsin. X-year spending target across

underground you consistently utility expect, replace deserve been most that As know, But hundreds miles Midwest. and named in aging lines. reliable of need to modernize service our transformers high levels customers overhead to aging the maintain the of poles, we and the of and we

optimize additional our to And footprint. infrastructure capital finally, energy position outside business earnings and our deploy We tax traditional in our excellent growth. to leverage we plan of our see continue to opportunities

our of to X-year to segment this the by base expect our total grow end business period. of We asset the approximately X% of

a our should grow the emphasize Overall, issue annually plan would and period, no capital our need earnings rate And of projection X-year base original our of our with base over the to $X.XX equity. X%. support growth this long-term asset by comes share, to X% XXXX that's new and the new continues of plan X% additional investment I guidance. off a midpoint to This

the with update And look regulatory calendar Kevin, our operations. more for details you forward on all sharing to now upcoming to I'll on an conference. We our Kevin turn EEI yours. at details it and over more

Joseph Fletcher

by start we Thank where I'd reviewing stand Wisconsin. you, Gale. like to in

process. the on rate update an First, review

we Industrial agreements This in a Wisconsin recall, settlement set Public of Service Commission Citizens proposal Board settlement the March to into commission Wisconsin Wisconsin, Wisconsin X. year, expect we on commission decision Wisconsin. the order Group written will of Hearings concluded with Clean a and August, say with of that rates the I'm be customer approving mid-November, rates in filed Public Utility determined entered new you that to December from introduced Energy October, pleased Rate in we this If the to the last by January in design and unanimous week. the just and we effective agreements Service. received we

our projects. to solar turning Now

ground Creeks Badger We've X I. projects recall may Public Two plant. of a total for Wisconsin, in solar solar broken You on that utility-scale Hollow of and Wisconsin megawatts capacity have we XXX Service,

these will the reminder, be in first facilities scale utility a Wisconsin. projects As solar

Our with $XXX approximately XXX an megawatts will share investment million. total of

end producing We expect next both projects of year. the to by energy begin

more also renewable The plans acquire We filed receive to Hollow Service commission's in Energies. solar to with would investment megawatts the XXXX. approval decision and park. of August, we the This II We past of Public $XXX Badger for at expect XXX we capacity Commission have for projected generation at be million, the spring

affordable Meanwhile, business, side our natural on to taking we're customers. our gas and the for reliable maintain steps service of

an liquefied natural We X mentioned, Gale Energies Wisconsin. just to As application filed in facilities here construct gas

in invest to million projects. $XXX these We expect approximately

the begin XXXX. subject plans evaluating summer of are site we We now in and, would to approval, construction

Illinois. to Turning

to This system. and critical is subsidiary the Our continues Chicago's third-largest modernize to reliability People's America's gas natural Gas in city. program safety long-term

following year-end we created facilities, and than As we aging X,XXX cities complete and our the the more jobs The program safe. XX% employees rigorous pipes keep to iron so has approximately protocols far. replace by will public and are be

turn with that, back And to over Gale. I'll it

Gale Klappa

Kevin, thank you.

Now growth folks, and considering our tightening with a hitting midpoint year our to of this range. strong the share guidance. of translates of XXXX rate to This of an expectation we're of far to range performance X.X% the a between original XXXX the $X.XX year, our guidance X% $X.XX a top so full a share

our a And dividend. now reminder about quick for

our board As plans will year assess next usual, December. scheduled our in for meeting early dividend our in

I in to of range of the earnings. will growth our so the payout per share. middle target a to to continue our in line growth XX% of that now, XX% We're with dividend in be expect ratio We continue earnings

Scott outlook CFO, the Lauber. Scott? And and results future, here's details on our our with now, for the third quarter

Scott Lauber

Thank you, Gale.

from Our third quarter share of with tax capital continued We and reduction emphasis $X.XX benefited on level were year's earnings credits additional results. per cost a control. investment, last

estimate storm hit our expenses the in restoration mentioned, weather as severe the a in impacted However, We system. that portions quarter. July's Gale $X.XX of resulted significantly electric

sharing we mild In in book accounted addition, companies in the not XXXX. and in quarter, $X.XX a our comparatively Wisconsin drag did temperatures any for

the to beginning taxes. earnings and comparison website on quarter operating our plan this to packet morning, includes of posted income, focus and results. the a other interest with and quarter income expense then and it I year-to-date third income We

packet. increase of tax $X.X consolidated Adjusting the of income rules, income new million adoption for $XXX.X accounting the and lease $XXX.X repairs Page of million impact reported the Referring to the for We operating of compares X to our million. in an earnings reflecting quarter. This was operating quarter-over-quarter. in XXXX, flat

in the be and update accounting focus will escrow changes reduced segment, year. the this balance in by through the tax rules. income the transmission lease We impact My operating Recall settlement that rate the of to tax repairs Wisconsin, our our agreed remains That of we of plan expectation as the offset Energies will certain of of regulatory growth previous to end that by year-end, at on and repairs benefits new apply excluding part to asset. continues X

sales resulted These on of were that couple reduction items. by July decreased a Recall largely expense. less million Starting substantially $XX.X Lower with income. increased in $XX by these part items due by a volume million operating Depreciation million and drag a driven operating favorable to in in segment. net a in $XX.X of Wisconsin million expense the $X.X in offset weather decrease This was the million. the maintenance income $X.X Operating storm resulted adjustments. quarter.

reduction However, plant recent $XX recognized part we have driven million in cost about a our closings. by

No in addition, in sharing quarter we Wisconsin recorded of our earnings we quarter. the place sharing million third last have year, accrued $XX utilities. mechanism this was In at

volumes increased income investment million our infrastructure. in $X.X of million result Operating in by Gas continued at segment capital increased in income as operating a by $X.X investment higher System. the our safety customer In the States People's Illinois, reliability growth gas and of utility driven to related Other

Turning energy was $X.X at down infrastructure this income now segment. segment to million. our Operating

Bishop on the have farm Upstream expected, operating income. not a material Hill As did impact Wind and

in segment from credits an XXXX Corporate in expense. variance related approximately our production to to quarter the the rules, reflects credits, excluding and $X.XX we earnings by income repairs Other $X.X These the loss of our operating consolidated of tax third these earnings production legacy was variances for Combining increased to and impact and The new of that facilities portion added operating recognized million. which gain recorded quarter. offset form come the business. million tax a a of $X.X are tax share unchanged. as per that lease recall the at However, a sale of The income these the tax

increase continued an the Company to investment. from million, The of by a Transmission quarter $XX.X $X Earnings totaled investment in third compared as driven increase million was of our capital XXXX. American ATC's

associated decreased expenses result gains of Note by as gains investment $X.X benefit partially plans. a lower net in segments. the included income Other our operating investment with our offset benefit million these that

to new the lease long-term of the interest accounting $XX due fund net impact capital by investment. that balances higher primarily million, guidance. expense Our to This excludes increased

related credits consolidated our Our to reform investments net tax income tax of million. decreased repairs, by include tax Drivers tax XXXX the item. expense, infrastructure $XX.X wind production and

We between to effective income this year. rate XX.X% expect our tax be XX.X% and

between tax benefits the tax our be XXXX we of repairs, rate effective XX% XX%. and Excluding expect would

be this time, partial we in to At a XXXX. expect taxpayer

Our efficiently with capital projection be able continue utilize to show to that we plan. our our updated position tax should

and statement investment X and billion capital asset regulated Looking earnings our by Page flow focus This increase of the of operating utility million continued decreased for businesses. Total XXXX, cash now were same a X by to period first on working Net infrastructure $XXX.X was provided the our The driven at the in largely from $X.X months activities XXXX. $XX.X on energy acquisitions reflects balances. the expenditures decrease cash packet. higher capital million.

of debt-to-capital at ratio of adjusted third XX.X% was XXXX. quarter the end Our end at compared XX.X% the the to

half calculation XXXX equity. Group to continues the of WEC common notes subordinated treat as Energy Our

We required our programs. are other and options using for XXX(k) shares cash to satisfy any plans,

shares. $XX.X common in do increase this the We effective dividend XXXX. Going This paid expect months first was level year. $XXX.X the XXXX, million forward, the any over same X that dividends million X.X% period we first increase reflects of of in the the additional to not of an during quarter in in issue

sales. to now Turning

a growth are on year down We XX,XXX more XXXX, Wisconsin Natural utilities volumes customers and the deliveries versus more shown of down and our gas approximately deliveries X.X% were the our continue earnings mine, XX,XXX Page across and use ore X.X% of months X retail increased XXXX. basis. X.X%. weather-normalized XXXX. And by deliveries third basis, Wisconsin to the XX iron the ago. electricity, And see months of on electric this for Overall, gas sales on Natural X weather-normal to first compared excludes power in compared packet. of a Retail gas system. customer XX deliveries natural serving electric the natural quarter were of gas generation. At first and were to end X.X% in a excluding grew the

earnings a on Finally, reminder quick guidance.

of per of for the tightening to $X.XX This share reaching $X.XX year. As with Gale expectation assumes mentioned, we range. guidance the earnings the of normal top to an weather year are full remainder our the

Gale. I And turn that, with things back to

Gale Klappa

Thanks, now for Overall, and track question-and-answer on Scott. known Thank very ready for our Operator, much. talking, the on our focused we're portion better of we're our as and customers delivering some you value call. stockholders. jive

Operator

Instructions]. [Operator

question first Evercore ISI. from Gordon with Your comes Greg

Gregory Gordon

actual real two have I questions now.

first on uncertainty down. the It's it economic forecast to or issues be. other growth are near-term chuck The sales longer but you of basis is going to not regard you're Can weighing trade is terrible normal up your the your factors couple is what also weather to sales? off is, hundred growth term, assuming a points normal economic that with number, that

Gale Klappa

question, Good Greg.

consumption. decline call to on that may industries saw our place designed XX% various to in about energy that export. the I industrial the the we industrial all production is mentioned have biggest among is that the across previous for XX% the of think that is I Wisconsin clearly factor takes you

down might roughly the that while look industrial and X.X% sales. economic in the The stabilized those question see level. have a and you we're as in various Europe, weeks, the you year looked, in to to looked X% last though, at ago. compared Kevin thinking if or I of ask quarter tensions with data at we're China, seemed at why Having last that So to the down Scott think terms latest conditions trade actually, reasons industries and this I just few we're you the

from the not we're everybody, an remind the and that seeing I war the is but any as slim. trade those on enter are in with would further QX, our So are real that very particularly deterioration use I with tensions going margins energy though, economy soft what's pause think we on our pricing, really associated time industrial margins customers industrial Europe.

even or of hit So the stage X% earnings translate a demand slight industrial downturn not does downturn a this major or in into a game. X.X% at

Gregory Gordon

little percentage Thanks. My is up the from to overall Okay. plan, energy up. than and second it's $XX the capital a is bit But also infrastructure $XX.X increase. up billion, more the a question basis on component billion on

think your the infrastructure of as I percentage billion spend XX%. $XX a was around

the utilities? to a but And is XX%. of doing portion you big $XX still the billion spend that seeing level infrastructure of spending are what you risk Your the that is a as opportunities? closer do profile increase Not core where you're capital at those think commensurate with in

Gale Klappa

we're to Well, first Greg, thought all of all, I let ask questions. multiple Shar going the

Gregory Gordon

me. Got

got You me.

Gale Klappa

our our profile. customers, one. be that also seeing outside tax fit -- will agreements Yes, we refine good high-quality spending number but and profile, plan a with as going energy two, the we number meets projects significant driving have, don't looking offtake opportunities risk the level with think profile, to And not percentage this of we're X-year business risk the moment, projections, of this I'm of to infrastructure risk but when we number meaning that. reasons sure. level, our our a kind in footprint. seeing back creditworthy I position. change high-quality, say in our projects maximizes we long-term you're capital of uptick new here only in really our And continue of fit Two again, a saw our One, Shar spend slight

our we really deployment is So good that this think a of capital.

Operator

comes question Pourreza Guggenheim Partners. next Shar with Your from

Shahriar Pourreza

here. real on quick quick questions two Just --

sort here we doing did guys curious, incremental We looks Badger kind Wisconsin do First, opportunities can't you sort especially like 'XX. governor's proposal propose are your your of obviously by peers How doing in think Two on like the it solar of since modestly Hollow, side. I'm one about see this. decreased X-gigawatt you're of utility CapEx the and of your generation plan, Creeks. afford new a

of So kind about you're thinking that. curious I'm on how

Gale Klappa

ask also on his it. well. take on my I'll give to you give you We'll this Kevin view

all, really needs generation First as our think really what know, we planning you our are. tracks capacity of

approved. our So Badger we've be II, just we Energies adjacent of for megawatts went should another I. what got subsidiary, the XXX-megawatt Hollow We call already immediately moment, for in solar obviously Badger to approval, Then XXX at Hollow we which

of retirements type fits additional that capacity, which solar other really, need, our generating is absent Kevin, right investment a So now. of capacity peaking

I'm has get asked of Now of force. having thoughts? is go the force task XXXX. that, to generation Kevin, acceleration figure we'll by a out any other trying there's the the pleased we'll said governor related task that cost-effective way where be And terms has our zero-carbon company of formed to to a any coming governor what the in see to to most the out if force. task member net

Joseph Fletcher

Gale, governor just had And his talk comfortable our plan you I'll laid has an opportunity, with are we've out. I've I'll tell and announced and plan. we to of and the mentioned as add, what where some you he's his folks, about

about we've since plants. XX-plus As retired, you XXXX of coal-fired percent said, well,

announced meets peaking and we're As you where a moves what solar starting peers mentioned, at good our at we're the about now. look our I But feel are doing far. we've on. take for so as what capacity But to needs time

Gale Klappa

Amen.

Shahriar Pourreza

a it be the sort assumed of we as sort think fleet generation move could as your the be balance Good. was pretty securitization PFC the kind coal that assets. sounded your That's Obviously guidance then partial on cautious on how thoughts Pleasant or we've of of at And forward? that i.e., Any at just remaining look one-off? template Prairie. should around was approving securitization to a about the sort we of perfect. transition, the we of Or

Gale Klappa

remaining guess, commission securitization than the read we that may $XXX it. the Well, commissioners. and of of our Prairie, have of differently all, balance discussion the what you at all of The the million first Pleasant of read read book we reaction Shar, I

from In fact this and thought in is this sense very positive the from staff conversation that is, a from instance. we've gotten they my their worked feedback that solution

I everyone and have for was they not by of very necessarily of is particular the the think of this caution might that -- on were commissioners solution the plant. they was retirement publicly think I one I picked and the perhaps was particular stakeholders. up by situation, But this weren't good whether that that you think note of approach that this a But template. that I works, and said the this it time or is saying settlement well to about received a a process open the that overall, being think, positive in our template, this these all

look on In we we're at. economics, don't we demand, we're solar capacity additional retire right obviously, for any look now, X.X terms forward, continue months in to of see next and focused so, getting any our to during XX look years where the portfolio, well. next to or have the But But at going operating plan and in capacity going XXXX. be that at or the at

Joseph Fletcher

just forward we generation look generation, back. assets, mix having polar something flowing. portfolio right to as we the needed gas cold I had people's is you far a that weather. keep was had at And coal extremely vortex. what us, the on would of and decisions, balance the your as In add keep we look We for on the lives don't our to, comments, we of that including the mix And to moving January, mentioned have in

from the as to decision-making that technological economics into the we'll decisions, addition a move making also forward. and standpoint in So we our balance

Gale Klappa

if been at and of that January, coal the point. Shar, truth a of the had back if wind, life-and-death Kevin. the array haven't gas, haven't it solar, that's we is, have nuclear, full great And of of situation. would we a capacity, full end Yes, complement capacity matter had And natural

the refine to to there's sense. But fool nothing around obviously, makes So We'll our to with. plans. continue we'll at economic continue what look most

Operator

Julien comes America. Bank question next with Your from of Dumoulin-Smith

Julien Dumoulin-Smith

I can. Two quick if points,

stuff presume you have comment so regionally off be you think then Obviously, outlooks. the generally there upwards the you're ability about Can bucket, to specific rolling part that separately, largely scaling you infrastructure investing through the How discrete the revising get the And been think could continue there, How if the term? that's items on be heard longer tax to there's period, in second context? MISO some spend. do I through do in tax to the going about into footprint rolling taxpayer the X-year MVP forecast you anything tied I presume are infrastructure sort still, forecast I the I given to infrastructure peers that cash not largely in? of, think Or there. now, be, if ATC Your [indiscernible] in And here that your CapEx a assets. what period. I assets producing

Gale Klappa

Great All questions, Great. right. Julien.

we and first, any second infrastructure the your would more If today, mind, taxpayer you in clarify say tax we be partial to you don't question cash is position. have for I'll tackle wanted investment XXXX. should if we on What that a then don't coming,

However, that with us we efficiently the infrastructure Scott, our capital allow new capacity we've expect that out infrastructure tax budget, our tax position credit in position. additional our add tax and am and to plan maximize related optimize segment I... that X-year will in laid

Scott Lauber

exactly No. That's correct.

going can taxpayer just to utilize And and we will a future. that we're cash helps be us make that the We purchases. X.X efficiently the in those

Gale Klappa

have In X production credits tax investments. we the available our that what take the the tax budget I us position essentially full years be advantage essence, to you, in cash and hope for capital advantage for Julien. put of -- next that with effectively takes clarifies would of this the us to that allows additional

Julien Dumoulin-Smith

Indeed. the former? And

Gale Klappa

question first me how us tell about roll question out I How your was again? focused so that tax again? by about on that Yes.

Julien Dumoulin-Smith

peers some positive meaningful adjacent of there revisions at MISO, is Your seen know transmission, on So we'd have Anything that. anything utilities and at your should we revisions, ATC? to positive of? the aware about with respect on friends be

Gale Klappa

Yes. Great question.

space plan. Kevin and don't in Scott a lot our and way. this of it put white me I Let capital like

plan investments we pulled capital out our potential ATC have of of footprint. essence, outside in our any so And

pulled at and have stuff what is ATC you'll know see detail in see deliberately by footprint. plan, solid capital be would and built we show don't is like you We And footprint, do. because But essentially, So of outside like X-year we be lot be out we white to exactly more our what anything really that to of to what that our you we're right in space. EEI able going just going space. the a now white to to

Joseph Fletcher

And I come took future. system, renewable and the potential out think more all more get may the into be exists there the the that more space. we as do transmission projects in white that But

Gale Klappa

to That's there a capital bit. If additional was to of what is is something upside suspicion for opportunities a going peers, our study look, But this I side. just it discuss be Wisconsin, that for the is lot that little on us. there, I'd additional have will renewable for my from

Operator

comes Weinstein Your with Michael next question from Crédit Suisse.

Michael Weinstein

if the might future? And down, might whether insight more wind than at solar PTCs some on from PTCs Just beyond separately extended think that as all that, to or as on think to infrastructure you you tax on current point continuing do bucket wind any start you program? you the -- do focusing have the question. at you in projects the the guys rather then be things the Are start

Gale Klappa

Mike, two things.

of some the tax up. two in that probably committees that the rumblings had like be bill Year's occur First that of associated voted and been would extenders this on house of likely of with potential credits will you the or picked some tax Washington extension one There Eve. all, New on our understanding it in the to were If on renewables. to XX:XX happen, at is be about

counting great. are that. not happens, that we But if So on

X-year additional we're business, down assuming from would out roll we've into credits our the With as tax the infrastructure the in current we've the roll law. the that production laid plan investment and put plan down they

of So question. first that's the the of part to kind answer your

not. think solar? the valuable, law to the in if second down credits more become us push tax current production stays they will I roll place the and Probably part, that at less

But better look solar as gas credits. to well Although far the we stay continue us projects that for as risk a value seen as our of as tax still the wind, would everything have potential the other reduction well at with infrastructure wind, indicate so we profiles. fit in would that natural even with projects

Michael Weinstein

infrastructure if update forecast the New mean, I bucket? Year's extension XX:XX there to So, capital Eve, be should an I an is to the on expecting toward

Gale Klappa

think Not we sweet is This -- got we necessarily. that is we've spot. what our in think No. what plan

Operator

Your next question from Goldman Michael with comes Lapides Sachs.

Michael Lapides

Real quickly. change in grown of big your at the base rate kicking growth level? expected utility spend kind capital base growth? numbers percentage Does for in capital of change same rate-based to takes forecast higher that growth law so maintain level CAGR your because the has is Or X-year much expectation rate the this

Gale Klappa

it, in of of I whole is tell as you call Michael, across the year. terms X% a what plan, look at Wheel Well, the breakdown spending, at our company, will asset of given Fortune, can you, thank and we grow our our X-year for base the question, capital that if this you

Michael Lapides

company used of outside the be finance do self-financing? the the you projects anticipate at financing growth know the company it. fund just I'm financing And trying so utilities holding to will to wind be all holding Got debt use themselves. having utilities to utility, think will to I utility. the the about at

Gale Klappa

equity use that to a growth. infrastructure paper given But that the be timing Scott? by in and fund situation, do we and thing. by Occasionally, large, will utility commercial large,

Scott Lauber

the the And up parent remember, support that is for to our parent. of And dividend dividend overall cash a the We corporation. doing utilities positive to are that the up to the also most Right. goes Power part, flow item

Michael Lapides

item, a prior then million. relative last generation to down And just the spend is lot, Got noticed forecast. $XXX just I the it. under on Not year

other plant therefore a the Just that? whether generation, there megawatts have and thinking retirements coming? about you are developed, what's a the solar forms curious where about of for of and in be could coal need hundred you incremental process incremental driver And couple of

Gale Klappa

Upper are the the rise capacity ore kind large we mine, units put essentially I time plan piece very difference approval biggest are ago, was great. X-year of is now fairly you iron at difference XXXX. hoping Michigan. mine gotten replacing Well, They and retirements. a out look mentioned, a additional the we the we're providing generation think Those this electricity for, are ore call way, we to expenditure. Peninsula answer when the probably rolled which of in the coal X-year new into really your is capital units plan in for you we But iron we're cost-effective the what including working completed, in That actually the the a additional for the service. capital the by you Peninsula the an that that Upper about is to is considerably the compared at of to as in that They sizable then energy that project. service spring solar that, capacity see solar this receive up to demand big And is year. What question approval the that year

to additional service to plans coal months so is units months the in any well. on operating going -- to retire We XX have getting those any focus solar next and be the in or next immediate XX Our XX next months. XX in capacity don't

customers, MISO a units we continue said plan continue not major or to will However, forward. can is our be generation we well. staff, commission interactive any with have in collaborate going discussions factor good as And big to our with and the that, retired whether having refine obviously as

our and on never, XX So for plan an months at is you solar in getting but the look the XX the economics to to of the future certainly our next the say to capacity in, capacity system. continue well in operating to focus never

Operator

from Praful comes Mehta with question next Your Citigroup.

Praful Mehta

out helping impact maybe earlier. growth industrial there and you that do rolls it mentioned you obviously the the industrial more if growth the XXXX? other If that's to you that that is XXXX base. costs thin, weakness to on see some weak, see you margins factors? uncertainty industrial trade do talked a at going point but So about I know starting on continues are How into into spread be larger point growth supports

Gale Klappa

into go good there's XXXX. Well, and a will I it think, possibility

we anticipated have this. However,

looked case. in It have We part the this. rate was our at of thinking

given see sector. continued any we in change So in seen the kind our industrial I the of have weakness even outlook don't Scott?

Scott Lauber

rate fact, and And monitoring are years. industrial been in we been factoring and future at the sales completely. our case agree for like we've said, Gale what this our weekly looking we've into, settlement I

Praful Mehta

you. Got

So assume what on would guess, specific then? to of more side industrial you kind I just growth for be XXXX, the

Gale Klappa

in industrial right our we're with of assessment the customers. Well, major our middle updated now

we in our where large We plan. on have years industrial process actually our and for then we've customers XXXX, place that a had outlook their update interview we for

significant that out, So see January, remind would got still as we're you, answer you'll right But though, economic forecast. development in you. nothing next into in. We've see now not the Foxconn given Kevin seeing we've either opportunities I that got up year. pointed We've updated are mean in. HARIBO change coming would coming very we're XXXX, XXXX. we've service Komatsu ramping got coming I seeing But our you'll December or

in Kevin? that expect forecast. don't our to change see I you're So any longer-term growth going

Joseph Fletcher

I to that, would add Gale.

are look and very areas these More week, there to to in at, EEI like particular have an it area that's you bit well. development support industries added you just come in there's EEI. That you popular for that particular being businesses time. happens not mentioned this of up example our next And to lot as a peripheral region, economic that what see we're come a growth. at here perspective, Foxconn seeing that at you that buying that little a mentioned talk when the customers coming become state when that are when at refresh industries of and Foxconn just from we'll but If we've

Gale Klappa

about we're of and It's I industrial. in bit we planned concerned seeing overly that something had that downturn get So Praful, to is this summarize, we -- something not not anticipated that for. wouldn't have it

Praful Mehta

side. helpful Got quickly And on the you. then Super just maybe color. equity

most mentioned of you're that taxes. cash renewable taxpayer all to side a the going investments cash You you you these offset become have that probably in but help the

As to over time still to this the get a you credit over still but metrics wanted the have a do Just need. you the period? don't little push weaker there maintain time? need understand, ability metrics equity Is the in, mentioned up metrics? equity no in Or also do

Gale Klappa

our We metrics, do not equity. we will maintain additional need and

lips, metrics read no very the good those, my one new that's And So of shape. equity. stay in

Operator

Avon comes Murti question from with Capital. next Vedula Your

Vedula Murti

go continue whether see? When the whether of sales, be just to whether weak if things. there's I few can seeing going kind It that? something seems to the we normalized across any wondering just commercial. that's at was that we fairly whether, seems looking kind what adjusted whatever. speak Or are to that pretty your retail residential/small of maybe of terms you're or A it's normalized forward, and distorting like you -- board factors ever, in as If I'm

Gale Klappa

you," Vedula, before you'll heard you probably from have. say, this and "I've

fact, error normalization best great. were normalization. of about as margin techniques saw normalization or we is this Scott in. not the the But I this the in weather at and numbers frankly, in margin are their weather come talking does just And Our industry weather error the significant. in Everybody pretty

residential believe think looked and because the piece industrial, me say, So just normalization last heard about, get Scott The probably didn't a weak commercial right down. probably little we I it's that I you talked weather the is year. and I both bit that

account deterioration look I as pause. we're in taken in in that we've significant and customers of this our But think see Scott? into don't forward, terms from we a usage. low-margin we drop any

Scott Lauber

No.

customers a we the being right, deck, and investors last and Gale. little about that residential normalized fact X%, up high. And year year's pulled about talked were or You're exactly last the the that actually

we're year-to-date. Now showing X.X

So we them in together, right get that -- it's X%. average

year, issue. there's last trending most likely this really trending a than I concerned. more year not to -- really of related agree not I'm more a it's but do So

Joseph Fletcher

And lot to going to somebody next air next when conditioning a summer, town, given. there's year, of comes be

Scott Lauber

right. That's

Joseph Fletcher

next at will conditions electricity residential, know, flowing. a you be for DNC. great air on. will would year, of the area All as time look All hosting, commercial. If downtown we're Milwaukee be you mentioned, Gale And around be anything industrial sure be be going I am as to all us. And it will

to looking forward we're So that.

Vedula Murti

competitive as one rates. residential -- of that? industrial of to been region it a of how -- to think investment, always within and all advantage because I was the in advantage you the been able mistaken, was that that if classes your not compressed. terms given commercial, that you you And have in us has seems the But about hallmark and I'm do -- are things time period like viewing When talk overall guys can refresh it's now the

Gale Klappa

of during putting freeze Future into our we the just suspect in was when period we've come a rates. the Power advantage investments place, that somewhat I But certainly, were off -- needed, investment all badly during were that compressed. X-year of

neighborhood rates look for sure fact, XXXX. customer up the our in for in XXXX just largest increase States very base rate I'm In were for over subsidiary, in feel We they X.X%. rates than you only in saw many the increases utilities you by We way, And rate Power you about years. asked Exelon Energies, a know, XX% Minnesota our our double-digit see you settlement, And lower position. our in rate Northern X customers by good competitive around were as Michigan. then going are our of and and Minnesota the

Vedula Murti

one And that. appreciate last thing. I

an some thought your a can going some today, what forward? the one-off. this few give tool how you can the little how to forward you you Prairie of Given as in not years. as at of on of securitization us terms be thoughts about simply I thinking using of But about how And least we idea to going how thinking to -- you're us did investment, Pleasant it's -- what with a should voluntary is should use over as next a that how, give tool and -- expect

Gale Klappa

by of securitization for ours cost a like environmental which companies allows to let the Wisconsin, in is there the projects. saying request -- law start Well, me environmental State of

So law Wisconsin. ordered. my XX other on the can't voluntary voluntary that's law. supported years State goodness, development in It the oh and it that is the be the actually about law. ago. law, In of back a vote a We But words, it's

for thought we instance. a good tool So was this it

ago and think benefited of we don't the of public their being for And weeks this understand their in forward. commissioners our template this the case, count on going said, they also of But well in a I couple these exceptionally our setting certainly that public review to that. constituents. all full agreed rate particular discussion worked

going suspect, like to to all So net know going And units. would office, discussions require because of and governor's I additional commission of the the technology retirements a to think as among get there'll stakeholders the lot by be of a I zero-carbon staff including, existing and forward that's he XXXX. you

one the but tell, I see equipment and good think go. So short time have will we right and answer we now, where is, we'll tool

Operator

Your next Paul Glenrock Associates. question comes from Patterson with

Paul Patterson

you ask So let me this.

I Just X.X% electric, Vedula's be on will to XXXX, I X.X% up Last the to on then to X.X% you looking question sales follow at and were growth XXXX in guys X on? forecast. recall, think, through

Gale Klappa

Yes.

Paul Patterson

still that include that does case? is industrial? the So And

Gale Klappa

Yes [indiscernible].

Paul Patterson

be, it But what up I it industrial, industrial, beyond? And be it again XXXX in would Without I what would and go guess. without guess? does why

Gale Klappa

as where Tool. to to up Komatsu economic in operation, coming to number. significant that additional either into to the of stage very are XXXX. have very mentioned, of goes number projects demand this, I've a Amazon significant it coming Milwaukee Foxconn significant will There's XXXX, will that now large beyond from HARIBO Yes, groundbreaking we electric in this be right out and projects pipeline development because or they construction, XXXX a and Well very XXXX in be under

we this this. that we've discussions industrial So Scott downturn of part revised as our in we'll the obviously It the the up mentioned, finish was settlement. But seen, we've that the as pause in put we anticipated demand, forecast. rate seen year, together, sales

kind So this I see in our change Scott? of don't term major any causing longer forecast.

Scott Lauber

at seeing we good Amazon, construction And Foxconn, mentioned. that still Kevin agree. longer-term here Gale stuff are the the the all specifically, I forecast, just are continuing projects No, and

we Wisconsin, at the is in been record see continue So gas on still And here Unemployment positive. lows that's so positive. to near growth. side, great customer that's

customers smaller I'm other secondary projects. really load. in are that in announced what our coming on And So put we or only into the of secondary effect that concerned remember, not We residential forecast didn't really in forecast. the put

monitoring So here. those we and was coming, out we on only literally a basis put monthly actually what knew there we're and

very feel comfortable that with I So forecast.

Paul Patterson

Okay.

being we really low large should comments we look you're counting forecast, customers, earlier, sort correct? thinking the development assume, because of sort essentially increase would about to when higher-margin of not that of Is ancillary effect. margin I economic that again, your So Or correct? at be customers, sort in which

Gale Klappa

I remind just a And nailed do customers, because on our is real of I really time drive earnings that it, would everyone, would That's That exactly remind the growth. of those correct. but pricing, right. industrial kind you, not low-margin particularly

Paul Patterson

you. got I

terms et a a on with about made of just respect I the they just of Foxconn. are been was what There's with really There's coming originally of through cetera. lot lot been or in month so, -- that last ground you comments about could that. how about seeing, press press that. you Foxconn the on to since expected local what Now original comment, was announcement, expectations guess, you're or before, your some, I if wondering you're

Gale Klappa

ground. actually I'm what what's look the glad on you asked and at in ignore it's worth advice the My is, the noise going for question. overall

going following that So they is they ground on detail the the that in are announced revised great plan January. on actually in in through what's

footprint. will the well-paying jobs. plan a original things plant XX,XXX have a They Gen is Phase redesigned time. They That is were but add that the which not smaller-sized they and XX/X the going LCD Gen away X, remember, X, LCD period in XX-year X phases to They have was backed screens. build longer plant. X X of Gen have produces X. the now But Phase difference inferior smaller So bit XX,XXX to would technology, development, over X from eventually their of of be they not Phase the over changed. building are terms period a were Originally, in had

the a of in footprint a from demand XX electricity Gen downsizing and terms the there is So a Gen X. to

center. However, a X high-capacity this to year in construction going on to later add their be Phase they've in data and plan are now they fact

Foxconn because week, original folks their X, we demand now data our Phase meet for X folks every meet look hasn't at the it has weeks. single look of demand technical with overall even the to every center. with our significant some projected So of high-capacity the thinking, changed changed at very Foxconn a when though and addition from and you -- I When

Milwaukee different press. So And than a is Phase did revise X. they if from view of in are freeway the have you on I X X development plan. drove of see to would enormous their a be and amount Chicago, Phase might They the going through in really you on, you their side rocking. thinking terms what But off revised seeing the following Phase of T to

Joseph Fletcher

in just and from add that data for the service let the also their to actually They're Foxconn just building for things for addition things hardware too, they're them, centers me where offer that Gale, mentioned to are like building center, they others. you the and servers doing. manufacturing a, call smart

high So plan the drawing in board the to you immediately. is what with facilities addition and mentioned, tech there build additional to

Gale Klappa

All I that our for participating. Thank folks. today. conference for right, concludes you call Amen. much Well, so think

in free you other have about questions, to Beth everybody. you reached bye. any Thanks, See week. Bye, XXX-XXX-XXXX. she be at Straka, a and If can call feel

WEC Energy (WEC) 6 Nov 192019 Q3 Earnings call transcript