WEC - Earnings call transcript Q1 2020

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Operator

Good afternoon, and welcome to WEC Energy Group's Conference Call for First Quarter 2020 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'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.

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.

earnings share, will unless referenced diluted based discussions, per earnings otherwise the per be share on During noted.

package with After be the A after call, replay conjunction two available at call. the opened will financial a this hours to analysts will is presentation, for questions-and-answers. wecenergygroup.com. the posted of detailed conference conclusion approximately this information be In of

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

Gale Klappa

we you hope for well results joining your Good review afternoon, as of certainly our healthy. the today, I families everyone. that quarter opening Thank and staying doing for us and are XXXX. all you

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

our We have Kevin Fletcher, President Lauber, Financial Chief and Scott CEO Officer. and

news a saw despite this The first more quarter Scott in share, you reported first $X.XX our investment metrics capital during earnings performance result will a later detail and our strong on as plan. discuss bit demand we mild call. from XXXX our gas a the operating morning, of efficiently a focus in executing quarter. our underscores natural release lower Now,

Of long-term our we're service success focused for plan company, essential course, pandemic. throughout on of providing COVID-XX we also the as the

guidelines. in health employees remains our adopted instill following communities health the As We've you would importance expect the top our CDC our minimize the and of risks priority. employees and numerous to of measures

of relatively area. many the of virus full late-March. service hit the orders, late. know effect Stay in the Illinois Keep are of our Michigan hardest Wisconsin as at that states and And hit outside parts issued mind our home you were across in four of

the our a that minimal quarter only impact saw results. Given pandemic we on from first timing,

even like to struck. the virus before costs to we also control action point I’d further took that out

in safety, or century. motion we the at The first wheels record warmest in expenses areas set of the to business beginning January, be saw that past happened one reliability to weather the customer we not the of When our affect satisfaction. of of on quarter reduce mild would

back, as across margin earnings year Also, for our broadly four typically at natural delivery of a come quarter. business mix, state the year of first stepping full Now more third comes area. for the approximately we from our gas XX% our look our pre-tax the business full in our

that you in we're So we major well-positioned year, the can is the with our the strong announced to asked of projects about with the about The deal of been a as short On. region. to have start status be have uncertainties ahead. as answer also development economic Many Rock

Gen that LCD good manufacturing now, and south in is taking facility enterprise production also fabrication A quarter panels for of year. the internal building servers is for campus Milwaukee. underway. expected of example to the this is begin fully The X with is and of is out shape, high-tech components Smart enclosed Foxconn build plant fourth racks

will speak. produce fight our Network addition, summer. starting external Foxconn and to of Foxconn announced in have the ventilators Foxconn's In structure Medtronic pandemic, Operation a state And being for is erected we as help that Center line Medtronic the this

highlight capital X% any of remains X% Obviously, Energy schedule. of plan well like to what a earnings we're on track. area is I progressing we're Based seeing adjustments that segment. on local capital close year. and long-term minor customer not billion for do That's rate of demand one economic growth keeping a trends eye Infrastructure expect today, plan to on in energy. With diminution I'd ahead our that our $XX our

In capacity. our infrastructure our just overall XX% and highly year XX in focus the $XXX that the XX% low all Blooming XX% of Farms. and megawatts of executable. January. plan regulatory risk we another committed to increasing segment, plan ownership in our our for seen to for plan, from may began over Pending plan and in the we've approvals, five additional an short, Upstream now invest total have we're You capital Thunderhead announcement Grove, that interest A is Wind million

issue We have ample liquidity, no need new to equity.

our end April billion. available fact, $X.X risen has In to liquidity the at of

cover finally, positive And I'd first to like development one from the other quarter.

be his Just Chief we steps Scott have We're will succession new pleased for the senior oversight the President will Operating next X. infrastructure Office Resources, Lauber, projects. continue our a He and Utilities serve responsibility a of of Officer as named ago, power our he chain, member Gas few and generation, weeks Michigan major fuels, become information Minnesota effective as important will Chair. process. technology, very supplier the to diversity announced of also in Scott Energy he with and June planning supply will has, In like role, and

Officer, to We're addition team, joining new Financial new welcoming, also you’ve a as effective the X. will our June the heard Chief Xia company as Liu be

served most sure, recently CenterPoint Energy. of capacity tremendous brings to Xia experience So new I'm the know the in you role. and Xia same amount a at depth

at a career in financial industry Southern back Company her as began analyst She XXXX.

and team, served Officer many, know, and Xia, Chair. additional as experience also over depth member of subsidiaries, our be for strong an During These Power, two results that Company Georgia the of delivered team Power, appointments many has Golf her Southern Chief Senior of career, Company. leadership years. of new President already the Southern exceptional as will and Vice Financial a the a she Treasurer and will Finance bring to Office as also you

Kevin, our first I'll over operations. details all the call Now turn for to Kevin yours. on quarter

Kevin Fletcher

to like the reliable I'd and We've field. inside homes, and this remotely throughout Gale. sharply curtailed work dedicated our safe of or working are you, customer’s service providing our employees are health in start employees, of who crisis. work XX% now the by highlighting Thank

without have Our recent employees technology, continuing The would precautions our possible making to adapting investments. safer using work changes been efficiently. that's are remote health company and to following these technology work our not

by a have we and procedures I'm place Although, put of long processes across the still in companies. have we road our encouraged us, ahead

Our and to health developing plans and support our and changing processes business conditions. incident management team continuity been employees have new instrumental executing occupational services in address

to support our and through Local communities. food and the contribute shelters, that hard foundations Through people pantries including hospitals, and to than I'm violence also matching gifts, and organizations grateful that front youth programs. crisis, our able lines, relief million domestic more COVID-XX thanking been sustain way working these [indiscernible], on customers this to providing through We’re of It's we're to our donations the $X our organizations we've efforts.

progress Despite on initiatives. these to we challenges key make continue

positive current environment. no have our this at active time, a we cases rate Importantly, real which is in

made may has stop disconnections the and charges know, it new necessary pandemic payment on customers. to a place you for moratorium As late

for regulators working future Our have the specific recovery. through we're supportive mechanisms been and

this the costs. incremental in Wisconsin, has clear, we and To Service made be expense as pandemic In defer our all as foregone clear commercial uncollectable related it authorized Public that charges, expenses related are industrial residential late sectors. and Commission covers to payment our well

projects, Turning scale to on we're solar add utility generation track now our to to our portfolio.

us megawatts broken projects which You may will already provide capacity. XXX on Public Wisconsin for recall that of we’ve two solar Service, with ground

year. Solar Creeks energy the of producing on by Project Two begin Our this time to end remains

time by I to XXXX capacity construction. allowance but Hollow expect end for Solar we'll used in earn the during funds auction. Badger for be the project continue we of experiencing it Our modest April, a MISO operational And is delay, to

of Public Service solar Wisconsin Energies In Hollow park XXX February, renewable our investment Once the will II. We approved megawatts complete, Badger of Commission in provide the with capacity.

We've you’ve in many in heard of a of this of completed invest shape. million project. sure We And that from network in expect National we're Democratic for that I'm $XXX good moved to preparation to review August. Convention very overall, influx and the our potential thorough has delegates, July the

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

Gale Klappa

Kevin, thank you very much.

to a stands the $X.XX guidance remainder As our year, the look for earnings share. we $X.XX at to of XXXX

position that earlier, results. put As achieve those in us to good I mentioned a very today our actions

So today, to our guidance we for a at share. $X.XX Again guidance XXXX. our $X.XX reaffirming stands are

of In rate. over about increase quick $XX.XX quarterly quarterly the our declared a dividend. cash share, dividend X.X% a January, of reminder our an previous Board Directors a that's Also, of

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

for And outlook of now, CFO and on Scott with on Lauber. here details our is information the our first our remainder results Scott? and quarter be to more COO; XXXX, about

Scott Lauber

Thank you, Gale.

on the earnings quarter control, at a Our the estimate rate mild Wisconsin share of emphasis was modest increase quarter We XXXX $X.XX investment. to and share first our XXXX. $X.XX $X.XX quarter for last winter additional first of capital the to year. result compared This a utilities drag driven that weather conditions accounted our per continued cost first on per by compared increased earnings

on $XX the XXXX results. million, placed website for our operating other increase of million. income and for the of $XX packet our to adjusting a income the earnings comparison impact I’ll operating quarter XXXX on by and focus this includes consolidated of of Page the operating repairs, income million by million. After operating $XXX an income packet, expense XXXX income, first of taxes. earnings then segment first and interest to Referring X morning of quarter The the first the tax quarter XXXX, compared XXXX of $XXX was income in increased first

the $XX remaining XXXX in This factors. operating repair will driven benefit. Wisconsin update adjusted several At by which focus segment million was segment, tax increased My operating income, excludes the a increase $XX million. income on

Presque control $XX benefit measures savings First, operating retirement and of the additional plant power and maintenance ago, expense largely to year from a due lower cost million, cost. decreased the Isle

our on our increased These offset million capital And in positive Wisconsin recovery. lower. weather were variants. as $XX.X $X.X positive $X.X our negative million plan. margins million than depreciation drivers order segment more factored well rate fuel Second, as continue finally, execute to by expense we as This were recent

operating million, driven cost other lower operating cost and to by first driven the segment maintenance winter control. of $XX.X by In temperatures, to repair our work due increased mild million, is in $X.X maintenance Operating net expense This lower milder and due decreased Illinois, decrease benefit quarter. million income and state riders. income $XX.X at

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

production As material tax as income. that the Coyote are earnings form a Recall, expected, last to tax Combining operating to not our a first earnings impact Ridge the approximately share contributed in coming XXXX. $X.XX XXXX an first credits year, impact With compared did in operating Bishop come of increased of the $XX farms recognized portion provide expense. income changes significant and XXXX, million. offset these from which in the wind and excluding quarter tax of online credits, these on Hill, tax Upstream repairs, Ridge of of to quarter income per protection late these $X.XX Coyote

$XX.X rule. totaled per capital investment million, increase Company November Earnings of of XX.XX%. investment. Transmission that on million. investment Recall, an for a our driven return the were earnings earning XXXX is FERC now This continued $X.X by in American Higher equity our is

Other our to expense noted expense deferred fund decreased segments. primarily $XX.X net losses by investment mainly income benefit increased debt lower were incremental program. our losses the partially benefit $X driven by our issuances related offset investment plans. These to million, at long-term million, the investment level driven Interest by capital in operating subsidiary

XX%. effect Our effective benefits between expect tax Wisconsin of XXXX unprotected This rate expense positive -- we decision. our rates and tax decreased tax by recent be Lower our consolidated following income to was expense of tax XX% tax income driven $XX.X repairs net tax the year, the million. refunding,

Excluding the in Currently, tax XX% we flow expect and of a to expect rate benefits, XX%. be effective our the be taxpayer back to XXXX. between unprotected we modest XXXX

capital efficiently show current to Our able projection our our be utilize plan. position we'll tax that with

to our our the time, like in forecast. this sales upon have sales what for XXXX. of we address April, XXXX earnings are At balance we I'd forecast Based seen and adjusting

a side, residential assumes electric increase in X% trending in X.X% our on quarter. fourth by the volumes quarter, sales the the Specifically, increase forecast second of to an now

industrial assuming of trending second trending quarter. For the an customers, the a for the small commercial we a commercial in reduction our fourth finally, reduction X% reduction fourth quarter, industrial quarter customers, by second in the reduction an are to we And for of X% quarter. X% are to assuming XX% large

We total this across of million believe approximately cost as compared nine efficiency through the retail revised absorb $XX a our the excluding we margin the Overall, ability margin volumes to reduction measures million enterprise. year. initiatives, have pre-tax compression temporary $XX based on as in the to for months, These for translate the volumes, these iron ore by X% well savings are the assumptions, to forecasting decrease that electric original to and multiple remaining approximately forecast. to mine we

to not stated commitment reliability earlier, Gale will customer As these and our satisfaction. safety, initiatives compromise

share. and to confident are $X.XX annual $X.XX guidance of we per reaffirming our So

$X.XX that per for our second share. sales of orders quarter. In the earned in $X.XX last differences We've are home assumes guidance volumes, and providing Given cost XXXX in share fuel per we the place the are there quarter declining per to we normal to share. rest are second obviously quarter, projected recovery. weather at timing stay region, still This year's of related $X.XX

I'll that, Gale. With things turn back to

Gale Klappa

Thank you very and of the it and now track Overall, to ready the we're our focused for call. we're open value customers up delivering stockholders. on much. Operator, question-and-answer on for our portion

Operator

first from [Operator you. question Instructions] Your Thank Guggenheim with Pourreza Partners. comes Shahriar

open. is line Your

Gale Klappa

you How roll, Shahriar. and are today? Rock

Shahriar Pourreza

Oh, not bad. How too doing? you

Gale Klappa

Yes. hunkered We're doing down well.

Shahriar Pourreza

hear. great That's to

questions. of couple a So

a us you in little how duration sort you're of bit and your long of remarks a are thinking this color But the How can thinking is give Gale. on you the more about going recovery a touched downturn? take? the to high-level, You prepared bit

just bit about is nature, right? this a about, downturn that CapEx maybe become So projected protracted, levers than And in the any planning internal opportunities downturn any secondary your X% talk risks more of assumptions? this the growth, more maybe to little if own sustainability is your

Gale Klappa

Well, Shahriar. question great

declines. Let terms appropriately take of our how of the near-term. been base extent our be sales I say conservative Scott of would in terms you me we might recovery in assumptions the that in recovery view place, quick with the have what covered and of first think

in evolve My if will we sense the that June, can economy by that in restarted fits region, get and things starts. the is

you by mean, economy I clearly is the consumer as As know, of two-thirds driven demand.

consumer is, going how I everybody back think will be confident the the real for their question to patterns. semi-normal in buying

if enterprise gas of that, what to in volumes. all that in I We're to terms efficient. I as have we our sales said We're happen remotely, we're in our of the mean, and think our across levers is will. expect initiatives you the appropriately Having here, learning more to of workforces we confident dozens even things conservative dozens electric of and XX% operating become and

about throughout obviously then and have ability the I but either the So appropriately prepared reductions think additional to And feel we good the benefit, very is pivot drive that’s quicker cost business. we conservative. way, been efficiency to to recovery our if we're all

our reliability. you about In terms think of the capital they plan, plan, are when about really of the all elements capital

improved don’t see for I or I any the reliability need capital really that that matter, plan So, see focused need service. still and to continue of customer on

as The be infrastructure can I tell. will segment unaffected, best

year. And so hope responds. X% long-term to right long X% growth see earnings a story threat projection short, our we of now really any I that to rate Shahriar don’t

Shahriar Pourreza

bend And light. does. does and to to just it No, I comes then always wanted your conservative confirm

So thank you for that.

of you're -- any Let I that facing - given [contra] looking appetite? the you're your projects, of into an segment? obviously especially hands effect the advantage with economy where people of capital mean ahead any cash segment, well dislocation seeing budget. just on of segment? new the play touched opportunities infrastructure short -- filling out have me Are So tax in to crunches, since economic this can developers the seeing -- actually your what you have [ph] it -- you are any driving is that a you of an in that you get

Gale Klappa

the a the projects answer, are yes, say little particular it's would definitive give projects. folks that, need the remember, there obviously the a fact will segment. be early more very sharp willing too we're high-quality indications And would additional kind think opportunity. cash, infrastructure see contraction economy, to early on going to some on I you the that of But take to that are we're I some about given given I but in say the we

at. as We will we But look we be think I hard though, selective, there be opportunity. projects will through will work a that do take additional very that

Shahriar Pourreza

can of we a lastly, it the you bps. remove? And they XX And proposal NOPR on adder? any Terrific. of ATC membership As remind then wash it, have if the by kind understand so, RTO thoughts do increase us you be if a to kind if recent it. would Got FERC just Transco just receives added yet

are how So sort thinking correctly? - we this of about

Gale Klappa

so. think I

adder. that is Although, XX Scott point echo getting one basis basis and to proposals I participation. Kevin of for one this, essentially me the think believe of is can XXX the I for ATC now, there and a on point adder proposals Right a be RTO

there's I mix. So Scott, another possibility in points think there, XX of a basis the

Scott Lauber

I'm Yes, exactly reading what from right now. that's correct

there. potential there's So

Shahriar Pourreza

and get Xia thanks the at Well, congrats, rolls, rest I'm much bit night it. Got on guys. more will And sure and Scott little new Xia [indiscernible]. a so

So congrats guys.

Gale Klappa

Thank you.

Scott Lauber

a I'm owl. night Shahriar, Hey

don't So count on that.

Shahriar Pourreza

that. I know

You congrats. guys,

Gale Klappa

you. Thank

Operator

next from Durgesh Your our with comes question ISI. Chopra Evercore

Your line open. is

Gale Klappa

you’re Greetings, Durgesh. doing? How

Durgesh Chopra

great. Hey, question. so rather. good Doing I'll taking for afternoon, have into Good actually morning, I the my Thanks Gale. question, two a apologize upfront. weeds

understand, see fuel million in that one, first on The the million I the is, Wisconsin in segment X savings. Slide as decline $XX.X $XX.X I

I to roughly you the $XX you demand, you million Can you your authorized it, any any, As just quarter? have that understand of million, $XX have? if savings first that might fuel were retain allowed in on utilized comment versus what

Gale Klappa

it, of all Scott? virtually, because think recovery, the of fuel of timing I

Scott Lauber

is $XX.X the the it's again, first lot timing fuel once quarter. in million to a And of a better recoveries. of Correct. it This the due

operating Wisconsin of fourth and under first As second back third fuel the pattern recall really fuel natural in with price positive cost just recoveries over Electric, recoveries you some you had our that the fuel and in first quarter. we a collect the the quarters, at gas swings quarter. And usually then the historically, in there's the and collect in of

ahead we compared guidance our set. last and to in specifically, plan So we original the quarter, of that year this compared first to are

Gale Klappa

the won't the pickup and means you what that gas So oil of into we’ve and amount of really because because is, as big collapse really see in Durgesh, of QX, the QX, eaten a again, full prices. timing

Scott Lauber

Exactly.

Durgesh Chopra

then what the Got up it. $XX.X million, tracking thought. O&M maybe, made That's your the off? I just color Scott, versus And And is other on category, any original that guidance? what is that perhaps additional how

Scott Lauber

Yes.

we deferred out, Trust. O&M talked some broke this is because Rabbi the that the of we offset So of in we've other before, it and the compensation is what about did

footprint. majority operating of more the the to So we're this O&M what's day-to-day Illinois and related related what its also. of seeing really the specifically the Wisconsin the segment that in to savings is this multitude across savings is from and in And smaller there's utilities

the that's stuff. day-to-day So

Durgesh Chopra

perfect. Thank congratulations. Okay, Scott, and you,

Scott Lauber

Thank you.

Gale Klappa

you, Thank Durgesh.

Operator

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

is open. line Your

Gale Klappa

Julien. Greetings,

Julien Dumoulin-Smith

about time. step Good afternoon. the you're commentary $XX forward. think taking I about think of let of a about that. reductions sustainability of appreciate thinking to There's here. cost then leave guys process do do it a offset, me interpret you I open little a at as into it, pre-tax you the in the think this ways ended. about into large I'll you Wisconsin? take that bit And couple How this lot clarification $XX you Perhaps, could you perhaps million subsequently, meshing 'XX? million, regulatory talked how When the

Gale Klappa

track terms me of go in for second about our and Well, talk just record. Okay. back a sustainability, let

what -- maintenance operation As our costs, call you may our reduced day-to-day day-to-day X.X% and XXXX. in those over by XXXX we recall, we

we put forced terms was in, as here. achieved reduction hundreds here mean and we now, sustainable XXXX. reduction of I we've the measures Our additional been possibilities cost in above we We're learning additional over through have literally what mentioned, for for pandemic X% long-term to to an forecast what some in the across through operate enterprise. things this of year plan X% and And

and come of important over customers. Kevin, So $XX allows some big of point that add? I cost track And costs not investments reliability would of rates, going benefits kinds record and retail reductions you operation think Scott, chunk I sustainable. that without making on of you'd here, give capital seeing billion to long-term to pressure business, to just anything down. will to like the takes rates, but a the confidence that we're benefits, only pressure also believe, I sustainable the to the are continue plan. of our our efficiency Because what be we're the in us off course, it else retail

Kevin Fletcher

this Kevin. Gale, is

opportunities. they proud we can that believe said, how and virus to extremely me Let and more a do Gale, you as forward. day-out we looking what what more just are and doing say, COVID our we're efficient, at mentioned during first finding day-in And be be they’ve of those But effective epidemic. sustainable I'm as you employees will of we're move and rallied lot I this

Gale Klappa

Thank you, Kevin.

Julien Dumoulin-Smith

today talked Got can folks it how think I it. Excellent. from in I beyond opportunities of as kind do a given been et infrastructure think And about cetera. strategic ago. but of moment more the holistically opportunity a late, broadly the about stands? Strategically, quickly. then you about know backing the the just if valuations, follow-up But and relative We've you today there's heard valuations backdrop away lot you opportunities, that obviously, infrastructure? of do How landscape

Gale Klappa

opportunities So, Julien, the asking segment. about infrastructure you're specifically in

Julien Dumoulin-Smith

thinking thinking was more I infrastructure you made set comments corporate that, But strategically about that beyond I opportunities level? on robust know beyond of just I'm the side. really.

Gale Klappa

a or that at my opportunity. put be think in to set are of repetitive, any I'll you so know, everybody because acquisition repeat we criteria, answer judgment. strategic least good I the just we Well, have But important, potential at question. And will we to these them quickly, as look boringly And use sleep.

value. in actually these criteria, if create shareholder industry, sector, them, execute follow you I these Following on think and our I in can our think, criteria you

story If think then I more the you a gets little muddy. don't, bit

by worked thrashing do we’re of sheet the balance strongest and would very we industry, one something a in to full accretive will stone sheets So to that We're closing. not the hard creative our balance to really be after year the in sheet. going we the would to the first set we trash are, believe have balance going acquire, have make anything in not it, criteria to

landscape, as gating have would think at and our have question thirdly, look this we’d that be the strong anything then as growth acquire And Julien, organic think we would to or as the right we now, the believe as right that of that the the own rate to gating be your we would that to share be Read question. growth biggest a at X% look I now, year, would question around landscape. hope that per us, anything X% responds growth rate I stronger. earnings I for to

Julien Dumoulin-Smith

time Yes. Absolutely. do Thank for you and the guys, well.

Gale Klappa

Thank you.

Operator

comes Your next with Wolfe Research. Fleishman Steve question from

line is open. Your

Gale Klappa

Hey, Steve.

Steve Fleishman

Hey, Gale. Good afternoon.

little a month more an color have data sales it maybe the bit Just on so sales, we overall particularly if If and for class, idea? April. do what by you have of

Gale Klappa

we're Let the States me looking XX with I time country. -- yes, in the middle data, at to data it of we Last we to that April the do operator the Midwest happy MISO day-to-day chatted, for broad, have mentioned you share you. swathe also

basically if May day-to-day the May So little March around the footprint done in Wisconsin, out consistently the was think X, stay down through same the was send March which we're XXth, at I look hours over just better MISO down X%. you through than home XX through from And in order announcement the bit a right X%. dates, kilowatt X, We've that. at date of of

pretty significantly seeing Scott, So MISO would talk that? what done like to uptick better seeing a bit residential an footprint. we're we day-out, consistently And usage. are across we've in day-in, you than the about

Scott Lauber

Yes.

done automatic we at really like using we've some And in to anywhere And residential, our customers our we are least the seeing our are meter reading. track residential at entire we usage. plus weeks looking So, and the system large before, data, and at X% our usage. on residential looking

X% our to looking realistic more a at put a estimate we little be conservative. together, forecast when of So is

second the in customers that in the our and it. through segments get as and look area, and that go we you as there, what we're and XX weekly large the classes, guidance here seeing that's track And XX% quarter. And we at looking down XX% reports we're our on factored commercial we the we into between and at customer major

the small then that segment that to really about third we're probably And area seeing is commercial X%. down X%

we how So that's factored in. it

Steve Fleishman

me. I for it. it was That Okay. appreciate

Gale Klappa

Thank you.

Scott Lauber

Steve. welcome, You're

Operator

Your Weinstein Credit with next from question comes Suisse. Michael

Your line is open.

Gale Klappa

you are today? how Michael, Greetings.

Michael Weinstein

Thank you okay, Congratulations doing I'm Xia. Gale. and very Scott much.

Scott Lauber

you. Thank

Michael Weinstein

reduction million things worst to the whole quarter the second $X fourth On say the year, where the and getting million be the is second better turns quarter, that's on throughout it of based in ballpark $X out be you being out kind year. sales, the to the quarter in things second you now Can let's and same of know well turns to quarter reductions? as like third if, be kind might

Gale Klappa

doing here, responding as question. think to math appropriately about your little We're a meatball we

Scott Lauber

Yes.

the trended we've thinking carry would year, that's, you that And mean, out take million. $XX if So may be would second that and million quarter if about whole the number the the case that $XX to some day. another to be here, ballpark been I scenario. again, once movement kind stay we'll watching every then we're down and start open we're of orders at see of we and do But as have anticipate here. it home start and we here kinds bookends back up seeing things go those up,

Gale Klappa

right. I think Scott is exactly

in the our the quarter second a $XXX quarter, fourth still and even As we've if of under million done margin think we're the terms loss. third quarter became I sensitivities, pre-tax

Michael Weinstein

been has factored in this? The already summer time

Gale Klappa

Yes. Yes, absolutely.

Michael Weinstein

both And and Right. curious it customers electric it's factor? would only of also, is that I’m apply to be much electric. gas now if a gas

Gale Klappa

I though, for very quarters and second factored Yes. minimal. electric. No, third are deliveries that you, in gas remind gas both would and the we

not have natural the And But normal reduction factored Our is gas. for natural back deliveries. I unaffected in. for some have in our in were seasons, we QX so, in world But factored quarters, QX, we deliveries are obviously gas QX. again, the mean big by QX and largely assuming to heating gas total the pandemic

Kevin Fletcher

will and open usage too, still Gale, come lot here. summer which markets National the will Convention remarks, well hour are the up, as my be add in to a there and help. kilowatt expecting if does And then that I’d it Democratic of prepared we during period

Michael Weinstein

and missed I expenses. I at Rider a residential treatments regulatory heard any in you mechanisms or for bad for being escrow Wisconsin discussed COVID-XX now, before, contemplated? something about there Are debt. other think have for this least Illinois Right accounting in I

Gale Klappa

Yes.

Wisconsin First commission set the of all, mechanism. up in a to regulatory the first country was the basically

being Wisconsin to track are that bad during future utilities any related since cannot all to late And asked, any number, going we're to be allowed we not two, agreed asked we've response expenses to and one. and pandemic are being the COVID disconnect all number We the to fees defer the and to levy recovery, pandemic, defer resulting direct debt. track potential customers for additional

we debt. for already a docket right you there's And pop But say, now. then bad for underway have escrow you Illinois, residential as Wisconsin, to accounting

are dockets really states. each in there fact, of underway the In four

this new commission for I’d there are sometime up late and Illinois, that in again, is going next be natural we would gas Illinois, the The no are ramp remind in in decoupled But fee the where docket its no weeks. payments. few next we And only delivery in probably along decoupled to you, Illinois. disconnects, that

anything So well. that's obviously helpful to add? as Scott,

Scott Lauber

both of debt expense already also, Illinois and for in collection commercial industrial in in there residential bad And place was Illinois.

place. So that's in already

Gale Klappa

a rider in been historically that's bill There's place there.

Michael Weinstein

or ramped more seeing got just time. Center that you any I it Development plans up that activity started kind know [ph] maybe Just up expecting Is that my for something and right, curiosity, beyond of were warehouse recently, that just Amazon doing there? any

Gale Klappa

delivery. in my warehouse. an about now, site the be would existing an site XXX,XXX That's one understanding Matter it's but of another through same-day That at that Amazon for And There's fact, going of right right it's approval square feet. suburbs. looking is yes. process their is now citing

So potential here yes, is expansion actively at well. as Amazon looking

Michael Weinstein

Thank you very guys. much,

Gale Klappa

you. Thank welcome. You're

Operator

Scotiabank. question comes Weisel next with Your from Andrew

Your line open. is

Gale Klappa

Andrew. Greetings, today? are How you

Andrew Weisel

I’m good. guys? you Hey, are everyone. How

Gale Klappa

We're good.

Andrew Weisel

you odds are would question resuming What of for the the the season? a Gale. say NBA First

Gale Klappa

question. Great

wants about even The talked the Here's I can the what resume. I of get desire restarting very They've season part league think some much of a strong on tell late to shape you. behalf league meaningful very form as to potentially way or August. a in to a as there's But playoff.

season, say odds event are be resumption a guess my fans would the season. of starting if I next than in if man, own current happen, Now, does having if means there will I that, were said stands. only a the NBA be a better that would it it the XX-XX some broadcast delay betting even is personal But without that in

Andrew Weisel

I I hope much miss as as I right, about reading utilities, All love sports. so, do

Gale Klappa

the championship, owner of ring. and might the be This pretty cool. would they you you're win And a a if Yes. get partial Bucks

Andrew Weisel

Alright.

question. So, next

the see would that the What On be first earnings versus roughly quarter weather, I million shows normal? year-over-year. package $XX hit a

Scott Lauber

it about gosh, normal. to compared Oh, $X.XX, is

million, $XX million. about $XX So

Gale Klappa

Yes. $XX to million. $XX million

Scott Lauber

Yeah.

Andrew Weisel

Okay.

January. mentioned start of some So, you look for stuff, going look started in cost in to or the terms you savings to you're to

normal. roughly million get You're to and be million about saying million $XX from would of that right? $XX those X%, to $XX million? to to that from the I weather Is guidance million Did coronavirus numbers X% roughly which versus compares your roughly right? $XX $XX And

Gale Klappa

ballpark. Yes, you're in Absolutely. the

Andrew Weisel

identify to cost Okay, you were Can great. Then that savings downturn? to can of generally you some incremental remind able XXXX time. go have as -- going you quite back how back far guys much you there been as for us XXXX, during as and

Gale Klappa

lord. trying say question? old? Are to good that Oh, Andrew, the you Is we're

Andrew Weisel

you’re I'm saying consistent.

Gale Klappa

number got on real you now dropped small industrial savings, to And and tell There I was well. can like commercial no usage residential. the O&M by XXXX remember specific don't in during but this. XXXX. devastated Industrial uptick compared as we're XX% I Well, seeing energy

our in Scott? at looking was great had we're additional we what say or based 'XX on of what terms accomplish memory, So and actually, experience to efficiency in my as potentially greater and today. I reductions 'XX probably cost would than

Scott Lauber

No, there. again, our guidance 'XX, little was and utilities. once we Gale, But, and right. period achieved our Yes. our you're we earned we earnings a returns on 'XX And exactly executed different

Gale Klappa

and I long-term. is into you as when part focus philosophy. management mantra a drive short-term you a you operating good a general as you can as gives and efficiency, as additional day-in think control, of additional and mean, this the where fundamentals, really focus executing cost our it the reductions, efficiently an on can, I day-out insight fundamentals both additional

at day. of is business. And that I the day, operating our the do teams get the what factors our for that's we fundamentals really would focus of every think I try cite every our to really of success better one

get every exactly, your up better and big top can So Understanding think bottom costs exactly we on down day. not driving what's I how well understanding just a as factor. that's

Andrew Weisel

what to of as Okay, you're terms done raises great. you Can end said think done the liquidity, few you see us quite the for the a yearend. billion capital of days you've year? or remind way bolster that? And up one, today, I Then in you world believe you do the a if from last I ago. one March $X.X may. bit On of That's

Gale Klappa

one. you Scott, I’ll handle let that

Scott Lauber

about million we a So far. our $XXX actually, so And has the been issue debt small total in the Overall, it with at utilities small million. flow helps $XXX MERC/MGU that cash positive liquidity. was did

have of also So through items we be segment, we look some debt. at the year, we'll holding now will looking company at remaining we potentially financing as multiple and infrastructure still in issuances that the that some have

now the but right we're little, So cash are coming a But the at so debt was good at the good. flow utilities. additional and now looking the that down smaller evaluating timing, right it looks and rates additional liquidity

Andrew Weisel

Great. Thank much. you very

Gale Klappa

You're welcome.

Operator

Your next with Tonet JP Jeremy Morgan. from question comes

line open. Your is

Gale Klappa

you? how are Jeremy,

Jeremy Tonet

Thanks Good. having for me.

level? industrial think industrial if share activity current on see But you on for wondering, and post-XXXX potential and touched just situation if start lingering whole expected the Foxconn from guess you've at here? impacts specifically anymore on call the And of going color could activity here. any I COVID-XX forward I industrial you the the

Gale Klappa

announced we of tell impossible mean, don't But, shutdown Well, one and the I good with two almost expansion until that in and rolling are economic as major forward said economy, commitment. see comes we it's this last the mentioned, know. I rocking same of years to as every the going out the really answer development Foxconn we've that, honest the how example, is the consumer is, a overall. of are projects having

made a be just In ago, name even the economic a learned half major year their and because but of not about footprint -- front public we've fact, development it's one of the won't announcements yet, in and the one we've larger. to the I mention is going

you a long-term growth, rate. customer one got and the I in projects major terms why see our that's the don't tell of on diminution So expansion. customer will We've growth of capital I way, reasons in

on thing a much that believe will optimistic more you more with even productivity reshaping much production of tell I chains, see supply or the optimistic already and other to I U.S. side, more we're the the more The going coming into

China, of prescribed of everybody antibiotics I production against in the for lessons that majority that be or great has all the the is dependent are U.S. the think learned on Chinese can't them. but we of one nothing

particularly think to Again, I reshaping production to of chain. view. more be of next advantage over in my the see take going U.S. you're a Wisconsin few coming supply that will the with suited well and the in years,

Jeremy Tonet

That's Illinois, just from if the Thanks. could. economic and you impacting both one see kind very rate more helpful. timing And if perspective. increase COVID replacement of an a I'm I of just perspective wondering pipe development in

Gale Klappa

our stay bit I say actually given shifted work customers' home have and benefit. replacement benefit pipe much Well, will and of at to some in this, to the orders, we the a little Illinois very

number really quarter. of to plan systems the So was neighborhoods upgrade in the in piping first starting the a

have in the on loop. time, some a though, deserted, do we permits Chicago schedule get to would but is later loop and Now, to work was Chicago at able we the done the were

of We you imagine, simply because can traffic are than with no work nothing disrupt possibly work. and far there's to more productive the that the timing

some to neighborhoods, It more that has able work. in anything work that? the actually absolutely, in down, of Scott, terms up some loop, slowing pleased get the to standpoint in the a to is been real been really Kevin, us done leg we're getting that work loop. be even the we've the obviously of to but done on actually to of efficient add work that the shifting had helpful pandemic from eventually, in So being Chicago and

Kevin Fletcher

would makes Yes. you moving mentioned, it because as Gale, add, the doing sense, away neighborhood. for excuse from just me, Scott, I so

meters not So also to interaction addition replacement the with going in us I'm to inside outside. allowed homes, pipe have moving to much the inside we're as because from

as So minimize with we focus just where we decision you be productive, attention to the more mentioned. that and a COVID-XX, could made

Jeremy Tonet

very helpful you. a That's color. Thank

Gale Klappa

welcome. You're

Operator

comes Lapides with question next Your from Sachs. Michael Goldman

Your line is open.

Michael Lapides

are for all on you your to team. family taking his hear within Hey, well. company's my you to Thank new and Scott glad leadership again the And question. Gale, congrats role

Gale Klappa

do we raise? Michael, you a him give think to got Hey,

Michael Lapides

that. No, talk Not five this from or seven about absolutely Maybe years in now. not. We'll environment.

Gale Klappa

I Thank that. you very much. appreciate

Just what I wanted to hear.

Michael Lapides

thinking around impacting the and demand the to I I’ll puts so. just or takes. talk I'm and about million sure want about $XX revenue And make

almost In had So $XX you Illinois, in Wisconsin, you O&M so XX had -- $XX call million benefit. it total. of million

than would that more saying Or So demand that’s halfway what would had? than already the the saying of reductions the offset take you cost Are because that that, you all you're O&M to you weakness. would even out are that take out? that's O&M you original more kind that plan

Gale Klappa

year, a minute. Great to plan guidance our initial of and O&M Remember, the backup question, for in let’s X%. earnings reduction forecast our for our a was X% embedded in and

what quoting plan. So the of you’re for results some really part of was QX

we’re offsets through reduction, to X%. above base the talking X% terms Scott? pre-tax our savings. about for million and what you case was look when at, achieve margin and that So in That’s we O&M here $XX million expect projection the $XX to of to over

Scott Lauber

right. Yes, that’s exactly

that a about some the achieve rest and had of to our we had. we’re cost control, first to great we weather of O&M we that on as So, the offset the needed talked continue the But O&M year, going take quarter that. to out really was to for

Michael Lapides

it. Got

put easier my we So X% of targeted? addition kind question that Is right had from O&M another go that I just if and millions this in way? dollar of of you reduction the is, maybe X% to kind original total guess in the X% the to kind Or is the there? it's to X%

Gale Klappa

Yes.

if of wise top yes, you're pretty on it. $XX X%, you're to million then that, we'd add $XX on the in much percentage think the But to I you X% assume Yes. ballpark. million

Michael Lapides

Got it.

of XXXX to a And I you mean, to of would sustainable and go obviously kind go kind reduction in which into tall? think a Okay. permanent O&M, will back the customer beyond?

Gale Klappa

I'm question. sorry, Michael. I there, were you muffled very not your did catch

Michael Lapides

and XXXX in of the O&M that that beyond? it permanent, last meaning would And Okay. some reduction, that assume is incremental you

Gale Klappa

Yes, correct. exactly that's

Michael Lapides

it. Got

Okay, And Bucks your appreciate you, are guys. hope Much I soon. Thank it. playing Gale.

Gale Klappa

Thank Yes. you, Michael.

Operator

Glenrock. question line of with comes Paul from last Your the Patterson

open. line Your is

Paul Patterson

afternoon. How doing? Good you are

Gale Klappa

Anything What's Paul? today? to good, you up

Paul Patterson

But few a on I’m about here. good. sort of just to follow-up questions

them a that? on chunk if bit give seeing savings savings, us big qualify, you Or of can't, sort little longer-term as you that the stuff? you are a the of a give sustainable. can You Could said where to of you're O&M the quantification a more longer-term, sense

Gale Klappa

savings I of little give brethren exactly on The But -- cost across achieve early case bit this think a the amount and for I of is sustainable. $XX million we this is to precise it's you that many tell our that $XX a of will Well, what to million that industry. you year to answer. expect the

effectively folks are I to that satisfaction. having managed have Kevin levels highest Now And this very our we're customer seen. And customer earlier, remotely doing to mentioned environment. as operate as we well. operate ever I've generally as the our satisfaction very we're mean, are, I we think have high and very actually in

that. I'll will give to of as We're were specific maybe of and thought to them, year. you the rest an none So don't as course example. once facilities for need I example. going need but going this And over to the example there would watch of we believe them, as going expansion the as all plans we're not need -- one physical many on be the out drawing think some shaking we we need. we of continue don't observe to and all I board. But we're

So we'll see goes. this how

decline would it our think this to I a in record. believe than that. X% to year. be And I ‘XX will than O&M ‘XX, But X% I mentioned just back track X% we more going that earlier you more permanent was a sustainable over point be reduction, to

Paul Patterson

then And the following-up Illinois and the sort about Okay. question on program. of replacement pipe

And articulated, we should the talking you're mean, that changes I'm think guess? resolution? a think resolution, As you Do saying? what that I you know, I passed city do council. I that their guess will about follow was guess how ameliorate, there as I the about this concerns you that in resolution

Gale Klappa

ago. the was resolution passed year Well, this a same was that

year the in of the we're now second So same resolution.

pipe For and the from we of few a those resolution familiar to of the understand not affordability. council it you major look are is into who cost basically this, the as replacement program. with effectiveness members governor asked concern the The of the

passed very, a is answer that bills customer And in this if in was customer replacement in good to utilities very that pipe And at bills you look that. are down. bills, that Illinois, starting the actually Illinois accelerate gas program, legislation customer incentivized there's that year to the

more any system in way crisis affordability should that terms bills. shape an a going created to not form. will while, efficient, the have it's customer be be We in or of completed, take Once and helpful

to from at hard take of a we replacement Commission our that, to just the provided basically And in the a addition us asked Commerce program. pipe known independent worldwide Illinois execution have study Commission to firm, look an the internationally engineering that

Kiefner study. So the we've called it's the -- presented just

Commerce You a it take to may at be should of Illinois on a certainly the Commission or summary want It should be. website, look that.

study shorter the XX line Kiefner the that years. what anticipated. underneath Kiefner to Chicago study remaining the a the we aging the life useful is, have But bottom And is according than useful even life pipes average indicated had

lot can know now. acceleration actually is. pandemic practical, do trying in a Commission don't to Kiefner, degree Commerce Illinois significant to additional more don't I So I accelerate in greater even know work an than do loop. to you we study recommended than work the we're other its a that the how where practically a

short, by two, outside compared heating even is program firm. story engineering this started. international Number when crisis there's now number verified the to no there more an one, the cost of program, need evidence long But for

Paul Patterson

so you a to terms you're in in the terms have actual side or your last I as the you us do Wisconsin. to you over deferral much is bills bill share clarifying with what the could could people get But or any Thanks month any in of trends for everything. you seeing pay? their get the us of back COVID t paying Or terms due time data gas so? Excellent. know electric know And on just experience of just, what deferral that. you flavor on I and to and then there give

Gale Klappa

that. of really cold residential we're disconnect Remember, through in our moratorium Paul, in all under yet, XX. a that nothing April states, usually runs weather

any day tax disconnections or we have difference seen normal tax through major day, terms So of collectability anyway. in wouldn't

at the So two don't we're looking a on week since is I really week two that period data only about then. And period. Scott think meaningful

Scott Lauber

those little saw early Normally, remaining in two a reduction really pretty we but we see it's No. small early weeks, yet. yet. increase, It's a

closely everything else. very So it watching we're like

Paul Patterson

so Great. guys. Awesome. Thanks Hang in there. much,

Gale Klappa

welcome. You're

you Thank very Paul. too, You much.

really folks, conference concludes for your Well, That call today. appreciate our we questions.

free anymore. If I you cannot -- have talk questions any additional feel

safe Straka, free And can You Relations care. wore XXX-XXX-XXXX. our and to she be Group. of me out here. contact Beth Feel reached Stay take Thanks, at Investor everybody. Head

Operator

conference gentlemen, for you and participating. today's concludes call. Ladies that Thank

disconnect. may now You

WEC Energy (WEC) 4 May 202020 Q1 Earnings call transcript