WEC - Earnings call transcript Q3 2020

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Operator

Good afternoon, and welcome to WEC Energy Group’s Conference Call for Third 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 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. After be the answers. open will to analysts presentation, for questions the conference and information a of call, this with at wecenergygroup.com. conjunction detailed In financial is posted package approximately will the conclusion hours replay call. A two this after available be of And Klappa, Chairman pleasure of WEC Gale my now introduce Energy it’s to Executive Group.

Gale Klappa

of our everyone. us today Live joining results the from for for the Thank heartland you XXXX. third quarter good we review afternoon as

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

Lauber, Fletcher, Chief Chief We President Straka, Corporate have Kevin our and Investor Officer; Officer; and Senior our CEO; Liu, and Scott President of Communications our Xia Vice Beth Operating Relations. Financial

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

driven minutes few the roadmap Our gains for cover discuss and of year temperatures a will our plan, provide a I’d more solid our capital warmer our next economic you new just five to first Scott Xia rebound efficiency But and capital region, the the activity years and like quarter in were with by progress. five operational will investment. Kevin on results in summer throughout operations. our and details

above So X.X% billion. our for to $X.X previous history, our XXXX plan. five-year we capital in or invest XXXX, five-year It’s expect the period through $XX.X plan largest of the an billion, increase

investing for the We’re calling billion this ESG roadmap, $XX.X our we’re sustainability because and Plan efficiency, Progress growth.

ESG renewables. you Progress includes in investment would Plan As expect, a our significant

regulated Wisconsin $X serve customers. nearly our to billion will that allocating We’re renewables utility

for XXX of The storage show storage bring and plan megawatts into our XXX option become we battery us. projects the megawatts have battery addition In we underway, that now cost-effective XXX to megawatts wind solar, a of has fleet. data of to

to XXX calls gas also capacity. our efficiency of fueled modernizing improve retire older megawatts plan we To generation for gas fleet. expect natural Our

in Riverside West additional generation in by of combined-cycle Wisconsin. units. finally capacity call a megawatts as XXX front, combustion reciprocating natural Energy plan recently or And internal new megawatts to an engines, them here the addition, to of natural purchase we the gas Energy build XXX Center. on In completed capacity we plan plant RICE That’s using we Alliant gas

As upper we’ve already seen and of in reliable, RICE is flexible, peninsula Michigan, the generation scalable.

efforts future coal cut Now lower The We’ll generation our us benefits of our of plan all our progress investment X,XXX and of these our superior maintain ESG should megawatts emissions, by energy. reliability, the grow retire XXXX. operating in allow very of are to clear. COX costs

you XXXX. aggressive XX% carbon Now, we’ve recall, set by as may already targets the levels by XXXX year reduce dioxide to below emissions

working We’re net carbon make to also generation by XXXX. fleet neutral our

gentlemen we target. near-term a With just reduction the announce plan that ladies COX you described to new today able we’re and to

We’re aiming levels by to next just the the lower five in XXXX XX% years of by XXXX. below emissions end

the base need growth for summary, of and the generation over economic years. number other at our at rate of our approximately plan in no happy in this equity. Progress projection with status significant important annually plan for of to EEI long-term grow the quo, X% but period expect supports upcoming of by capital to five-year plan the with for our updated addition we’ll the earnings fully the our should customers. $X In X% the details longer-term, conference, a are There to ESG benefits Compared over asset savings year. billion our be XX share we next customer elements all additional you will And Plan, a a deliver X%

look the to in turn economy Now at and here quick moment a conditions Wisconsin. let’s for a

and As industrial range and of produce customers. commercial them deliver of you broad Many a to know, we essential provide energy services.

in few strength rebound paper, The the particular And past pandemic, manufacturing would the the data over latest a creating the there of in more been the show packaging, food new strong market electronic seen plastics Wisconsin’s I below unemployment months. has labor processing, During state. developments controls. available that clearly and rates the down to in add even X.X% that’s opportunity, we’ve course particularly and are Southeastern average. national of corridor well

For campus example, recently its broke ground state-of-the-art mining as area manufacturing global Komatsu headquarters. on and a serving Milwaukee

with district. facility just people. days is XXXX. a Construction in center manufacturing to than acres include few and engineering XX approximately Oak in the campus robotics million customer to invest that’s development, of and And Creek, million of sold place literally Amazon more Komatsu complex, center as Milwaukee. opened and office project. potential which large a X.X distribution equipped square a a company This ago, for Milwaukee’s Our four latest story be South foot employ will in full center, to is strength, expects what’s is the employ full-time complete course, workers And, When complete in taking its the of this interested at all And shipping. $XXX Amazon development Foxconn labs, you County. land with and in Racine modern more packing harbor to to for the Komatsu know thousand known are in it robotics at a of of facility. X,XXX a expects I expected just

operation envisioned. than campus Since continues computing. a product plans performance work evolved. high have and a that As a more just will Foxconn’s years of breaking assessing clearly place ago. smart more network took company little facility Ground is a The that now originally support diverse the than we line center two time speak on manufacturing construction high-tech much

Now revise business the Foxconn support is State’s agency development with Head the to economic its State and because door asking has state. Wisconsin of contract changes, incentive open wide the said the expansion of to of in tax is the these Foxconn’s

and sales Scott, third all over we of will considered So about optimistic the turn a Scott he our this pipeline, things about resilient sales with the year. to developments major our yours. and And in we’ll all quarter growth. with that, long-term chat economy remain it for

Scott Lauber

Gale. you, Thank

We and gas approximately volume and XX electric a are XX,XXX customer the the utilities electric our compared Retail the to natural to across Page a see continue system. more our showing on natural sales were of basis earnings on year and in XX conservative gas XX,XXX more quarter, end growth At third ago. serving customers packet.

As classes. we were customer The start adjusted you recall, adjusted forecast third at than the across forecast of pandemic. quarter this our the our in all results better

actual demand third forecast. continue And at weather-normal the the For forecast. third up electric and on of of basis. Page X.X%. from a ahead Overall, a both were were example, of a rebound on tracking basis tenths XXXX X.X% tenths package, on of X.X%. residential sales normal This in to a our Wisconsin bull X.X% were down of commercial on on down than our – of and in quarter we That’s of XXXX, commercial the were by favorable electricity from six sales our the industrial weather-normal retail X.X% reflects better than three see weather-normal X.X% the quarter electricity third sales forecast. forecast. economic activity was the X.X% than sales, Small And looking large, the was quarter. quarter. third towards industrial down basis X.X%, XXXX. iron were year’s deliveries a from better mine, down and and were down in XX of ore This progression excluding quarter up were weather-normal third trend And X% from last of the our better and X% on basis, Meanwhile,

we’ve seen sales very results we’re preliminary with for the pleased fact, In October.

segment. on our of Of course, Grove we’re updates is the always, economic prepared what drops Grove should this on the Ridge year. saw schedule. completed a projects to end the year. of indicators level I few we’re and respond the Tatanka projects Blooming on watching we recovery and wind if be as infrastructure this also earlier have back by to in Construction Blooming

we complete. For in Tatanka operation in Wind Center of on expect the the another to nearly Ridge, Thunderhead And first is Energy of Nebraska quarter XXXX. projects, construction turning our commercial

been date. This Public will by related delay has substation in permit However, a as last a District. delay be to there Nebraska we by built the quarter, reported caused being Power in-service a issue

to work point number the of that Thunderhead to would upsides XXXX. out a latter half in the of with the I operation We bring complete are have all in we working parties and commercial plan.

earnings update this our should change of things growth And So XXXX. now utility on over the an I’ll turn for give trajectory delay not Kevin, to operations. to

Kevin Fletcher

customer Thank you, that with start on our have fact and service. safety maintained I’ll Scott. focus we the

confident at seen fact, continue. cost maintenance and a have and customer this remain high. number efficiency measures, momentum streamlined will our scores that we of Meanwhile, satisfaction the an all-time In our operations through we’ve year I’m record

report ahead on continue develop and of to I’ll Wisconsin, budget. And of first is of in megawatts Wisconsin capacity our plans operation, Now, our schedule we of began farm where that Public This an solar two Creeks yesterday, facilities. XXX with In million. for utility-scale natural project pleased stand Solar to Two state $XXX commercial investment gas the for liquefied I’m just jurisdictions. customers Service, providing renewable we review our

smaller in and approvals, of we’re facilities We’re with to Wisconsin’s one a winters. reliability costs. enhance and Shore the the Illinois, regulators seeking of working Gas to will customers, approximately Chicago. Since North subsidiaries, last customer local These we set review reducing northern five for necessary serve ago our XXXX. fall more rate during our provide we Shore while and XXX,XXX Gas, were officials savings cold for expect then years operating construction acquired of all invested in start In before serves Rights North consistently than customers have which company. the we capital suburbs pending

turn rates with constructive as reliability. We Illinois over will Commission, that, seek and safety Commerce to support with the dialogue that expect system a I’ll And we Xia. it

Xia Liu

Thank you, Kevin.

largely in Scott’s decrease rate had Overall, margin execution share, much our on than third impact earlier, quarter utility to in XXXX. $X.XX for the that on capital COVID-XX the estimate focus noted pandemic our offset of Gale a $X.XX by milder efficiency, per was quarter. third quarter favorable our per To we electric to more sales. XXXX operating This driven comment, compared caused plan. grew reiterate earnings continued Wisconsin share As and at our results, $X.XX the by adjustment decrease a

walk through outperformed normal placed our on Page the XX. our with website also Our earnings the this Starting quarter impacting significant by utility than on we from share. third year package our results I’ll The last quarter operations, morning this earnings warmer third comparison drivers $X.XX. of electric per quarter, weather. benefited includes utilities

depreciation operating on and driven from Our by capital amortization higher day-to-day $X.XX, weather. $X.XX rate investment positive a O&M focus warmer decrease by from of drove primarily $X.XX variance And offset had efficiency were by share benefited and factors recovery favorable factors per expense. in fuel. continued all We other estimated $X.XX an adjustment, a expenses. These of

segment Our from also credit. quarter. placed to Infrastructure Energy share, tax wind late service Coyote the XXXX, farm, added which was $X.XX December Ridge in The primarily was accretive in per production

$X.XX the utility expense we by corporate Rabbi In other, offset is was tax driven Trust $X.XX. some XXXX and improved performance. in in mostly and offset on drag interest our other Trust improved by performance performance Rabbi lower and third items, by Remember, Finally, summary, partially O&M. quarter

items. to I’d Now on financial like you update some other

we full For income year, tax our the between to and rate expect XX% be XX%. effective

expect XX% the a flowing to time, in our be taxpayer modest tax we we this between be Excluding XX%. of project rates At and unprotected taxes benefit XXXX customers, XXXX. to effective to

our current able with show efficiently tax capital will we to be projections that utilize Our position plan. our

Total of billion flow cash were cash investment month, for XXXX, from capital working $XXX Looking $XXX $XXX $X.X reflects Page earnings offset by the higher by increased months was debt, coupon partially the provided refinanced earnings, package, focus now higher first on of to our these of in This company driven regulated nine notes the at This capital operating we utility. including net average increase reducing from requirements, X.X% million million holding our X.X%. activities increase our million. by cash a of statement XXXX. Last impacts. expenditures the COVID-related X,

guidance. factored into We quarter, the will already updated XXXX the annual we premium In provide guidance. make-whole to our our $X.XX closing, which I’d like fourth in recognize have

the We’re of guidance remainder to $X.XX the normal $X.XX reaching narrowing, the earnings the end and of weather a year. raising for XXXX of per of range. our share, This to for with range expectation top an assumes

previous the Our that, per it range $X.XX to $X.XX With share. was turn back I’ll of to Gale. in guidance

Gale Klappa

very Xia, thank you much.

of share range. light of Xia for We’re range our top the Again a stands performance, indicated on track solid end guidance now in expectation year. at with to clear of $X.XX our $X.XX strong a the reaching as per

the in range long-term We’re projection X% reaffirming earnings reminder of about also dividend. to a year. our of a finally, our And growth X% quick

our December. dividend expect meeting plans As will Board early year at our assess in scheduled for next usual, our I

We earnings. ratio of payout continue to XX% to of target a XX%

now. We’re right range the that in middle of

in for the the So I call. growth share. earnings dividend continue the growth And will to ready our per now our it in up we’re line operator, expect question-and-answer to be portion of open with

Operator

Thank you.

Now Shar Instructions] Partners. we questions. question [Operator will your first from Your take Guggenheim with Pourreza comes

is open. Your line

Gale Klappa

how Shar, doing Hey are you today?

Shar Pourreza

you? too How not are bad, Gale. Oh,

Gale Klappa

We’re still Are you your in good. Jersey? bunker in unidentified

Shar Pourreza

Yes. I’m to with Hopefully there. ready still to be break healthy. but yes, still out you, honest everyone’s there,

Gale Klappa

here. good We’re you, Thank Shar.

Shar Pourreza

Excellent, excellent.

questions So here. a of couple

healthy heading lumpy EEI. more renewable. versus traditional little bit into spend The another increases can were obviously be First, CapEx generation a

especially remind linear? aren’t the that between So spend Is should end sort cadence how right. it what that is about through unforeseen drive the issuing sort of Just growth, do equity, growth ratable? rate-based XXXX? we marrying something you rate-based was X% of the simply growth you delta top close of implying Is to rate-based us, X% and earnings growth That earnings Gale stuff. Or unless since the clear. be think

do how we about to that? So think start

Gale Klappa

terrific. Okay,

how your X% to fact growth some differentiating be think earnings for part in help you issuing obviously the the question issue about will we know, take Scott the And the five-year over the to account and mean to then particularly of question portion generation we of our into don’t Xia in projections be asset-based it handle second the capital is since me to as we’ll of talk need I that into and basic a program. have terms And the accurate let translate equity. that us. out growth, But period. Let shakes you I finance your factor about debt capital how and first, spend

finance that – projection. assumptions financing when that roughly. of debt, growth equity that essence, for growth a this takes half the in on And X% costs X% response put half X%s, hope say essence your In in certainly down of you low and Shar, you basically to throw question, us that plan the the well our So and some I conservatively growth remember, to at – to we’re XX% in into top should would debt, at asset-based look in trying top certainly I in but X% that the XX% bit. X%

Shar Pourreza

does, It does. It and I that. appreciate

Gale Klappa

Xia and spending Scott over the And the right. years. All generation five on

Scott Lauber

where the and – color years, in provide deck four more regulatory probably we plan, and on the capital through But be over we it’s as more the this seen will over approval, a But four years little the in quite and first usually go have see Friday there’ll EEI. timing you’ve probably analyzed Yes, that quite off to our the years to affect But for of – a that we’re all five-year three, you larger much plan that’s later, it’s laying once four the the again, projects. detail the five-year those more tail first early, this. look typical that bit little spread years it that spending. to two XXXX the XXXX or a XXXX years far being but three get it that at or and more you’ll out five

are by So XXXX and bigger the years. XXXX

Shar Pourreza

you for that, Got Scott. Thank it.

Gale Klappa

be of were XXXX unit color capacity in some to on order XXXX. to piece plan, upfront. unit we’d to expecting and we’re to capital expecting our those other retirements, for Yes. And in replacement spending in just Shar add that, prepare And we have retirements

think I So right. Scott, you’re

bit spend would over our to capital XXXX, generation expect XXXX, XXXX. perhaps lion’s into share. the and of You XXXX, I think would a see

Shar Pourreza

and the maybe what Right, – as additional that focusing That’s gigawatts is Gale, then obviously that assets the some afford And I transition, look look of you O&M wind. think of think profile X.X bill like kind seen like to proposing the just we’ve as at headroom in looking of helpful. generation it’s right. are to industry. at this rate about you’re this solar, savings, XXXX batteries, on model today, retiring, the of mean going of How fuel some as cost inflation O&M of additional sort beyond do like there and for and the to just trajectory seems it guys have. opportunities. you we we profile of sort capital going even the O&M about Because the is additional we’re to size the or sort fossil lead

Gale Klappa

retire say service. units. probably would those then the this, because about plant decline plant, as of terms that, There’s there’s kept less and in really them that if on customer these amount we don’t here we’re units if give involved that, million net $XX maintaining we But plant I operation To of avoided about older is of inefficient we avoided maintaining example. in imagine that bit significant capital maintenance kept think to four-unit think of spent Yes, efficient significant the for a continuing good capital. like real older have what There’s and – example superior units yes, there of Shar. in costs, terms on retirement any units, is a an also or we’ve a really some you all coal-fired talked efficient the a older of O&M seeing running. O&M can an be we for example, savings as in is a you question while

but fuel as its So the here, mention I of savings mentioned script additional cost O&M savings. multimillion clearly coal retirements, dollars there during involved to are not

compared period. the on for there’ll of at in recovery little be saving there’s don’t some of yes, to driving be quo trajectory be the at headroom the of increases mentioned, savings pressure. stage plan in the here expect inflation XXXX capital, huge would like, the there’ll see the rate the this O&M in at the least fuel near-term, we game where status but going really our that terms of little then And are costs above status longer-term, about to continue. as this And offsets for we for a customers, finish we take to and billion So I uptick compared to Kevin, over bit care I rate. we’ll XX-year offsets we’re look very the at savings ask that have budgets to so But and think we just quo, as $X all of O&M will

Kevin Fletcher

exactly That’s Gale. right,

As my we full expectations in I far, continue seen we’ve mentioned comment, that so forward. have going

Shar Pourreza

Perfect. has on And sort on as obviously, it? determination me, of move sidelines? sitting this the Do process kind Is the sort still a together playing changed and sidelines, we of of Foxconn’s do on stuff how how of sort put this Gale, think and of on just the it then of sort just saw lastly, of UDC’s for credits week its given we to tax opportunities How little. challenge kind process scope design change. should with the project? last observers out see part you we the you the envision Like, incremental all about do of

Gale Klappa

Yes. you a give would And Great answer. Shar. I question, three-part

campus. this in has about two is, they’re now into what’s invested The over years developing. going before, in Foxconn you’ve campus. Look campus this the that a heard the at Look what on construction activity $X.X at billion on you me already happening first the headlines. the high-tech read say forget

do capacity They’ve which plan County. again, I would you, and building are what will changes so contract, happening there with plan look original the happen become that, mentioned, Gen about the to LCD property their because changed single already was think they But, to will campus. state about. say some to the I the the ongoing computing. would Racine construction fabrication at panels. what’s contract in for As on specific not – did here be because think XX.X discussions have I add county have plans taxpayer do a in continues. high have their the And largest I I And

of We’re for still projection seeing demand electricity. significant

our their dramatically changed that really of computing. not them, say at out have capacity last plans, they’ve that they’re because added as was they’re the really XG all, projections at server that from you thing already a deploying products to amazing. robotics basis high a out the that changed demand of the racks. there of on just yesterday our intelligence, one parts campus. And and like I that got developing on of server they’ve just things already would and a racks in at deploying is, server then looking campus, and producing efficient technologies combination And the evolved of I So which producer They’re test and be server artificial and world most briefing to campus,

in want would keep So do it determining contract, happening of require to modifications we’ll be the will your they’re wording on campus again, to I some and do active say, still there. they very think happy the I terms but updated. probably of what’s the to what keep you on eye

Shar Pourreza

Chairman. Perfect. your expansion as congrats Thank on you Gale, guys.

stuck you’re us Now till with XXXX.

Gale Klappa

Shar. you, to be Happy Thank stuck.

Shar Pourreza

right. guys. you, See All

Gale Klappa

care. Take

Operator

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

Your open line is

Gale Klappa

Greetings, assume. in where today? U.S. times, the I you and are several Julien, voting Traveling

Julien Dumoulin-Smith

every Always, comment. let And Shar’s reemphasize me time.

that. too, pleased be We’re doing what looking continue to few over years, report next to forward able we’re so the to to

Gale Klappa

you. Thank

Julien Dumoulin-Smith

dock I can the left where well. if up you pick So as it

et Let’s opportunities we more year talked were you successful to the you I infrastructure, as so like the What’s they generation just again, but the opportunities, talk broadly larger all before were cetera. about and the before. it the identified seems probably energy pulling here, know you as you were well. this now back cap forward especially timing that than that guys infrastructure do as piece that first potential energy on in

far you to but want curious myself of here, respond get how that. don’t I ahead So too

Gale Klappa

before at When the though, we your are definitely successful it opportunity today that even correct. segment. pandemic. broader and pipeline, That deeper significant Yes. investment you all, the as of forward, of infrastructure I pipeline quality in the is you first think opportunities high of and very have was a Well, than seeing observation in we pipeline that is say, of pulling been greater look amount

we’re – here, of selective hoops. without closure a a lot as very to competitive we can having the appetite know, with bring without having tax that being strong, were through to equity, our position So fact to very issue in and we are with these you go because we

focusing being announcement space very projects. and selective we’re four – just I of we’re year, right on XXXX. this but end I or any now So three near-term expect say, before the new watch for announcement the wouldn’t would

Julien Dumoulin-Smith

that excellent. in pull it, if as earnings then you able And to the O&M the Got I can it latitude, all the the way. context XQ opportunities X%, accelerate, costs necessarily do I’ll of your it the you numbers, the but Especially, on numbers some turn about that not latitudes next back term especially, of earnings going put frame year here you and in think add your some about ability to refinancing you XXXX way. the next longer of X% that confidence the as to were just perhaps, and think have to given year. How from to I’ll well. into

Gale Klappa

question, Great Julien. Yes.

the a we this, O&M our X% in of number had original say recall, in underway may this a plan, as projects for reduction We me Let which significant identified, quarter. addition to year. to had X% you maintenance now about have fourth in

heard terms of in had we positive million a up that, number is if of what to addition you’ve In cost news reductions needed. of to The developments. additional about $XX with the good identified

job, Xia the addition reduction. that, deeper refinancing. finance and not did will cost a you And mentioned that in as to need team on the great We

So that’s another plus.

right be there’s to and O&M So derisking projects Xia, work to projects lot that? maintenance the a going think XXXX. add terms now, helpful that other in anything kinds I on of of will of outage and

Xia Liu

I you think No, it, Gale. covered

Julien Dumoulin-Smith

Awesome over. it pass guys. I’ll

Gale Klappa

Anything Thank else Julien. you, on mind. your

Julien Dumoulin-Smith

are Excellent. the That’s We good. block.

Gale Klappa

you Thank you. very Thank much.

Operator

next Your with from comes Crédit Instructions] Suisse. Michael Weinstein question [Operator

open is line Your

Kevin Fletcher

Michael. Greetings,

Michael Weinstein

If earnings increase original Hey, infrastructure in your be rates, curious going rates Have of tax that a tax Should a modest on a the going grow there’s taxpayer ability XXXX, plan, deeper? XXXX. in it would might that higher faster, of higher just your overall forward. were depending election higher that to how affect. the outcome talk of guys. percentage you’re possible the Considering be business there to than taxpayer

Gale Klappa

question. Good

Scott to to answer me Let going whatever Xia try they ask the to like would and that add and we’re question. frame on

are starters, as we always you modest know. For

in tax always tax work on there’ll investment tax XXXX, taxpayer So credits be the is. rules a tax but – going production and we’re on what no production rate be the way to the with track credits, modest effective current matter

simply We’re be to going you always the under to a projections, in take it really modest zero. our taxpayer rules can’t because

up, if And one us then point. a tax benefits actually that’s of So go rates there’s John? couple to overall.

Xia Liu

there’s Yes, the Michael, so interest you of rates all one knew that to appetite, at a top went have holding tax I would could we if tax tax your think potentially that shield potentially therefore point, on the we higher and And up speed company. up infrastructure that, investment.

all – in rate some would obviously probably jurisdiction and have the recover have finance[ph], cash holding higher mechanisms metrics. that a and the higher flow we but if benefits we’re we credit the with then provide in through tax we And rates with So pass each would at basically of need to regulators tax would the better the work able to company, on jurisdictions.

So I of think in overall, different are we prepared situation tax case

Gale Klappa

think And curiosity, going you just I don’t works avoid that to higher for how of Does you. out taxes? are Michael it?

Michael Weinstein

best the policy. is Modesty

Gale Klappa

of total not earnings. the I I reiterate look long-term XX% segment that than regardless more the that are just our the of we with would to going at infrastructure facts, tax to rates you. being want all reiterate

Michael Weinstein

think credits giving batteries Hey, just forward? ITC one able that more you new going extending question guess I than tax PTC. to and I’ll area an of that – to let in going talk might you they presumably be forward. an it’s a go. If also or There��s invest rather Is you

that your might how thought about affect curious Just process.

Kevin Fletcher

first almost battery would regulated we’re with be storage fill out plan very if long that are credits with associated modification to we we’re time it this time economic I it push PTC, surprise some all tax with for there five-year batteries. have for say our the presidency, the economics The me the an ITC to today, opposed of wins will function to first think And tax can you we without would for new a But wouldn’t see guess additional credits big or yes. business. credits. for renewables. us such the rolling a in as it now for Yes, for battery a need the storage me but short, that capital was tax in probably of that And amount regardless that adding heard who story you

We have the first niche capital but times, our for the the an that time, sense that it’s in economic beginning batteries, peak economics counted five-year make making on plan, customers. particularly its significant we our not in need at for and have for to just

Michael Weinstein

the projects you though? there’d Do be role a with for business think the batteries wind and infrastructure

Gale Klappa

our absolutely. yes, number have Absolutely wind projects. at the we and room potentially, and of infrastructure farms Oh, our

have room We for battery storage.

potentially that road. yes, So question. the enhancement could be No an down

Michael Weinstein

have Take Thanks. Great, a interesting. day. great Alright, care.

Gale Klappa

Thank you.

Operator

Tonet from comes Jeremy with JPMorgan. question next Your

open. Your line is

Gale Klappa

Jeremy. everything How How’s afternoon, Jeremy? are Good you?

Jeremy Tonet

Hi, me. good Very afternoon. having good, for thanks

Gale Klappa

nice being here. to It’s

Jeremy Tonet

for COVID-XX of on that and electric there? there. the mentioned you expectations the able how under the economic think just versus a season you on here on was wondering I local curious gas And as of favorable to do the kind said us your heating impacts kind differ sales underpinning you also winter operations if and ongoing the impacts October trends across you were trends, service be territory update might bit

Gale Klappa

internal natural how great impacts gas that’s distribution that. in have had discussion the between lot and the differ of a a terms we actually business. And question Yes, of about electric

the let all, related seeing. of and say kind a me trends you side framing answer give electric the just to of to we’re a First this,

during has residential As I mentioned of to the electricity thought what consumption we exceeded you pandemic.

that We cases Now also in that was from home some energy some just summer of just normal, many it a customers. from had weather compared is schooling to and working home residential more consumption warm of driving driven. but the from is fact

would. terms of that’s industrial we’ve better we electricity few on has plus than for would for we So thought or the whether last done down, but better the than residential side. expectations, exceeded we we actually demand still in not electricity done our thought demand during We’ve been months, the

As a Where produce our customers essential paper, many script see electronic processing, XX% strength and all those are restaurants food is food to I it and capacity. we the small packaging, won’t that have mentioned controls, drag continue certainly at in a manufacturing, industrial, and seen during number industrial you plastics of segments. customers among products we commercial we’ve surprise still in

students much that you example, having the university back salons levels, are give to lower of to of not full dorms campuses not operated full. Just are are terms an in complement so at some hair

on there’s commercial struggle the for a still side, business, particularly small So going on.

and be would Straka as of Scott my And that whatever So can well. and like they Kevin would kind add answer.

but the difference terms see, In interesting we be a had relatively to and of between cold to electric it’s going gas, October.

For projections. normalized, October Wisconsin in the weather was demand it even exceeded better be, we our Midwest matter in for actually temperatures gas natural would that thought than upper and

I to the is, of that Scott? this, can natural business. side seeing I good significant distribution think gas on growth we’re very, tell you and add Scott thing customer can the other very The

Scott Lauber

good we look year year. Especially last gas over we’re side economic than it’s Wisconsin Gale. the correct, growth you’re had the at the and we’re customer industrial growth growth. more about natural hookups and nearly electrical Gas when X% development you talking, on seeing new growth, That’s talking and this

had customer X% growth or good like So on side. X% electric and the numbers

on view as preliminary seeing. positive seeing what and connections into really reasonable months, the with and October our So we’re we’re right very you’re looks winter going for new come happy

Gale Klappa

at Does that respond to Jeremy? all, your question

Jeremy Tonet

meaningful very what XXXX back just commission just trended versus into how want wanted there? here? to extending you appetite was these the Thank and to I to are savings see to guess, O&M really expectations, And has Wisconsin And you defer then your go savings O&M enough rate on sense for Yes, side, that that. case in any see potentially next are helpful.

Gale Klappa

I it will we are have of of terms I’m about then, filing O&M year But you’re our But to into the next in simply say calendar the line seeing, up now. every end operational that. reduction calendar bottom But better know developments, now. every the our just we’ve this am right I’m is this, last on I O&M early year move year. don’t Wisconsin. than we’re first say in of chunk options Shaw feel a potential for in identified and had on Kevin, the head X% whole table momentum to we I on cut that XXXX down. Jeremy, positive as year, we Well, that about reductions, the on savings would option everything and savings O&M And more simply is a guessing of the me that to everything lower as will let Yes. was way sustainable. O&M shaking up say deep. have that X% on number table need than I side. your We is potentially meaningful I’m than And first right discussions I seeing seeing too case essentially into big next And rate part any a but lot the front, closer continue had to

Kevin Fletcher

Gale. exactly right, That’s

If things we’re learned field that all the that in look and our scheduling. we’ve during with operation you been is, pandemic COVID we’ve more effective dealing at

here, the of of will savings We’re for some available our our service well. customer We have in as the companies. first that will for platform our consistent and also That’ll cost all be that platform. And – January sustainability completing give us a also Energies

Gale Klappa

the less O&M will we retirements you have also older in generating got units, future course of then plan, deliver efficient know, which as we’ve of And savings.

across efficiency very we’re to and our bullish best practice our companies. seven operating continue to So and on ability drive optimistic

Jeremy Tonet

for Thank that. Got it. you helpful. very That’s

Gale Klappa

You’re welcome. more than

You take care.

Jeremy Tonet

You Thanks too.

Operator

Karp Your from KeyBanc. next comes question Sophie with

Your line is open.

Gale Klappa

today? are How Sophie. you Hello,

Sophie Karp

Thank are great. Good doing you. afternoon. How you? I’m

Gale Klappa

in of the In state Ohio, great right, Cleveland.

in hanging You Cleveland?

Sophie Karp

in down. No, no. Hunkering I’m Utah.

Gale Klappa

right. Utah, Good for you. Oh, All wow.

Sophie Karp

Okay.

for And color little question more what? a you. you a relative So could you’re bit solution the effective some you give us sort, maybe Could I’m for guys comparing what terms, on and cost those becoming cost it too? put them you peakers maybe relative in assets replace that to if in assuming batteries are effective batteries, or they on how mentioned deploying you a

Gale Klappa

become very Or compared need to compared other you as is cost during be That’d if will, the effective solutions, capacity help basically an amount capacity, solution of was the is one to battery I It’s effective sunset, thought answer other peaking But really you straightforward. of to. it meetings going for other to yes, battery other someone to give comparison. day, our storage other customers. our peaking that a interesting for when we happy And after meet demand. technology, certain – us to compare cost would peak has said sunshine which peaking

Sophie Karp

attached So incentives are it? that to any before tax is potential

Gale Klappa

any before That is would That additional incentives. correct. be tax

not We’re all. incentives additional tax at on counting any

Scott Lauber

take if them. they’re definitely advantage will of But available, we

Gale Klappa

Scott Yes. Oh, absolutely. is right.

Sophie Karp

the Got other, power storage? it. other other at beyond battery you guess, I it for stationary point or are solutions chemistries, types – at lithium batteries, that looking you ion primarily stationary storage solutions, Are are maybe In not is you? any looking technologies of this batteries just

Gale Klappa

it point, this remains At lithium batteries. ion

plan, now, about and shareholder that’s and of if our If like the batteries. the it’s and reliability, business job. right that technology. from to just two would plan, effectiveness, But know philosophical now to customer blind proven, deliver we our Cost certainly effectiveness costs five-year be else. plan customer me I of whole the leads two all I understand of cost-effective management because Now mean, value the right in and open something we’re this and lithium-ion our believe lithium-ion emerges we’re we effectiveness that the the for this to it’s we all the But into is same cost value, else then is that something let the reliability, satisfaction, edge calls bleeding and returns. shareholder that now a doesn’t and not being reliable, I don’t to years mean ours, technology, it. of feel on to in A way. add mean, comment. years team company

Power So what believe of the a was and we’re developments, the We not we number for years a of core follower. for is Kevin close ago, we business. we Research participate stay but technology – the the And experimental I Board projects. customers in is but do Electric of on how our abreast of Institute. very we’re

of edge bleeding the into technology. not We’re

Sophie Karp

is Appreciate Thank you. me. the This answers. all for

Gale Klappa

Oh, you’re more Take of than welcome. Sophie. care

Operator

question Our from Wolfe with Sullivan Research. next Michael comes

Your open. line is

Gale Klappa

today? Hi, How’s Michael. going it

Michael Sullivan

Hey, hopefully four the get during everyone. sticking a I’m we right? happier next could couple doing years, I’m around of Gale. well, titles bucks

Gale Klappa

we have to take more I’ve certainly see. we’ll We’re get And honest, hope I to so. had pay be to because a lower think,

about that. talk will We

Michael Sullivan

shutting rate you Hey, gas sounds – that Are that the quantify able remaining X,XXX down on All megawatts. to base the good. had a and of I value the you’re coal that right, just recouped? be the base to and how question planning and rate that’s XXX

Gale Klappa

Absolutely.

retirements So if probably of XXXX. and you those about, occur think in again, most will them XXXX,

at look you if it’s our about $XX roughly for entire billion. would operation, be base It roughly across XXXX, projected So our rate our system. entire

essentially If probably taxes. remaining rate deferred of be roughly that will saw million we what $XXX you basis the retiring, look at

at Wisconsin base. and our about is our asset be base will for that look about X% a way to rate base under So of it’s X% our asset of or X% of total total

them customer the So in I see solution basic well – that’s future terms of in recovery, very of upon an to done of we’ve with numbers coming And really we agreed kind today. terms in also commission, as think with some the terms particularly we groups. record coming in of the constructive to a environmental of securitization, advocates, got We’ve amiable track of recovery costs. of and control good with industrial environmental the an solution terms potentially

X% less XXXX roughly X% of years, lot asset question, So, by be your direct the of our discussions answer to the and next of in than base. four total rate about but Wisconsin there’ll a over base

Michael Sullivan

same Great. term Illinois, plans near Peoples That’s just, second for Gas in mentioned the was case in a my question super any Gas? the then about helpful. do remarks And you North Shore to filing

Gale Klappa

no. Short answer,

Michael Sullivan

Simple enough.

Thanks Okay. it. lot. Appreciate a

Gale Klappa

welcome. You’re Thank you.

Operator

Your Glenrock. last question from Patterson with Paul comes

is open. line Your

Gale Klappa

Paul. Greetings,

Paul Patterson

greetings. Hey,

any far sort the are know were, little what when then COVID, anything kind are after more you’re to – demand you more over, you think of patterns pandemic seeing of is activity long happening are changes that, usage potential a any going the that over? changes to just it’s potentially in telecommuting is growth that So off, are the I COVID be what seeing and sort occurring about of that’s economic your thoughts but in once like lasting you thinking you’re seeing, peak,

Gale Klappa

a question, good been fuzzy in what we’ve after XXXX. ball that’s Well, everybody’s Paul. crystal a through all In bit is

However, what a for couple of there were. thoughts

I think going are home, from telecommuting, need all less most to seen think, can office ours to I space. included working positive all And how corporations, lead we’ve results. major working remotely

permanent many, of a many I the some remote come. amount American corporate be the years to working for will and part think landscape of landscape

energy terms then So will what how manufacturing And residential those particularly still a distribution And is manufacturing, in to of COVID commercial of remote also terms that question in to Southeastern working I corner energy conquered. me, with mean usage? the questions harden as of we and in in continuing the finally remain usage, this after becomes, Wisconsin. does much well, and growth have think answered, are be but area

here as right for see months that diminishing. don’t mentioned prepared or Some a remarks, commercial growth we the this projects these now, in I of may a but move hot area industrial and few is there,

things commercial the between upon to residential, work a there home at the vaccine. shift bit and continues around depending be thoughts? much Kevin, activity other So how then any post the question becomes

Kevin Fletcher

economy. Gail, our at broader group that’s certainly look true for the if you

at what you result, facilities. a about again look just you seen mentioned we’ve If as

the results needs that we our positive major and biofacilities Now, need of we’re as our customers, don’t we’ve much in that in seeing of the the because markets. meeting had

early I you perspective, it’s bounce I how be back to like we So think would in quickly other to that and looking pointed see too but we bounce. broadly tell will as industries also really out, how agree us

Paul Patterson

Great. Okay.

have things amount have years. also industrial of large got, that that, you’ve the changed over gone over, guys you guys So you have and activity on note that a

there’s large got of the very a what supportive immediate amount in of Foxconn You’ve know about I Foxconn. you this, And sort know you’re you. as diversity of saga and you and geographical have mentioned and

You what for that let’s state an but Foxconn and argument’s for have to see big reason can’t come win sake, say that agreement. just, a whatever and the you,

growth of it that just everything would around what geographic with now; the light have? the you, size you in Do actually what kind Given I’m impact that saying? happen. your you dynamic didn’t for diversity, just the you, got follow If of company also going but

Gale Klappa

a corporation. let me mean first of is I say, Well huge Yes. Foxconn all,

in beginning they’re standpoint, campus company largest the mean, revenue world. a $X.X County. in a But the from to size, they’ve about tech $XXX that we’ve even million I billion, out in fourth think build already Racine invested than company the I more that talked

walk just company size, production a equipment. modern state-of-the-art don’t from would very that that away even just made billion So think I $X.X they investment in

step further capacity They computing $X.X if they’ve because take to still nothing have and they that to demand would So, did of investment. billion significant more, a have they still electric their high added would plans.

has In investment fact, two-thirds additional campus. billion but of that’s additional And already around Foxconn to billion the which being $X.X private investment, Foxconn with of of underway $X.X directly, seen the now. do XX-mile right nothing in already private complete or is that we’ve either built

campus. are they month. bigger we project the have breaking $XXX State be Then which to So that their they at been or of development that. gosh, $XXX talked effect, they’ve It’s a economic done XX% more a herbal, benefited in next been envisioned. Foxconn be, was billion ripple more gummy the already standpoint, has no still to lot, put originally the probably there of textbook – much already the investment To million, there’s people, going Paul, a and from we from development if to already Wisconsin. would which there’s than the from history investment about economic XX% in tremendous going is largest perspective And bear be state ground

So concerned on both tremendous of growth pipeline there’s we’re good seeing mean, not and that, here. I I’m opportunity also, such happen. might And faith what tremendous about overly sides

forget ground. don’t you just I rhetoric what’s going headlines. is see, on mean, political I So, that the my at see the on, again, all Look advice the despite

Paul Patterson

appreciate Wisconsin. great. take it. Okay, than further I much. so guess maybe could I that we Thanks

Gale Klappa

than more Paul. are welcome, You

Gale Klappa

right. All

Thanks concludes for be us with think again up I that joy call That to you. folks. conference today. for a our wraps participating. Always

Thanks Beth and contact day. Stay have any election feel good at have you to Straka. safe other reached be questions, If free (XXX) XXX-XXXX. please can everybody. She a

WEC Energy (WEC) 3 Nov 202020 Q3 Earnings call transcript