WEC - Earnings call transcript Q1 2022

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Operator

Good afternoon, and welcome to WEC Energy Group's Conference Call for First Quarter 2022 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

review the for NBA afternoon, everybody, From quarter good joining today the Bucks, us home for champion, of Milwaukee our as of XXXX. we the first thank you results defending and

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

We have Beth Liu, Straka, President and Chief and our President, Vice Executive; Corporate Communications Scott Xia Lauber, our Senior Investor Officer; Chief Financial Relations. and

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

a driven to of $X.XX course, to largely the the this light segment. This, range. XXXX Infrastructure colder-than-normal year, we're earnings by expectation $X.XX new of top strong normal raising end for start weather the weather, In reaching XXXX. an with performance the economy to a range remainder were our assumes results by for of Our and share our of share, of a strong this $X.XX a guidance of of

also plan the progress strong. Company and the is good sheet and ESG a We're capital cash without headway The as Our billion fund balance this five-year efficiency, on $XX.X plan, flows And making focused us plan sustainability plan discussed, equity. history. issuing to remained our growth. allows we highly largest capital on in executable

capital more minutes. way we're in than Scott for provide just a $X.X progress we've the months, few projects received detail the Over approval regulatory preparing further will more billion Wisconsin. needed ahead. in for few And of past

utilities by investments we this to even the to in residential typical the largest make in with Scott reviews and is two-year request, the ladies this I morning, reliability for packet that expect Wisconsin review that the summary, poised will cover national Wisconsin. electric do industry We But of rate is impact any we about five-year best panel regulatory to to that the not be see delays, strong the has have our point Department increases Department returns by at asked have clearly our And you As the many add and request, Commission and battery going still in Service clean solar will the below companies, industry. released through just XXXX earnings impacts the across our all our investigation you are we details customers the But filed with in record, moment. now, about period plan. the bill risk-adjusted the projects continue gentlemen, the delivering for customers the solar highlights Public have material on the XXXX. will In approval seen, for we're track among you may the we and the of the continue in would our to Commerce. provided and may energy with Commerce offer. on particularly that potential transition There our and need Switching history. important enhance process capital of average. remain gears a price our some

for the of our the emissions generating of power of we're to a reduction from dividend exit of our Across an plan by improved by environmental growth We By year X% immaterial, in in aiming coal growth, use earnings XXXX, we be XX% dramatically year year XXXX, will average by for we're progress baseline. targeting reduction XXXX. a and support the coal base from generation of ESG and and complete our end expect end growth XXXX expect XXXX both end carbon driving the of a a our fleet, asset XX% performance.

transition. investments this capital fully support Our

longer course, on investing distribution of of on gas term, focused renewable business our and Of natural natural in the generation developing we We're the emissions remain for XXXX. goal also from net-zero power sources carbon gas.

is to working key of XXXX. Our help the energy. example, decades be achieve methane emissions future plan the end shape net-zero in goals the Hydrogen, mind, for in ahead. by solution the could those part With clean we're of to a of

first programs States. with the test growing earlier Wisconsin's this our joining testing unemployment in protocols across a in of you on The the to at take our Upper developed, recovered of we kind state's rate Engineering of So in especially a Research one now and look let's strong industry. and We X.X%, as this XXXX being the manufacturing look pilot We're unit in its announced the the Peninsula fall. see Institute show brief average. data in to one hydrogen blending at to sharing available year, well investments course, the forward recall, track national now the economy hydrogen results United of as region. of actual And regional economy. latest major of power below Power from companies Michigan. continue source for are natural growth throughout gas-powered hydrogen sector, units the The the and with at fuel specifications we're Electric we

is building in the XXX is materials. could to expansion jobs a expanding a as Uline's workforce packaging employees X,XXX and joined workforce lease with XXX more add strong Wisconsin Uline now expects already is you shipping to Uline's know, in one the its year, in workforce development. of Southeastern is and Wisconsin to Amazon that For last rise. This region. add year. XXX Amazon's workforce, plans this square is new also example, suppliers Uline, the million of nation's largest jobs under that X presence on may foot

operations the optimistic segment infrastructure of Scott, Scott as call only turn utility information And not I'll remain and for economy. about to all we our over the that, well. strength trajectory more the regional So yours. but on our the with

Scott Lauber

you, Gale. Thank

As plan. solar our making Work progress good progress and Wisconsin, facility Hollow on part in our II Gale mentioned, across ESG southwestern of the of the transition continues our fleet we're on state. the generation Badger

plan XXX We have in of time in a panels, Commission so approved still Park. in our with and its customers the our expect customs sunset. It's delivery and Wisconsin half Paris South storage, history. largest service II and XX% XXXX. investment Milwaukee, from reasonable XXX host of Public for megawatts project Solar we frame, acceptance of solar after of providing of kind purchase be Battery Wisconsin we generation the of sunshine will clearance of battery the the a this megawatts of facility Hollow to Service in first And recently, Located Badger the

have more work battery we sight and still storage X% it's delays all details that the provide of these course, situation worth continue fluid, our of and and Paris five-year of project Regarding this battery in developments. perspective, we'll a To is line And about capacity production we only devoted examine noting we'll the and we'll on operation to and capital with of plan by commercial delivery to battery delivery, in with solar production through our put in situation is in potential the facility. installation XXXX. renewables light mid-XXXX. of panels, you The information the more

units generation. build our dispatchable projects. other call important gas our older, plans commission seven Wisconsin. at price natural Weston units. or will Northern of generation the retirement XXX in facility power them, to we has approved These coal existing internal combustion plant The will megawatts efficient to engines, The new of use Turning site reciprocating as less support

this into We project service in expect to XXXX. go

As will wind addition Gale this service, to Jayhawk, expect in be the the the next in year. positive Infrastructure fall farm go quarter which with into Thunderhead noted, of commercial we a of driver entered operation mid-December. WEC and was now for that the

for schedule of we in infrastructure business. before, discussed our plan As remain capital investment five-year our ahead

gas distribution. to Turning

Just signed our brings a us This XXXX. to renewable another to use dairy of RNG, end goal farm. for new local last halfway methane gas, net-zero week, agreement natural from we or the contract

mentioned. XX, On filed April Wisconsin. the Now Public of I'll a Commission we rate touch filings Service with review on rate the Gale

Our discuss to and affordable reduce We Service. proposed set for Public rates to help provide emissions, strengthen plans I'll Wisconsin to power to request us continue and would customers. the Energies key infrastructure

and utilities, the You two of renewables, XXXX generation of for drivers our the X% to to customers typical for increase packet XX can capital earnings a Pages our XX storage storage, and have would or $X in system. for the electric $X battery residential our Many Key natural gas investments approved. for already in plans been to refer bill distribution approximately these Under proposed gas roughly projects more include details. for increase LNG X%. month

rate to part in are years system that costs addition, severe protect are Energies. a includes for review in against introducing XX-year and represents weather, have time rate base projects second recover We proceedings. hardening grid we increase plan this In a have that asked the eight to been summary, only authorized the our In we for other previous of

new orders final of effective by expect the We XXXX. in the end rates with year January

to regulatory with We no it across Gale. other have reviews And that, pending I'll turn companies. back our

Gale Klappa

very Scott, you much. thank

Board the our our cash believe dividend this may top raised quarterly will Directors, of rank you X.X%. our decile January As by in of its at increase We recall, industry. meeting

we're And so Again, X% growth right ratio earnings payout middle of in to not with continue of per share. We're that of of now, need new growth dividend projection be target today, do a I expect issue XX% our to equity. line we our at continue in to We the a to any reaffirming will in X% see year. growth XX% to range earnings the long-term earnings.

all will quarter Xia yours. numbers our details up, guidance. Xia, quarter and our provide Next first second on more

Xia Liu

Thanks, Gale.

of share the quarter compared $X.XX to increased per quarter Our XXXX first XXXX. earnings of per first $X.XX share

we XX. the our package a our quarter with drivers. the through earnings I'll Starting first Our of by $X.XX Page first to utility operations, quarter compared walk on includes earnings grew results 'XX. significant of comparison

First, base growth contributed earnings. rate to $X.XX

ESG grew to progress rate execute plan, by our last utility over we base As our X% we year. continued on

X.X% to weather were 'XX. normalized 'XX, compared generation, in stronger first the rebound increase year. up quarter continued commercial of the saw the Next, gas Overall, when gas drove conditions of normalized sales continued Also, and natural economic Wisconsin, first $X.XX earnings industrial natural to from first compared of recovery for XXXX. deliveries up the were natural $X.XX, of we X.X% colder quarter a quarter Weather winter weather economic reflecting retail Residential X.X%. quarter. gas quarter first last power a during and the gas up added in sales excluding in were used sales

and fuel. production first retail 'XX. compared These a of $X.XX Energy Overall, of from $X.XX $X.XX up wind were added in were iron operations. expense of $X.XX we excluding quarter-over-quarter at utility normalized to in the Earnings of first tax quarter offset of depreciation weather the the added 'XX. $X.XX Higher X.X% quarter each positive deliveries ore the and first our O&M by increase to improved mine, segment Infrastructure driven and Additionally, production, drivers day-to-day credits, electricity, higher earnings. by compared strong amortization in 'XX partially quarter

a final contribution We resolution $X.XX Power related settlements of this market Arie. also Storm Pool the earnings from QX year Southwest to recognized in that the were in

In Finally, performance you'll to a clean our earnings trust decreased of of at investment This a by pickup rabbi offset partially we 'XX compared fund. of in quarter other the $X.XX a $X.XX our corporate from per earnings quarter in see $X.XX on segment first performance energy our by 'XX. improved that share. resulted was $X.XX when reduction. summary, Unfavorable and first

primarily first the the Gale, commodity like on farm. the earnings provide by cash $XXX I were Cash million provided spending closing, expenditures In I'd was from second before activities in decrease and package, of of XXXX. Looking turn quarter increase. it earnings Jayhawk increased and our operating million quarter. wind million. acquisitions of flow to a asset by Total This costs to 'XX, back $XXX statement for the driven X guidance Page at cash contributed this to now net recovery on $XXX capital

of range the for of weather This $X.XX April assumes For $X.XX normal accounts per the share. weather and quarter, quarter. to a we're expecting for the rest

new $X.XX $X.XX range to As earlier, share, quarter $X.XX that, from reaching And I'll top estimated end a as XXXX Gale an the a the per mentioned reminder, with earnings in which per of raising we favorable our last the share With to back we're earned it of to expectation weather. second guidance turn $X.XX an year, Gale. of included range.

Gale Klappa

portion to Xia, open Operator, you. of focused on thank the the and ready for we're and value on it Overall, our for track call. delivering Q&A now up our we're customers stockholders.

Operator

Thank you.

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

Shar Pourreza

bucks, playoffs. making on congrats the two around of the to it Yes,

Gale Klappa

but they be up to yesterday. tough showed Going series, sure

Shar Pourreza

sure. For

For sure.

resiliency, So about sort an a sort pace is the Gale, for maybe just timing Wisconsin the just the the and how storm mile? maybe miles cost cases miles point should we What's rate specifically planned and the over spending grid next undergrounding on XXX XXX expanded hardening, the the of per of for think program. And of of decade. starting

Gale Klappa

Yes.

that -- I think, mean and Shar, record, history us to XX-year saw some look I I what about and be country. sure restoration in review at track continue we maintain of is a year, I to the the the we way in but ahead start we program have don't is reliability see most we a way best of that in we're very storms, to We've and the of abate it that's proposed outage utilities make had to think really the really going -- great necessarily. to one last particular, serious seeing mean, rate of reliable terms

have also aging We equipment.

Scott you see start you detail, a Scott, give laid in the more rate program. can but So, out case, laid out What have the internally we we've is that. of XX-year and

Xia Liu

Correct, Gale.

the yes, grid, had So we it self-feeling a in saw but right we'll million million it's of the technology sold XX-year we than in in is XXXX, more that period, Northern to that $XXX and of couple similar it evaluate over but it's start the to now, like continue We technology, starting projects more do. just a undergrounding. of benefits It's we $XXX where Wisconsin, more XX% about re-closures, adding improvement. to the

this So looking of it get but it's we'll But evaluate about into program, we $XXX course, to it, forward million. more. as

Shar Pourreza

to incremental this Scott, Or plan? of is the this inclusive And plan? Okay. is current the

Scott Lauber

factored is that our five-year that plan. XX, our the we XX-year time was look our been has laid remember, last and out getting to I our you think XX, plan, because longer how system. this through we in system that lot No, But that old, as runway get that as majority runway a -- of or XX years at year the just that renew

Gale Klappa

got we've as Shar, transformers you as are. some old

So to of we them. replace really need kind

Shar Pourreza

of I guys I you reducing of just, done Gale, There and a you've thinking about XX-year-old are current job guess, only the in transformers. the if done light some just in of now, the -- guess, the of transitory, what observable are for not 'XX O&M -- your you great we're That's In pretty then us just pressures kind are reductions filed have flat how O&M reduction. historically. assuming target see and case to O&M of to X% 'XX they're seeing you in level market and inflationary cases? remind you

Gale Klappa

our our give at long for you was then XXXX, of achievable, and in rate target proposed answer Well, review. XXXX. plan. believe increase in look the And O&M increases, reduction short, cetera, Xia we'll for number rate zero the to review et to for in modest Xia? We in still the in light X% for review, in that's of in a ask that's rate have But you wage we when light filing the inflation, what's O&M. the and take the day-to-day two story pieces, I'll 'XX a

Xia Liu

Yes.

for you O&M if in reduction rate So, rate compare is X.X%. last net to of XXXX, order our the a filing actually

mentioned. actual to actually what a modest you it three increase a ago, But XXXX, like proposed it's commission compare compared us the So years Gail reduction. ordered if to we

Shar Pourreza

constraints aren't thank comfortable yet? XXX megawatts go, and tail plan, wind, Or Okay. some bring I subsided? to the it the like risks for these addressing the want let's sounds see haven't supply issues, on of last circumvention feel of Do we just current for Got still filed but quick from replaced this if just you that solar you you And you which Can in then with it. home. chain real pivot with could for approvals instance, say,

Gale Klappa

question, great Shar. a it's Yes,

certainly I and where are me on projects about yes. think doable, covered at that. that immediate already two already projects with two is Scott you We're either really that be are have the related let And short pivots the still point a answer a clear we approval have those of the on panel. a are or that construction. earliest received horizon in sight regulatory line solar stages to the plan of the

the some if very and our be is yes, projects in that price units projects solar projects through of that as are still less in there, going feel But we than capital So, solar increases, pivot and And delays. solar-related think significant like still, there the about be When to about, about to you if that. and regulatory important could you And five-year you think X% Scott said, through in about not are the we that additions win. still plan, we there total battery may may -- good if got we've Wisconsin very going needed review, rice think batteries Wisconsin. Northern of XXXX. that capacity are the

So, very posed about the Department feel situation we Commerce. in of by we difficult good light where even the of are

Shar Pourreza

to the make results. Beth hopefully, speedy Congrats a recovery. really on And continues

Gale Klappa

Thank so much, Shar. Great. you

Operator

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

Julien Dumoulin-Smith

better Hope here. well you are and hope doing all doing you're particular, guys Beth, in doing

Gale Klappa

good. well moment. She Very is the at

Julien Dumoulin-Smith

say here, projects, -- which really on and So any your just committing application numbers ago the again, of 'XX? coming here, to was cetera, then that question. rate like that be and the remarks but heard sure 'XX, delays largely does How there's I would But filed in moment later impact you're sounds right forget net to want gap secondly, you 'XX just regardless. what to last to close make first kind it also the in then guys I your that in period on anything back I that filling a the out off? et if intact as shifts in And

Gale Klappa

investigation everything billion, plan, Great we there, instead Yes. at $XX.X we a derail Yes, ESG long win, seeing Yes, -- question, move capital flexibility. particular upon plan pivot we don't Julien. a we're five-year lot how right of five-year given installation something in solar Scott? see or that goes, Commerce year? given the a Department but this here capital progress now, plan. are win Could clarify we to of will between of that depending have could the anything

Scott Lauber

absolutely. No,

at be you test looking year. a and have it Wisconsin, and we'll as So in two-year -- forward-looking recall, we

So that at will cost any the as on timing give of the and we together. batteries us the to that next XXXX, look solar an look at putting opportunity of case the part of effects the

Julien Dumoulin-Smith

of appreciate Like are it you retail you especially is within pointing here, right? over can like is particularly the X.X% it's the long-term But think I bit net obviously solar mean, tailwind, And perspective driving year-over-year a doesn't this this more, here Weather little just bit not CAGR. solar at I like raise EPS where where already outlook your growth what's looks this up I -- as a but O&M point your to if seem just to little about pivot drag any it to a in think Absolutely, a what's outsized. sales here? rabbi are the if it? you of I mean ex frame impact is the outlook, upper also, bigger the especially you if then here, end can it. in speak to driving already, you guidance And trust. as wanted if net to well speak bring and time,

Gale Klappa

two about if think is two the get right, about $X.XX. about the Infrastructure our mean raise to you -- really the penny invested if of pickup performance result I in, basically, from All that fund essentially, of outside question. And think utilities. first results you of is, the the points we've technology to -- the the segment, the pieces nickel you

layer for think with So and target our utility for on then being about year essentially, projections, on the you but target start, you of a if strong the earnings remainder being the happened the quarter pickup was I what in by the no and our to first reason basically, Infrastructure mean guidance with with raise from Fund, Energize on not segment $X.XX. there

equity. was range. we earnings as need we at to to believe longer still then for prepared said that come that again, And I expect again, essentially X% top And raise the term, the we're the And share of the X% we thinking no per range. as at in end remarks, issue growth longer So in term. the to

Julien Dumoulin-Smith

And the expectations. into the that infrastructure it energy the would the for said, through you my here well if you the is which out The year words accruing segment? It Excellent. was the be like, delta year, the XQ infrastructure in of above some tracking or would and next for mouth as expectations front, above not further energy as that clarification. took course balance seems the of there's impact offset the really of

Gale Klappa

correct. You are

Operator

Your question from comes next Michael Wolfe Sullivan Research. with

Michael Sullivan

you to of panels I what's a on, physically of causing wasn't a guess is you just have get can questions sorry horse near-term then side also delivery, exactly say here, little the quite battery delays off. some mean when you if for the Yes, on could sticking but of things? sight with following production first, on of start kind projects? clarify just beat the what line on color that we going does and to And there. more just your the dead I solar

Gale Klappa

well. Sure. me let be saying start with happy you as provide by detail Scott to Okay. But do out We'll some that, and just can this.

panels is plan, first project the as is where which Scott very one, We term are. mentioned, Hollow plan. II. have, is nearest got we the the the We a We solar which mentioned, first Badger a know which project,

schedule. confident in are We the

On you production a given to a schedule just that to our which approved sight and we got on want really So, a schedule be that? won't very delivery sense there clear. there, do recently, clear clear pretty precedent Scott, and add problem. have that's really Paris, on customs

Scott Lauber

bit, walking logistics. frame, on through this time ready exactly are sites right looking a now. quite at that's And the talked -- No, the getting we've our details through

matter just of solar it's and the So, a said, delivery with beginning sites of of aspect. still for on the year, out laid mid-year comfortable like we completion the those delivery panels. the two of that And the Gale XXXX feel

As to delivery volatile across on the batteries, we and the delivered trying of been the site. into get look production those country more has batteries the little just to a a batteries

So, details. more those. we're just of wanted cautious retook solar the to through batteries aspects out after and very of We that the go and the lay first will through it, work for on schedule

Gale Klappa

And X% look the on Scott spending is our in is into and that plan XXXX billion plan. five-year like right spending, spending all XXXX capital at if the five-year on was $XX.X perspective, capital plan, you in that the batteries of XXXX so our batteries the

not Is needle way that it's one another. going or Michael? to significantly So, move helpful, the

Michael Sullivan

on if just there. is, That I follow could

some on terms things, then what the saw your cost least level In a ones? can you set of think if nearer-term most on and of projects just some for where maybe of mentioned recent things I right as tracking now too, you you but the at of fluidity little of solar of bit there, are

Gale Klappa

Yes.

wouldn't For compared to the to seeing what to past. XX% a we've the been future in surprise solar projects, me increase Scott, it XX% see

Scott Lauber

we $X,XXX extremely And rate, Correct. low the projects at in kilowatt. a remember, put solar Correct. the first a were

XX% the term, probably XX% shorter we projects then term, in kilowatt XX% the in two to bit are probably probably first those in in So, next little to ones XX%. going hour. about up Gale longer The $X,XXX a more and a put

Gale Klappa

bit And battery kind Scott over pricing, has the place. a as of less predictable all said, and been

shakes we'll of seeing how on So, the that situation some out. I side. what we're the But sense solar gives see battery hope you

Michael Sullivan

shifting rate memory I reopener little could limited over jog is there more asking precedent Yes, Just XXXX? to for super just case, in bit squeeze a in you're the trying there? the helpful. in, rate my If to one Wisconsin that for

Gale Klappa

Yes, reopener, press there's for absolutely. certainly ample a limited

Operator

question Chopra from Durgesh comes with next Evercore Your ISI.

Durgesh Chopra

goes? this to mean, going and think what on, as headed you I'm Klappa's here? you of actually do hearing you leader Commerce investigation sort what an Department I how for views. the are your views and industry Unfortunately, of thoughts Gale ask is

Gale Klappa

dime but pressure my the significant Oh, gosh. amount at Department going there's a Commerce. much happy opinion. get you on think give I on that a to to you of Well, Starbucks, that be of won't I'll be do

You're seeing it already.

think by Department Commerce, saying, the to signed Department Commerce messing the XX up is I U.S. basically of industry a of really in either this Friday went letter senators, the or today Look,

the be try mean, get of to is the sense on coming that solar United duty Department thorough. months. with please are but is, investigation, produced to take or So I of need, be from panels, given Commerce real are not the will their that my States. nine My thorough, sense the It's more solar XX% utility-scale panels outside

the potential gives magnitude that just the and So sense of the issue a of you the impact of delay.

would guessing the the more extent that just we'll and the stand they that to have have to case. they potentially be could where like can, I'm So up speed review It they the see thorough, my sense industry probably might a is the go. Department might they but will but -- nobody it, duty of to be Commerce process tariffs,

really go. is this But energy will United States. issue eventually as important very the a for to is it unpredictable the where DOC think I security

of So my I you will there way worst, sense the you And decision. out a also worse is to action executive see if house. be could comes also balanced think some see could --

as another, I other as more early So possible. but or way conclude thoroughly, Durgesh, to investigation too drumbeat soon that than continued a give that will definitive than there one think helps. you be hope to this I anything

Durgesh Chopra

be early. Am could any I I that tariffs are you the in That And helps earlier additional correct thanks before implications be just increase too put question? maybe I Gale. Or of it's in mentioned, tariffs, what just tremendously, if about that question, can XX% is think, answer one response would XX% And quick place. to that? the to that clarification, an additional

Gale Klappa

Commerce the any investigation. I of is it's XX% The question, think were answer second for of part of the to the early, XX% we But is impact the Durgesh, Department short probably quoting yes. before too

Operator

Your comes with Morgan. question JP next Jeremy from Tonet

Jeremy Tonet

wishes for to thank and you Well me. having Beth,

lot you retirements. star outlook There's with guess, potential want start about as about the and could off, and just your Had delays -- guess, maybe And you a I Just wondering, delays bit the noted service in demand to you wondering, grow? I in solar And risk? a territory the we've reserve talked we be more reserve could batteries being there. and here, if how delayed. There little to coal just about noted. continues margins think

Gale Klappa

by it's days obviously, a about there's a information potential and MISO coming obviously, particularly capacity summer in to Scott ago this, our but we relook at of we shortfalls, normal as this Well, few great do a situation. have continually And mentioned just question, warmer than in his about if saw released capacity you the remarks, concern summer. and even probably terms

-- We have as of five-year in part retirements on tap this plan.

we have So situation. but relook our capacity certainly yet, will to nothing definitive

think fact in signaling been doesn't hot I the about not outages It think only concern, in reasonably reliability The that potential surprise talking and good Midwest. summer, is we're a of I concern actually, summer certainly this kind concern, for MISO in But Wisconsin, potential and because this of but were what we've potential seeing. us real in I and about a shape. Xia Scott earlier. a

You at may full we our in run help being to the a on have by time the that to even lengthy of days temperature asked heard energy in balance keep MISO of me market. MISO for couple last capacity were over in demand units in lengthy, Wisconsin, years, say particular, periods meet to few years

which at us, But thing And continually it reasonably this a with the potential as we is said, be goes. keep we for we shortfall producing we'll delays, in a grid things lot be Wisconsin, I'm that the situation. our Jeremy. good shape. term of Scott delivery. guessing for and I hope relook see we'll into production obviously. to of think have helps, length the saw energy the So I fed of any And kind in coming, to will issues how we're help see good this longer and summer, will Again, here, that battery stable capacity

Jeremy Tonet

just pivoting maybe a then towards And little there. here. sales helpful is that bit Yes,

growth drivers color, sales was the As provide it you relates what to And growth, initial delta your with color outlook I on in as a more expectations retail guess, point? have the to at how you do provide might this versus wondering, projection see your Just the more relates retail changed quarter? you could between bit those it sales? higher there could if achieved on electric

Gale Klappa

I'm art, Scott quarter move is it one expectations mean my let unchanged. to outlook and you is longer-term normalization particularly not going colder normal. on can't a think some more I a standpoint, you your Weather where From I Xia quarter, was than give the really an detail. based Well, science.

Wisconsin least, give manufacturing from So, we in sectors the and best estimate driver opinion, our my But of the what's normal weather at what's us. think, Scott, is big and I a not. of backdrop strength for

Scott Lauber

No, you're exactly right.

couple about two when of you large really, that in manufacturing. see that We're in we positive. at in them company, very sector XX as a So manufacturing -- the sectors, items, I seeing our track being the data, in our or look the

addition, is was of this quarter, quarter, small In ahead our commercial one forecast. just it industrial that although

getting open, pandemic business loss, even where opening So anticipated is more we just back than et cetera. the

been they've well growing here. So, pretty

the commercial sector. see industrial going positive, in the and So to really particularly that was small happy manufacturing large

overall, coming happy very So, sales the with I'm are in. where

Gale Klappa

EV when large add become her. forecast for But I in our was to that joke north that she our Downtown have condo me. any EVs. That of underground and Teslas one plan. happened doubled I really just But this noticed our through there garage I the condo I charging units with nothing amazing. And now of live CFO seven Xia they're building. I'll basically moved our And seven yesterday, her Tesla five-year yesterday, have building those to our XX thought Judy because pass in in penetration EV surprised penetration Milwaukee, We in own brought anecdotal units, units we and with significant thing. where are

penetration. EV think, getting EV may anything, also the lot of conservative our about we're pilot. And in a interest I if So we be

in So place. year pilot that that of really beginning started went this

coming So, the good lot inquiries and some nice good then a load on of we're I -- residential side, people expect seeing lot side. which on also potentially a that, here of commercial

good challenge but is yet, the now indication. got early The to that get everyone's vehicle. just So a

Operator

with Crowdell Anthony from comes question next Mizuho. Your

Anthony Crowdell

I'm good And luck tomorrow Boston in night, a fan. Yankee

loses, I any so a happy. am Boston So time team

questions. quick two maybe Just

of obviously, on them, of lot solar. a the call delays One the

of cost some impact any rising investigation. Commerce about talked projects You before on renewable Department of

the been headwinds portfolio? maybe change maybe going Do with on any you are for going forward the plan Company's customers. has going renewable generation on and it's the keep benefited now this regulators change diversified that think from years the right over I portfolio, diversified more of that's strategy the a to lot see the a and of

Gale Klappa

support with strong, ball. strong we with commissioners. And talk of talk actually, there energy to That's the Department most for to can I and I've obviously, is you gubernatorial the to state a we we policymakers strong And do decarbonization. both has and Natural decarbonization have conversations, eye here do all can is I great support with and Resources, a there your tell Yes, the and -- ongoing And you off mean administration both. governor's is with the aggressive for the industry, been also in office. some one, with state I not support that the with we strong a past take particularly but security. current person talk We to been goals as a since of know, carbonize, which there continues the Wisconsin. We in be have think but question.

have I That have hasn't it's security. and to. changed, don't think energy We to going

clean. part keep power gas terms I a got transition generation. in decarbonize options at power Wisconsin, going trucking say, of can And reliable economy a going to be we all provide range in a also to mean, we're significant variety everything the practical. me a to with transition the I still without we pretty And do our but of in to energy sources. that be have we that over do alive is we have A-R-C, in but look affordable, We today. call we that there portfolio the what also natural be economy. We that -- as and is both. cannot you've can major think I I of believe ARC, of heard can time, It's three, can through reliable, you just

Anthony Crowdell

they've this one, guys And same guess, there's wrong. last And I you if it's too focused ROE all being, I for a rate I've this such given this the had in they're the step-up as maybe inflationary request rate you customer for two and what significant ROE. I maybe months, have. a the apologize in had all if you filing And seen cases, last currently thing, I across utilities filed believe country, other month, environment, requesting as

have of ROE on guys level you the filed that Just thoughts for.

Gale Klappa

that mechanism in benefit and at us both with the shareholders. time provide cost credit think that with of level just is We planning, basically, and our this ROE, allowed point cash again, capital. to that at reflects of strong the appropriate. sharing maintain of the provides It approach would ratings. to it's an ROE flows We level think ROE earn inappropriate opportunity and our customers the And above to

the right for us. at overall look we we think the level -- it's when situation, our look So when at we

Operator

Your Sachs. with comes next from Goldman question Michael Lapides

Michael Lapides

rate a embedded box. the go side at one to costs always the it. couple the questions you, grid. in proposal. going I with lead has this bias electric your If right, got on for of A fuel I'm you've Obviously, read

days, what's about total Wisconsin trying -- rate customer to to customer bill? just component bill just the going in the some So the relative to But not I'm total think the side, you of on the what's to happening can the gas just neighboring the bill? of states these base remind me

Gale Klappa

give to Scott, Xia, a you shot? want that

Scott Lauber

Yes.

put still like and commission case And on -- that the fall fuel for it file line we with relates on in we a bill. But the Midwest has every provide our this when as does -- numbers together. to that's $X $X total and et include is month every average It'll below the in fuel we year, year. cetera, right the that. of the go latest for a the prices, the ongoing So, the updating year each in at time gas call did peers a forecast in an and the just process the we'll national update of

more a So even we -- at but now, better put look fuel-free that have -- very the even $X. at you in it's case and little final $X or may modest makes a for bit renewables fuel number there. when That really renewables change it's that that that right resource as

Gale Klappa

to like you would add? what Xia,

Xia Liu

the about think compared Overall, feel requests reach peers the at think covered I to customer Scott Midwest national really and and to in good average, impact. the we overall our the compared that really I look No, it. we

Gale Klappa

residential And as for Scott include stage this customer month of said, the a typical $X the of game $X estimate the an fuel. to does at

Michael Lapides

make entered the guidance The Because quarter know other But you to kind the that question one upside I I demand year, just a asked all and that you at you surprising are -- electricity your seems again? normal the gas growth some demand I gas and had about know was about weather it is demand. what again years. is Gale, the doesn't I when length for entering year, curious, over talked when growth? there's long-term seems it trend, of And but have

Gale Klappa

Yes.

X.X%. was in, going think a Scott, I

Scott Lauber

X.X%.

Gale Klappa

the than this X.X%. And the colder with in first it's the, is remember, quarter not normal normalization all indication. we and best when discussed the

been and actually On year is yet may the you natural little from get very some several when still to every day, for though into paper coal the seeing looking fuel fall, more think I converting insulation putting be costs, conservation mean you about -- other gas converted hand, I people strong. oil gas see usage customers gas and bit the gas, year. more do as in usage as last the in and what a you're think -- getting natural we gas have to sales and cleaner from oil up. customers commercial this

we and usage. So, line in we'll the -- our gas upside but that be always to -- growth growth customer with surprise we're want with on see, at looking

Gale Klappa

to mixture growth of gas point, a great say some And business. people -- off generation switching -- Yes. cleaner are Scott we is their to said, natural have actually as in gas oil today. burning of have It's continue They're gosh, things. but our customers, see to a customers I And XX-year-old will is network. I that and it gas. our the distribution then Scott really said, oil-burning continue Scott getting own as by making not furnaces. mean, industrial putting on distribution my of to furnaces on side converting good see we we moving They're customer

So, both strong but also growth. growth, see usage we customer

year, gas customer last our fact, growth. our most In months growth electric in of customer exceeded

Michael Lapides

one. last One

multiyear of kind Just curious, think growth the business? what earnings for is annualized for I the meaning ATC, transmission

Gale Klappa

that plan, X% to at year. the a five-year roughly it's looking probably in X% And

Xia Liu

right. about that's Yes,

Michael Lapides

Okay.

of base growth? kind rate with in So line

Gale Klappa

don't you anything long we MISO Future is tranches. X there in Future exactly. Except, has referring long, call going Tranche One Future know And what I'm X. to, process, a One of Yes, and for have which they three planning through

X correctly. in kind plan, there's late X, vote I I there of the now Tranche will. you on anything think in for MISO remember five-year our really toward if don't July, is would So And which they Scott, creeping X. resolution, has Tranche Tranche in have projects said in We if

Scott Lauber

it, five-year start don't plan. those the when the decade. our have anything projects hitting about until But won't probably you in of we No, end think

the transmission, renewables in plan, alone. next the hit just years, maybe So, in Wisconsin the ATC, happening we've more from I that let's the some actually the are this But and but talk probably of we'll last about July. it of see from couple once growth five-year again, about it seen here mean, won't -- system year's

Gale Klappa

upgrading lines. aging And from transmission

we about just it out doesn't when anything One. wanted So X% assume be asset-based clear, coming to X% growth to of said Future ATC,

Operator

Associates. we Glenrock And with Paul for question, the Patterson last have

Gale Klappa

an award-winning you're Not Paul. and day, having wonderful usual, a bad as

Paul Patterson

an choosing, bad Beggars it be what but... It's is. just No. particularly day. a can't Not average

Gale Klappa

don't thought know, I I your would day. Paul. our brighten call

Paul Patterson

Well, it in its is way. own

in I always guess. sunny So, Wisconsin, it's

of is to and like been to that's interested investigation order zero now. might and lead? I'm So any weeks road actually, stuff. in have since ago the my it. was me all still out transition this regarding sort proceeding exploring asked it you, saying PBR, -- of map and this But wondering, mean, at few you they're just things there about they got an of where regulation, question affordability looking just thoughts efficiency I've sort do performance-based And I is energy But put that any and they're

Gale Klappa

has right whether the think without deliberate any Commission or I changes to Wisconsin there's other again, incentives help kind that begun at investigate there energy other very, incentivize could a decarbonization, the to just of process any that very are continue regulatory to compromising security.

-- we regulation, as any forward-looking alternatives. potential but earliest very of Wisconsin with a always, think So, as far-side this considering I and balanced see -- the they're do stages in

see for would anything, So, our example, I wouldn't that impact case. current rate

Paul Patterson

We'll appreciate And thanks Okay, happens. really much. see it. fair so I what enough.

Gale Klappa

our You folks, welcome. care. I right. conference Take Well, concludes think All today. call that for so Thanks participating. for much

Take be feel (XXX) Beth. She mute. everybody. you XXX-XXXX. to contact have free any won't other If Thanks, questions, on care.

Operator

conference today's call. concludes This

disconnect. may You now

WEC Energy (WEC) 2 May 222022 Q1 Earnings call transcript