WEC Energy (WEC) 3 Aug 222022 Q2 Earnings call transcript

Company Profile

Participants

Gale Klappa	Executive Chairman
Scott Lauber	President & Chief Executive Officer
Xia Liu	Executive Vice President & Chief Financial Officer
Shar Pourreza	Guggenheim Partners
Julien Dumoulin-Smith	Bank of America
Durgesh Chopra	Evercore
Jeremy Tonet	JPMorgan
Michael Sullivan	Wolfe Research
Anthony Crowdell	Mizuho
Sophie Karp	KeyBanc
Michael Lapides	Goldman Sachs
Andrew Weisel	Scotia Howard Weil
Paul Patterson	Glenrock Associates

Call transcript

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Operator

Good afternoon and welcome to WEC Energy Group's Conference Call for Second Quarter 2022 Results. This call is being recorded for rebroadcast. [Operator Instructions] 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 open the to will analysts for presentation, questions and the conference answers. information call, of with a conjunction at wecenergygroup.com. this detailed In financial is posted package approximately will the conclusion hours replay call. A X this after available be of And Gale Executive my Chairman and introduce is now to WEC it pleasure Klappa, Energy Group.

Gale Klappa

of today for summer everyone. Thank joining quarter us afternoon, the the results you our Good as city. in review Hot town we XXXX. second for

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

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

quarter to another we're guidance of XXXX warm execution of that $X.XX light share. strong you to A range shaped summer, In and Infrastructure plan major of this XXXX, a the earnings as from $X.XX to release saw for this second raising were Now $X.XX again start results a a time news our by capital continued segment new share. our yet from solid of factors our share, quarter. $X.XX performance, morning, our per reported we strong this earnings

to of the new the of expect weather of for remainder range. end course, this We reach top This, the normal assumes year.

new allows for discussed, Our need a balance capital sheet and as without remain us to any this fund strong. our we've cash flows executable plan And highly equity.

initiatives the our billion $XX.X the plan. quarter, to in investments During enterprise, ESG including on continued forward across we move progress major

you and a delivering infrastructure, clean. and update in moments. reliable just remains affordable, on with building energy project reliable focus highly Our a a Scott will provide few that's maintaining

for the a longer the Keeping Creek Creek our older Oak because we're purposes at units a aggressive remain we generating great cost MISO even higher our Wisconsin. fleet, the in the environmental backup emissions But of goals. avoid market. by capacity extension for in online purchase complete of process targeting with we need bit by we're we from committed XXXX. reduction coal customers makes Oak plan the investments of approval the sense support expect only end XXXX, a transition. fuel in XX% reduction for end an and And capital we to fully XXXX as exit and of of XXXX. a XX% this the the in end a extend carbon XX will our Creek an units the schedule by at operating The X X we end to can Oak units, recent to be for units our and capacity Units renewable by Midwest We the recall until delays to to delayed affect the lives until site. will retirements. plant are adjustment First, this X panels May critical going that and coal-fueled clearly market; supply These delivery may of year the in have The XXXX. and our of units that We the of megawatts. X older now projects delayed about about X dates decision plan you X X,XXX factors: Now through of expected and total on delays power rated be made announcement retirement months in conditions based power late tight of that the the XXXX. a batteries, solar in-service regulatory energy our capacity use aiming by coal Across of will still

carrying drive on you we help goal that working XXXX. know, focused And discussions zero economy. the innovative remain out on policy decarbonization the future engaging in as projects generation to Of the the of emissions course, longer for of net can power we're from carbon term, shape and clean by ground, of the energy,

our great renewable for units natural field field networks Separately, be Upper project. progress at our of as achieve will Switching the gas distribution plans now gas leading-edge industry. Research supplies The hydrogen our the modern emissions Power now. this we've up one distribution and for will gears shortly we're methane Electric of a finalized for blending natural gas results Michigan. with our XXXX. securing making plan We've natural Peninsula in Institute business, work gas. us zero the example, update of across net is gas will reminder, in place to the by with take of teamed shared test but the end fall For Scott our this from

unemployment average brief course, investments take look in X.X%, of we rate growing regional the a from Let's to the well, at Wisconsin's continue major companies national our data and below at show latest region. The economy. see

the in Aerospace XXXX The is Fox exteriors. center This and For offices, Gulfstream's expansion could operations equipment. Mining at Wisconsin's painting world-class of grand workforce month, And jobs Wisconsin. state-of-the-art it company of manufacturing heavy about here new employees. third campus Gulfstream is That's to for XXX official Valley, its to Milwaukee. XXX Appleton existing build aircraft Green Komatsu in hosting a and of build and last the is expanding space headquarters expected add Bay. to a in the training its planning new mining already celebrated opening just Airport. includes open It finishing facility in quarter The to southwest example, is

is in XXX major place the the second which Georgia-Pacific region. also During new a bring to in is facility million about for new paper mill expansion groundbreaking Bay. Georgia-Pacific the expected $XXX Green to of jobs its took quarter, investing

the And infrastructure with segment. for range over all Scott, information to operations So on our of call Scott I’ll future that, and our economy. we in yours. the the turn wide more remain about utility optimistic developments a with very of long-term pipeline, the regional

Scott Lauber

Gale. Thank you,

underway number good we're mentioned, making Gale As on projects. regulated our Construction is plan. progress of capital on a

of XXX Also, we liquefied on internal on gas units capacity site to cost as at in RICE reciprocating them, estimated These have underway. the started megawatts western our engines, storage dispatchable combustion work units, expected natural an is Northern work our $XXX with We or Wisconsin. in million. of are call provide

gas needed investment As approved for LNG peaking $XXX capacity Wisconsin. X provide the you recall, in commission distribution our Southeastern units business. will This million

megawatts deployed the front, the completed, will these will On projects Also, an Barn additional X about expect Wind renewable our XX $XXX investments reliability to Wisconsin those our of development for When production It provide performance Red Southwestern at farms. regulated years. enhance million These sites to these the towards customers. we credits at qualify renewable projects come wind our Public and will end refurbishing year. around farms. Wisconsin XX in for energy online Service of Park tax of we've

continues more the Badger front, solar II work We solar On Battery Hollow service still Park. Wisconsin go to the these Paris facility to and energy next our the battery on clean supplying customers. projects solar year, into Solar and expect

informed we've Commission delayed that expected be the the to project is until However, battery XXXX. Wisconsin of portion the Paris

X our We we for approval of fleet Darien service XXXX, solar and Koshkonong. to these in have recall, XXXX plan respectively. may projects, you now and in filed project and them XXXX. As initially enter other We add battery to to XXXX

place now Center XXXX. expect to the take in addition, In of Columbia retirement Energy we

operates and Energy Alliant owner. know, we part a you facility are Columbia the As

keep you on any updated we’ll course, developments. further Of

our utilities. rate a for review recall, we Commission you Public filed last with Wisconsin As Service the quarter

Oak increase interest and to operating in our lives variables, Columbia investments units older the completion also support our projects. solar costs and of projects. filing. important update update units. with rate Our extended proposed an capital associated including hardening We the of Creek Recently, This reflects and provided higher factored grid other the would the we rates

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

our In gas renewable project at this have no We initiative. approved business, to natural our The bring other Commission time. for plans Wisconsin reviews rate to our recently discussed we’ve this pending customers. gas pilot high-quality

are our for RNG we XX% RNG The system our scheduled the a our way Farm the our projected of Northeast infrastructure this by to We Nebraska end large in have go project X year. Wind connect our segment contracts contract of quarter. next plan The system Outside for emissions. was into Just later Thunderhead zero this the dairy be flowing signed in of farm year. month, again third to the bring our us driver positive will in last net once utilities, methane located toward WEC will service to Wisconsin. to of goal a in which distribution place

Together, also year-end. projects expect of investment, online of We Sapphire our approximately the million $XXX come the Sky Wind by X in X-year plan. Illinois project well us to ahead capital represent keeping

address start Midwest you projects to set today’s that, know, things transmission needs out in Company its long-range as As operator, board X. the $XXX last Midwest. American the in transmission Transmission And investment Gale. these XXXX. to MISO long-dated in approximately as plan to That’s that the are week, time, across this is At I’ll tranche projects for And the expected MISO, tranche approved a estimates X grid dollars. Investment early turn back with opportunity has million.

Gale Klappa

Scott, you very thank much.

as top the Now cash January decile our Board recall, our We its in by at may quarterly of of meeting us dividend you raised this industry. Directors believe ranks our X.X%.

in payout ratio line We growth are the to XX% our be X% of growth earnings XX% to earnings I earnings at today, therefore, year. and in of X% to growth expect we to share. reaffirming dividend continue target a with a projection continue will of per And long-term our

the and view and she'll more with investment energy that opportunities. bill We transition the as touch will in appears reconciliation be for quarter positive for for future Next impact details up, legislation Xia? customers, on headed second provide a the likely our Senate. you U.S. of the Xia vote for broadly our the financials to on

Xia Liu

Gale. Thanks,

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

with XXXX. was mainly at by in second of continued our our Wind that in well American credits stronger tax by of end to Earnings increased XXXX, $X.XX a investment went Company, day-to-day O&M. as XXXX Overall, Our quarter to quarter compared demand is Energy operation ore $X.XX commercial portfolio of of This At second of up was walk second production Rate-based year. depreciation of of last by significant Jayhawk commercial across regulated second through related wind production our driven the the at Farm Wisconsin, partially to This were on in amortization in quarter and the our quarter-over-quarter. the excluding growth electricity small for basis, the we iron I'll $X.XX earnings. earnings the earnings quarter by On deliveries our by Across flat second a impact tracking the XX. our contributed package our utility X.XX%, comparison weather forecast. grew compared weather-normalized business, Page offset operations. industrial retail quarter customers. $X.XX drivers. XXXX. improved a results and increase Infrastructure $X.XX investment. electric Starting driven to $X.XX in of as includes capital is compared our higher Transmission mines, our and retail led to earnings The segment expense

you'll Finally, a in quarter Other Corporate in driven investment second see our trust that $X.XX, we year on on improved that second at rabbi year. recognized Remember, segment in gain last quarter performance last decreased compared per and our our is and last clean earnings fund a energy by performance rabbi O&M. share the to Overall, we trust $X.XX largely year. offset by primarily

on and earnings first total cash by million. of during increase. a $X X Looking statement to And cash earnings $XXX normal package. Cash capital this XXXX. provided half contributed Net billion of now recovery activities flow the the commodity operating costs were the at increased of expenditures Page

capital our As been on can well we you plan. see, have executing

I'd Act. the Before I'll we the I Inflation now, still our the bit understand back of give like proposal. third for to we guidance would what production color believe in Gale, of projects the provide provide for option solar customers analyzing and details apply the flexibility to recently both to We're future at turn proposal investments. also from to Reduction additional the for WEC provide to proposed ability benefits From the would tax This it our transfer on credits quarter. at utilities segment. would and tax renewable choose Infrastructure our credits investments more renewables. An a

benefits future overall, investment see opportunities credit So we stronger to and metrics. customers,

quarter. third the for guidance the you give me let Now,

We $X.XX the in and costs per storm accounts and a rest of $X.XX to recovery for weather range share. are expecting normal weather of This assumes quarter. the July for

top the I’ll full raising earlier, third that, of per guidance year As $X.XX better-than-normal share a the reminder, which mentioned our it range range. to expectation in end last we of included $X.XX And Gale to Gale. per earned with the share weather. quarter to year an we’re of as back turn a $X.XX of reaching $X.XX With

Gale Klappa

the ready and you. Operator, we're call. for now for portion Overall, delivering Xia, we're and thank the focused question-and-answer on track on of our value our stockholders. customers

Operator

Instructions] Guggenheim with Your line of question [Operator first comes from Shar the Pourreza Partners.

Shar Pourreza

on maybe or, second highlighted, Let the following for policy specifically touch a if of earlier and PRA generation your and me spring -- like backdrop kind more this own the you modifications just can MISO retirement we delays.

from your present coming envision maybe a changes auction where position maybe years? additional position, is any could see this we Just to Gale, extensions And dynamic line at structural the this time a we the headwind? retirement you Or in could because do of a undertake O&M which WEC in be point? definitive possible supply-demand the

Gale Klappa

markets. I the so That's said think we a that the coal-fired fairly themselves think, they plants extensions we've this, capacity I in the the of increase Luckily, times units, unaffected gave a tight The And and up last has by were much them prudent I that of on answers demand bring that good of our auction I in any couple pretty this is been dates. likely really Based well to as We retirement Oak future into retirement for been high continue for that of We really other customers capacity plan older continuing to sure you, question, prepared. us MISO the we're older think talked and current to need Oak hope these really about, today, in we deal. that make not supply auction units, found situations. big great here. regions basically enter capacity clearly, significant of in it feel have we're but very remember, high to Shar. had in of run really, Creek question. our sense costs there's from the protects going Creek But that hold they're on date capacity We've going costs purposes we're that online in here these about to great seeing we to at Shar, dates everything a your older online. And terms units capacity retirement terms Scott I projected what's plants. don't in units. we extending, diverse that the was

Shar Pourreza

I to well. as No, there's and IRA it does. of of then think I capital And sort the Act program a but Xia obviously kind appreciate some the Reduction that. on bit or And linkages your little mentioned taxes Inflation

from forward As conference, you the kind we’re of see customer, we is the And program, by the beared heading this into that? probably work counteractive obviously then to about finalize the fall, especially be as how minimum which could the spend additional there’s will right? force roll tax the do we think that

Gale Klappa

we're further. I on of kind And based everything everything piece the all really that tax of say of seeing issues. working Yes. we're minimum Based on this, will legislation Xia in of through our benefits models. right other now, can comment we're seeing, offset and the some of that

Xia, or expand be on a might Xia we you credit -- Xia? metric will an us. think, want don’t for mentioned likely positive bit. a It this is little and there positive as we So, FFO actually to

Xia Liu

AMT. Yes, very we mentioned, exactly. Like manageable Gale from see impact

forth. the I tax $XX benefits probably lower lower think of of just of in like the we -- financing quite million general, from a payment. so offset million, balance, bit by increase mentioned, cash in and But credits metric monetization tax of see Gale costs credit either or sources $XX debt

overall, pieces, So see the benefit if all metrics. I the think consideration credit moving to into actually a we you take

Gale Klappa

to emphasize, this at that at clear help comes is I that with not investment of this benefit this a about the our think, for customers. we'll through things point Infrastructure investment one utilities only other, us, we to here, opportunities the legislation, cover. the but piece of Shar, can And have cost one also the I also, -- talk customers to continue reduce regulated good But cost mean our segment. expanding that

So Shar. there's here, some broad positives

Shar Pourreza

lastly, I got if Okay, real quick just it. it. And may. then Got

schedule procedural the case, week. obviously rate last issued the Just was

You at guys are great settling.

potential maybe the looking of thinking should for options as September, about that? we we're be early settlement at So October end

Gale Klappa

Right frame on to settlement very interact which we very we’re good. The the continuing normal an of It’s still to the requests to process. staff discussions. -- time pace the early with pretty is in staff on their are place Yes. hard absolute data now, and continue

part, by the has which schedule dates. part proposed that was would So the some in off law interveners between kicked our say, audit of which case going the more think staff time. I time that’s going the And smoothly, judge filing, as going in administrative on a little you like a well, the

the And as certainly our what in been about schedule all half a projects I it’s I’m of proposed hardening, really steady case already in in in would It’s O&M And last have close order. approved final. than mean grid sure in very but reminder, is this this we just So was renewables, reliability not is to and I over investment case investment and final lower the goes. straightforward. the is actually she investment capital approved say that

So And as steady positive. she the is backdrop right very it’s now, goes. still

Operator

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

Julien Dumoulin-Smith

So of get just you Normalize for needle move I through the a but again, the a forecasted details obviously, just here, guys had -- as large margin much back that, C&I, that coming versus on to what on X/XX, I if year. doesn’t there’s -- couple can.

you up that what of half? highlighted the can. set you that But you’re are here expecting second in the bode there? well. reverse what’s Or at seeing number industrial if -- to you I there, trends know a You just outset the

Gale Klappa

saw answering. -- The and done serve we XX question, for economy. the large sectors small when of the we got decrease way, by in And customers remember, I different Julien. question of as industrial we that C&I I'm in you Great kind a

a very on. So food half food what's saw gauge that broad processing, sectors and showed quarter bit in a a of X the the in first it's second decline: going We processing. and of really food

one is Some to our of of very switching that large lines. that related product is customers

I sectors they're a was wife. processing an up decline. rebound the a the electronics, they X of in going going that was very chocolate outage long small good. bit. our my some -- categories food economy the actually, short, rebound to think that's metals thing, the anyway, customers But commercial and printing so make to So And Primary story commercial is extend had according good were little showed and but very to more strong in which

So where concerned we'll very, all mean the I backdrop But the clearly, moves from looked in commercial business. now industrial half. not a about at restaurants at it. area Wisconsin entertainment to every we're see right hotels very very in strong commercial it. second really you seeing is the We're side up we There's of -- what recovery to active economy. in name is the to a

So on look and sales when with year. we all holistically, our feel track forecast for a at much the you as take put together we're said, like it very it Xia

Julien Dumoulin-Smith

Nice.

talk I ] $XXX that metric, impact if that if it credit debt, as question, Do of method half you the your before want let you on ] might how spot squeeze bit on well a give impact me to [ range credit little in you here. answer that million [ a to just I I and even you is. or if point Xia, is? beach And quantify net think, here. on, this As put back Okay, bit that Excellent. what best shift little more can can anything? metric as a take, one

Xia Liu

investment many there's qualification Sure. We pieces, regulated that the change credit tax just know, yet the tax a among as have of number dynamics production credit businesses. could because you really don't so versus moving

but quantified So we number more on to you really come that. haven't for a

agreements. talking On to imputed power methodology most you're update their debt filing just the Wisconsin methodology the made to to recently the purchase related -- calculate updated in It's supplemental S&P. the to -- -- a change about that we related they related the

methodologies updated the more applying are based than industry. methodologies, on they nothing So we the new same across the And the calculation that.

alone So we're there. not

Julien Dumoulin-Smith

you would Right. And presumably -- say? the recovery there,

Xia Liu

Right.

Gale Klappa

It's yes. thing. of pretty type Yes, pretty standaround It's formulaic, a yes.

how's So check, just Julien, married want I going? to your life

Julien Dumoulin-Smith

It’s a bought going We great. we’re house, keeping going.

Gale Klappa

all right, right. All

Operator

Evercore. Durgesh comes Your the line of question next with Chopra from

Durgesh Chopra

quarter. Congratulations solid on yet another

know on Just just of but spot well the this I sorry, wanted put Xia to topic. is again going to you I’m knowing sort this and -- how you

on and tax transferability. of the the concept Just of monetization the this, credits

bill opportunity? is of etcetera? those this think obviously, credits? sort yourselves might be ITCs, which part really viewing How options doesn’t include about opportunity Is pay Back Better. So you Or the other transferability you of what like monetize when those an are for an direct utilities etcetera, Build PTCs, as to monetizing that

Xia Liu

Yes.

metrics. with the that investment formal customers, like remarks, for overall bill opportunities this we think I see I in and touched for benefits future credit

versus of of the projects customer provide solar in The one. ITCs benefits of stand-alone benefit. the versus terms could PTCs would ITC flow-through on benefits, be normalization So sources from battery obviously, customer

the of touched credits. You marketing tax

customers, goes terms So credits, like of looking with of our opportunities, tax example, in that now, be of appetite for touched our marketability tax the for we're appetite. match opportunities are away. WEC, Gale Those could credits. the investment extension And tax try customer Obviously, to future investment benefits. that of with beneficial tax to right at sources then,

opportunities additional already the opportunities we wind. beyond credit And that investment and up for metrics. open potentially consider could I So touched could then

see of I plan capital So a I think as on we current -- think potential these. said isn’t our Having overall, relying that, any positive. this built

tailwind If was some this just So this, from see I we we’re fine. think would not, passed.

Gale Klappa

envision Yes. right, I'd exactly plan add doesn't billion we've for you the something on Xia outlined $XX.X to to just like X-year any that these capital said. potential of benefits. She's

a much tax and this direct I of tax think, personally transferability superior a and structure we of need gets own don't complicated than rid solution of of just It rid creating -- we that's pay, the why say is I equity simpler. this time-consuming. It's frankly. equity broadly is but actually gets that's it market, the tax credits, is view, positive. would basically So idea think my just a

in actually bill. approach in I of tax the pretty the helps. that think ingenious credits terms of hope is transferability I this a

Durgesh Chopra

don’t tremendously. tax understand, you transferability ownership credits. right I need investor don’t in That as need that helps just thinking these I as so you an ownership in ownership need equity tax actually Gale, am where you project, But buyer the unlike or about this an of

interest market tax equity credits specific these the it? going essentially, than So thinking be those in is to way select or Is just right investors. larger or that tax those much of about banks the

Gale Klappa

you're think I right Yes, on.

on, tax think some a idea I dead bit the Manchin. to this a Durgesh. in of the tax really who crafting major those with a came broader little of major And investor, were with fact, was be period, selling credits, in you're that these opens the bill. of just much And background point, terms background. about discussions a I equity selling know this not to opportunity for point, how Senator a that of all

I well. analyzed So think you it really

Operator

comes JPMorgan. Your with Jeremy line the of question Tonet next from

Gale Klappa

conference? your survived You

Jeremy Tonet

was for it you fireside Thank great. the chat, did. I attending did. I

bit, so come as to if do rate see been little Just And what reactions want could, case. just I potential to it back on you settlement talks Wisconsin from retirements this? any have far? And coal implications the a the to relates

Gale Klappa

announcement communicated rate The were big Scott terms reliability taking implications this responsibility answer obviously industrial in was well is positive. the is ensure Commission, uniformly reaction supportive. very staff going really Scott, overall, to answer short which Public its Service very prior the to I'm help not in changing we And has you customers the to see to the at And positive. with requirement. factor of give don't but revenue detail the positive. a any is was The Certainly, some been the Governor’s short -- ask the The office case. we

Scott Lauber

And all, No, we running due lives, delayed a these units everything Gale. you’re Factoring when those this we factored factoring the for bit factoring in these delays in remember, challenges, longer, delay. in, keeping to the And chain extending avoiding the and not some neutral. at in, just And then, case requirement those building revenue additional supply solar this capacity those batteries. costs. relatively it was case, particular and remember, little

that So it and can was reliability adding well of online. we capacity these other built the some received renewables get until

conversations across from So it the board was received with individuals board my like Gale said. well across the

Gale Klappa

And improvement in able action. were Jeremy, script, we as our to commitment in is were to mentioned addition that that, to to unchanged reassure, I the by able environmental reassure really we everyone aggressive this

of sense cost ton both and a made just customer from reliability a standpoint. customer it So

Jeremy Tonet

Got come very it. back, want tax I helpful there. IRA And That’s I credits what’s could, possible to just to there. if and and

breadcrumbs far talked set You opportunity give investment a larger. what larger imagine might us you being if I the about wondering could be? scale opportunity just breadbox it’s WEC Infrastructure than but for any possibly as as the of

Gale Klappa

made are in give very answer in been have it's Jeremy, well reported Infrastructure probably breadbox At this we how the that performing those which to point will bigger time, projects. segment, a much early to say but we've than now, wind I you, as too you this. Right all our significant investments

we production to this it is number think that to the of already, giving option of of a That for Xia the them them solar I committed do simply tax open ours What an and have up pointed projects in investment operating which could and were infrastructure like economics wind entire of some X already. because avenue of operating for segment solar. does companies work credits the the today. way

They’re wind idea. just now So gives in segment. all you the right that an infrastructure

wind We investment it but continue whole solar. see a opportunities different technology could with also to up open with

Xia Liu

WEC XX% that passing. with we so this from total a [ as see portfolio have I don't the will bill we though, investment even change ] add,

Gale Klappa

that’s Yes, a good point.

well. We’re is growing -- but the opportunity our continues regulated as business because

intend the going forward. earnings keep to but segment yes, at XX% -- Infrastructure we of So around

Operator

with from comes Research. the question Wolfe Michael next Your line of Sullivan

Michael Sullivan

half -- first the wanted pretty I I what’s it’s gas know quarter the color that you a is? I the guess, strong looking really sales strong. there, that with at business shoulder on but of to Really, trends remain sustainable any year. the start for think how driving and

Gale Klappa

question asking -- it's question. interesting strong So is an it, right? how Actually, you're is your

we were heard data, two as and really is is asking should answers. And more two interesting, we and the are of what me and Scott normalization we other the The precise were than say but here? viewpoint accurate. Xia answers are weather What trends? ourselves, times, day, their this gazillion you've is a reviewing seeing add One all this

that I'm is that other positive, actually, in normalization techniques the particularly as in that the picked think that it our techniques coming increase perhaps Wisconsin. surprising processes used look QX. and of the gas. up increase a segments I sure of but all again, gas. is the normalization cold not weather chunk reflects out weather big as strong in So gas thing on When for month QX you saw, industrial And weather April for is process the increase, pick is some impact that abnormally up positive. we pretty customers, in quite not we're that And that our an strength But drove started and that of and fully. a seeing the back economy this we seeing biggest sales of didn't from we're industrial the and at see our

where our of And driver We'll a customers see hope months, in a increased question I that's industrial So, the customers use by quarter, purposes. that. was increase very QX X for But gas terms what the April helpful. about we continues gas. use here. large It of process in saw the cold been biggest the strong has no more throughout residential

Michael Sullivan

terms in building. side the then you’re the that business And on renewables the helpful. of very projects of pending Okay, regulated

there’s going thus some been are term bit to the there you do a good? of those -- there’s pickup upward still far. has I on nearer-term think Or little a the pressure think stuff, well? pretty like whereas be been ultimately some steady as numbers of longer Is cost

Gale Klappa

give you had We'll will folks. view and say on nearer-term the I regulatory this. we let cost his fully changes, with Scott this, anticipated our Scott? communicated

Scott Lauber

see is So saying we a talked XX% anyone I anticipated don't surprise incremental the increases about that file in going been when to increases. them think we've we're XX%. it. what we And to to cost and it's to

about kW $X,XXX. solar, -- first project then came And on about fact, the in it's filing the $X,XXX last In kilowatt. the now we were a

the last one is about think I $X,XXX.

up the once we'll where chain could seeing bit, years XX% with future, to moving In But supply looking go there's country. they're what in here said and be a to we're across multiple of we a have things So little but you're out. the again, see line XX%. still lot it

line, So country. cost a did go the right in across bit really now, see we but the little up see there lower than we in what fact,

Michael Sullivan

last And a soon? quick. anytime real one case gas to plans people’s Okay. Any file

Gale Klappa

soon. time No No.

Operator

Crowdell next from line of with comes the Mizuho. Anthony question Your

Anthony Crowdell

Gale? is all How it well. hope as going, I

Gale Klappa

Same here.

Anthony Crowdell

want you for you But historically, also, is just to in has hopefully CAGR. with case in easy from life and slide in I I questions. just someone been guiding problems. X% for X% previous EEI, -- sees presentation, number? think, to of curious X% just happen if Married one on which X% non-GAAP difference. checking. wife There’s is, the all there’s any July tailwind well highlighted guess, it’s that been questions, going to really hit I my GAAP you've decks, what you’ve that don't me One two -- to Hopefully, the between the the I’m no mentioned

Gale Klappa

happen to us hit to trajectory? has a for growth What X%

Anthony Crowdell

Yes.

Gale Klappa

our is practices that and I would right now. out blue don't terms of best in Scott? of efficiency that anticipate the of Downsides operations. approved through we something driving that projection and anticipate. pipeline don't continued our investments And X%. certainly, simply our I take really have the It capital what be X% Remember, in to would kind

Scott Lauber

agree, No, I Gale.

you in. to transition we’re putting of customer seen additional do makes like to renewables. We a grid as we storms and projects summer, it about lot last that, have go the summer that sense we’ve really The good think hardening. this value-added When

where also. really are be a able It’s to we execute. with we to plan very capital executable So comfortable feel

Gale Klappa

With no for need equity.

Scott Lauber

Exactly.

So -- into it. our but to evaluate we pull will look capital projects, fall the at continue we’ll as to continue we And we growth. and at the look

Gale Klappa

at Anthony, Boston. stays I when EEI, in just what on say, see goes your And wife How's in I'll that? Boston

Anthony Crowdell

What What seeing part when your put maintaining budget? What I on the the If the the side, half you in X% at that. I that. of first in O&M look I as the of is slides inflationary cost cost appreciate biggest the challenging are O&M this environment? I out. challenge? so more of part year, down is you at O&M roughly look appreciate far,

Gale Klappa

to are as Well, you very Scott Xia close on can give Well, certainly, I an numbers that. initial the and well. thought

trucks. you you our think you -- first certainly storm, our cost we for the cost mean our having I to trucks few you that possible. biggest the more factor when doubled, about you of of -- are have So than have to mind own in trucks. about And just When our our just trucks, one their we'll that’s as an our service a the we That’s to roll say as ask got rolling fleet, But that got would day-to-day. the big of factor that bucket gasoline think big gasoline -- a operate we largely I the actually costs comes when to view. I trucks, has and have you When Xia? be trucks. that would factor our think to first. you roll array But about point thing out Scott, that the got may one been not enterprise control. outage,

Scott Lauber

No, you're right, exactly Gale.

few really on You income top a the a we're review we of seeing are There's breakdown packet. here, pages yourself just to for correct our numbers statement O&M, in look we're the those behind at some you where on And of items our level year to that at detailed pull little in some rate the the kind the decreases here. of of when have last had transmission. that additional

that some is to. we to agreed transmission So of reductions related that

bit little year-to-date. a up was actually Wisconsin So

storms O&M. our these reaction talks be But total pressures X% at flat look and that in of X% because we still inflationary forecast, overall, So to. we’re that’s it’s down to some when projecting to about to Gale

- Gale Klappa

you’d anything Xia, like to add?

Xia Liu

No, I you very well. think covered it

Gale Klappa

Okay. to question. hope I Terrific. Anthony, that's your responsive

Anthony Crowdell

is Green I Jets finally and my may think win October. one Bay schedule out NFL in in Perfect.

Gale Klappa

under I'll over that on for take one you. Yes. the

Operator

Karp KeyBanc. question of Sophie from the comes Your with next line

Gale Klappa

doing are How Sophie. today? you Greetings,

Sophie Karp

discussion great. I am Great doing so far.

Just if than on I There’s right? the may there press you just a store. little bit more wind more -- on in provisions, IRA this

a to lot other PTCs beyond right? maybe We have incentives areas, branching How of some right? Evs, about at for you the technology-agnostic moving out solar wind and think for do basically some and Could Your into of maybe looked you you have Or fleet, your or electrification mentioned prices are own like municipal you doing? gasoline example, do, peers for fleet, modular nuclear? fleet opportunities etcetera. point,

beyond, on is wind you If elaborate could solar. just I what guess, and

Gale Klappa

of to. inclusion also -- credits. as And important in a act is course Yes, the is of Xia mentioned batteries battery in well and the happy but this terms this

that's plan probably be and in and certainly going in forward. batteries, will our already plan our greatly more So even

So batteries for do can is have beneficial goals piece do it of enough we probably what's legislation. talk about we don’t in of No that of this one doubt our fleet. all We about to have be area us and given electrification that. but

So that’s coming.

to program really months residential the We that commercial and have now approaching good installing place the a start. would their we a some off and few that we Wisconsin in where a individual in customers asset own Wisconsin Commission at pilot ago about is where approved are chargers locations

to come two immediately. So things mind those

that. we’re As the question far as modular No mean, reactors, tracking about small I progress.

in contact serial plan, plan number probably of the road, the the could not But X-year are in that had the option kind strategy you’d folks an will of tax regular be down one. of particularly road. developers with down the but say apply, not add? generation we Xia, business anything X-year this this, if I certainly have down the credits like in the side Our our the of business certainly road, SMR. not to who next certainly, on

Xia Liu

process No, And more thing as on part production going this is of I learn there's credit. the hydrogen clean only are think that. hydrogen we test the to through IRA, new

would into. we making something sense, be something look that's So that happy would if it be to that is indeed

Gale Klappa

A good Scott? point. very

Scott Lauber

X-year system. a think it robust we've mentioned And our like a And But the of we didn't we forecast any we quarter EVs. it third hardening the in EVs that future but said, that see got other in you grid point, Yes. put how of more onto not talked even adoption this the as really come does more lot traction. more EVs, about see I that of our remember, call. Gale already, we program as our And expand and

have nothing EV. we our to in So plans related long-term

adoption nice for So there be tailwind there some sales. could little a

Gale Klappa

for a it’s And our probably our thumb you Yes. of probably rule household. EVs put equivalent every onto the equivalent, single new X of energy heard Sophie, system, that the

behind really other day out system couple state, they’re the a will rule right, investment it’s just the I of a would just adoption have thumb State EVs in significant have of point mean, about household. energy on to XXXX. to of We’ll really, numbers be in -- borne when our EV of So Scott’s thousand, the to about projecting few new you fully the from if think and state by statistics demand Wisconsin a X EVs right. equal we today. thousand our a the projecting the And particularly saw of be close single because, huge only that’s with But see even that very some in trajectory if estimate we

Operator

line of Sachs. with comes Michael question Lapides the Goldman next from Your

Michael Lapides

I’ll two I Actually, have have I an easy you. do one questions that for sequentially.

long-term you models what small is the stations policy from in came. the follows the generally we about owner the country do that. question relative charging today EV The various How think is role the this is you utility public just a not to the first of very component market about and of have where utility that utility, electric of kind on it a potential think the standpoint? you or that the one is talk and of charging Can just ownership of stations

Gale Klappa

think there's I would Well, that's I a this. don't say Michael. a answer. great one-size-fits-all question,

on charging hit different country, models floating state of by with now the you've around there's earlier, plan. the think the a it state, lot I government federal even

the very, infrastructure support would you know, as electric development vehicles. very, transition we're whole of massive So early in that very a the to

the about out to of the terms think in I is when how equipment question still you actual it really so terms hardening. will say though, time grid own. So in can and and will just much tell But jury comment -- goes this I can't a of charging give I clear -- will -- answer I of on that don't and utilities Scott's think on today. really anybody think you that back

If for a homes larger about know, don't X a adopt put have or I much transformer you neighborhood, those X homes, we're cul-de-sac that to in to If neighborhood. think of well, let's with, say, example. in X EVs, going

So there our of in investment terms incredible requirements are basic infrastructure.

again company have a of the to the EVs. moment. with Forget I tremendous the to think, that massive, And for like adoption opportunity for of investment ours a various a capital need will going equipment significant open to come massive of the charging number There really up transition able are grid needs are that EVs. supports to itself but that kind also that, be

again, of So none that's in forecast. our

I and wait will you we Wisconsin. think tell the momentum I question about here forward. how how it's can see adoption that. to any there's beginning don't in But We -- EV moves gain

are extent answer So, There just too many now about owns going a give more to extent. too I don't much you who I specific response. a hope that your answers to to discussion question some what right and single models there's good think much just forward. development what and

Michael Lapides

or legislature my one or and with And the another of question you go state meet is Governor then the some kind understand. policy team -- when Evers you meet folks the to totally some the today of still is with are go second large go which or utilities or No, meet in that What in you is like next the the X-year of in doing do? of or have X-year their that not plans it see guys state groups. business X-year leaders they

Gale Klappa

Governor still That to like we Evers or that see? like see would would to

Michael Lapides

business and governor and officials elected leaders. the other both That

Gale Klappa

make mean, the happened people not word, does public Texas all in support want that It to the is legislative reliability key. Scott? but with governor's really that sure reliability. to office, what revolving to whenever going transition. is the the reliability. here. all we're And with it -- I have all the capability we happen to service to energy down Affordability, around comes continue They when discussions to one -- comes it yes with have down commissioners,

Scott Lauber

here houses the Wisconsin. on electric gas, It’s keeping environment reliability, not on but natural in only in warm also this cold

So that’s a key. also

don’t want So at it we to one side. just from look

Gale Klappa

extend and units. talking decision it to the them the us of Which with reliability. was older about all briefly the assuring Again, Creek Oak again lives led to making

Michael Lapides

in X Got what the think -- for solar time the to in we projects, about does to this finally, the it. for dates in-service the storage the years? next should changes X And then forecast with the and how CapEx

Gale Klappa

little. Scott, year we I shift that much flexibility It might have Very major that, in from so capital year see to budget I but mean, don't impact. any

Scott Lauber

don’t. I No,

have few We’re at a but really we that there’s little to move every looking the around things year, numbers a bit.

flow our a next So it’s as be here. to not change iteration we through substantial going

Operator

Howard Your of next comes Andrew the Weil. question line Scotia Weisel from with

Gale Klappa

Greetings, Andrew.

Andrew Weisel

A coal couple of quick ones on first.

does from dates What baseload to of So becoming the future. talked to impact the -- first, about solar resources in benefits run delays retirement you’ve the battery like terms of operating units look some on and changing impact capacity in very savings O&M coming between often? won’t that fundamentally as about solar move as these think that the and decision to nonfuel you O&M around

Gale Klappa

these to Well, Creek by older use O&M I a units million about said $XX the Scott? as capacity factors think mentioned. offset there'd uptick we basically in the machines Oak be Scott other that

Scott Lauber

Right.

efficiencies, O&Ms go overall, as of $XX the back $XX at the what quite when think not million. it at so So ongoing, that's running much. when you Still we you rate to the really to maybe years, baseload about were of them think as you're in plants, still here. come we're million had you probably -- full-on case as look it looking couple compared when they trying you down about when But a

the a to variety of can the and as efficient You possible. as staff projects, make trying workforce utilize

market. that but buying it's cheaper going out than the lot and -- So a capacity in

Andrew Weisel

that makes Right, sense.

all a their a it Okay. over And on that sudden, decrease months or capacity units? of look Or for predetermined then they're for like up flip the now? transition how a factors back few only seasons? will switch a Will they day that will coal gradually

Gale Klappa

what and hour in we units time. all ahead, MISO at market, the I day depends Midwest what all etcetera. the cost know we marginal operator mean, No, -- available I it let as basically ahead, mean you have grid the know,

really units times, will during anticipate they demand the based be run modelling, in highest MISO we not looking and non-higher demand at used those summer, seasonally the we and on online efficiency demand our time, So But probably at Scott? winter much will the anticipate, just market. very

Scott Lauber

to the And look switch. do be type at strategy asset. We'll No, a not do the right. every to forecast as of that's other exactly it's we going and continue

Andrew Weisel

determined ultimately is dispatch MISO, by right? But Okay.

Gale Klappa

Yes, Yes, every unit. just absolutely. like other

offer asset every an MISO that becomes in just this day. portfolio our basically, So to we

Andrew Weisel

If question Great. attack perspective. Then the can Okay. O&M question. separate one different from I a

position the year-to-date or thinking of are and started Given yourself? ‘XX I the pulling about from midst you from forward the know strength you’re rate you a talked pressures beyond and have better about in you case of storms. to results, inflation, expenses from

think takes. how about Just those to and wondering puts

Gale Klappa

other Well, our number pretty seeing you're plan the operating we've the half normal not for projects additional of serious numbers in short answer in our we've scheduled is we maintenance had, maintenance. particularly yet, of the we year. have already a maintenance, have second had July, plant storms, Power some in that in costs obviously. some had so July And

in Xia? not our to we're forward on O&M So any planning additional things because got do normal we've pulling plenty of plan.

Xia Liu

right. exactly that’s think I

Operator

the with Your Paul Patterson from Associates. today comes line final question of Glenrock

Paul Patterson

good talking you. hopefully but last just but to least, not So

understand the coal chain retirements? And that’s just like with associated renewables. were reading At plant guess, wondering actually bit is the So I’m What least plant how I’ve transmission it press, just seems to is pushback it what I’m delayed? been it is components? Or supply to a storage? on what is projects follow in the by the the what issues. impact just I’m on I the mean local thing. up from -- that little of Or I trying confused caused, it --

Gale Klappa

what delayed. making and the cover great been investments is are approved one to that Paris the there Battery the going really Scott there first park which we'll two elements to are let Park. we batteries the major Solar is be And clarify, details. question. The That's battery a call to are already we it have of But solar

they’re that So are solar And that's mentioned projects X a and going on not think, the dates. there piece going original the in then on I the Scott, it. regulatory of through come to now are you during script, we prepared process

Scott Lauber

Correct. not going in. They're come to

several uncertainty on to them. the So solar had just with solar pull in projects trigger those And it and we also to the attached sense had not make batteries those capacity, projects that additional did retirements.

Gale Klappa

couple Paul, of going just years machines. the perspective. we the of to that be to also lives them on we're capacity. put capacity Oak were solar little be for were a here running kind Creek in all bit, batteries in just those as going extend as that We're units we their older over to The running next putting

here. we're trade-off the really making that's So

Paul Patterson

else or that you -- Got it. of seeing Are any guys sort around you anywhere And with? then parts of production. on you wind any wondering, that constraints. impact in I’m guys wind seeing production? of you curtailment that are constraints Wisconsin are the country, we’re different Transmission impacting of associated seeing

Gale Klappa

in far little. So Wisconsin, very

some Infrastructure we've outages farm. Jayhawk in transmission Dakotas, Kansas seen transmission in the be issues to that resolved seem However, now in with lengthy segment, example. wind for our maintenance We've seen some our

So gotten transmission it got sporadically, where grid Scott, reliability that as yes, move thought it’s got heard pleased gotten and has we why We've actually, projects. issues MISO that the to do forward to, without question with and than to seen point just we no of probably originally. to that’s we have some doubt. a there's a we’re higher they’ve the And you transmission maintain $XXX to nation, have million

Transmission for that to think you. investment. for All with enjoy sports tranche our now I Company conference much American concludes the fans. Well, a X So Always MISO Thanks for right, call participating. today. $XXX million is up so talking

free contact questions, If She feel (XXX) so Thanks, reached Straka. XXXX. to you be can have long. everybody, more at XXX Beth any

Operator

you That Thank attending. for concludes today's call. conference

now disconnect. may You

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