WEC Energy (WEC) 1 May 232023 Q1 Earnings call transcript

Company Profile

Participants

Gale Klappa	Executive Chairman
Scott Lauber	President and Chief Executive Officer
Xia Liu	Executive Vice President and Chief Financial Officer
Shar Pourreza	Guggenheim Partners
Julien Dumoulin-Smith	Bank of America
Jeremy Tonet	JPMorgan Chase
Michael Sullivan	Wolfe Research
Durgesh Chopra	Evercore ISI
Andrew Weisel	Scotiabank
Anthony Crowdell	Mizuho
Ashar Khan	Verition

Call transcript

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Operator

Good afternoon, and welcome to WEC Energy Group’s Conference Call for First Quarter 2023 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 open will to analysts presentation, for questions-and-answers. the conference is package In detailed conjunction call, wecenergygroup.com. a with financial this information posted at of hours The of the this replay conclusion after approximately will available be two call.

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

Gale Klappa

Thank you for Thank you afternoon, Good everyone. very much. Heartland. Live us from today. the joining

our for first of results our review we As XXXX. quarter

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

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

$X.XX news this one a from as was the reported lower a major Midwest. saw factor Now the in of mildest for the morning, history saw share. release We you of the quarter. upper our Weather first our in we winters results of earnings quarter XXXX

For quarter example, it was since XXXX. first Milwaukee in the second warmest

However, our plan XXXX. remainder reaffirming and the we're confident year our for in of we're guidance the for

fundamentals we range focused As share customer going $X.XX guiding always, we're And to of a our of weather discipline, the financial operating a normal efficiency as full-year. to for $X.XX the This reminder, on business, satisfaction. assumes forward. a remain and

and investment strong. sustainability largest are for efficiency, greater gears that investment and for look plan of clear as our the to work need at history on growth. ESG we low-risk the the $XX.X even on executable. decarbonization it's pace. is now, based billion highly drive that It's lost five-year the a in Switching plans And will projects progress The future, plan steady continues totaling megatrend plan our reliability and that are and the

on new investment than just has companies. projects report by billion Scott of the several will a last I'm but to capital since $X you Commission approved more in more that pleased moment, specific December, detail with provide Wisconsin our

discussed, to we've fund we plan need ESG for project any fully through progress of drive our our a X.X% plan from X% we that XXXX equity. will growth to without and As year expect capital compound earnings new XXXX

the Now let's regional a look brief at economy. take

news came from the average. to And at a Wisconsin. record X.X%, have in national for continue In in and the good March, latest major unemployment the well data see the area. in We low developments the state rate below we that's

fact, $X an new will by three campus purchase Microsoft a create parcel that in and approvals Local potential to being and July. the and have land Microsoft for the sector. growth in us and underscores is on more the the strength planning Just billion. it technology of a a before work. by received park South Foxconn. with meantime, Microsoft area economy purchase center close announced plans the Microsoft very we on park. of XXst of the the in data positions initial data investment center or This few in the moving with Milwaukee of In expect developed acre XXX speed is region also been our ago, to of decision ahead built complex Wisconsin full weeks that technology The design will in be Microsoft the well

all our more segment. operations Scott, turn and yours. with to for our Scott infrastructure I'll regulatory information over And our on that, call the developments,

Scott Lauber

front. a I'd with you, to like regulatory on start few Thank the Gale. updates

start for New rates Wisconsin the have been year. in of our since utilities effect the

service in for this a limited file investments to XXXX. and this projects quarter. for will planning capital The re-opener we're expected, XXXX recovery the filing into address As later of going year

by Gas expect all in for file filings North the gas for with be interveners consideration. nine the the Peoples modest up After years hearings requests making our early are The this And request and end review and on for The with be X, direct equity the we flat lower commission will project of testimony on their And rate we're rate for layer Illinois key quite have will as scheduled and we at customer you we XXXX. for and to staff will May recall, be XXXX in decision step not Gas. these equity bills set under next Shore are return are to year. without from a commissioned case Gas, and August. a infrastructure. investment People's support natural prices, The

Gas at would a result increase XX%. in into approval, subject on progress effect X.X% Michigan with layer announce rates, base Utilities. next at that's to a Resources We I'm on return equity January expect several in an Minnesota that This months. the we also and is Energy commission X.XX% Minnesota rate interim a based and of settlement settlement that in which November equity received pleased with X. we We filed and last parties reviews have went rates to

XX March, primarily our making application at reliability. by supporting for noted, Park we Meanwhile, projects. XXXX. capacity progress on approvals regulatory to since good for a three last base investments a Utilities is And driven capital rate This customers. Commission capital we in Wisconsin December. Wisconsin increase Barn X.X% last the Gale And month for we're Gas received megawatts of number filed and significant as to the of Red of clean Wind Michigan safety project service our providing went is energy

go we is Battery West Energy approval Park, Riverside planned service recall, Solar-Battery Park. you quarter West Darien approximately for last plant XXX Riverside of discussed the Alliant Solar Center We to Solar and as Darien the by cycle XXXX. megawatts February, owned gas Koshkonong in and For received the $XXX Riverside Park capacity our In Energy. approval in for of natural purchase a million. combined is

this close expect month. purchase of by We the end the to

megawatts capacity, and an that have another this we XXX purchase year. to to have exercise Riverside We option of later option planned

megawatts Koshkonong we portion storage, to XX% Park. of this in expected investment will million. We of an Battery capacity of Solar our into With XXXX. of plans purchase and battery megawatts XXX own project approval for facility with of project solar service We also $XXX the for received the go of XXX solar

also Badger solar continue Battery on the X Paris the Solar Hollow Park. facility We and

While projects Badger Chicago some are of currently remaining solar received customs panels the has through panels, in the for the going Hollow process.

Assuming of early into solar timely release the year expect year. this we parks go or to these panels, late service next

evaluating For of the Koshkonong we're battery the timing and projects, Paris investments. the

future course, you any developments. updated we'll Of keep on

in continue projects Outside now farm, our we zero make Sapphire a on In our of service infrastructure progress Wind acquisition segment. of in utilities, completed WEC February, Sky we to carbon Illinois. in

megawatts in a XX% total, and in capacity offers February, a XX% own Texas. Also project has we X in megawatts. the that an we reminder, project in of solar a of XXX XXX The located Northeast ownership capacity project Samson share. As added

the As and disclosed significant previously, energy improving the for bottom-line expect impact Samson X to continue we no site. suffered as of but at we losses. project the storm XX% producing is March, beginning every currently The day restore property damage level about at

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

Gale Klappa

much. Scott, very thank you

of the higher cash X.X%. our shareholders Now raised will as that Directors you consecutive dividends. Board marks XXth with may our recall, quarterly at reward company its year This dividend by meeting January our

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

provide financial more our will guidance. Xia and up, results second details Next with Xia? you on quarter our

Xia Liu

Gale. you, Thank

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

on page quarter package results includes first comparison drivers. significant XX. of a earnings Our the walk-through I'll

the from to the plan. more utility as This our lower, were for by in base with number offset Rate rate includes quarter rate Starting January for to increase ‘XX. operations, Wisconsin contributed by progress rate of ESG factors. our $X.XX increase our well were as compared growth utilities, Energy margin driven first both Resources, continued favorable base growth investment earnings was based earnings, a Minnesota This XXXX. interim than of effective $X.XX of X, the our which impact

decrease in the earnings, drove noted, one the first in Gale as year. of to winters compared quarter experienced First, mildest which a last we history, $X.XX of

of a variance. other, and timing depreciation and O&M, negative drove taxes $X.XX day-to-day expense, Additionally, amortization fuel interest, combined

other our normalized to let weather sales. earnings Before the discuss segments, turn I me briefly at

our page remind weather find Extreme weather package. be warm in weather the first I'd normalized that like not is our fully of information can you to earnings nine the perfect may data. sign. You quarter sales a on normalization in reflected not

were in for down X%. Having excluding said retail that, generation, power natural gas weather gas normal natural deliveries Wisconsin, used

X.X% weather relatively Weather last retail normal However, deliveries, normal mine our flat, of again excluding ore usage year. iron That to a lower. forecast. the on residential ahead Residential basis was X.X%. usage, electric was compared were grew

higher by largely quarter first of in Energy of Production Southwest of acquisitions first compared Infrastructure we year by market resolution resulting renewable ’XX. offset earnings of Power recorded in segment, settlements a the last credits was the Now tax first from projects. Pool. lower from quarter the at $X.XX $X.XX to were pickup the generation in This increase were quarter-over-quarter, the quarter ’XX, our that

from items. is our and the pickup favorable fund. quarter segment interest items by trust trust partially recorded our offset a expense other by other primarily rabbi clean largely Finally, you'll tax in and corporate and ‘XX see that rabbi performance performance energy in O&M. in These earnings $X.XX, driven and first an some were at in decreased investment the offset increase Remember,

Wisconsin $XXX ‘XX. quarter expenditures an on statement primarily flow the segment, six Generation our This of recovery in the provided this the farm by net and and by the page X Samson mild in decreased quarter acquisition of driven facility contributed Whitewater costs Power timing earnings as cash cash Sapphire from solar Wind Sky Total $X.X Gas winter ‘XX, Natural well to the capital $XXX of the was of our segment. at infrastructure acquisitions of million now commodity first the billion The in operating facility million. first as increase were Looking package, activities decrease. asset and of

normal Gale as offset guidance implementing the of share weather earlier, the of we're of first $X.XX a reaffirming for To our closing, per $X.XX mentioned year. In weather initiatives. rest quarter impact, mild variety assuming XXXX we're to the earnings

we higher expectation now to to XXXX versus X% than day-to-day higher. result, X% expect a As previous X% our O&M X% of to be our

the year second-half largely than expense, in fuel O&M expect and that the be due add materially of also timing will to this we of I second-half XXXX. better of to earnings

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

share we in per a quarter As reminder, year. last $X.XX the earned second

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

Gale Klappa

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

Operator

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

Gale Klappa

Good those afternoon, still Are Shar. you using pillowcases?

Shar Pourreza

rest of the issue. the match doing? you don't are the house Yes. though, they But that's How

Gale Klappa

We're How about fine. you?

Shar Pourreza

bad, too too bad. not not Good,

So, Gale, one quick a here.

half So, hybrid like attractive these a at dozen convertible issued notes have like utilities rates. pretty

in basis some no there. obviously XXX cases, rate interest I There's points of savings. think like equity it's credit

So, you [Indiscernible] help like be sense? to cue just hybrid obviously, you that see get guess, you've seen securities by I plan. don't any mean, value some being peers your there's to even it make -- we're these fund it of it, Does your but… if want five-year need to with equity. released language from around I to sense the kind any waiting for utilized whether see I

Gale Klappa

our us, course take this a Shar. would me as question, hard We've of of we too through found that this, more just the cash we if today it good look of than found product. the hard we a go Shar, let issuance we for at and say -- of companies A are really that a remainder Xia? was have announced XXXX there well it sector through doing against in if even taken very look. debt our certainly good convert we're pay plan Yes. announced But the use number And for and advantageous XXXX, the halfway, budget. clearly,

Xia Liu

than whether notes understand so transactions. And made But Yes, fit cash time, so… at pros quite pay criteria. as and fit any not rate, bit -- we much planned we've We aware really cons. our this the and not convertible of done really we're the far we've better to have a very add, those done well, decision financing

Shar Pourreza

option -- want then Xia, looking language I just plan the be potentially there queue, hybrids front-run any an there And as around or is but don't the not? fund at will to to

Gale Klappa

about are the hybrids Shar, or talking about talking you both? you converts are or pay cash

Shar Pourreza

These or you them cash want call to pay this whatever at converts or point? hybrids

Gale Klappa

any the… don't queue language I think planning that in there's we're the of

Xia Liu

at No, we this haven't point. planned that

Shar Pourreza

I in filed which just then lastly appreciate cases It's of think January. how data Any but the this And Gale, going? off, anything about? thoughts, Is been a gas point potentially tailwind. obviously, the have since should will Okay, guess, have there on prices come case, it’s I thinking help that. be dialog perfect. Illinois, hopefully actually points not settling at has I were the lot a on then, we

Gale Klappa

to early very too settlement in the Illinois. was way Way, going think even The or Yes. about process process smoothly. along in contemplate

much mentioned as May and be X. commodity costs next gone. The staff I in in Illinois far, moving his increase remarks, with And that testimony think flat they've for process we lower historically our increase step point the But base favor, costs, a exactly filed steps, seeking, for full will they the as story bills your on case. in the to XXXX. and in Scott even combine base expect with we But short, commodity data we're you responding about moved rate -- to to our requests. next even favor that intervenor is the going customer so we're prepared XXXX granting be even long more bills in since

Gas years. about first in in And when actually the So, we're at filed, the rate company, what lower recall, company of look acquired base think a will be, as this just increase base the facts you for Peoples -- rate what again, our nine acquired is that's we And when you good actually increase XXXX. the year we news. we very basic may $XX O&M since first than million we

a story. pretty good So,

Shar Pourreza

Thanks. Congrats guys. great it. and Terrific, execution far. Appreciate so a Perfect.

Gale Klappa

Thank you, Shar.

Operator

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

Julien Dumoulin-Smith

the are no How Hey. dog you able mix. we'll yet, doing? in be -- Gale, but we're to

Gale Klappa

yet, question. okay. my dog stole You No

Julien Dumoulin-Smith

free air, Shar some where you was to to with Trying know. that. going me you. Lies let follow-up up Listen,

be thinking been thoughts the without you place of future the gas, think circumstances How on you bills? it the the to of any out longer-term the Peoples front? And talking also QIP on tackle, respect how has et should in I over. I'm but you moderating about OpEx gas separately, traditional that think to little -- as of sort the we response items, some Any just of some mitigating bit then has scrutiny with in a the investing CapEx in bill to and pressures. here, just So, do versus there, just case about of, about the some obviously mean, do rolled how here-and-now cetera., the sense? that

Gale Klappa

want Yes. you Good dog. question, Julien. And let me help know, to I name the

So, let me know.

and program program modernization carrying out QIP Chicago. in the On the upgrade in investment the pipe program, been we've safety the that

natural Chicago, upgrading most the we've country. deteriorated delivery gas invested which say to a City about now, and the we the of program. Commerce of the the first that the of average, about policy really in public oldest, future debate in me $XXX make is, it the just Illinois in million Let And decision welcome network year the the put pipe way, Commission will one by perspective, the and on under that networks

So, complete upgrade investing plan, long XX% and with story a about again, we're $XXX almost the pipe year. million short,

think do who something different banking those should are on Now, electrification. we

our engineering have independent then delivery ordered bets the left So, a of less. have Commission accepted, has -- electrify than pipes to would that than form and that continue life And more network study in Illinois of completely or to or, independent the the the some not useful because the shows Chicago years Chicago XX-years. make XX% XX study XX-years, can Commerce program in you iron that lastly in less under is

those continued be some are just Julien, pipes. who to when in I'm not, some And money. patched. after then any the you would patch it customers at can't be after that of save say, look our patch patch, telling you O&M lastly, estimation, there the pipes well, And would patch required

future an both increase, cover our a there so other is think here rate warm. what the the we we that keep under Chicago is could of a hydrogen cost do and to program if program. deliver, very say, base you secondly, delivery to think proposal the no-carbon So, continue preserve long-term evidence important as would then of will, overwhelming We for fuels to Chicago, where to or safety immediate annual network

that So, response I hope helps.

Julien Dumoulin-Smith

rights venue give you're and a I wants I you, case looking if Absolutely quickly. appreciate vision a If some this et how spending, in the extent pace rate It which new you respect the place, new to to going, right? I'm got naming I avenue, should -- for to that are through right you this to be it. ICC back does. will to direction not ICC think the come Thank Gale. I the -- [Technical indeed. here, to on the to you articulate to the where to the I super can, cetera., your will process, of though mean, I things you. just think With sort mean, bet want the other trying Difficulty] about will? There's response proposed We've

Gale Klappa

there program, Well, program, in But requests extensive, et you welcome about expect, as have would there dialog. rate of about kind wanted need dialog. of there multiple this this any are review, about and the the requests to the as cetera. kind data there the data of particularly but future we are are are the program, for We

I So, with you. agree

the that the And X of next earlier, proceeding under will, forum we made. the when is normal decision requests. said this step policy is formal and we you May have if expect everything to think intervenor the I data proper be schedule, would And testimony. as staff now,

Julien Dumoulin-Smith

right? color. Thank [Technical next you. care. Difficulty] and You for week, you take thank Right. Yes, look we’ll

Gale Klappa

Take Julien. Thanks, care.

Operator

JPMorgan the Tonet ahead. of Jeremy Your with line next Chase. Please, comes go from question

Gale Klappa

or, Bank Republic know… to moving you you are Jeremy,

Jeremy Tonet

there. say to Nothing

Gale Klappa

There go. you

Jeremy Tonet

I as you being to weather kind back, of guess, happened there. tool O&M offsets think the kind in we of wanted come impacts the -- Just this to Should and as quarter just as about shape the And offset up the across could or the just there to give might quantify the balance -- that and more color main any for year? of wondering year. if over the you how

half, a said lightens kind you in up the think of I bit. back it

color So, helpful. there could be any more

Gale Klappa

to Yes. specifics. do ask Xia will We'd you to happy be some and give that

a couple Let things me for frame you. of

experienced all, of pretty road before. a we've down got team, been First we've this management

and company, the well have They every There of So, and playbook, section. initiatives department, every every we have the have implemented. been plans a pretty playbook has are group in tested goals. O&M they

big related is it a So, costs. part obviously of maintenance day-to-day to and operation

with big for the seeing. compared then And positive our interest cost the briefly Another you forecast this and QX kind of to difference sharing again, Scott I'm into and to ask and deep of is we're bands savings through compared us, last year, were QX going QX our QX see budget of to and that when walk customers. in that Xia our we really year to we

off let to year. last why QX we'll some the Xia, you, and bands -- then with So, Scott don't specifics? impacted talk really ask QX we'll we start and that sharing about And

Xia Liu

Sure.

So, was about QX mentioned weather remarks. $X.XX deficit the prepared I in as

O&M identified we've $X.XX, $X.XX, So, $X.XX offset of can target that reduction that.

the We conservative assumptions financing built some plan. also in

execution we the lower of financing debt also. than continued to So, savings expect in year, to or $X.XX at terms issuing plan be rates later this the $X.XX

initiatives beyond at have two weather offset two deficit. we other also QX But those we're we could those items, between looking the So, items.

Scott Lauber

where of fortunate sharing you year, last with then have remember years actual in very the half a into we've when be customers. think been to be -- band about sharing the we're you the last to And several Sure.

able million. our year, we $XX about to request think last reduce I were fuel

half, weather, accelerate in So, customers. the quite we to year. the when And half we additional do a last think had last remember, some warmer-than-normal you or for so able bit spending of charges were that's our about

we incurred plus costs So, O&M the band. sharing additional

the So, year year, -- that see was meaningful this of shaping for we the half coming to up. last compared

Gale Klappa

don't this customers obviously bands ourselves into see we sharing with point, Scott's the year. to And

of costs So, to I won't quarter XXXX, that million the XXXX. second-half of fourth and of basically reappear compared the third think in $XX terms of in

Jeremy Tonet

wondering to it. on you And a touched very there. it bit just helpful chain. bit prepared thoughts just just guess, to you solar. general? in ongoing solar to I tariff But supply President's just Got that the on And and as supply solar Thanks. efforts remarks congressional know wondering, thoughts two could shifting on the years if I That's the in you a this relates suspension or any chain the share have revoke there

Gale Klappa

any Well, effort my Biden particular is President understanding that said that undo would veto he to initiative.

one's Scott, need again, solar as his sure for project not II Badger Solar I'm in in for utilities, Paris our for in remarks, Chicago? and our meantime, got hanging that solar anywhere, Hollow Wisconsin regulated all Battery Wisconsin prepared for the Scott but our in So, indicated going project, panels in utility, the warehouse we our we

Scott Lauber

commission course, They're the of we're in future other the projects, them the to options available U.S. future warehouse. customs that those has with including alternatives Chicago, in the in get potential that working just approved. out for at projects of future warehouse to And looking source we're

Gale Klappa

and night, Scott one wouldn't the that in. went down let I warehouse Doberman Jeremy, us but to

we know those there. panels are of all So,

Jeremy Tonet

future Got it in tranches here. it. not-too-distant as one shape one helpful. relates if That's the then and kind I last future MISO could, transmission just taking of, to maybe, quick And

reform wondering for you permitting, on updated what WEC Just down the thoughts could had mean if road? or MISO any outlook the

Gale Klappa

progress may announced out with And to to need the just related there not generation guessing, coming project. upside any would to plan. transmission basically Scott? the transmission X and any terms current that, of MISO that at reform again, even Phase that investment development of mentioned major much all are in plan the game. Microsoft, permitting in And on way incremental needs early quite this Tranche that X, we Microsoft as the of on favorable being economic stage project stakeholder works project then of what saw Tranche opportunity see addition X. in in process, Don't its greater But or some I of I'm particular indications was be the the on than the through be additional

Scott Lauber

X No, of was a Tranche And of a reminder, also that's lot using correct, existing ways. Gale. right

of happy able be started using in time we're ‘XX right in ‘XX, ways earlier that that frame, So to construction time very frame. existing to get

Jeremy Tonet

it. helpful. Thank you. leave it I'll That's Got there.

Gale Klappa

you, Jeremy. Thank

Operator

go line Sullivan Wolfe Research. Your next the Michael ahead. of question with from comes Please,

Gale Klappa

Hey, Michael.

Michael Sullivan

Gale. Hey, you? are How

Gale Klappa

We're good. about How you?

Michael Sullivan

back Okay, just the O&M. to yes. No, doing great. Maybe

going a was little tick it this to up understand, bit year. So,

Now of back you're offset weather. kind pulling that the help to

As we of was think we beyond think and the know trajectory? XXXX, about you the should kind in to a the it record how this of was first time have track year bringing I down, it up? set a step while

Gale Klappa

Yes.

X, for X and and Scott? retirement I And reminder, a think future X, along of at be at as reduction. and substantial you a older of the near-term Units Creek another scheduled And with come we X retirements. are and year, X X site, look X, chunk units to X. O&M in the Units past the have XXXX, chunk XXXX. related Oak are next O&M four retirement, going And seeing then just Units to will that, when we're reduction planned

Scott Lauber

No, you're exactly right.

As the will and this the and a over units go -- that's we new into we the that this lot remember, put the including the O&M on driver those the also down. rice additional But infrastructure, as system. plants in and plants run putting capital to all service O&M. year of new last O&M new wacky plants we're year increases was We put added those in for retirements,

capital So, investments. really supporting

Gale Klappa

benefit thought investments investments, are that fuel final on that actually they're the there's the coming Scott And is stages replace the costs. in to making we're saying, another investments other completion. online what solar and to online, we're adding energy, that producing when Those of one particularly,

of coming going also because to the solar chunks simply addition the costs, units, retirement O&M obviously fuel reductions we're fuel coal-fired is here of and free. savings see in in to forward So, from older wind, with

Michael Sullivan

helpful. there how to shutdown base, retirement shifting pushed Okay. that, just all And in and of That's to timing down move Just do -- in extent that have are assets to any around? that across a the your warehouse or business of little you the are of we risk you and the tying rate I issues extent solar and detail. other kind and supply that coal solar you Is implications that? related those the the to just are of that, earning the chain the on to things the the see kind the terms with other panels projects very what get bit? that appreciate to react

Gale Klappa

the and need Well, retirement commission very, dates of those older any change those XXXX further very during construction terms And units, delays, then get the four projects. remember, we're we that we to of XXXX a and don't the on solar believe, B supportive each Scott, the see for have I to AFUDC answer we of plan here can't continue earning units. again, is to get your if second part potential the will question That, finish coal-fired schedule. clearance clearance projects, got period. the to retirements the be of in of we've two for And regulated projects. the But these are in

Scott Lauber

released. the are panels we're get Correct. the continuing when they construction, to so And solar site-ready

and moving is And the So, along Hollow need just Badger construction and nicely. well Paris pretty we done. II, panels, Hollow Badger is Paris II solar

those panels long So, ready, them take to are it won't pop up.

Michael Sullivan

Great. lot. Thanks a

Gale Klappa

Take care, Michael.

Operator

next Your ISI. with the of Durgesh question go ahead. Evercore Chopra line from comes Please,

Gale Klappa

Wow.

Durgesh? eight got Jersey You've the number on,

Durgesh Chopra

Gale. I about don't that, know

Gale Klappa

Still know. Eagle I know. right? fan, I die-hard

Durgesh Chopra

still hurts, It hurts. it still

Gale Klappa

sorry. I'm

Durgesh Chopra

year. Okay. We'll back the be next

Gale, the I a ton discussion make you the had as just, go We've wanted back here filing. So, reopener. to to

those approved, for. equity remarks are projects for not right be in that talk his already for opening I will CapEx quarter? the can you you these as I as ROE extent help that in in file not you're looking you so us Am necessarily you mentioned Scott then what these And make for seeking thinking filings it's layer. just we are about the about sort Maybe frame think of -- the projects? to can filing prudency of that that at, you projects

Gale Klappa

out ask I will Scott as well. to Sure. help

the for and correct, does the layer you and in reopener and projects of by defined they're as the this commission. limited limited up equity reopener, I not filing So, -- the approved you This -- have be rate correct. will in There's roughly ROE all already order, the yes, recovery we reconsideration. are for not set are are that mean, been

So, correct. that is absolutely

of that that about correctly, it's reopener? in, Scott, I coming And recall be capital into $X will billion if

Scott Lauber

Yes. about to about reopener. $XXX don't reopener, at are was we the put the like number exact when in so that, of But Riverside be my Western for part that'll the now be a It's going fingertips. approximately reopener. talked think those full-year, that approved projects we'll I you units, that into million it's have rice the The

these So, of are these of the part some capital projects. full-year, are year actually of some

Gale Klappa

one our LNG projects. LNG, And of

Scott Lauber

LNG The projects. Yes.

across So, it's additions. up electric with capital really truing the just and gas,

Durgesh Chopra

then this Scott. Thanks, as talked it. of be request. that included part the you've limited previously O&M also be a part that could part Is of to filing limited of about Got savings And reopener filing? reopener or

Scott Lauber

is we those here and The units the Sure. Oak retirement of filed we at year, for doing O&M the what -- case piece units. Creek is May Remember real a really end Oak of Creek them. and we're the those now extended that then XXXX. X, older X And closing last

put be to in the we reduction factor case. So, for us order O&M into the that that'll that the actual

Gale Klappa

environmental exactly largest of right. control won't units closure those are all units retired, Durgesh, for will until are units Scott for come the at when retiring reduction the all older Oak four we O&M is reduction operation really site offline. And, the be largest -- because O&M that The Creek from the

Durgesh Chopra

time. Got Thank super-helpful, guys. it. That's appreciate you. the I

Gale Klappa

Take Durgesh. welcome. You're care,

Operator

Andrew Your comes line ahead. next from question with Scotiabank. Please, Weisel the of go

Gale Klappa

Andrew. Greetings,

Andrew Weisel

everybody. afternoon, good Hey,

the I First on for minus when? know if question your that cost. full-year you reverse? fuel XQ based waterfall. fully the curves? What's And on Do so, current to that's expectation expect in timing $X.XX of

Xia Liu

-- We Xia. is this timing. Andrew, that's purely

that expense, in the and expect booked We second quite happen. of that third to year, to Gale mentioned, quarter. the the we recover last quarter band like don't that because throughout bit sharing a of and we expect and Remember fourth fuel

fuel in earnings. in So, we terms see a impact on pickup in of

Gale Klappa

So, We'll half a see purely timing. turnaround. second

Andrew Weisel

trends. if on usage. And then you little the Thanks. demand elaborate bit Okay. a Xia, on could

adjusting trends? the expected came you How any residential electric the on much for changes of weather. side, weather, all But in I around just think gas down. than notable that do demand customer you were classes noise is or extreme better see said the in

Xia Liu

Yes. A weather accepted noise of lot I said. around like normalization,

weather-normalized expectations. perspective, the sales forecasted met put our just it to So, in residential

of those we So, or -- we segments. the a diverse very to food, good growth of call on essential plastic, And we lots oil industries, paper, in and of services exposure the like first higher-margin really And reminder, gas just a we front, the C&I are quarter. and which provide industry. had automobile many have processing, a don't have mix

we trends And really haven't feel the really any our we good mix. about recession in industry So, territory. of potential seen service any

XXX So, regularly. large about over customers little we a track

those of year-over-year, to quarter that the Therefore, almost of variance because And year-over-year. contributed the first non-economic two were half down negative reasons. substantially in of

So, the one fire, had a had other an outbreak.

to expect the we normal of those through to the rest return So, year.

role So -- played again, and numbers. weather noise these normal in a

to numbers right overreact wouldn't these So, now. I

Gale Klappa

you this only accurate QX, company, but heard techniques deviations and when long saying, the gazillion me for of I the weather they is not Xia basically standard for deviations the from are say what who are. a the you reliable away on far followed from get mean, from time, of more precise just you, times, norm, industry the normalization techniques in normal. terms I you've were two can build to us look a less our weather and as just normalization you a than the across further the whole, those temperatures away And Andrew, tell at for standard Yes,

wouldn't just numbers. again, QX as said, general too So, much into caveat, as Xia read a

Andrew Weisel

Okay.

very be you to wanted much. sure. Just Thank

Gale Klappa

No, thank you.

Operator

ahead. next go line Please, Mizuho. Anthony question of comes from Your with Crowdell the

Gale Klappa

Hey, Anthony.

Anthony Crowdell

afternoon, Gale. Good

Gale Klappa

dog a name? got to We've

Anthony Crowdell

Doberman. that That for thinking may work warehouse was Julien. I

Gale Klappa

naming bad Hey, of go But, take all Anthony. the input I'll your dog on idea. not a for Julien. ahead,

Anthony Crowdell

and we're maybe So, its have when come then it, getting rid XX-years on or of you had piping and if talk in carbon, we think XX-years took it, do question ago C&I Andrew, ago of gas Xia sales. your curious, think on comments of nuclear iron back sudden, earlier LDC? rid could we maybe the I a about a all just how to the realization similar we moment of how in pivot I zero and importance just I'm some and think generation, getting we're recession just my If we of the Chicago.

we think bring more that, -- realize area to dependent that Midwest its that asset if And to locations where within the if the it, as do, retire that, we as on parties electrify this you XX-years is is? be that's closer it you such valuable up we to get how going we recognition there to do colder hey, wanted do -- have

Gale Klappa

Anthony. of epiphany do when will know couple that's there but epiphany I are Yes, question, here moment. great that occur, be And a a will exactly an moment Don't thoughts. think

XX-years first be would what be? and the step are build then think is let's can heating. have you electrify how replace by, kind The And we the gas generation you needed of you take say, next would to from going say, completely now, generation to that that to if

equation, winter the Well, think much in January when days the in heating heavy on So, of generation. I is working gas February, on solar And a moment. in count start amount what, how through count tremendous epiphany you that the about right? you clunking an up in Midwest guess How will January When could the into wind be you think February? could It's people needed cold and power much and and plan end there quite particularly gas-fired most. February? January

that's part think I it. of

of cost and hydrogen natural some blend we more IRA, this RNG, -- mean, our we to as hubs network. renewable gas I from summer, natural already more evolution see the to We're utilities and begin beginning the under will fact, is, continue see other to effectiveness the are continue we then as in And blending hydrogen gas. hydrogen gas, blend to with beginning into

I So, see going think to that begin be Yes, no-carbon through an or about you're to sticker. valuable having we past-the-bumper low a future. as as how people think moment transition resource will to epiphany

it I another way. mean, about think

no-carbon delay transition, will that sacrifice to it we to reliability on get We years. many, a And many right if future. got this have transition the transition many, for

approach we're all safe back approach will a practical the and we're this the I where moment we to to have to, of recognizes and everybody this. to So, above back the think,

Anthony Crowdell

as Thanks much. Gale, so always. Great,

Gale Klappa

Thank you, Anthony.

Operator

line with Verition. Khan Please, Our the ahead. Ashar from final question go of will come

Ashar Khan

had How questions Hi. which we quarter? down my Most why the been I second are quarter-over-quarter the you quarter? just with a the doing? Could expect variances second small guys in me of you are in one. you have Xia, answered. just help

Xia Liu

Sure, I'd be to. happy

QX costs year. financing are compared to So, be higher to expected last

growth than big do we rate a but better offset year, last minuses, There is year. financing last is plus expected but base have and that's by better Fuel So, costs. that's be driver. to than largely

Ashar Khan

Thank Okay. you so much.

Gale Klappa

sorry. is Terrific. -- oops, more? think there Well, folks, I'm concludes I that

Operator

now turn remarks. to I'll concluding call back you, over for any Mr. Klappa, the

Gale Klappa

you. you There feel concludes for conference for Thank Straka, we Thank questions, so Well, have our Take to again. today. participating much that everybody. contact go. And as XXX-XXX-XXXX. free I Thanks additional jumped care. Beth call always. you, if

Operator

for Thank joining today's you meeting.

You may now disconnect.

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