WEC Energy Group Q4 2021 Earnings Call Transcript

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Provided by Quartr
February 2, 2022

Key Takeaways

  • Beat guidance with $4.11 EPS in 2021—driven by favorable weather, regional economic recovery and operating efficiency—while maintaining strong cash flow to fund capital projects without issuing equity.
  • Aggressive carbon targets: aiming to reduce emissions 60% by 2025 and 80% by 2030 from a 2005 baseline, exit coal by 2035 and reach net-zero power generation by 2050, including a first-of-its-kind hydrogen pilot with EPRI.
  • $17.7 billion ESG progress plan over five years, featuring nearly 2,400 MW of renewables, designed to grow the asset base ~7% annually and deliver top-decile dividend increases.
  • 2022 outlook reaffirmed at $4.29–4.33 EPS (≈7.5% growth) with Q1 guidance of $1.68–1.70, and a 7.4% dividend boost marking the 19th consecutive annual increase.
  • Ongoing utility and infrastructure investments include Badger Hollow solar phases, LNG storage, renewable natural gas contracts, wind-farm approvals/acquisitions and $1.9 billion planned spend in the infrastructure segment.
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Earnings Conference Call
WEC Energy Group Q4 2021
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Operator

Good afternoon, and welcome to WEC Energy Group's conference call for fourth quarter and year-end 2021 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 involves risks and uncertainties that are subject to change at any time. Such statements are based on management 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. During the discussions, referenced earnings per share will be based on diluted earnings per share unless otherwise noted.

Operator

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

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Well, good afternoon, everyone. Thank you for joining us today as we review our results for calendar year 2021. First, I'd like to introduce, as always, the members of our management team who are here with me today. We have Scott Lauber, who's now our President and Chief Executive, Xia Liu, our Chief Financial Officer, and Beth Straka, Senior Vice President of Corporate Communications and Investor Relations. As you saw from our news release this morning, we reported full-year 2021 earnings of $4.11 a share. This exceeded the upper end of our most recent guidance, which was $4.07 a share. Our positive results were driven by favorable weather, solid economic recovery in our region, and our continued focus on operating efficiency.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Our balance sheet and cash flows remain strong, and as we've discussed, this allows us to fund a highly executable capital plan without issuing equity. I would also note that the earnings we're reporting today are quality earnings with no adjustments. Now, as you know, we've been very active in shaping the future of clean energy. Looking back on 2021, we set some of the most aggressive goals in our industry for reducing carbon emissions. Across our generating fleet, we're targeting a 60% reduction in carbon emissions by 2025 and an 80% reduction by the end of 2030, all from a 2005 baseline. In fact, by the end of 2030, we expect our use of coal for power generation will be immaterial, and our plan calls for a complete exit from coal by the year 2035.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Of course, for the longer term, we remain focused on achieving net zero carbon emissions from power generation by 2050. Now, we all recognize that advances in technology will be needed to decarbonize the economy by 2050. Hydrogen, of course, could be a key player, a key part of the solution in the decades ahead. To that end, we announced last week one of the first hydrogen power pilot programs of its kind in the United States. We're joining with the Electric Power Research Institute to test hydrogen as a fuel source at one of our newer natural gas-powered units located in the Upper Peninsula of Michigan. The project will be carried out this year, and the results will be shared across the industry to demonstrate how the use of hydrogen could materially reduce carbon emissions.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Switching gears now, we're driving forward on our $17.7 billion ESG Progress Plan, the largest five-year plan in the company's history. The plan is focused on efficiency, sustainability, and growth. One of the highlights is the planned investment in nearly 2,400 MW of renewable capacity over the next five years. These renewable projects will serve the customers of our regulated utilities here in Wisconsin. Overall, we expect the ESG Progress Plan to support average growth in our asset base of 7% a year, driving earnings growth, dividend growth, and dramatically improved environmental performance. In summary, we believe we're poised to deliver among the very best risk-adjusted returns our industry has to offer. Now let's take a brief look at the regional economy. We saw a promising recovery throughout 2021 despite the prolonged pandemic.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

The latest available data show Wisconsin's unemployment rate down at 2.8%. Folks, that's a record low and more than a full percentage point below the national average. Importantly, jobs in the manufacturing sectors across Wisconsin have returned to pre-pandemic levels. Major economic development projects are moving full steam ahead. HARIBO, the gummy bear company, is now recruiting workers at its brand-new campus in Pleasant Prairie. Komatsu has begun relocating employees to its new state-of-the-art Milwaukee campus. Milwaukee Tool downtown office tower is set to begin operations this month, and we see more growth ahead. For example, ABB, a global industrial and technology company and Saputo, a leading dairy products company have announced plans for major expansions in our region. Finally, you've heard the phrase, "A rising tide lifts all boats."

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Well, I'm pleased to report that one of the most celebrated luxury boat makers in the world, Grand Craft boats, is relocating its operations from Michigan to the Milwaukee region. You know, J.Lo, George Clooney, Robert Redford, they're among the high-profile clients of Grand Craft, so it'll be interesting to see who shows up, you know, below deck at our next analyst day. Bottom line, we remain optimistic about the strength of the regional economy and our outlook for long-term growth. With that, I'll turn the call over to Scott for more details on our utility operations and our infrastructure segment. Scott, all yours.

Scott Lauber
Scott Lauber
President and CEO at WEC Energy Group

Thank you, Gale. Looking back, we made significant progress in 2021. I'll start by covering some developments in Wisconsin. As Gale mentioned, we're continuing to make progress on the transition of our generation fleet and our ESG Progress Plan. I am pleased to report that our Badger Hollow I solar project is now providing energy to our customers. You'll recall that we own 100 MW of this project in Southwest Wisconsin. We have also made progress on the construction of Badger Hollow II. Currently, we expect an in-service date in the first quarter of 2023. This factors in a delay of approximately three months due to ongoing supply chain constraints. We do not expect a material change in the construction costs. In addition, the Public Service Commission has approved our plans to build two liquefied natural gas storage facilities in the southeastern part of the state.

Scott Lauber
Scott Lauber
President and CEO at WEC Energy Group

Construction has started, and we plan to bring the facilities into service in late 2023 and mid-2024. We expect this project to save our customers approximately $200 million over time and help ensure reliability during Wisconsin's coldest winters. We recently signed our first contract for renewable natural gas or RNG for our gas distribution business. We'll be tapping into the output of one of our large local dairy farms. The gas supplied each year will directly replace higher emission methane from natural gas that would have been entered our pipes. This one contract alone represents 25% of our 2030 goal for methane reduction. The Wisconsin-based company, U.S. Gain, is planning to have RNG flowing to our distribution network by the end of this year. The commission also approved the development of Red Barn, a wind farm in southwestern part of the state.

Scott Lauber
Scott Lauber
President and CEO at WEC Energy Group

We expect our Wisconsin Public Service utility to invest approximately $150 million in this project and for it to qualify for Production Tax Credits. When complete, it will provide WPS with 82 MW of renewable capacity. Just this past Monday, we filed an application with the commission for approval to acquire a portion of the capacity from West Riverside Energy Center. West Riverside is a combined cycle natural gas plant owned by Alliant Energy. If approved, Wisconsin Public Service would re-acquire 100 MW for approximately $91 million. That's the first of two potential option exercises. We expect the transaction to close in the second quarter of 2023. Looking forward, we expect to file a rate review for our Wisconsin utilities by May. We have no other rate cases planned at this time. Turning now to our infrastructure segment.

Scott Lauber
Scott Lauber
President and CEO at WEC Energy Group

The 190-MW Jayhawk Wind Farm located in Kansas began service in December. We invested approximately $300 million in this project. Overall, we have brought six projects online in our infrastructure segment, representing more than 1,000 MW of capacity. As you'll recall, we expect the Thunderhead Wind Farm to come online for the second quarter and the Sapphire Sky by the end of this year. Including these two projects, we plan to invest a total of $1.9 billion in this segment over the next five years, and we remain ahead of plan. With that, I'll turn things back to Gale.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Scott, thanks so much. We're confident that we can deliver our earnings guidance for 2022. We're guiding, as you know, in a range of $4.29 a share to $4.33 a share. The midpoint, $4.31, represents growth of 7.5% from the midpoint of our original guidance last year. You may have seen the announcement that our board of directors at its January meeting raised our quarterly cash dividend by 7.4%. We believe this increase will rank in the top decile of our industry. This also marks the 19th consecutive year that our company will reward shareholders with higher dividends.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

We continue to target a payout ratio of 65%-70% of earnings right in the middle of that range now, so I expect our dividend growth will continue to be in line with the growth in our earnings per share. Next up, Xia will provide you with more detail on our financial results and our first quarter guidance. Xia?

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

Thanks, Gale. Turning now to earnings. Our 2021 results of $4.11 per share increased $0.32 or 8.4% compared to 2020. Our earnings packet includes a comparison of 2021 results on page 17. I'll walk through the significant drivers. Starting with our utility operations, we grew our earnings by $0.10 compared to 2020. First, weather added $0.04, mostly driven by colder winter weather conditions compared to 2020. Second, continued economic recovery drove a $0.09 increase in earnings. This reflected stronger weather normalized electric sales, as well as the resumption of late payment and other charges. Let me give you some highlights on our weather normalized retail sales. Overall, retail delivery of electricity excluding the iron ore mine were up 2.6% compared to 2020.

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

We saw a continued economic rebound in 2021 in our service territory. Small commercial and industrial electric sales were up 4.4% from 2020, and large commercial and industrial sales, excluding the iron ore mine, were up 5.1%. Natural gas deliveries in Wisconsin were relatively flat, excluding gas used for power generation. Lastly, rate relief and additional capital investment contributed $0.14 to earnings. Lower day-to-day O&M drove a $0.03 improvement. These favorable factors were partially offset by $0.17 of higher depreciation and amortization expense and a net $0.03 reduction from fuel costs and other items. Overall, we added $0.10 year-over-year from utility operations. Earnings from our investment in American Transmission Company decreased $0.02 per share year-over-year. The positive impact of additional capital investment was more than offset by two factors.

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

A 2020 fourth quarter that benefited 2020 earnings and an impairment that we booked in the fourth quarter of 2021 on an investment outside of the ATC service territory. This substantially wrote off all of the goodwill on the project. Earnings at our energy infrastructure segment improved $0.06 in 2021. This was mostly related to production tax credit from the Blooming Grove and Tatanka Ridge Wind Farms. Finally, we saw a $0.18 improvement in the corporate and other segment. Lower interest expense contributed $0.07 year-over-year. Also, we recognized a $0.04 gain from our investment in a fund devoted to clean energy infrastructure and technology development. The remaining positive variance related to improved Rabbi Trust performance and some favorable tax and other items. In summary, we improved on our 2020 earnings by $0.32 per share.

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

Looking now at the cash flow statement on page six. Net cash provided by operating activities decreased $163 million. The increase in cash earnings was more than offset by working capital requirements, mostly related to higher natural gas prices. As we resume normal collection practices in the spring, we expect working capital to improve throughout the year. Total capital expenditures and asset acquisitions were $2.4 billion in 2021. This represents a $471 million decrease compared to 2020, due primarily to the timing of the in-service date of Thunderhead Wind Farm. Turning now to financing activities. We opportunistically refinanced over $450 million of holding company debt during the fourth quarter.

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

This reduced the average interest rate of these notes from 4.5% to 2.2%. We continue to demonstrate our commitment to strong credit quality. Adjusting for the impact of voluntary pension contribution and the year-over-year increase in working capital, our FFO-to-debt was 15.7% in 2021. Finally, let's look at our guidance for sales and earnings. For weather normalized sales in Wisconsin, we're expecting 0.5% growth this year in both our electric and natural gas businesses. Continued growth after a very strong year. In terms of 2022 earnings guidance, last year we earned $1.61 per share in the first quarter. We project first quarter 2022 earnings to be in the range of $1.68 per share to $1.70 per share.

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

This forecast assumes normal weather for the rest of the quarter. As Gale stated, for the full year 2022, we are reaffirming our annual guidance of $4.29-$4.33 per share. With that, I'll turn it back to Gale.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Xia, thank you so much. Overall, we're on track and focused on providing value for our customers and our stockholders. Operator, we're now ready to open it up for the question and answer portion of the call.

Operator

Now we will take your questions. The question and answer session will be conducted electronically. To ask a question, please press the star key followed by the digit one on your phone. If you are using a speakerphone, turn off your mute function to allow your signal to reach our equipment.

Operator

We will take as many questions as the time permits. Once again, press star and then one on your phone to ask a question. Your first question comes from the line of Shar Pourreza of Guggenheim Partners.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Rock and roll, Shar. How are you doing today?

Shar Pourreza
Senior Managing Director of Energy, Power, and Utilities at Guggenheim Partners

How you doing, Gale?

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

All good.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

We're good. We're good.

Shar Pourreza
Senior Managing Director of Energy, Power, and Utilities at Guggenheim Partners

Excellent.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Yeah.

Shar Pourreza
Senior Managing Director of Energy, Power, and Utilities at Guggenheim Partners

Excellent. Just, [audio distortion], I know this seems like a perennial topic at this point, but any sort of thoughts on the potential end of QIP in Illinois? It seems like efforts to eliminate it are getting traction yet again with, you know, obviously piece of legislation. There was a press conference on Monday. It's scheduled to expire, so what are your thoughts here? I mean, it's a little bit noisy, just high level would be great.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Terrific, Shar. Thanks for the question. First of all, this is really nothing new. Each year, late in the session for the past five years, a bill has been introduced. Very similar bills have been introduced each year for the past five years. We don't expect any significant movement in that piece of legislation, just exactly as what happened in the last five years. You are correct. Under current law, the QIP rider that allows us to put into to basically begin earning a return on and of after new piping is put into service, that rider is scheduled by law to expire at the end of 2023. We got a ways to go.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

I would say this, we continue to try to educate, and I think have had some significant success in helping, most people to understand two things. First of all, the QIP rider and the way it works is actually the most cost-effective way for customers, to basically have us continue with a very needed pipe upgrade program. Secondly, the Illinois Commerce Commission last year, authorized a study. They asked us to hire an independent consulting firm called Kiefner, which did more than a year's work in looking at what's needed in Chicago. They concluded that, you know, that more than 2/3, almost 80% of the remaining gas distribution pipes under Chicago have a useful life of less than 15 years.

Shar Pourreza
Senior Managing Director of Energy, Power, and Utilities at Guggenheim Partners

Right.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

The work has to be done. We're doing it the most cost-effective way possible, not concerned about any near-term legislation.

Shar Pourreza
Senior Managing Director of Energy, Power, and Utilities at Guggenheim Partners

Okay, perfect. Then maybe just shifting over to the infrastructure segment, seems like it's been, you know, a bit of a longer time since your, you know, your last acquisition like Sapphire Sky versus, I guess, your prior cadence. Just curious, is this sort of a symptom of anything in particular? Is there fewer opportunities or just a lot of competition, supply chain, returns? Are you seeing projects maybe getting pushed out a little bit ahead of federal policy clarity? Just maybe some thoughts there would be great.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

No, I'd be happy to answer that question, Shar. First of all, as Xia mentioned, and Scott, we're way ahead of plan.

Shar Pourreza
Senior Managing Director of Energy, Power, and Utilities at Guggenheim Partners

Right. Right.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Jayhawk came into service a bit early on budget. Sapphire Sky, which we announced late last year, is under construction, and I expect Sapphire Sky to begin commercial operation at the end of this year. We don't have anything particularly in the plan for this year, not because there's a paucity of projects. We have a robust pipeline that we're looking at. I think some of the uncertainty over federal tax credits may be slowing things down a hair, but we're way ahead of plan. We didn't have anything specific in this year's plan, but we continue to look. We have a robust pipeline of projects, and you will see some continuing effort here. We can be, as you know, very selective because we're so far ahead of plan.

Shar Pourreza
Senior Managing Director of Energy, Power, and Utilities at Guggenheim Partners

Got it. Just one real quick modeling question is the ATC Holdco goodwill impairment that's in the driver slide. Just remind me what that is.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Yeah, happy to. It's an outside the service area investment that years ago the joint venture of Duke Energy and ATC made in California, and we'll let Xia give you the detail.

Shar Pourreza
Senior Managing Director of Energy, Power, and Utilities at Guggenheim Partners

Perfect.

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

Yeah. Basically, we jointly own a transmission project. We acquired that back in 2013, and we performed the normal goodwill assessment on that project and decided that it's very prudent for us to write down the majority of the goodwill. It's a non-cash book entry that we did in the fourth quarter of 2021.

Shar Pourreza
Senior Managing Director of Energy, Power, and Utilities at Guggenheim Partners

Got it. Perfect. Thanks, guys. I appreciate it. Gale, hopefully the quote-unquote "no adjustments" comment in your prepared remarks was understood well by the audience. Appreciate it. Thanks, guys.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Thank you, Shar.

Shar Pourreza
Senior Managing Director of Energy, Power, and Utilities at Guggenheim Partners

Bye.

Operator

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

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Afternoon.

Julien Dumoulin-Smith
Julien Dumoulin-Smith
Senior Research Analyst at Bank of America

Hey, hey. Hey, afternoon. Thanks for the time, guys. Appreciate it. Just to clarify the last question just a little bit on [Peoples] in Illinois here. I mean, when you say you're not concerned, the CapEx spend that you have over 2022-2026 here, which obviously spans the lapsing of the current program, you're saying that if that program were to go away here, that would, that number ballpark would stay intact?

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Well, what would happen, I mean, first of all, I think the most direct answer to your question is that work is needed for safety and reliability. We either would continue, assuming that the rider was renewed by legislation post the end of 2023, or we would revert to basically annual rate cases. Again, if you recall, in Illinois, the commission there uses forward-looking test periods. Either way, that work's got to continue, and the investment is in the range, depending upon the year, of $280 million-$300 million a year.

Julien Dumoulin-Smith
Julien Dumoulin-Smith
Senior Research Analyst at Bank of America

Got it. Excellent. Thank you. Then pivoting on the transition side here, Cardinal-Hickory Creek, obviously there's been developments in the courts last week. How are you thinking about options given the federal wildlife preserve, you know, just in terms of alternate routes, timing, CapEx, recovery? Anything you can share there.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Sure. Happy to. For those who might not have been following Cardinal-Hickory Creek, there is some activity in the courts with an environmental group challenging the permits that were issued by the U.S. Fish and Wildlife Service, by the Iowa Utilities Board, by the Public Service Commission of Wisconsin. There have been multiple permits that would allow this more than 100-mile line to be built coming out of Iowa into southwestern Wisconsin and then working its way over to the Madison area. That's essentially a little more than 100-mile line. To show you how long these projects take, that project was first envisioned and first discussed in 2011. Construction has been underway essentially in the Iowa portion.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

The portion in question where the permits are being challenged is in the southwestern part. It's an environmentally sensitive part of the southwestern section of the state of Wisconsin. It's called the Driftless area. American Transmission Company, and again, this line will be partially owned by ITC, ATC, and the Dairyland Power Cooperative. The ATC portion, no one has questioned the permits for that section of the line. We'll see how all of this works out in court. Long story short, the Wisconsin Commission has reiterated the need for the line, and reiterated their belief that the approval was appropriate and needed. We'll see how all this works out in court.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

At the end of the day, that line is an important part of moving renewable energy across the Midwest and into Wisconsin. At the end of the day, I'm confident something positive will come out of this. It may be a bit delayed. We'll see what happens in the courts. I hope that helps, Julien.

Julien Dumoulin-Smith
Julien Dumoulin-Smith
Senior Research Analyst at Bank of America

No, absolutely. It's good color. Well, I'll leave it there, guys. Thank you again, and best of luck, and hope to see you guys soon.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Sounds good. Thanks, Julien.

Julien Dumoulin-Smith
Julien Dumoulin-Smith
Senior Research Analyst at Bank of America

Sure.

Operator

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

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Greetings, Jeremy.

Richard Sunderland
Richard Sunderland
Executive Director of Equity Research at JPMorgan

Hi. It's actually Richard Sunderland on for Jeremy. Can you hear me?

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

I can. What have you done with Jeremy?

Richard Sunderland
Richard Sunderland
Executive Director of Equity Research at JPMorgan

Jeremy, sorry to miss, but I'm happy you had the time for me today. Just, you know, maybe starting around the load growth expectations for 2022, you know, curious on the key drivers there and, really, how you think about realized recovery from the pandemic in 2021 and, you know, maybe how much conservatism is baked in there for the 2022 outlook.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

We're gonna let Scott handle that for you. He and Xia are on top of those details. I will say this, though. Just as a reminder, we're coming off a very strong recovery in 2021, and we see continued growth in 2022. Scott, particularly, at least I was impressed by the numbers related to the small C&I segment.

Scott Lauber
Scott Lauber
President and CEO at WEC Energy Group

Yeah, you're exactly right, Gale. In fact, when we go back, and Xia and I look at our forecasts compared to what happened in 2021, we were right on with residential. It hit exactly on. The positive surprise was in small commercial and large commercial. Our original forecast was about 1.3% growth. We came in at 2.5% at a retail [audio distortion]. Very happy with the growth that we saw. As you look at it, we then continue in 2022 to expect residential. As people can start coming back to work, and you start to see more and more people return to work, residential will go down a little bit, and then that small commercial to grow, continuing to expand in there.

Scott Lauber
Scott Lauber
President and CEO at WEC Energy Group

Once again, large commercial, you know, we almost have a 2% growth in that large commercial sector. We're seeing really, really good growth. You can see, as you look at our longer-term plan, a lot of good economic growth that Gale talked about on the call. A lot of good economic growth coming here too.

Richard Sunderland
Richard Sunderland
Executive Director of Equity Research at JPMorgan

Thanks. I appreciate the color there. You know, maybe pivoting to this new pilot program in Michigan, what's the long-term target for blending, and, you know, how do you think about this program in the context of your entire fleet?

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

You're speaking, I believe, of the hydrogen pilot program that we're going to undertake in the Upper Peninsula of Michigan at one of our newer RICE units. Just to put all of that in context for everyone, the RICE units, it's a technology that's been well proven, fueled by natural gas, modular technology, if you will. It does not require a water permit. I mean, these are really advanced, state-of-the-art power generation facilities. The project is really a pilot project. It's being designed right now. We will actually test burn hydrogen in a mix with natural gas, up to 25% hydrogen, 75% natural gas. This project will actually be in the field in the fourth quarter of 2023. We, with the Electric Power Research Institute, will then analyze the results.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

As I mentioned in the prepared remarks, the results will be shared across the industry. We're optimistic that this pilot program, one of the first of its kind in the U.S., will demonstrate that hydrogen with that particular technology, the RICE unit technology, could be a major player going forward in decarbonizing the economy.

Richard Sunderland
Richard Sunderland
Executive Director of Equity Research at JPMorgan

Great. Thank you for the time today.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

You're welcome.

Operator

Your next question comes from the line of Neil Kalton of Wells Fargo Securities.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Greetings, Neil.

Neil Kalton
Neil Kalton
Senior Equity Analyst at Wells Fargo Securities

Hey, everybody. Yeah, hello.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Neil, are you getting snow or ice where you are?

Neil Kalton
Neil Kalton
Senior Equity Analyst at Wells Fargo Securities

We're getting a lot of it, and I'm watching all my neighbors and my wife and son shoveling the driveway right now, so I'm feeling pretty good about this. I'm winning.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

I just got a text from your wife that said, "You dog."

Neil Kalton
Neil Kalton
Senior Equity Analyst at Wells Fargo Securities

Yeah. Bad back. I can't do things anymore. Anyway. Just a question on the solar. Obviously, Badger Hollow, I guess it slipped a little bit, understandable given all the supply chain issues, et cetera, but you've got quite a bit more solar in the plan as we look out over the next few years. I'm curious if there's any, at this point, any reason to be concerned about costs or timing, from what you're seeing right now, as it relates to the additional, I think, 1,300 MW that you plan to do over time.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Yeah, great question, Neil. I think the short answer is, with what we're seeing for 2022 and what we have under contract, no significant issues other than perhaps some timing. Down the road, Scott, your thoughts?

Scott Lauber
Scott Lauber
President and CEO at WEC Energy Group

Yeah. Down the road, I mean, we're definitely watching, you know, steel prices for the infrastructure and also the solar panels. You know, as you look at natural gas prices also, as those prices go up, the economics are still there. You know, we expect that some of the costs will rise, and we're monitoring it very closely, as you can imagine, but I don't think it's gonna change our plan.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Yeah. Look, I agree with Scott. Neil, one other point. The drive to decarbonize the economy is not abating in any way, shape, or form. You know, we continue to see those investments as both needed and expected as we go down the road.

Neil Kalton
Neil Kalton
Senior Equity Analyst at Wells Fargo Securities

Perfect. Thank you.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Thank you, Neil.

Operator

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

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Greetings, Durgesh.

Durgesh Chopra
Durgesh Chopra
Managing Director of Power and Utilities at Evercore ISI

Hey.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

How you doing?

Durgesh Chopra
Durgesh Chopra
Managing Director of Power and Utilities at Evercore ISI

I'm doing well. [audio distortion]. Thank you for taking my question also. Xia, just, this is a modeling question. The $0.04 gain on clean energy fund, can you just elaborate on that? Then what quarter was that gain? Then I'm assuming you're not sort of modeling anything for 2022. That was a multipart question. I'm sorry.

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

That's okay. I think on the second quarter call, I mentioned that we booked $0.03 of gain in the second quarter, then we picked up another $0.01 in the fourth quarter. $0.04 for the whole year. When we develop the financial plan, we don't try to build any expectations of anything, like, similar, like investment gains like this. If the market continues to point in the right direction, then if we end up having more gains, we'll be happy to book those, but we don't count on those going forward.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Yeah. Xia's right. We'd be delighted to book more gains. I think this was from a revaluation, if you will, of one particular investment in the fund that is. You know, these funds, as you know, investing in clean technology, some of them hit, some of them don't. This one hit very, very well. With the new round of funding and with the valuation, it was perfectly appropriate to revalue our investment.

Durgesh Chopra
Durgesh Chopra
Managing Director of Power and Utilities at Evercore ISI

Awesome. Thank you for that color. Then just maybe, you know, your peers on a call today talked about, you know, just wanna sort of be interested in your progress on your—actually your execution on your capital plan for 2021. You know, your peers mentioned some supply chain concerns and they had to push some of their renewable projects out. Just wondering, are you seeing any of those pressures, and how did you actually do in 2021 versus your targeted CapEx plan?

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Well, we'll ask Scott to give you his view as well. The one impact we had was really more from COVID than it was from supply chain, and that was a large solar farm, a large solar field called Badger Hollow I, and that got delayed. It's now in service. That got delayed several months. It was a decision that we helped to make. At the point where we were deep in the pandemic in 2021, to continue the construction apace, we would have had to bring in about 150 crew people from outside the state to continue the construction at that point in time. In the middle of the pandemic, we thought that was really not a very good idea, so we agreed to a schedule delay.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Scott, no significant cost delay at all, and that's now behind us.

Scott Lauber
Scott Lauber
President and CEO at WEC Energy Group

No, that's exactly correct. Everything else for 2021, you know, our supply chain worked with our vendors to get everything in line. We've had a practice here for several years that we are ordering some of the long lead time materials a year and a half ahead of time for some of these major projects to make sure we have it. The only other item was just what we mentioned in our prepared remarks, whereas Badger Hollow II, you know, we see about a three-month delay right now, but no significant cost at this time.

Durgesh Chopra
Durgesh Chopra
Managing Director of Power and Utilities at Evercore ISI

Excellent. Thank you, guys. Much appreciated the time.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

You're welcome. Thank you, Durgesh. Take care.

Operator

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

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Michael-

Michael Sullivan
Michael Sullivan
Director of Equity Research at Wolfe Research

Hey.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

How's your IT department?

Michael Sullivan
Michael Sullivan
Director of Equity Research at Wolfe Research

Oh, yeah, it's fantastic.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

You might kind of reiterate no change in your rating, right, Michael?

Michael Sullivan
Michael Sullivan
Director of Equity Research at Wolfe Research

Yes. Yeah. For sure. You got it, Gale.

Michael Sullivan
Michael Sullivan
Director of Equity Research at Wolfe Research

Yeah, the first question, maybe just if you could give us a sense of what the clean O&M savings number was for 2021 and what you're embedding in 2022 guidance.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Happy to do so. Xia's got it right in front of her. Xia?

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

For year 2021, we ended with 1.6% down year-over-year compared to 2020. We guided earlier in the year to do 3%, and we're right in that range. What was...

Michael Sullivan
Michael Sullivan
Director of Equity Research at Wolfe Research

Okay.

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

You had a second part of your question?

Michael Sullivan
Michael Sullivan
Director of Equity Research at Wolfe Research

For 2022? Yeah. What are you assuming in 2022?

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

Yeah. For 2022, we guide flat to 1% reduction from 2021.

Michael Sullivan
Michael Sullivan
Director of Equity Research at Wolfe Research

Okay, great.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Michael, I'm sorry. I'm sure you recognize this, but in light of the general inflation in the economy, we think that's really strong performance. We're very pleased about the plan we have in place to deliver what Xia's discussing.

Michael Sullivan
Michael Sullivan
Director of Equity Research at Wolfe Research

Got it. Okay. Just curious if you could give any latest thoughts on where you think things might go with the pending issue at FERC as it relates to the RTO rider.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

My own guess, and this is just a guess, but my own view is the RTO rider is probably history, but to be replaced by something else, perhaps an incentive-type mechanism. I'm guessing that the RTO rider, as we've known it, probably won't survive. However, very important point, we have not assumed the continuation at all of the RTO rider in our forecast for 2022 earnings.

Michael Sullivan
Michael Sullivan
Director of Equity Research at Wolfe Research

Okay. That's great. Thanks. Sorry, just one last one. If maybe it looks like the FFO-to-debt metric ticked down a little bit year-over-year, should we think about that as kind of stabilizing around that, you know, 15.7%, I think, where it came out, as a go-forward target?

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Xia, your view?

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

Yeah. We target you know, the 15%-16%, measured by Moody's and S&P, so this is right in that neighborhood. As I said in the prepared remarks, the dip is really driven by year-over-year change of working capital. And then that's largely attributed to higher natural gas prices, so we expect that to recover. We also made a voluntary pension contribution in 2021. Overall, I think we're right in the target range for FFO-to-debt.

Michael Sullivan
Michael Sullivan
Director of Equity Research at Wolfe Research

Great. Thank you very much.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Thank you, Michael. Take care.

Operator

[Audio distortion].

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Keep an eye on your IT folks.

Operator

Your next question comes from the line of Andrew Weisel of Scotiabank.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Good afternoon, Andrew.

Andrew Weisel
Andrew Weisel
Director and Senior Equity Analyst at Scotiabank

Hey, thanks for taking my question. Most of them have been answered. I just wanna follow up a little bit on the upcoming Wisconsin rate case. Two quick ones. First is, do you see any potential for yet another stay-out or agreement to keep rates unchanged? I don't mean to be greedy. You've done a great job managing the customer bills. Just wondering strategically if you want to extend the stay-out or if you feel it's time to have a conversation with regulators and interveners like you do every so often.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

It's a great question, Andrew, and I think unanimously, we believe it's time to reset, if you will. Number of moving parts that are in our thinking. I mean, first of all, as you recall, we've announced the retirement of four older coal-fired units at our Oak Creek site. These are 1960s vintage units, and we've announced the retirement of the first two of those four in 2023, and the second two of the four in 2024. There'll be retirement there'll be cost savings there, and we really have been out of a rate case for so long that it's really just time to step back and reset.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

I think everyone, the commission staff, the interveners, I mean, we all believe it's just time to take a thorough review again, and we're looking forward to that. Scott?

Scott Lauber
Scott Lauber
President and CEO at WEC Energy Group

It's gonna be a very straightforward rate case. I mean, when you look at our capital investments that we've made, the capital investments, and the majority of them, I think when you look at what's already been approved and at the commission right now, that's about 60% or a little over 60% of the rate base. Then you even add in new services and other reliability capital, almost all of this has been approved or, you know, great capital additions for reliability or decarbonizing the environment. It's gonna be a pretty straightforward rate case as you see us pull the final numbers together here in the next couple months.

Andrew Weisel
Andrew Weisel
Director and Senior Equity Analyst at Scotiabank

Okay. Not to get ahead of that, but are you able to give us any kind of high-level guess at what it might do to rates, you know, directionally or qualitatively?

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Stay tuned. We're pulling everything together. The filing is due by May 1, so we'll certainly have a good conversation with you in advance of that.

Scott Lauber
Scott Lauber
President and CEO at WEC Energy Group

Yeah. I think the other thing to remember is, you know, this is a place where you do two-year forward-looking rate cases. A lot of our capital projects, when you see that capital spending, it's gonna come in over two years, just like Gale mentioned the retirement of those plants are over two years. We'll factor that in too. It'll be a multi-year filing we do here.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Very straightforward case, though. We wouldn't expect, I mean, to have, you know, anything as dramatic. This is not a case about higher O&M. As Scott said, this is a case about capital, much of which will have already been approved, capital needed for reliability and for decarbonization.

Andrew Weisel
Andrew Weisel
Director and Senior Equity Analyst at Scotiabank

Very good. Just a quick follow-up. Is it too early to talk about performance-based rate making in this upcoming case?

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Yeah. I'm glad you asked. For those of you who've not followed it perhaps quite as closely, the commission did have an informational hearing about, you know, just about the concept of performance-based rate making. That hearing came out of more than a year's worth of work of the governor's task force looking at climate change, looking at decarbonization, looking at what initiatives the state might put in place. I think it's very clear from the informational hearing that any changes in the process for putting rates in place in Wisconsin is gonna be deliberate, gonna be thoroughly thought through, and I would not expect that to have any impact on our upcoming rate review.

Andrew Weisel
Andrew Weisel
Director and Senior Equity Analyst at Scotiabank

Okay. Very helpful. Thank you.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

You're welcome. By the way, before we go to the next caller, I just got a text from one of your brethren who says, "Given your performance, nobody's asking the most important question. Will Aaron Rodgers be back in Green Bay next year?" The answer to that is, "I don't know. But Giannis is still with us for the Bucks, and rock and roll."

Operator

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

Michael Lapides
Michael Lapides
VP and Senior Equity Analyst at Goldman Sachs

Hey, guys.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Hey.

Michael Lapides
Michael Lapides
VP and Senior Equity Analyst at Goldman Sachs

Thank you for taking my questions, and I'll leave my Ja Morant props at home for now.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

There you go.

Michael Lapides
Michael Lapides
VP and Senior Equity Analyst at Goldman Sachs

Real nice night in New York last night. Real quick, just thinking about gas demand. If I go back over the last several years, kind of three, four years or so, you know, whether normalized gas demand in Wisconsin was actually pretty elevated. I can even go back five years. Now this year you're forecasting about 0.5%, and then if I look at your November slide deck, y'all kind of forecast I think it's around 0.7%-1% demand growth. Can you just talk to us a little bit about the trajectory, meaning why coming down off that kind of.

Michael Lapides
Michael Lapides
VP and Senior Equity Analyst at Goldman Sachs

You know, first of all, what led to the abnormal, kind of that 3%-ish plus range from a couple of years ago and that lasted for several years, and then down to 0.5% now kind of as we're coming out of COVID, but then re-ramping back up.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Yeah. Scott and I will both take a shot at that for you. Good question, Michael. The easy question, the first piece is, what happened? Why did we not see growth in weather-normal gas demand during this past year, during 2021? As we looked at the data, I think the answer, it really pops out from the data, and that is the effect of the pandemic. If you think about the most dramatically impacted segment of our customer base for the pandemic, it's small commercial and industrial customers. Many of those premises were just closed during, you know, huge swaths of the pandemic, and so they weren't. You know, think of the restaurants that weren't cooking. Think of the stores that were completely closed and not heated to the normal level.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Clearly the impact of the pandemic tempered the growth in customer demand for natural gas. We still think we're going to see a growth trajectory. Scott, we're still seeing strong customer growth.

Scott Lauber
Scott Lauber
President and CEO at WEC Energy Group

Yeah. That's exactly right. When we look at it, we're looking at strong customer growth, about 0.5%, maybe, you know, 0.7%. I mean, you can imagine we're factoring in if prices stay a little bit higher, conservation will continue and products continue to become efficient. Looking forward, you know, we're still assuming that 0.5% in the future, about 0.7%-1%. Good growth. To Gale's point, remember the pandemic started in about March. Last year there was two months that weren't reflected in the previous year when the pandemic, we didn't have a pandemic. That's also why 2021 was a little weaker because of just the timing of the pandemic.

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

Yeah. I would just add that, Michael, that it, we came pretty much on top of our forecast last year, so we guided that way, so we came out exactly what we thought it would happen last year.

Michael Lapides
Michael Lapides
VP and Senior Equity Analyst at Goldman Sachs

Got it. Just a follow-on question. Like, if I look at 2020 and 2021 earnings, both years actually would've been a higher number if I backed out the kind of roughly the $0.08 of debt extinguishment costs that showed up in each year. The earnings number, like, you know, a lot of companies consider that, you know, non-recurring and I respect the fact that you don't back things in and out, but, you know, kind of you stick with GAAP. If I think about it, that is something that probably isn't gonna happen in 2022 or 2023. I may be wrong there. It would imply the base would've actually been higher, meaning the 2021 starting point or the 2020 starting point.

Michael Lapides
Michael Lapides
VP and Senior Equity Analyst at Goldman Sachs

The growth rate into 2022 and 2023 would actually be a little bit lower 'cause just 'cause the starting point is higher. Am I just kind of thinking about that right? Or you know, are you looking at the debt tranches at the holdco and saying, "Hey, look, I'm gonna have other refinancings, and I'll probably incur other similar like costs," or are there other moving parts I'm not considering?

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Well, Michael, I'm gonna ask Scott to answer the question about the holdco debt. Let me, if I can, respond though a little bit more broadly. Of course there are a number of moving pieces in any given year. As you know, some companies in our industry basically adjust their way to a high growth rate. We don't do that. You know, I'm glad you're asking the question because I think the quality of our earnings and the fact that we don't adjust our way to a higher growth rate. I think that's a differentiator for us. I mean, I really do. It shows up in things like cash flows. It shows up in things like dividend growth.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

What we're reporting. I mean, we don't nickel-and-dime you to death with little adjustments here and there just to hit a growth rate. What we're reporting is high quality and real and GAAP. With that, I will get off my soapbox and let Xia respond.

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

Michael, I wouldn't just pick out that one item and readjust whatever you're trying to adjust because to Gale's point, we very much focus on the quality of earnings. If we see favorable weather, we see stronger economic recovery than what we originally forecasted, if we also have some favorable tax resolution happen in 2020, in the year, that we'll remain opportunistic about debt refinancing and just to take advantage of the development. I think that's just the normal course of what we do to manage throughout the year. I wouldn't pick one item out and adjust it out at all.

Michael Lapides
Michael Lapides
VP and Senior Equity Analyst at Goldman Sachs

Got it. Thank you, guys. Much appreciated.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

All right. Take care, Michael.

Operator

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

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Paul, you changed your last name, did you?

Paul Patterson
Analyst at Glenrock Associates

No. That's common. That's a common misunderstanding. A lot of my questions have been asked and answered, but I don't wanna nickel-and-dime you guys to death, but just sort of quick little follow-ups here. The $0.06 for the taxes, how should we think about that going into 2022? Is there any sort of something unusual there or just how should we think about that going into 2022?

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Xia, your thoughts.

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

Yeah. No, nothing unusual there. As I said in the prepared remarks, that was largely driven by the production tax credit, the additional projects that we brought online. You know that we expect a couple more projects coming online, one in the middle of the year, the other end of the year. We expect another $0.08 of pickups from this section. The only thing I would warn you is I wouldn't do a $0.02 per quarter 'cause depending on the timeline and everything else, it could be skewed to one quarter versus another. For the year, we expect another $0.08 increase.

Paul Patterson
Analyst at Glenrock Associates

Awesome. Just with the goodwill impairment, I know it looks tiny to me. I mean, it looks like it's what? A penny or something maybe. Just, I was just a little bit curious. You guys did a test and it led to a revaluation. What caused what changed in order to have the test? I'm just sort of curious as to what made you guys say, "Hey, the goodwill doesn't apply anymore." What was there any particular event or anything there that had that? Again, I know it's kind of nickel-and-diming.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

Yeah.

Paul Patterson
Analyst at Glenrock Associates

you guys, but I'm just sort of wondering.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

No, no problem. It was really basically a FERC ROE case that we got a FERC order and we took another look. Xia?

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

Yeah. Gale mentioned one of the drivers for the year-over-year change for ATC. If you're just looking at the goodwill impairment, we do that every year. We look at the goodwill, we do the evaluation, we look at the assumptions, including forward-looking ROE, capital expenditure opportunities, and all the assumptions around that. The most recent assessment led us to believe that the goodwill should be written off.

Paul Patterson
Analyst at Glenrock Associates

And that was just-

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

Nothing abnormal. It's just normal.

Paul Patterson
Analyst at Glenrock Associates

[Audio distortion]

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

Normal course.

Paul Patterson
Analyst at Glenrock Associates

Right. That's because basically you guys saw a lower ROE. Because a lower ROE had been awarded, it impaired goodwill. Is that how we should think about it? Do I understand you guys correctly or is it something else?

Xia Liu
Xia Liu
EVP and CFO at WEC Energy Group

No. Capital expenditure opportunities is. No, nothing unusual. We just look at the net cash flows and terminal value and apply the different assumptions which led to the conclusion that the goodwill should be written off.

Paul Patterson
Analyst at Glenrock Associates

Okay. Well, thanks so much. I appreciate it.

Gale Klappa
Gale Klappa
Chairman of the Board at WEC Energy Group

You're more than welcome. Happy to have your questions. All right. Well, I think we've worn you out. So thanks so much for participating in our conference call today. We appreciate all your questions. If you have any other questions, feel free to contact Beth Straka. Her direct line is 414-221-4639. Thanks, everybody. Take care. So long for now.

Operator

Again, thank you for participating in today's conference call. You may now disconnect.

Executives
Analysts
    • Andrew Weisel
      Director and Senior Equity Analyst at Scotiabank
    • Durgesh Chopra
      Managing Director of Power and Utilities at Evercore ISI
    • Julien Dumoulin-Smith
      Senior Research Analyst at Bank of America
    • Michael Lapides
      VP and Senior Equity Analyst at Goldman Sachs
    • Michael Sullivan
      Director of Equity Research at Wolfe Research
    • Neil Kalton
      Senior Equity Analyst at Wells Fargo Securities
    • Paul Patterson
      Analyst at Glenrock Associates
    • Richard Sunderland
      Executive Director of Equity Research at JPMorgan
    • Shar Pourreza
      Senior Managing Director of Energy, Power, and Utilities at Guggenheim Partners
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