The operator introduces the conference call for WEC Energy Group's third quarter 2023 results and reminds participants that all statements are forward-looking and subject to change. The company's executive chairman, Gale Klappa, then introduces the management team and highlights their solid earnings growth for the quarter.

The company is focused on executing its business fundamentals and reaffirming its earnings guidance for the year. They have announced a $23.4 billion investment plan for 2024-2028, with a focus on efficiency, sustainability, and growth. This is the largest capital plan in the company's history, driven by economic growth in the Milwaukee region and new commercial and residential developments. The plan includes an 8.1% annual growth in assets and a 6.5-7% annual increase in earnings per share. The company will also issue new equity in 2024, but there is no need for block equity in the five-year plan.

Xia will provide more details on the financing plan shortly, but some key points include a commitment to renewable energy sources and modernization of our power generation fleet. We are also adapting to new capacity rules and investing in transmission and distribution networks for energy security. Our goal is to reduce CO2 emissions by 80% by 2030, and we are on track to exit call three years earlier. The regional economy in Wisconsin is strong, with a low unemployment rate and growing companies investing in the area, such as Microsoft and Haribo.

Haribo and Uline are expanding their production capabilities in Wisconsin, highlighting the strength of the state's economy. Wisconsin Energy is also planning to invest $3.3 billion in renewable energy, transmission, and natural gas generation over the next five years to support reliable service for customers. This includes $1.4 billion for new renewable capacity, $1 billion for transmission, $1.3 billion for natural gas generation, and $800 million for liquified natural gas capacity. As a result, their planned investment in the Energy Infrastructure segment has been reduced.

The company will share more details at the upcoming EEI conference and provide updates on their regulatory front, including expected decisions from the Wisconsin Commission and recent approvals from the Minnesota and Michigan Commissions. They are also making progress on several regulated capital projects, including the addition of 100 megawatts of efficient combined cycle natural gas generation and the release of solar panels for their Badger Hollow II and Paris and Darien solar parks. The company plans to have all panels released and in their possession by the end of the year and expects the Badger Hollow II facility to go into service late this year or early next year. The Darien facility is planned to go into service by the end of 2024.

Gale Klappa, the CEO, reminds listeners that the company's dividend growth is in the top decile of the industry and is expected to continue in line with earnings per share growth. Xia Liu, the CFO, provides details on the third quarter financials, including an increase in earnings per share compared to the same quarter in the previous year. This was driven by rate base growth, timing of fuel expenses, and lower day-to-day operating expenses. Liu also mentions the weather-normalized sales for the quarter.

In the third quarter of 2023, retail electric deliveries in Wisconsin decreased by 0.8%, mainly due to lower sales to large commercial and industrial customers. However, residential usage was up 1.3% and sales to small commercial and industrial customers remained on track with forecasts. Earnings at Energy Infrastructure and American Transmission Company also decreased compared to the previous year. The company reaffirmed their annual guidance and discussed their financing plan for the next five years, which includes using cash from operations, debt, and equity to fund their capital needs. They also plan to utilize dividend reinvestment and employee benefit plans to tap into the equity market.

In the paragraph, the speaker discusses the projected common equity issuance for the company in 2024 and over the next five years. They mention that the equity ratios in their utilities are thicker, resulting in a $400 million equity raise. The remaining equity raise will support the company's capital plan and maintain their credit metrics. The speaker also mentions their upcoming holding company refinancing needs and concludes by stating that they are excited about the investment opportunities ahead. During the question-and-answer portion, the first question is asked by Shar Pourreza from Guggenheim.

Gale Klappa and Xia Liu discuss the reasons for the large equity guide in Xia's prepared remarks. They explain that about $400 million of the equity raise is a one-time catch up, and the rest will go towards supporting strong credit metrics and potential future capital expenditures, including the Microsoft plan. They estimate that equity will make up about 50% of any incremental capital beyond what is in the plan. Shar Pourreza asks for more information on the $3.3 billion in CapEx, but Gale Klappa says they do not have any further details at this time.

The speaker explains that the details of the capital plan will be discussed at EEI and there will be a breakdown of the plan. They mention that there will be additional capital needed for generation and LNG projects, leading to a rise in the five-year capital plan. The equity issuance will match the capital investment each year. In regards to the Infrastructure segment, there is no lack of opportunity, but they are reallocating resources to focus on the growth opportunities in the regulated business. This reallocation is not a reflection of the potential, returns, or opportunity in the Infrastructure segment.

In this paragraph, Shar Pourreza asks a question about capital allocation and then ends the call. The next question comes from Ross Fowler, who asks about the DRIP program and its uptake. Gale Klappa and Xia Liu answer the question, stating that the DRIP program averages $100 million to $200 million per year and that the company has been buying shares off the market to satisfy it. They clarify that the new plan puts them in line with others in the industry and that the coretirement deadlines have been changed to the end of 2032.

Gale Klappa confirms that natural gas conversion at their units fits into the power of the future mechanism. This transition does not require any regulatory approval and the investment in this conversion will earn a higher ROE and go through the same mortgage amortization process. Michael Sullivan asks a question about Halloween costumes, but Gale Klappa jokes about dressing up as Taylor Swift or Travis Kelsey.

The speaker, Michael Sullivan, asks about the current status of a case in Illinois and the timeline for the speaker, Gale Klappa, in his current role. Klappa mentions that there may be a final decision by the Illinois Commission and that he has requested an extension of his current agreement, which goes until 2024. There are ongoing discussions with the Board and an announcement is expected soon. Another person, Julien Dumoulin-Smith, asks a question about a new dog.

The speaker talks about having fun in their role and confirms that they are still enjoying it. They then discuss the Microsoft response and the additional capacity needed to support their data center development, which is included in their five-year plan. They mention the need for 1400 megawatts of additional capacity and the timeline for ordering equipment and identifying sites.

The speaker asks about the company's plans for acquiring more gas storage and the recent update on the ATC front. The speaker also mentions the increase in transmission capital and asks about the allocation of funds for aging facilities. The speaker also mentions the importance of LNG in ensuring gas supply during peak demand periods.

In this paragraph, Gale Klappa and Scott Williams discuss the benefits of having an LNG tank at their South Oak Creek plant in Wisconsin. They mention how it helped their system during a cold snap and prevented potential issues with gas flow and power outages. They also highlight the importance of energy security and the role that the LNG tank plays in maintaining it. When asked about the EPS CAGR, they confirm that they are assuming no changes to the allowed earned ROEs in their forecast over the next five years.

The speaker wishes the listener a happy Halloween and discusses the role of IRA tax credit transferability in their financing plans. They mention a significant amount of cash coming in from transferability and expect to use between $1.6 billion to $1.8 billion in tax credits in the next five years. The speaker also mentions that their balance sheet metrics are getting stronger and they are meeting their target credit metrics. They will be visiting the rating agencies next week and are looking forward to discussing their results.

In a recent earnings call, the CEO of a company discussed their nonrecurring O&M expenses and their outlook for the fourth quarter of 2022. He mentioned that there were a lot of one-time expenses in the fourth quarter of 2022 that won't be repeated in the fourth quarter of 2023. The CFO and COO also provided their views and stated that they are projecting a strong fourth quarter with favorable weather, rate base increases, and O&M upside. The CEO then took a question from an analyst and ended the call by wishing them a happy Halloween.

During an earnings call, Xia Liu, Gale Klappa, and Scott Lauber discuss the funding for growth at ATC capital. Xia Liu clarifies that ATC capital is self-funding and that the $3 billion in uses is excluded from the sources, but the net result is still positive. Gale Klappa adds that they receive cash distributions from ATC and that they will be issuing equity to support their growth plan, which they believe will be viewed favorably by the rating agencies. Scott Lauber adds that they will be meeting with the rating agencies next week to discuss the plan in more detail.

The speaker, Gale Klappa, thanks the interviewer and expresses excitement about meeting in Phoenix. They then take a question from an analyst about the company's FFO to debt ratio, and confirm that it falls within their target range of 15-16%. The analyst also asks about the potential impact of the company's coal exit on customer bills, and the speaker explains that there likely won't be a significant impact due to the same output from the plant and potential fluctuations in fuel prices. The company is making smaller capital investments for the conversion.

Gale Klappa and Scott Lauber of Wisconsin Energy Corporation discuss their plan to convert from coal to natural gas at their Oak Creek units, which has been in the works for a couple of years. They have had extensive discussions with commissioners and are on track to achieve an 80% reduction in CO2 emissions by 2030. This is not a new concept in the state and is seen as a more efficient and cost-effective solution compared to implementing carbon capture technology. The new Oak Creek units are critical assets in the Midwest operator footprint, helping to keep the lights on in Wisconsin and across the region. As for rate changes for customers, Wisconsin Energy Corporation's outlook has not changed due to factors such as interest rates and inflation.

Gale Klappa discusses the proposed changes in investment for upgrading the natural gas pipe system in Illinois and the expected impact on customer bills. He also mentions the expected load growth in Wisconsin and the possibility of inflation-related rate increases. The conference call concludes with contact information for further questions and a reminder about an upcoming event in Phoenix.

This summary was generated with AI and may contain some inaccuracies.