The article introduces the WEC Energy Group's Conference Call for Second Quarter 2024 Results and provides important information for participants, such as the availability of a replay and the disclaimer regarding forward-looking statements. The President and CEO, Scott Lauber, along with the CFO and Senior VP, will review the company's earnings for the second quarter and their outlook for the full year. They reported earnings of $0.67 per share and are on track to meet their full-year guidance. The company is also experiencing strong economic growth in their region.

The unemployment rate in Wisconsin is below the national average, with a strong economic pipeline in the I-94 corridor. Major companies like WestRock and Microsoft are investing in the area, creating thousands of jobs. This highlights the need for investments in the capital plan, which includes $23.7 billion for efficiency, sustainability, and growth. The plan is based on low-risk and highly executable projects, and the company recently closed on an option for a 100 megawatt natural gas generation plant. There have also been filings for other major projects to support economic growth and reliability in Wisconsin.

The company has proposed several projects in Wisconsin, including natural gas generation, a liquefied natural gas storage facility, and a solar energy center. These projects represent a $2.1 billion investment and are currently under review by the Wisconsin Commission. The company also plans to purchase a 90% ownership interest in a solar energy center and expects a decision to be made by the end of the year. The company's Delilah I solar project in Texas has been delayed due to a weather event and is now expected to go into service at the end of the year. The company is also on schedule with the development of their next five-year plan and expects to share details in the fall. In Wisconsin, the company has filed for new rate reviews for 2025 and 2026 to address areas of need.

The company is working on improving reliability and reducing outages due to increased storm activity, supporting economic growth in Wisconsin, and transitioning to renewable energy sources. Decisions on rate reviews for Michigan Gas Utilities and Upper Michigan Energy Resources are expected by the end of the year. In Illinois, there are three dockets, with one decision already made and two others still ongoing. The company is appealing a decision to only grant a portion of their request for safety modernization funds. They are also actively involved in two other dockets, with decisions expected in the first quarter of 2025 and within a year. The company is making progress towards reducing greenhouse gas emissions and recently retired units at their Oak Creek power plant.

In the second quarter, the company retired 500 megawatts of coal-fired generation and has retired a total of 2,500 megawatts since 2018. They aim to maintain a dividend payout ratio of 65% to 70% of earnings and are on track to meet their 2024 earnings guidance. The utility operations saw a decrease of $0.19 compared to the same quarter last year due to higher O&M, fuel, depreciation and amortization, interest, and other expenses. The increase in O&M was mainly due to higher storm costs and a land sale in Q2 of last year. The company expects overall day-to-day O&M in 2024 to be 2% to 3% higher compared to 2023.

In the second quarter of 2024, our earnings improved by $0.04 compared to our initial expectation due to our cost-saving initiatives. Weather had a minimal impact on our earnings, and our electric sales in Wisconsin were in line with our forecast. Capital investments at ATC and higher production tax credits at WEC Infrastructure also contributed to earnings growth. However, earnings at our Corporate and Other segment decreased due to tax timing and higher interest expense. We are expecting a third quarter earnings range of $0.68 to $0.70 per share and reaffirming our 2024 earnings guidance of $4.80 to $4.90 per share. We plan to issue up to $200 million in common equity for 2024 and will provide updates on our capital and financing plans in the fall.

Scott Lauber, the speaker, thanks Xia for the update on their company's progress and their focus on providing value for customers and stockholders. The question-and-answer portion of the call begins, with the first question coming from Shar Pourreza of Guggenheim Partners. Shar asks about the Microsoft opportunity and how much of it is included in the company's current plan. Scott responds by mentioning that Microsoft has recently purchased more land, but their current plans only account for the initial 315 acres. Xia adds that they are working on plans for the next five years. Shar also asks about the delay in the Delilah I solar project and how it will affect the company's prior assumptions. Xia responds by saying that there will likely be offsets to the potential headwind caused by the delay.

The company is reaffirming its annual guidance and focusing on managing costs and taxes to offset any potential downside from delays. They also mentioned the potential opportunities in the data center market, specifically with Microsoft, and are working to meet the capacity needs for the region to support growth.

The company is planning to add more renewable projects in the next month to meet the energy needs in the region. They are also investing in transmission and factoring in all these plans in their five-year plan. The PSC's denial in the AFUDC does not affect their plans and they will ask for reconsideration and refile the information. The company believes there is a lot of value in getting these orders in early for cost-savings and timely delivery.

The speaker thanks his colleagues for their efforts and congratulates them. He then discusses the upcoming plan refresh and potential equity needs. He also addresses the pending docket in Illinois, specifically the pipe program review and QIP Rider reconciliations from previous years.

The speaker is discussing the requirements for the company's program and how they have been prudent in their decisions, taking into account audits and staff recommendations. They mention that no one requested a pause in the program during the last rate case and that there is a range of opinions on how to proceed, but all agree that the pause should be lifted. The speaker acknowledges the risk of the ICC potentially coming out worse than other interveners in the final order.

The speaker is discussing the recent decision on the safety modernization program review in Illinois. They mention that the plan has been reduced by $800 million and the current plan includes $100-120 million per year. They also mention that they are in the process of refreshing the capital plan to reflect the latest developments from the commission's decision to approve $28.5 million.

Carly Davenport asked a question about transmission and ATC, specifically about the sizing of MISO Tranche 2 increasing.

The speaker discusses the potential opportunities for transmission in Illinois and the uncertainty surrounding it. They mention that Tranche 2 is expected to be larger than Tranche 1 and will likely occur after 2030. Economic development and renewables in Wisconsin are also seen as drivers for American Transmission Company. The speaker also mentions that the uncertainty in Illinois will last for about a year and they will have more information on the S&P program in the first quarter of next year.

The company is considering the future of natural gas and will involve stakeholders in the planning process. They will be conservative in their capital plans until there is more clarity. Xia Liu, a manager in the business unit, explains that they are focusing on reducing O&M costs and have made progress since the last quarter. The savings are a combination of one-time initiatives and continued efficiency efforts. The warm first quarter also resulted in less O&M costs in the gas system.

The company is facing challenges due to storms and warmer weather, and is working to control costs and respond to storms while also focusing on customer reliability and their forestry program. The corporate and other taxes were slightly negative this quarter due to a shift in earnings and a delay in a project, but are expected to become positive by the end of the year. The company is also considering potential opportunities with Microsoft, but it is unclear when any potential spending related to these opportunities will be included in their plan.

The company is spending money on substations and generation to support economic development. They anticipate more spending in the future and plan to add renewables to their portfolio. The recent commission vote in Wisconsin was split, but it is too early to tell the direction of the commission.

The speaker discusses a communication between staff and mentions that they will review an order and ask for a reconsideration. They are not overly concerned and appreciate the evaluative process. The speaker also mentions ongoing discussions with NextEra regarding a PPA. The questioner asks about the timing for a resolution to the Illinois Gas Appeal at the Appellate Court.

During a conference call, Scott Lauber and Paul Patterson discussed a decision that is expected to take a year or two. The call concluded with Lauber inviting further questions and providing a contact number.

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