WEC Energy Group Inc. has raised its 2019 guidance to a range of $3.50 per share to $3.53 per share despite negative weather events, with Executive Chairman Gale Klappa, speaking on the company's Aug. 5 earnings call, partly crediting savings made on operations costs from three shuttered coal-fired facilities. Meanwhile, the company is continuing its investment in renewables and upgrading Chicago's 150-year-old gas infrastructure.
"The second quarter this year was really the first quarter we're seeing the full benefit of the retirement of our older, less efficient coal-fired power plants," said Klappa, citing the retirement of the 200-MW Pulliam plant in Green Bay, Wis., which is owned by subsidiary Wisconsin Public Service Corp.., as well as the 1,190-MW Pleasant Prairie plant in Pleasant Prairie, Wis., and the 350-MW Presque Isle plant in Marquette, Mich., both of which were owned by We Energies. WEC subsidiaries Wisconsin Electric Power Co. and Wisconsin Gas LLC do business together as We Energies.
"The closure of those three plants is delivering, as we expected, significant O&M cost reductions," Klappa said.
Meanwhile, WEC Energy is adding more solar capacity to its portfolio, planning to purchase 100 MW of the 150-MW second phase of the Badger Hollow Solar Farm solar facility in the southwestern part of the state alongside Madison Gas and Electric Co., which will own the other 50 MW. WEC's investment will be approximately $130 million, WEC President, CEO and Director Kevin Fletcher said on the call.
"We've identified the need for additional capacity at We Energies, capacity that can deliver carbon-free energy," said Klappa, noting that the company has already received permission for Wisconsin Public Service Corp. to invest in the 150-MW first phase of the Badger Hollow solar project.
WEC Energy has been helped by what Klappa called a "a very healthy economy here in Wisconsin" and a "wide range of economic development projects" in the state, including the development of production facilities by Fresenius Medical Care and Nexus Pharmaceuticals Inc., Foxconn's Gen 6 plant and candy maker Haribo's first North American plant. "Folks, the Gummi Bears are coming!" Klappa proclaimed.
With the Foxconn plant in its first phase of construction, WEC will be discussing how to power operations at the facility, Klappa said.
"I think solar is still a possibility, and we'll see where they go, but they really have not been in a position, as they've redesigned Phase 1, to really talk about that kind of detail in this stage of the game," he added.
WEC Energy has also been focusing a modernization program for Chicago-based subsidiary Peoples Gas. Peoples Gas Light and Coke Co. and North Shore Gas Co. do business as Peoples Gas.
"This long-term effort to provide Chicago with a safe and modern natural gas delivery network is approximately 26% complete," said Fletcher, who noted that the company recently retired the Windy City's oldest natural gas main. The ironwork was placed into service in 1859, one year before Abraham Lincoln was elected president.