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WEC Energy Group, inc (NYSE:WEC)
Q2 2021 Earnings Call
Aug 3, 2021, 2:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to WEC Energy Group's conference call for Second Quarter 2021 Results. This call is being recorded for rebroadcast. [Operator Instructions] 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. During the discussions, referenced earnings per share will be based on diluted earnings per share, unless otherwise noted. 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 conclusion of this call. And now it is my pleasure to introduce Peter.

Peter Feigin -- President

Excuse me. Excuse me. I'd like to interrupt just for a minute. I'm Peter Feigin, President of the NBA champion, Milwaukee Bucks. And I can tell you, firsthand, in a big way, that you can't have a truly great NBA team without an incredible energy company to power you up. So I'm proud to introduce a personal friend, one of the terrific minority owners of the Bucks and the Chairman of one of the best energy companies in America, Gale Klappa. Go Bucks, and go WEC.

Gale E. Klappa -- Executive Chairman

Oh, my goodness. Well, wonders never cease. Peter, thank you so much for dropping by, and congratulations from all of us to the world champion, Milwaukee Bucks. And I'm not sure I can top all of that, but no pun intended, let's give it a shot. So good afternoon, everyone. Thank you for joining us today as we review our results for the second quarter of 2021. First, I'd like to introduce the members of our management team here with me today. We have Kevin Fletcher, our President and CEO; Scott Lauber, our Chief Operating Officer; 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 second quarter 2021 earnings of $0.87 a share. Xia will provide you with more details in just a few minutes. But given our strong performance through the first half of this year, we're raising our annual guidance. The new range is $4.02 a share to $4.05 a share, and our expectation is that we will reach the top end of that range. As always, this assumes normal weather for the remainder of the year. Now as we look across our business lines, I'm pleased to report that every segment is performing at a high level. Our companies continue to deliver superior reliability and customer satisfaction. A solid economic recovery in Wisconsin with commercial and industrial expansion gives us confidence in our projected sales growth. Our balance sheet is strong. We have no need to issue new equity to fund our ESG progress plan, and our plan is well on track for both our regulated and our infrastructure segments.

As you may know, we expect our ESG progress plan to drive average annual growth in our asset base of 7%. At the same time, it's bolstering our sustainability as we invest in renewable energy and state-of-the-art technology. A good example of our progress is the announcement we made just a week ago about a $400 million investment in the Sapphire Sky Wind Energy Center. Scott will provide you with more detail on this development in just a moment, but I will tell you that the offtake agreement is with one of the largest high-tech companies in the world, and we expect the project to meet or exceed all of our financial metrics. We've also made great progress on our plan to build 1,800 megawatts of regulated solar, wind and battery storage. These carbon-free assets will play a significant role in improving our environmental footprint. Recall that, back in May, we set near-term goals that are among the most ambitious in the industry: reducing carbon emissions by 60% from our electric generation fleet by 2025 and achieving an 80% reduction by the end of 2030, both from a 2005 baseline. So ahead that we now expect only 8% of our regulated electricity supply to come from coal by the end of 2030. We believe we can accomplish these targets with the retirement of older, less efficient units; operating refinements; and the use of existing technology as we execute our ESG progress plan. Of course, our long-term goal remains net-zero carbon emissions from our generating fleet by 2050. And our ongoing effort to upgrade our gas delivery networks and introduce renewable natural gas into our system will help us achieve another aggressive goal: net-zero methane emissions by 2030. You can learn more about these goals and much more in our corporate responsibility report, which we published just last week.

And now let's switch gears a bit and take a quick look at our regional economy. We're still seeing the positive effects of a strong recovery. Wisconsin's unemployment rate, in fact, stands today at 3.9%. Folks, that's two full percentage points better than the national average. As I mentioned, business continues to grow with new projects across the region. For example, Milwaukee Tool is expanding the operations again here in Milwaukee. If you're not familiar with Milwaukee Tool, company has been a leader in the development of battery-powered, cordless tools. It now has become the world's number one producer of tools for professionals in the construction trades, utility sector, as well as for auto mechanics. And now Milwaukee Tool is redeveloping a vacant downtown office tower to provide space for one,200 new employees over the next five years. In addition, a number of other economic development projects are in the pipeline, and we'll be covering those with you in future calls. On that note, I'll turn our call over to Scott for more detail on our sales results for the quarter, as well as an update on our infrastructure segment. Scott, all yours. Oh, my goodness. Well, wonders never cease. Peter, thank you so much for dropping by, and congratulations from all of us to the world champion, Milwaukee Bucks. And I'm not sure I can top all of that, but no pun intended, let's give it a shot. So good afternoon, everyone. Thank you for joining us today as we review our results for the second quarter of 2021. First, I'd like to introduce the members of our management team here with me today. We have Kevin Fletcher, our President and CEO; Scott Lauber, our Chief Operating Officer; 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 second quarter 2021 earnings of $0.87 a share. Xia will provide you with more details in just a few minutes. But given our strong performance through the first half of this year, we're raising our annual guidance. The new range is $4.02 a share to $4.05 a share, and our expectation is that we will reach the top end of that range. As always, this assumes normal weather for the remainder of the year. Now as we look across our business lines, I'm pleased to report that every segment is performing at a high level. Our companies continue to deliver superior reliability and customer satisfaction. A solid economic recovery in Wisconsin with commercial and industrial expansion gives us confidence in our projected sales growth. Our balance sheet is strong. We have no need to issue new equity to fund our ESG progress plan, and our plan is well on track for both our regulated and our infrastructure segments. As you may know, we expect our ESG progress plan to drive average annual growth in our asset base of 7%. At the same time, it's bolstering our sustainability as we invest in renewable energy and state-of-the-art technology. A good example of our progress is the announcement we made just a week ago about a $400 million investment in the Sapphire Sky Wind Energy Center. Scott will provide you with more detail on this development in just a moment, but I will tell you that the offtake agreement is with one of the largest high-tech companies in the world, and we expect the project to meet or exceed all of our financial metrics. We've also made great progress on our plan to build 1,800 megawatts of regulated solar, wind and battery storage. These carbon-free assets will play a significant role in improving our environmental footprint. Recall that, back in May, we set near-term goals that are among the most ambitious in the industry: reducing carbon emissions by 60% from our electric generation fleet by 2025 and achieving an 80% reduction by the end of 2030, both from a 2005 baseline. So ahead that we now expect only 8% of our regulated electricity supply to come from coal by the end of 2030.

We believe we can accomplish these targets with the retirement of older, less efficient units; operating refinements; and the use of existing technology as we execute our ESG progress plan. Of course, our long-term goal remains net-zero carbon emissions from our generating fleet by 2050. And our ongoing effort to upgrade our gas delivery networks and introduce renewable natural gas into our system will help us achieve another aggressive goal: net-zero methane emissions by 2030. You can learn more about these goals and much more in our corporate responsibility report, which we published just last week. And now let's switch gears a bit and take a quick look at our regional economy. We're still seeing the positive effects of a strong recovery. Wisconsin's unemployment rate, in fact, stands today at 3.9%. Folks, that's two full percentage points better than the national average. As I mentioned, business continues to grow with new projects across the region. For example, Milwaukee Tool is expanding the operations again here in Milwaukee. If you're not familiar with Milwaukee Tool, company has been a leader in the development of battery-powered, cordless tools. It now has become the world's number one producer of tools for professionals in the construction trades, utility sector, as well as for auto mechanics. And now Milwaukee Tool is redeveloping a vacant downtown office tower to provide space for one,200 new employees over the next five years. In addition, a number of other economic development projects are in the pipeline, and we'll be covering those with you in future calls.

On that note, I'll turn our call over to Scott for more detail on our sales results for the quarter, as well as an update on our infrastructure segment. Scott, all yours. Oh, my goodness. Well, wonders never cease. Peter, thank you so much for dropping by, and congratulations from all of us to the world champion, Milwaukee Bucks. And I'm not sure I can top all of that, but no pun intended, let's give it a shot. So good afternoon, everyone. Thank you for joining us today as we review our results for the second quarter of 2021. First, I'd like to introduce the members of our management team here with me today. We have Kevin Fletcher, our President and CEO; Scott Lauber, our Chief Operating Officer; 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 second quarter 2021 earnings of $0.87 a share. Xia will provide you with more details in just a few minutes. But given our strong performance through the first half of this year, we're raising our annual guidance. The new range is $4.02 a share to $4.05 a share, and our expectation is that we will reach the top end of that range. As always, this assumes normal weather for the remainder of the year. Now as we look across our business lines, I'm pleased to report that every segment is performing at a high level. Our companies continue to deliver superior reliability and customer satisfaction. A solid economic recovery in Wisconsin with commercial and industrial expansion gives us confidence in our projected sales growth. Our balance sheet is strong.

We have no need to issue new equity to fund our ESG progress plan, and our plan is well on track for both our regulated and our infrastructure segments. As you may know, we expect our ESG progress plan to drive average annual growth in our asset base of 7%. At the same time, it's bolstering our sustainability as we invest in renewable energy and state-of-the-art technology. A good example of our progress is the announcement we made just a week ago about a $400 million investment in the Sapphire Sky Wind Energy Center. Scott will provide you with more detail on this development in just a moment, but I will tell you that the offtake agreement is with one of the largest high-tech companies in the world, and we expect the project to meet or exceed all of our financial metrics. We've also made great progress on our plan to build 1,800 megawatts of regulated solar, wind and battery storage. These carbon-free assets will play a significant role in improving our environmental footprint. Recall that, back in May, we set near-term goals that are among the most ambitious in the industry: reducing carbon emissions by 60% from our electric generation fleet by 2025 and achieving an 80% reduction by the end of 2030, both from a 2005 baseline. So ahead that we now expect only 8% of our regulated electricity supply to come from coal by the end of 2030. We believe we can accomplish these targets with the retirement of older, less efficient units; operating refinements; and the use of existing technology as we execute our ESG progress plan. Of course, our long-term goal remains net-zero carbon emissions from our generating fleet by 2050. And our ongoing effort to upgrade our gas delivery networks and introduce renewable natural gas into our system will help us achieve another aggressive goal: net-zero methane emissions by 2030.

You can learn more about these goals and much more in our corporate responsibility report, which we published just last week. And now let's switch gears a bit and take a quick look at our regional economy. We're still seeing the positive effects of a strong recovery. Wisconsin's unemployment rate, in fact, stands today at 3.9%. Folks, that's two full percentage points better than the national average. As I mentioned, business continues to grow with new projects across the region. For example, Milwaukee Tool is expanding the operations again here in Milwaukee. If you're not familiar with Milwaukee Tool, company has been a leader in the development of battery-powered, cordless tools. It now has become the world's number one producer of tools for professionals in the construction trades, utility sector, as well as for auto mechanics. And now Milwaukee Tool is redeveloping a vacant downtown office tower to provide space for one,200 new employees over the next five years. In addition, a number of other economic development projects are in the pipeline, and we'll be covering those with you in future calls. On that note, I'll turn our call over to Scott for more detail on our sales results for the quarter, as well as an update on our infrastructure segment. Scott, all yours. Oh, my goodness. Well, wonders never cease. Peter, thank you so much for dropping by, and congratulations from all of us to the world champion, Milwaukee Bucks. And I'm not sure I can top all of that, but no pun intended, let's give it a shot.

So good afternoon, everyone. Thank you for joining us today as we review our results for the second quarter of 2021. First, I'd like to introduce the members of our management team here with me today. We have Kevin Fletcher, our President and CEO; Scott Lauber, our Chief Operating Officer; 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 second quarter 2021 earnings of $0.87 a share. Xia will provide you with more details in just a few minutes. But given our strong performance through the first half of this year, we're raising our annual guidance. The new range is $4.02 a share to $4.05 a share, and our expectation is that we will reach the top end of that range. As always, this assumes normal weather for the remainder of the year. Now as we look across our business lines, I'm pleased to report that every segment is performing at a high level. Our companies continue to deliver superior reliability and customer satisfaction. A solid economic recovery in Wisconsin with commercial and industrial expansion gives us confidence in our projected sales growth. Our balance sheet is strong. We have no need to issue new equity to fund our ESG progress plan, and our plan is well on track for both our regulated and our infrastructure segments. As you may know, we expect our ESG progress plan to drive average annual growth in our asset base of 7%. At the same time, it's bolstering our sustainability as we invest in renewable energy and state-of-the-art technology.

A good example of our progress is the announcement we made just a week ago about a $400 million investment in the Sapphire Sky Wind Energy Center. Scott will provide you with more detail on this development in just a moment, but I will tell you that the offtake agreement is with one of the largest high-tech companies in the world, and we expect the project to meet or exceed all of our financial metrics. We've also made great progress on our plan to build 1,800 megawatts of regulated solar, wind and battery storage. These carbon-free assets will play a significant role in improving our environmental footprint. Recall that, back in May, we set near-term goals that are among the most ambitious in the industry: reducing carbon emissions by 60% from our electric generation fleet by 2025 and achieving an 80% reduction by the end of 2030, both from a 2005 baseline. So ahead that we now expect only 8% of our regulated electricity supply to come from coal by the end of 2030. We believe we can accomplish these targets with the retirement of older, less efficient units; operating refinements; and the use of existing technology as we execute our ESG progress plan. Of course, our long-term goal remains net-zero carbon emissions from our generating fleet by 2050. And our ongoing effort to upgrade our gas delivery networks and introduce renewable natural gas into our system will help us achieve another aggressive goal: net-zero methane emissions by 2030. You can learn more about these goals and much more in our corporate responsibility report, which we published just last week. And now let's switch gears a bit and take a quick look at our regional economy.

We're still seeing the positive effects of a strong recovery. Wisconsin's unemployment rate, in fact, stands today at 3.9%. Folks, that's two full percentage points better than the national average. As I mentioned, business continues to grow with new projects across the region. For example, Milwaukee Tool is expanding the operations again here in Milwaukee. If you're not familiar with Milwaukee Tool, company has been a leader in the development of battery-powered, cordless tools. It now has become the world's number one producer of tools for professionals in the construction trades, utility sector, as well as for auto mechanics. And now Milwaukee Tool is redeveloping a vacant downtown office tower to provide space for one,200 new employees over the next five years. In addition, a number of other economic development projects are in the pipeline, and we'll be covering those with you in future calls. On that note, I'll turn our call over to Scott for more detail on our sales results for the quarter, as well as an update on our infrastructure segment. Scott, all yours.

Scott J. Lauber -- Senior Executive Vice President and Chief Operating Officer

Thank you, Gale. We continue to see customer growth across our system. At the end of June, our utilities were serving approximately 4,000 more electric customers and 18,000 more natural gas customers compared to a year ago. Retail electric and natural gas sales volumes are shown on a comparative basis, beginning on page 13 of the earnings packet. Overall retail deliveries of electricity, excluding the iron ore mine, were up 7.1% from the second quarter of 2020 and on a weather-normal basis were up 5.8%. We are encouraged by the economic rebound we are seeing in our service territory. For example, small commercial and industrial electric sales were up 10.4% from last year's second quarter and on a weather-normal basis were up 9.2%. Meanwhile, large commercial and industrial sales, excluding the iron ore mine, were up 14.8% from the second quarter of 2020 and on a weather-normal basis were up 13.9%. Natural gas deliveries in Wisconsin were down 4.9%. This excludes gas used for power generation. And on a weather-normal basis, natural gas deliveries in Wisconsin grew by 2.5%. Overall, our growth continues to track ahead of our forecast as the economy continues to open up. Turning now to our WEC infrastructure segment. As Gale noted, we have agreed to acquire a 90% ownership interest in the Sapphire Sky Wind Energy Center.

The project is being developed in McLean County, Illinois by Invenergy. The site will consist of 64 wind turbines with a combined capacity of 250 megawatts. We expect it will go in service late in 2022. The project fits our investment criteria very well. We plan to invest $412 million for the 90% ownership interest. We now have eight wind projects announced or in operation in our infrastructure segment. This represents approximately $2.3 billion of investment. We expect to invest an additional $1.1 billion in this segment over the remainder of our five-year plan. Our Jayhawk Wind Farm is projected to go in service by early next year, and our Thunderhead Wind investment is now projected to go in service in the first half of 2022. These time lines have been factored into our forecast. In case you're wondering about the impact of inflation on these projects, to date, we have not encountered any significant inflationary pressure. Remember that we primarily invest in turnkey projects with developers, so we are seeing no reduction of returns. With that, I'll turn it over to Kevin for an update on our utility operations.

Kevin Fletcher -- President and Chief Executive Officer

Thank you, Scott. Touching on some recent developments in Wisconsin, I'm pleased to report that our Badger Hollow I solar project is nearing completion and is producing test energy. As you may recall, we own 100 megawatts of this project in Southwest Wisconsin, and Madison Gas and Electric owns the remaining 50 megawatts. This is our second large-scale solar project and part of our plans for more than triple renewable energy between 2021 and 2025 we expect the next phase of the project, Badger Hollow II, to achieve commercial operations next year. Now for a few regulatory updates. Recall that after reaching an agreement with a major customer and environmental groups, we filed a request with the Public Service Commission to forego a rate base for our Wisconsin utilities this year. We expect a decision in the weeks to come. And we're pleased that the commission has approved pilot programs for electric vehicle charging in our Wisconsin service areas. With these programs, we plan to install charging equipment and electric distribution infrastructure. This is the first step in our effort to promote affordable charging options for electric vehicles. And we also have updates on the rate reviews at two of our smaller utilities. In Illinois, earlier this year, North Shore Gas requested a rate increase, primarily due to the significant capital investments we have made since the last rate case in 2015. Recently, the administrative law judge on the case issued a proposed order. The order recommends a $4.2 million rate increase on a 9.67% ROE and 51.6% equity component. We expect the commission's final decision by mid-September. Finally, in Michigan, I'm pleased to advise you that we have reached a settlement with all parties to conclude our rate review for Michigan Gas Utilities. This settlement stipulates a 9.85% return on equity and a revenue increase of $9.25 million with an equity layer of 51.5%. We expect the commission's approval by the end of the third quarter. We have no other rate cases pending at this time. And with that, I'll turn it over to Xia.

Xia Liu -- Executive Vice President and Chief Financial Officer

Thanks, Kevin. Our 2021 second quarter earnings of $0.87 per share increased $0.11 per share compared to the second quarter of 2020. Our favorable results were largely driven by higher earnings from our utility operations. Our regulated utilities benefited from warmer-than-normal weather, recovering economy, continued execution of our capital plan and our focus on operating efficiency. The earnings package posted on our website this morning includes a comparison of second quarter results on page 17. I'll walk through the significant drivers. Starting with our Utility Operations. We grew our earnings by $0.09 compared to the second quarter of 2020. First, continued economic recovery from the pandemic drove a $0.06 increase in earnings. This reflects stronger weather-normalized sales, as well as the resumption of late payment and other charges. Also, rate relief and additional capital investment added $0.04 compared to the second quarter of 2020. Lower day-to-day O&M contributed $0.01, and all other factors resulted in a positive variance of $0.02. These favorable factors were partially offset by $0.04 of higher depreciation and amortization expense. I'd like to point out that quarter-over-quarter, the impact of weather was flat. Overall, we added $0.09 quarter-over-quarter from Utility Operations. Moving on to our investment in American Transmission Company. Earnings decreased $0.02 compared to the second quarter of 2020. While we picked up $0.01 in the current quarter from continued capital investment, this was more than offset by a $0.03 benefit recognized in the second quarter of 2020 related to a FERC order.

Recall that this order allowed ATC to increase its ROE from 10.38% to 10.52% retroactive to November 2013. Earnings at our Energy Infrastructure segment improved $0.01 in the second quarter of 2021 compared to the second quarter of 2020. This was mainly driven by production tax credits related to wind farm acquisitions, partially offset by less-than-projected wind resources. Finally, we saw a $0.03 improvement in the Corporate and Other segment. Lower interest expense contributed $0.02 quarter-over-quarter. We recognized a $0.03 gain from our investment in a fund devoted to clean energy infrastructure and technology development. These positive variances were partially offset by a reduction of $0.01 in rabbi trust performance and $0.01 in taxes and other. In summary, we improved on our second quarter 2020 performance by $0.11. Now I'd like to update you on some other financial items. For the full year, we expect our effective income tax rate to be between 13% and 14%. Excluding the benefit of unprotected taxes flowing to customers, we project our 2021 effective tax rate will be between 19% and 20%. As in past years, we expect to be a modest taxpayer in 2021. Our projections show that we will be able to efficiently utilize our tax position with our current capital plan. Looking now at the cash flow statement on page six of the earnings package. Net cash provided by operating activities decreased $153 million. Our increase in cash earnings in the first six months of 2021 was more than offset by higher working capital requirements. Recall that the spike in natural gas costs seen throughout the central part of the country this February, coupled with higher accounts receivable balances, contributed to this increase in working capital. We were able to improve our working capital position in the second quarter. With normal collection practices underway in our major markets, we expect working capital to continue to improve throughout the remainder of the year. Total capital expenditures and asset acquisitions were $1.1 billion for the first six months of 2021, a $93 million increase as compared with the first six months of 2020. This reflects our investment focus in our regulated utility and Energy Infrastructure business.

On the financing front, we continue to find opportunities to lower our interest costs. In fact, in June, we refinanced $300 million of debt at Wisconsin Electric, reducing the average coupon of these notes by over 1.2% and extending the maturity to 2028. In closing, before I turn it back to Gale, I'd like to provide our guidance for the third quarter. We are expecting a range of $0.72 to $0.74 per share for the third quarter. This accounts for July weather and assumes normal weather for the rest of the quarter. This also takes into account timing of our fuel recovery and the costs associated with major storms that impacted our system last week. As a reminder, we earned $0.84 per share in the third quarter last year. This includes an estimated $0.05 of better-than-normal weather. And as Gale mentioned earlier, we're raising our 2021 earnings guidance to a range of $4.02 to $4.05 per share with an expectation of reaching the top end of the range. This assumes normal weather for the remainder of the year. With that, I'll turn it back to Gale.

Gale E. Klappa -- Executive Chairman

Xia, thank you very much. In addition to raising our annual guidance, we are reaffirming our projection of long-term earnings growth of 5% to 7% a year with a strong bias toward the upper half of that range. And finally, a quick reminder about our dividend. As you may recall, in January, our Board of Directors raised the quarterly dividend by 7.1% to $0.6775 a share. We continue to target a payout ratio of 65% to 70% of earnings. We're 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. Overall, ladies and gentlemen, we're on track, focused on providing value for our customers and our stockholders. And operator, we're ready now to open it up for the question-and-answer portion of the call.

Questions and Answers:

Operator

Yes, sir. [Operator Instructions] And our first question comes from the line of Shar Pourreza with Guggenheim Partners.

Gale E. Klappa -- Executive Chairman

Good afternoon, Shar.

James Kennedy -- Guggenheim Securities -- Analyst

Good afternoon, guys. It's actually James for Shar. Sorry, Gale.

Gale E. Klappa -- Executive Chairman

Hey, how you're doing.

James Kennedy -- Guggenheim Securities -- Analyst

Good, good. Thanks for taking my questions.

Gale E. Klappa -- Executive Chairman

Well, what have you done with Shar.

James Kennedy -- Guggenheim Securities -- Analyst

He's still in his bunker in New Jersey.

Gale E. Klappa -- Executive Chairman

There you go -- that's what I -- OK. Great.

James Kennedy -- Guggenheim Securities -- Analyst

So, I guess, just first on the policy side in Illinois. It sounds like negotiations, the comprehensive package in impasse recently. I realize it's not heavily focused on gas, but you guys are still involved. Do you guys have any updated thoughts on the prospects for something to get done in the coming weeks?

Gale E. Klappa -- Executive Chairman

Well, I think, we always thought that getting something done reasonably quickly was a very long shot in Illinois. The one thing that I think stands out post the public discussion of the impasse between the parties is that, both the Governor and the Senate majority leader have essentially urged the parties to continue talking. So we'll see what happens. But again, very little impact on gas distribution companies in Illinois. This is a major focus, as you know, particularly on Exelon and on the nuclear power plants. So pass or not, agreement or not, there's really no material impact on our company on Peoples Gas or North Shore Gas in Illinois.

James Kennedy -- Guggenheim Securities -- Analyst

Got you. Thanks. And I guess a little closer to home on the Wisconsin side. WPL's recent settlement had an interesting proposal for the recovery on the retiring Edgewater plant. Have you guys gotten a chance to dig into that? And could that be a template for the balance of the non-Power the Future fleet, which I think is just West and Colombia at this point?

Gale E. Klappa -- Executive Chairman

Well we're very aware of the approach that Alliant took. And could it be a template for going forward? It certainly could be. It's an interesting approach. I think it's a balanced approach and certainly something we'll be taking a look at. As you know, we're planning to retire the older units at our Oak Creek site, units five, six, seven and eight. 1960s vintage units, we're planning to retire those. We've announced the retirements in 2023 and 2024. So we have plenty of time to continue to work with all the parties involved. But, yeah, it was a very interesting approach to a settlement and one that really could make a lot of sense going forward.

James Kennedy -- Guggenheim Securities -- Analyst

Got it. That's all I had. Thanks and congrats on the results and the championship.

Gale E. Klappa -- Executive Chairman

Thank you. Appreciate it very much. Tell Shar to behave, OK?

James Kennedy -- Guggenheim Securities -- Analyst

Will do.

Operator

And your next question comes from the line of Julien Dumoulin-Smith with Bank of America.

Gale E. Klappa -- Executive Chairman

Hey, Julien

Julien Patrick Dumoulin Smith -- Bank of America Securities -- Analyst

Hey, hey. How are you?

Gale E. Klappa -- Executive Chairman

We're good. What about you.

Julien Patrick Dumoulin Smith -- Bank of America Securities -- Analyst

Quite well. Thank you. Congrats on the recent win here, must be exciting.

Gale E. Klappa -- Executive Chairman

Yeah. Terrific. Been great for the city, been great for the region. So happy for the team. And happy for you. I understand that you proposed during the game six, is that true.

Julien Patrick Dumoulin Smith -- Bank of America Securities -- Analyst

So after the airing, right? Recently, we -- I can confirm that it's been exciting. Thank you. Maybe to cut to other exciting news here. You guys -- if I look at 2021 guidance relative to where you are year-to-date here, you're ahead $0.30. How are you thinking about O&M in the back half of the year? I know you guys like to push and pull O&M to ensure a linear trajectory here. But as you think about the relative conservative nature of your guidance, can you comment a little bit on where you stand on the back half of this year?

Gale E. Klappa -- Executive Chairman

Sure. We have a number of maintenance projects planned for the back half of the year. And also as Xia mentioned, we had some $6 million $7 million of reasonably extraordinary costs, just last week for repair from serious storms that took out over 100,000 customers in Northern Wisconsin and had six tornadoes in a line between the Western Milwaukee suburbs and Madison. So, we had some extraordinary costs in July, which influenced the range of guidance that Xia gave you for the third quarter. But again, there are numerous projects that we have lined up for the fourth quarter for O&M. I still believe that we will -- our day-to-day O&M will be down for the year, but we certainly have an opportunity to really carry out some very, very good maintenance that will help us for 2022.

Julien Patrick Dumoulin Smith -- Bank of America Securities -- Analyst

Right, excellent. And perhaps just to parse that statement a little bit you still leave it to be down but your previous expectation 2% to 3%?

Gale E. Klappa -- Executive Chairman

Yeah. That was our previous expectation. It's certainly a goal we could hit. But as we look at some of the extraordinary storm costs and other work, again we believe it will be down. It may not be down 2% to 3%, but that doesn't mean that the trajectory is still long term out in place. It still is. It's just a matter of looking at a six-month period if you will.

Julien Patrick Dumoulin Smith -- Bank of America Securities -- Analyst

Got it, excellent. And lastly, can I could here? Obviously you're pretty excited about sales some of the leading indicators of what sales might do. Can you comment a little bit preliminarily on how you're thinking about trends into 2022 even? I mean obviously, 2021 retail sales coming in 1% below 2019 on a normalized basis it sets up pretty nicely here as you think about it. But I'd be curious on how you would characterize some of these larger projects, et cetera coming in.

Gale E. Klappa -- Executive Chairman

Well, many of the larger projects that we've been referring to the larger economic development projects are now under construction. We wouldn't necessarily expect a big uptick in 2022 from those projects, although there will be some. But really, it's 2023 and 2024 and beyond where we'll see the big impact from some of the economic development projects. But I would say, kind of as we look at the landscape again you go back to the tailwind of the economic recovery in Wisconsin, which has been very strong. Scott detailed a big uptick in large commercial and industrial demand. And Scott, I think one of the more encouraging things to me on the natural gas side of the business as we continue to see very strong customer growth.

Scott J. Lauber -- Senior Executive Vice President and Chief Operating Officer

No. That's exactly correct, Gale. So we're seeing good customer growth, specifically on the gas side. But on the electric side too. We're hooking up a lot of new services on both gas and electric in Wisconsin and Michigan and Minnesota on the gas side also. So, good growth and the small commercial and industrial really did well this quarter. But remember, it was compared to the first quarter of the pandemic last year. But, very happy where the sales are right now.

Gale E. Klappa -- Executive Chairman

I do think we have to see how the variant continues to spread. Many companies were planning on a significant return to the office if you will in September. We and others have now pushed that off until October at the earliest. So that could have some short-term impact. But overall, as Scott said, we feel very, very positive about our projections for demand growth for both gas and electricity.

Scott J. Lauber -- Senior Executive Vice President and Chief Operating Officer

Excellent. All right. Well thank you very much. Take care. See you soon.

Gale E. Klappa -- Executive Chairman

You too. Thank you, Julien.

Operator

And your next question comes from the line of Durgesh Chopra with Evercore ISI.

Gale E. Klappa -- Executive Chairman

Hi, Durgesh. How are you today?

Durgesh Chopra -- Evercore ISI -- Analyst

Hey, Gale, congrats on both fronts sports and a great quarter. Just two questions for me. First for Xia. On the $0.03 gain on Clean Energy Fund, could you elaborate on what that is?

Xia Liu -- Executive Vice President and Chief Financial Officer

Sure. We have a very small investment in a fund that invests in development-stage companies in the renewable energy space and charging infrastructure space. So it's a very small -- I think the balance is only like $30 million, but we're happy to see the gain.

Durgesh Chopra -- Evercore ISI -- Analyst

Got it. Okay. Thanks. Didn't realized you actually had that investment. Okay. Just -- and then maybe just quickly Gale, sorry, if I missed this, but any update on the Wisconsin rate case proceeding your sort of petition to delay the rate case? We haven't heard back from the commission yet, right?

Gale E. Klappa -- Executive Chairman

Yes. We have now seen publicly the commission staff memo on the subject. And usually, the commission will vote post the publication of the staff memo on any matter like this within a matter of weeks. So I would expect within just a matter of weeks we will have a commission vote on the stay-out proposal. And again, the -- overall the staff memo was just fine.

Durgesh Chopra -- Evercore ISI -- Analyst

Excellent. Congrats again here on back-to-back execution for many years and again this quarter. Thanks. Thank you, Durgesh. Appreciate it.

Operator

And your next question comes from the line of Michael Lapides with Goldman Sachs.

Michael Jay Lapides -- Goldman Sachs -- Analyst

Hey, guys.

Gale E. Klappa -- Executive Chairman

Hey, Michael.

Michael Jay Lapides -- Goldman Sachs -- Analyst

Greetings and congratulations Gale in the city Milwaukee on the NBA title that's -- I wish my Grizzlies would pull off something like that rooting for him. Got a question for you. When I look at your capital budget your five year and I know you're only a couple of months away from providing investors with an update to that, year four and year five are down from years one, two, three. If that actually happens, it means you become a free cash flow-generating company. But if you had to be a wagering man at this earlier stage and I know year four and year five is an eternity away, do you think that actually happens? And if not what are the things -- what are the buckets that could make year four and year five or maybe even years three through five a good bit higher than what you outlined in last November for your five year outlook?

Gale E. Klappa -- Executive Chairman

Great question, Michael. First of all, if you look historically at our five-year capital plan, years four and five always tail off a bit. It's just kind of how we roll. And the reason for that is we don't like to have a lot of white space and a lot of undefined line items in our five-year capital plan. So we tend to give you particularly for the first three years stuff that we know is actually going to be proposed, is actually going to be built upon approval et cetera. But historically, I think for all the years I've been here, when we've laid out our five-year capital plan, you've always seen a bit of a downturn compared to the first three years for years four and five. So to directly answer your question, I do not believe when we update our five-year capital plan, which we'll do on our next analyst call in early November Beth, I believe and then with much more details at the EEI Finance Conference. You're not going to see -- I would be stunned if you saw any kind of a decline in what is now years four and five. It's just not going to happen, not going to happen in particular because of the strong investment opportunity that we have in front of us. And what kind of buckets might we see? Well, clearly, there's going to be an additional emphasis on continuing to invest in renewables and battery storage, distribution upgrades, new customer connections, you name it. It will be across the board. But as you know a very significant tailwind as we continue to execute our ESG progress plan continue to reach those lofty environmental goals those aggressive environmental goals. So again, I wouldn't put too much stock in looking at years four and five right now. Those buckets will definitely be filled up. Scott, anything to add to that?

Scott J. Lauber -- Senior Executive Vice President and Chief Operating Officer

I think you're exactly right, Gale. We've always had a tendency to be a little bit lower in those outer years. And as Kevin, mentioned in his prepared remarks, we're just seeing the start of the electric vehicle pilot we have. So we already got some interest in that and then we don't even have the order yet. So I think there's a lot of opportunities ahead on the generation and the distribution side.

Michael Jay Lapides -- Goldman Sachs -- Analyst

Got it. And then one follow-up. Gale, you made a comment about inflation. What are you all seeing in terms of cost -- commodity cost input for things like gas distribution mains or equipment other equipment things like copper et cetera. And even on the regulated side of the business, the larger side of the business and what that does to your capex projections?

Gale E. Klappa -- Executive Chairman

Well at the present time -- I mean if you look at copper for example, it was elevated four or five, six months ago and hasn't moved much since for example. We're really frankly not seeing a ton. I think as we phrased it, really not -- no significant impact so far. Now, part of that is because of the way we deal with our infrastructure segment and the fact that we have set prices with developers that have very long history of being able to procure, at very positive and constructive prices. So on the infrastructure side, we haven't really seen any significant impact at all. On the regulated side, again, a lot of the projects that we have underway procurement has already taken place. So not much at this stage of the game in terms of inflationary impact. Where we have seen where we have seen some inflationary impact is actually in the natural gas commodity prices. Gosh we were up over $4 per million Btu just the other day. So there I think -- with the glut of natural gas a bit disappearing across the country, I think we're going to see some elevated natural gas prices certainly for winter -- the upcoming winter. But that's where in my opinion we're seeing the first kind of signs. And then in terms of the future, it's anybody's guess how sticky the inflation numbers are but one of the things that I always tend to look at for what it's worth. Remember Milton Friedman said that inflation is, has been and always will be a monetary phenomenon. So one of the things I think that we look at is, essentially the growth of the money supply. And if you look at the growth of the money supply it's already begun to taper off a little bit. It's still up and up materially but it's already begun to taper off a little bit. So that gives me some hope that while we probably for the next year we'll see some elevated inflation numbers perhaps it's on its way to a more normal level.

Michael Jay Lapides -- Goldman Sachs -- Analyst

Got it. And, hey, one last question and this is just a modeling one. Can you remind me you mentioned in the prepared remarks the in-service dates for Thunderhead and Jayhawk?

Gale E. Klappa -- Executive Chairman

Yeah. Scott?

Scott J. Lauber -- Senior Executive Vice President and Chief Operating Officer

Yeah. Thunderhead is going to be in the first half of next year and then Jay Hawk should be probably in the first quarter.

Michael Jay Lapides -- Goldman Sachs -- Analyst

Got it. So both of those moved a little from original in-service dates?

Gale E. Klappa -- Executive Chairman

Well, Jay Hawk maybe a month or two no big deal. Thunderhead we ran into a problem with something called the American burying beetle which has now been removed as I understand it from the endangered species list. Actually, the construction on Thunderhead is about done. It's a matter of the substation completing construction now that, all of that has been worked through in terms of moving forward post the issue of the American burying beetle.

Michael Jay Lapides -- Goldman Sachs -- Analyst

Got it. Thank you guys. Much appreciate it.

Gale E. Klappa -- Executive Chairman

You're welcome. Thank you for your questions.

Operator

And your next question comes from the line of Jeremy Tonet with JPMorgan.

Gale E. Klappa -- Executive Chairman

Hey, Jeremy. How are you today?

Jeremy Bryan Tonet -- JPMorgan Chase -- Analyst

Good afternoon. Thanks for having me.

Gale E. Klappa -- Executive Chairman

Nice being here. Now go ahead.

Jeremy Bryan Tonet -- JPMorgan Chase -- Analyst

I just wanted to touch base on -- with your way this wind announcement here it seems that about half of the planned infrastructure investments are now identified. Are there any timing or tax considerations limiting a continued acceleration here? And just how do you see the market backdrop amid kind of broader infrastructure discussions in D.C. here?

Gale E. Klappa -- Executive Chairman

Yeah. Well the truth of the matter is we have timed the size if you will and the timing of our infrastructure segment investments over the five-year period to match our tax position and the ability to monetize production tax credits. There's nothing that would stand in the way of some modest additional acceleration of the investments. And you're right we are ahead of schedule, with very high-quality projects. Going forward, I know there's been a lot of discussion around the industry about lower returns, about backlogs and delays. But I would say, if you look at our pipeline of potential projects, it is still very robust. And we're working with potential projects and developers that have long successful track records. We don't see right now any diminution of the kind of projects that we're interested in for our infrastructure segment or and importantly we're not seeing any significant diminution in returns. In fact, we mentioned both Scott and I, Sapphire Sky. That has the potential to be one of the very best return projects we have ever had. So again, for us, for the segment we're looking at and for the highest-quality projects with great developers we feel very, very positive about our pipeline. And I hope that responds to your question.

Jeremy Bryan Tonet -- JPMorgan Chase -- Analyst

That was very helpful. Thank you for that. Maybe just kind of shifting gears a bit here given the elevated market attention on coal generation and when you think about Power of the Future coal here, just wondering you could update us how you balance local reliability needs with this backdrop and maybe the potential to repower the asset with natural gas? And how near term could this potential be, if you decide to go in that direction?

Gale E. Klappa -- Executive Chairman

Well, great question. I'm going to ask Scott to give you his view on this as well. Let me just say, two quick things. I mean essentially with the retirement of older coal-fired units that has already taken place on our system with the announced retirements that we've talked about already really there's very little coal-fired capacity left in our system after 2025. Like you and others we're asked about the new units at our Oak Creek site. Those new units are very efficient among the most efficient thermal-fired power plants in the world. And I should remind everybody that what we need to do in looking at the future of those units is to separate the value of those units from the fuel source. And let me explain that. The new Oak Creek units are ideally situated on the transmission grid in the Midwest. They are very important to reliability in the middle western part of the United States not just Wisconsin. So we built those units. And remember the first unit came online in 2010 the second in 2011. We built those units with some flexibility. In fact I mean there is natural gas into the site. It is possible and we've done it several times to coal fire, the units on coal and natural gas. And yes, it is possible -- technically possible for the units to be converted away from coal to natural gas at some point. In fact, we are taking a look at both from an engineering standpoint and a cost standpoint the feasibility of doing so. Scott what would you like to add to that?

Scott J. Lauber -- Senior Executive Vice President and Chief Operating Officer

No. That's exactly right Gale. And when you think about the reliability because you brought up the reliability of the system and when we look at it and when we talk about 8% of energy from coal in 2030 that still gives a potential for about 17% 18% of capacity as needed on that really peak day to make sure we have the energy that's needed. And Gale is exactly right we can look at potential conversions there in the future. So we really have to look at how do we keep the reliability and affordability and clean energy in the system.

Gale E. Klappa -- Executive Chairman

And one other point: our goal for 2030 of an 80% reduction in carbon does not assume any conversion of the new Oak Creek units away from coal to natural gas. So that just gives you a sense of how effective we can be in continuing to reduce CO2 even with a very efficient coal-fired units at the new Oak Creek site still in place.

Jeremy Bryan Tonet -- JPMorgan Chase -- Analyst

Got it. So it sounds like a nice optionality going forward there.

Gale E. Klappa -- Executive Chairman

And I think that's a great way to describe it. We have a lot of options with a very key asset again to reliability for the region.

Jeremy Bryan Tonet -- JPMorgan Chase -- Analyst

Great. Thanks. And just one last one if I could sneak it in here. Thanks for the update on the Wisconsin rate case process there. I'm just wondering are you focused on any other regulatory items locally in advance of filing next year?

Gale E. Klappa -- Executive Chairman

No. It's pretty calm. I mean it really is. I think Kevin described the ALJ proposed order at North Shore Gas one of our smallest companies in Illinois. Just agreed to a settlement of a rate case in Michigan for Michigan Gas Utilities. But other than that in the normal course filings it's pretty steady as you go.

Scott J. Lauber -- Senior Executive Vice President and Chief Operating Officer

The condition continue to look at our solar projects we have on the solar and battery projects so we can get approval on those and start implementing that.

Gale E. Klappa -- Executive Chairman

Yes. That's a good point. We've made several multiple filings if you will over the course of the first half of this year to move forward with that 1800 megawatts of wind, solar and battery storage regulated for Wisconsin. That's going well.

Jeremy Bryan Tonet -- JPMorgan Chase -- Analyst

Great. Thanks for your time. I will leave it there.

Gale E. Klappa -- Executive Chairman

Thank you, Jeremy.

Operator

And your next question comes from the line of Sophie Karp with KeyBanc Capital Markets.

Gale E. Klappa -- Executive Chairman

Good morning, Sophie.

Sangita Jain -- KeyBanc Capital -- Analyst

Hi. This is actually Sangita [Phonetic] for Sophie. Thanks for taking my question, Gale.

Gale E. Klappa -- Executive Chairman

Sure.

Sangita Jain -- KeyBanc Capital -- Analyst

So about the Oak Creek and Columbia units that you plan to retire, can you tell us if that's part of the regulated utility or the unregulated part?

Gale E. Klappa -- Executive Chairman

No. Those are all part of our regulated asset base in Wisconsin.

Sangita Jain -- KeyBanc Capital -- Analyst

And does it -- as you look at retiring more in the future, does it make a difference which ones you decide to retire first? I'm just trying to get a sense of what factors go into some situation as you sequence the retirement.

Gale E. Klappa -- Executive Chairman

Well, that's really a very simple answer, and that is as we look to retire additional capacity, we look first and foremost at older units that are less efficient. So it's all driven by age and efficiency, what kind of capital it might take to keep those units alive. It's really not a complicated formula. We look at age efficiency and whether or not it makes any sense from a capital investment standpoint to spend the dollars that would keep those units alive. And of course, as I mentioned the next units to be retired on our system would be the older Oak Creek units. They've been part of the Wisconsin retail rate base since 1960s. That's Units five, six, seven and eight at our older Oak Creek site. And then we are a joint owner with Alliant for the Columbia Units one and two. And Scott those would retire in the same time frame, correct?

Scott J. Lauber -- Senior Executive Vice President and Chief Operating Officer

Correct. 2023 and 2024.

Sangita Jain -- KeyBanc Capital -- Analyst

Okay. Great. Thanks so much.

Gale E. Klappa -- Executive Chairman

You're welcome.

Operator

And your next question comes from the line of Andrew Weisel of Scotiabank.

Gale E. Klappa -- Executive Chairman

Hello, Andrew.

Andrew Marc Weisel -- Scotiabank -- Analyst

Hi. Good afternoon.

Gale E. Klappa -- Executive Chairman

Good afternoon.

Andrew Marc Weisel -- Scotiabank -- Analyst

Two quick ones. It seems like so many others you've been facing a growing number of extreme weather events. You've been fortunate and well positioned to react quickly so it hasn't been devastating in terms of outages. But as you evaluate your O&M programs, do you see any opportunity or need to change anything as far as storm preparation and response?

Gale E. Klappa -- Executive Chairman

Well, the short answer is we continue to invest in reliability. And I'm very proud of our folks, very proud of the fact that We Energies has been named the most reliable utility in the Midwest for 10 consecutive years running. So we have a historic and positive investment program that we continue with to ensure upgrades and reliability not only just from the standpoint of undergrounding some lines like we've done in Northern Wisconsin, but proactive replacement of transformers where we know there's a failure rate post age 50. There's a lot going on in terms of again positive investment opportunities to maintain superior reliability. I would just say though Andrew, I'm not sure we're seeing more extraordinary weather events than we have in the past. In fact in the last couple of years the tornado season in Wisconsin has been milder than in some previous years. We have seen two or three polar vortex events. But if you look back, I mean, over the course of the last 40 or 50 years candidly Scott, we've both been around Wisconsin a long time in the Midwest. I don't think we're seeing a dramatic change in weather events. Do you?

Scott J. Lauber -- Senior Executive Vice President and Chief Operating Officer

No. We were having extreme polar vortex years ago. We just didn't have the fancy name polar vortex. It was just cold. But I think you're just seeing more strain on the system as across the enterprise or across the country as like we saw in Texas and a variety of I think you're getting a lot more media time too.

Gale E. Klappa -- Executive Chairman

Yes. And to Scott's point there's a lesson here from what we're seeing around the country and it's a lesson that I think all of us have been around for a while truly believe in. And that is when you have to have it for reliability when lives are on the line when it's minus 42 without the windchill in Northern Wisconsin diversity of fuel mix and dispatchability will really make a difference. And that's something we can't forget as an industry or as a company. Reliability is at the bedrock of what we do. Millions of lives were saved by the availability of natural gas this past winter in the northern part of the US. So, we're very cognizant of how important the reliability is and we'll continue to invest to maintain superior reliability.

Andrew Marc Weisel -- Scotiabank -- Analyst

Got it. Thank you everyone.

Gale E. Klappa -- Executive Chairman

You're welcome.

Operator

And your final question comes from the line of Vedula Murti with Hudson Bay Capital.

Gale E. Klappa -- Executive Chairman

Rock and roll Vedula. Long time no talk too.

Vedula Murti -- Analyst

Can you hear me?

Gale E. Klappa -- Executive Chairman

We can hear you. How are you doing Vedula?

Vedula Murti -- Analyst

Doing well. Thank you. A couple of things. One you touched a little bit on collection vehicle infrastructure. But what I'm kind of more interested in is how you [Technical Issues]

Gale E. Klappa -- Executive Chairman

Vedula I'm very sorry. You broke up several times. I am not sure that I understood the gist of your question. Beth was a little bit closer to -- Beth can you tell me what you think Vedula was asking?

M. Beth Straka -- Senior Vice President, Corporate Communications and Investor Relations

I only caught a portion of it related to -- and growth of EV.

Gale E. Klappa -- Executive Chairman

Okay. All right. Well we can certainly -- and Vedula if you want to try it again. Again you broke up a few times and I apologize we couldn't quite follow you.

Vedula Murti -- Analyst

Sorry. Where I was going -- I'm having trouble with my phone as well. So, why don't you ahead Gale.

Gale E. Klappa -- Executive Chairman

Okay. Well, we can talk a bit about the growth of EVs. Again we're very pleased. There will be I think a number of policy initiatives both at the federal level as you know, but also at the state level here in Wisconsin to try to encourage the penetration and customer ownership of EVs. And I see that as another investment opportunity for us. As Kevin mentioned, we just had approved a pilot program that will allow us to offer cost-effective charging options for a range of customers including some non-profit customers, including government entities, etc., etc,. So, we're on it in terms of trying to encourage the adoption of electric vehicles. And we'll see how this goes. But already, again as Scott mentioned, we don't even have a final order written yet and we have a number of interested parties and we're already beginning substantive talks with folks on our EV pilot charging program. I hope, Vedula that answers your question.

Vedula Murti -- Analyst

All right. I'll follow up off-line. Thank you.

Gale E. Klappa -- Executive Chairman

Okay, terrific. Thank you, Vedula. All right, well I think that covers the waterfront for today folks. That concludes our conference call for this afternoon. Thank you so much for taking part. If you have more questions, feel free to contact Beth Straka. And she can be reached at 414-221-4539. Thank you everybody. Take care.

Operator

[Operator Closing Remarks]

Duration: 52 minutes

Call participants:

Peter Feigin -- President

Gale E. Klappa -- Executive Chairman

Scott J. Lauber -- Senior Executive Vice President and Chief Operating Officer

Kevin Fletcher -- President and Chief Executive Officer

Xia Liu -- Executive Vice President and Chief Financial Officer

M. Beth Straka -- Senior Vice President, Corporate Communications and Investor Relations

James Kennedy -- Guggenheim Securities -- Analyst

Julien Patrick Dumoulin Smith -- Bank of America Securities -- Analyst

Durgesh Chopra -- Evercore ISI -- Analyst

Michael Jay Lapides -- Goldman Sachs -- Analyst

Jeremy Bryan Tonet -- JPMorgan Chase -- Analyst

Sangita Jain -- KeyBanc Capital -- Analyst

Andrew Marc Weisel -- Scotiabank -- Analyst

Vedula Murti -- Analyst

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