By Amanda Durish Cook
Cold weather and a stronger regional economy helped boost WEC Energy Group’s first-quarter earnings above expectations, the company reported Tuesday.
The company also addressed uncertainty in its executive suite and described its near-term plans for more renewable investment.
WEC’s profits totaled $390.1 million ($1.23/share) during the quarter, compared with $356.6 million ($1.12/share) for the same period last year.
CEO Gale Klappa said the “solid results” were driven by a stronger-than-expected demand for electricity and natural gas. “Colder winter temperatures, a strengthening economy and efficiency gains across our system were all positive factors that lifted our earnings above year-ago levels,” Klappa said.
The company’s operating revenue for the quarter slipped from $2.3 billion to $2.29 billion this year.
During a May 1 earnings conference call, Klappa praised the company’s performance and said it has a plan readied in the event that company President Allen Leverett does not return to his post as CEO after being placed on medical leave in October 2017 when he suffered a stroke. Klappa said Leverett is currently undergoing intensive speech therapy and is in “good physical condition.” Should Leverett choose not to resume the role of CEO, WEC will employ a succession plan that would “involve a number of internal promotions,” Klappa said.
“I can assure you that we have a solid Plan B in place if Allen does not assume his previous role. … We would have great continuity going forward, and the board and I are very comfortable with [that],” Klappa said, adding that he and WEC’s board of directors will continue to monitor the situation.
Klappa also said WEC is making multiple renewable energy investments throughout 2018. The company on April 30 signed a $280 million agreement to acquire an 80% ownership interest in the 200-MW Upstream Wind Energy Center, currently being built by Invenergy in Antelope County, Neb. Klappa said he expects the wind farm deal to close in early 2019, pending FERC approval — just as Upstream begins commercial operation.
Early last month, WEC closed on its $80 million partial purchase of the 129-MW Forward Wind Energy Center near Brownsville, Wis. Klappa said WEC now owns 44.6% of the wind farm, which is expected to generate savings for customers.
WEC also plans to file construction requests with Wisconsin regulators by the end of the second quarter to build its first solar farm, Klappa said.
“Over the past few years … utility-scale solar has increased in efficiency, and prices have dropped by nearly 70%, making it a cost-effective option for our customers, an option that also fits very well with our summer peak demand curve and with our plan to significantly reduce carbon dioxide emissions,” Klappa said.
He also said WEC is developing plans to provide natural gas and electric infrastructure to “Wisconn Valley,” the moniker for the future site of electronics manufacturer Foxconn’s $10 billion plant. In February, MISO expedited review of American Transmission Co.’s proposed, $140 million interconnection project to link the plant into WEC subsidiary We Energies’ transmission network. (See MISO Fast-Tracks ATC Foxconn Project Review.)
