Well, good morning, ladies and gentlemen. Welcome to Concordia University Wisconsin. It's 10:00 A.M., Central Daylight Time, the time set for convening WEC Energy Group's 2018 annual meeting of stockholders. I'm Gale Klappa, Chairman of the Board and Chief Executive of WEC Energy Group, and I will serve as Chairman for today's meeting. We're delighted to be back here at Concordia. It's our annual meeting home away from home, and I'd like to again thank the President of Concordia, the Reverend Dr. Patrick Ferry and his staff, for their always gracious hospitality year after year. Now, before we begin our session today, I'd like to ask Dave Megna, our Vice President of System Operations, Chris Fernandez, a lead lineman from Wisconsin Public Service, and Kim Higginbotham, a veteran We Energies line mechanic, to join me here at the podium. Folks,
Welcome Dave. Welcome, Kim. Welcome,
Chris.
Thank you.
Last September, when Puerto Rico took a devastating blow from Hurricane Maria, virtually the entire island was left in the dark, the electric power grid literally devastated. Millions were left without power, living without the basic necessities of life for months on end. By January of this year, it was clear that a massive restoration effort was needed. Our electric utilities, We Energies and Wisconsin Public Service, were among those who answered the call. It was, ladies and gentlemen, an unprecedented effort for us, sending crews and a massive amount of equipment outside the continental United States for the first time in our history. Trucks and equipment had to be driven to Florida, where they were loaded onto barges and then transported to the island. Our workers had to commit to a six-week stay, but there was no shortage of volunteers from our companies.
Dave Megna was the mastermind who organized the effort. Chris and Kim were among more than 70 employees who answered the call to join this humanitarian mission. The conditions, to say the least, were difficult. The work was hard. In fact, they worked 16 hours a day, seven days a week. Instead of six weeks, most of our folks ended up staying for a full two months. Let's watch.
Roosters crow as crews gear up to restore power in Puerto Rico. Each day begins before dawn, the sun barely rising by morning briefing.
Target zero again, everybody. Zero injuries, no motor vehicle accidents.
A small army of nearly 60 We Energies and Wisconsin Public Service employees hit the streets of San Juan.
Basically, we're working 16 hours, and then you go, you get something to eat, and you go to sleep.
There's little time for rest when you're up against this. It's been months since Hurricane Maria, but with damage remaining at every turn, it's as if time has stood still here.
Home after home that is without power, street after street. You finish one, and you go onto the next, it's the same thing. It's so widespread, and it's total devastation.
A bird's-eye view of the crew staging area shows dozens of utility trucks, just a fraction of the 1,500 utility workers that came from the mainland in mid-January. New York utility Con Edison led the charge in San Juan, specifically requesting to work with our crews based on the lasting impression they made during Hurricane Sandy.
That's exactly what happened. I saw the name on the board as resources. I was like, "Get Wisconsin.
It was the residents of Puerto Rico who were happiest to see our crews.
It was like the cavalry coming in to save the day. We were very grateful. I think it's an understatement to say that we were very grateful.
In urban areas, crews navigated narrow streets and braved rough neighborhoods where other utilities refused to work. Houses were attached in some spots, making backlot utility poles hard to reach. Crews had to go through homes with special equipment and use cranes to lift poles up and over. In mountainous regions outside San Juan, steep inclines posed another set of challenges. Crews had to restring wire through jungles, some jobs taking multiple days. The work was physically challenging, and there was emotional sacrifice, too.
Both my girls, I'm missing their birthdays when I'm here. seven and nine. They'll be eight and 10 when I get home. If you see the expressions on the people's faces, you see how they react when we're putting the lights back on. It truly doesn't make you forget that you're away from home, but it makes it all worthwhile.
Scenes like this played out over and over. Residents overjoyed to have electricity again after months in the dark.
What else do you have to say?
Yeah, there's crying, there's screaming, jumping up and down. It's a wide range of emotions.
The celebration in schools was especially heartwarming.
Thank you for bringing our light, and we wish you luck to get light to all Puerto Rico.
Everywhere they went, people expressed gratitude with food. Even those with little to give shared what they had.
Try Recaito from Puerto Rico.
There we go. People who lost so much still with so much to give. To them, crews weren't just restoring power, but restoring faith.
It's indescribable, I would say.
I am touched and blessed by just the generosity, the heart, the resilience of the people of Puerto Rico.
That's the way we were made. We just thank God every day that we have life, and we can just keep going. Thank you. Thank you. That's all that I can do. Thank you.
Well, to borrow a line from Kim, it's in the lineman's heart to just get things done, and that's exactly what our folks did. On recognition of their tireless effort, every employee who helped to restore electricity in Puerto Rico is receiving a Chairman's Award. Not all of our volunteers could be here today. They actually have some work to do. I appreciate Dave, Chris, and Kim accepting these awards on their behalf. I can tell you without hesitation that our crews and our logistics people are among the very best this industry has to offer. They also, ladies and gentlemen, have great hearts. Dave. Kim. Chris. Congratulations. Congratulations. Congratulations, Kim. Thank you. Thank you, Chris.
In honor of all of our volunteers, the We Energies Foundation and the Wisconsin Public Service Foundation will each make a $5,000 contribution to the relief efforts of the American Red Cross. Dave, Chris, and Kim, thank you again for your caring attitude and for the fantastic work you do for our companies. Now, ladies and gentlemen, if you will please stand, Dave will lead us in the pledge of allegiance. Dave?
I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all.
Perfect. Thank you, Kim.
Thank you.
Appreciate it. Chris, thank you very much. Dave, good work.
Thank you.
Thank you, guys. All right. Thank you again, folks. Well, I'm delighted to see all of you here this morning. I'd also like to extend a word of welcome to those who are joining us via our webcast. Our meeting is streaming live today at wecenergygroup.com. Now it's time to call our 2018 annual meeting to order. I've been given the inspector's report, which indicates that more than 88% of the company's outstanding shares are represented. This constitutes a quorum under the company's bylaws, and this meeting, therefore, is duly convened to conduct business. At the end of our formal program, we'll be happy to answer as many of your questions as time allows. As always, some of the information you will receive this morning is forward-looking in nature and is based on our current expectations.
Our projections clearly involve risks and uncertainties, factors discussed in the company's latest Form 10-K and in future reports filed with the Securities and Exchange Commission could cause our actual results to differ materially from those discussed today. Now we'll begin our business session by introducing the members of the WEC Energy Group Board of Directors. I would ask each director to please stand as I introduce them and remain standing until all the directors have been recognized. Ladies and gentlemen, if you would please hold your applause until the end of the introductions. We'll begin with John F. Bergstrom, Chairman and Chief Executive Officer of Bergstrom Corporation. John could not be with us today because he's on a special trip to the Vatican, and under the pecking order, the Vatican comes first. Next is Barbara L.
Bowles, Retired Vice Chair of Profit Investment Management and Retired Chairman of The Kenwood Group. William J. Brodsky, Chairman of Cedar Street Asset Management, LLC. Albert J. Budny Jr., Retired President and Director of Niagara Mohawk Holdings, Incorporated. Patricia W. Chadwick, President of Ravengate Partners, LLC. Curt S. Culver, Non-Executive Chairman of MGIC Investment Corporation and Mortgage Guaranty Insurance Corporation. Danielle Cunningham, Retired Partner and Chief Risk Officer of Deloitte & Touche, LP. William M. Farrow III, Chairman and Chief Executive Officer of Winston & Strawn LLP. Thomas J. Fischer, Principal of Fischer Financial Consulting LLC. Henry W. Knueppel, Retired Chairman and Chief Executive Officer of Regal Beloit Corporation. Alan L. Leveritt, President of WEC Energy Group. As many of you know, Alan is on medical leave as he recovers from a stroke. He's in speech therapy and could not be with us today.
Next is Ulice Payne Jr., Managing Member of Addison-Clifton, LLC. Mary Ellen Stanek, Managing Director and Director of Asset Management for Baird Financial Group. Please join me in a round of applause for our directors. Next, I'd like to recognize the officers of WEC Energy Group and its subsidiaries, as well as the union and management representatives who are here with us today. Our union and management teams work very closely together to address important company issues. Folks, would you please stand? Thank you very much. I'd also like to introduce Susan Hogan from Computershare. Computershare is the company that serves as our transfer agent and registrar. Susan has been appointed as the Inspector of Election for our meeting. Susan, would you please stand? There we go. Susan has assured me there's been no Russian meddling with the proxy votes. Right, Susan? All right.
Also with us today are representatives of Deloitte & Touche, Kevin Scheibel and Bob Gordon. They're our auditors, and they can answer any questions you may have about our 2017 financial statements. Gentlemen, would you please stand? There we go. Now I'll call on our Executive Vice President, General Counsel, and Corporate Secretary, Peggy Kelsey, to report on the proposals that we have before us this morning. Peggy?
Thank you, Gale, and good morning. On March 22nd, 2018, a notice of this meeting was sent to all stockholders of record as of February 22nd, 2018. As set forth in your proxy statement, there are three items on which shareholders have been asked to vote. Number one, election of 14 directors to serve for terms expiring at the annual meeting of stockholders in 2019. Number two, ratification of Deloitte & Touche LLP as independent auditors for 2018. Number three, an advisory vote to approve compensation of the named executive officers, commonly known as say on pay. We will now proceed with the vote for the 2018 annual meeting. If you previously voted your proxy, your vote has already been recorded. At this time, I would like to ask if there are any outstanding proxies that have not been turned in to be counted.
If you have not yet voted, please raise your hand and an usher will pick up your ballot. Thank you. The vote is now closed. I have been appointed to vote all of the shares represented by proxy votes sent in by our stockholders. I have submitted the proxy ballot, which reflects your instructions to the Inspector of Election. The preliminary inspector's report has now been completed. The following nominees for election to the board of directors all received more than 93% of the votes cast and have been duly elected. John Bergstrom, Barbara Bowles, William Brodsky, Al Budny Jr., Patricia Chadwick, Curt Culver, Danny Cunningham, William Farrow III, Thomas Fischer, Gale Klappa, Henry Knueppel, Allen Leverett, Ulice Payne Jr., and Mary Ellen Stanek. Each director will serve until the 2019 annual meeting.
The proposal to ratify Deloitte & Touche LLP as independent auditors for 2018 has received an affirmative vote of more than 97% of the votes cast. Deloitte & Touche is therefore ratified as the independent auditors for 2018. Finally, the proposal to approve the compensation of the company's named executive officers, as disclosed in the proxy statement, has received the affirmative vote of more than 93% of the votes cast. This say on pay vote was advisory and not binding. However, the board reviews the voting results and takes them into consideration when making future decisions regarding executive compensation. The formal portion of this meeting is now adjourned. I will now turn the meeting back over to you, Gale.
Thank you, Peggy. Appreciate your good work, Peggy. Well, just for a moment, ladies and gentlemen, I would like to take you back to a different era. Many of you are probably old enough to remember the early 1960s. Actually, television sets, believe it or not, if you recall, even had knobs back then. Many families gathered in their living rooms on Sunday evening to watch a program called "The General Electric Theater." The spokesman for that show was none other than Ronald Reagan, and he helped to make famous, back in that era, a phrase that I think is as relevant today as it was more than 50 years ago. The phrase is simple, but I think profound, and here are the words.
Progress is our most important product." That phrase, I think, fits very well the description of the mission of our company today, and I'm very pleased to report to you that we delivered another year of progress in 2017. 2017 was actually the second full year post our acquisition of Integrys. I thought, just for as a reminder, it might be helpful to give you a sense again of what our company looks like today. We start, as you see on the screen, with our traditional utilities, Wisconsin Electric Power Company, Wisconsin Gas, known as We Energies, serving about 2.2 million customers in various parts of the state of Wisconsin, with the lion's share of our customers in the Milwaukee 7 region in the southeastern part of the state. With the acquisition of Integrys, Wisconsin Public Service joined our family of companies.
Wisconsin Public Service, of course, based in Green Bay, serving, as you see in the darker brown shadow, about 770,000 customers, mostly in the northeastern part of the state of Wisconsin. We also added to our family of companies North Shore Gas. North Shore Gas is a natural gas distribution company only, serving the northern suburbs of the Chicago area, places like Winnetka, and about 160,000 natural gas customers. The little dot that you just saw pop up on the screen is really misleading because it represents Peoples Gas in the city of Chicago, and that little dot represents over 845,000 natural customers that are served by Peoples Gas in the great city of Chicago. Moving over to Michigan. With the acquisition of Integrys, we also added customers in the southern tier of the state of Michigan, about 176,000 natural gas-only customers.
Popping over to Minnesota, we've added about 235,000, again, natural gas customers in various cities across the state of Minnesota, ranging from Rochester, where the Mayo Clinic is expanding rapidly and needs a significant amount of additional natural gas service, to actually International Falls, way up in the northwestern part of the state, which is known lovingly as the ice box of the nation. Just as a summary, here are some statistics that describe the platform and size of our company today. We are a Fortune 500 company now, actually rated number 368 in Fortune's last ranking. What that really means is by revenues, we are the 368th largest corporation in America today. We have more than 8,000 colleagues, more than 8,000 employees, serving in total over four and a half million customers. The assets of the company now reach above $31 billion.
When you break it down into electric distribution lines, we have over 69,000 miles of electric distribution lines and over 48,000 miles of natural gas distribution lines as well. That makes us the eighth largest natural gas distribution utility in the U.S., and by market value, the 13th largest publicly traded utility in America. As you probably saw from our materials, 2017 was marked by record earnings. We had the highest net income in company history, the highest earnings per share in company history. We came in at $3.14 a share, about a 5.7% increase over what was the record in 2016. If you look back about 15 years, you can see the history on the screen of our dividend growth. We're fortunate that we were able to be in a financial condition to begin raising the dividend again in 2004.
For 15 consecutive years, our shareholders have enjoyed higher dividends per share each year. In January of this year, our board of directors voted to increase the dividend again to an annual rate of $2.21 a share. Again, this is our 15th consecutive year of dividend increases. Looking back over those 15 years since we began raising the dividend, I thought it might be interesting to show you some statistics on our total shareholder return. Remember, we define total shareholder return as appreciation in the stock price plus the value of reinvested dividends. If you had, in essence, bought Wisconsin Energy then stock, which is now WEC Energy Group stock, 15 years ago, you could have also bought a basket of utilities.
You can see that basket of utilities in the form of the Dow Jones Utility Average, the PHLX Utility Sector Index, and the S&P 500 Electric Utilities Index, all have had a pretty good 15-year run, with the Dow Jones Utility Average actually being up over 493% when you assume reinvested dividends. If you look at the broader markets, the Dow, the S&P 500, and the Nasdaq, actually, over that same 15-year period, the Nasdaq had the best run, up over 511% in terms of total shareholder return, again, over that 15-year period of time. By contrast, simply by buying a share of stock of WEC Energy Group 15 years ago and reinvesting the dividends along the way, your total return would have exceeded 720%. Just breaking it down a little bit further since I really like these statistics.
What you can see in the blue is the increase in our share price over that 15-year period. In the green is the value of the dividends that we have paid over that same period of time. If you look at it very simply, if you'd invested $1,000 in our stock on January 1 of 2004 and just let it ride, did nothing but reinvest the dividends, your $1,000 investment by the end of 2017 would have grown to $8,240. Another way of looking at it, we've been able to deliver an average annual return, a compound annual return over that 15-year period of 15.1% per year. That's the statistics over the last 15 years.
As someone said the other day, "What have you done for me lately?" We released our first quarter results just two days ago, and we had a very solid first quarter. A couple of encouraging things about the first quarter. The first is that we have begun to see industrial demand for electricity rise again with the strengthening economy. We turned in a stronger than expected performance than we had projected in terms of industrial usage of electricity, and customer usage of natural gas continues to grow quite rapidly. With a strengthening economy, with a long winter, and with rising demand for both electricity and natural gas, our first quarter earnings came in at $1.23 a share, up over 9% over the first quarter of 2016.
Again, we're projecting a full year earnings between $3.26 and $3.30 a share, and we're now saying we expect to hit the top end of that earnings guidance. Results like this really are almost, ladies and gentlemen, a byproduct. You can't achieve, in my experience, results like this without a strong and effective focus on the fundamentals of our business: safety, reliability, financial discipline, efficiency, and an absolute focus on customer satisfaction. I wanted to take you through a couple of the other important metrics that really result in the kinds of financials that we've been able to report to you today. The first is one of real pride in that this past year, we were named the most reliable utility in America by an outside consulting firm, and we'll talk more in a few minutes about how they make those kinds of decisions.
We Energies was named the most reliable utility in America for keeping the lights on in the past year. I tell our folks that's really an amazing accomplishment in many ways, because one of our competitors, for example, is San Diego Gas & Electric. For those of you who've ever spent any time in San Diego, it's like 76 and sunny all the time. You don't have to worry in San Diego about 23 inches of snow or an ice storm that can really affect electric service. Most reliable utility in America for 2017. We were also named again one of America's best Corporate Citizens. There's a very respected magazine called Corporate Responsibility Magazine that looks at and analyzes the activities of all the major publicly traded corporations in America.
For another year, for 2017, we were named one of 100 Best Corporate Citizens in the U.S. I'm told that the next ranking, which comes out annually, will be in a few days, you'll see our name again on the list of America's Best Corporate Citizens. We've also been very focused on our environmental performance. I thought this chart really said it all. We have spent much of the last decade, in essence, building a modern, efficient power generation network with much more environmentally friendly attributes. As you can see on the screen, since we began upgrading our power generation network back in the year 2000, we have reduced the three major pollutants that are regulated by the Clean Air Act.
We've reduced sulfur dioxide emissions by way more than 90%, we've reduced nitrogen oxide emissions by 90%, we've reduced mercury by more than 90%. We also have set aggressive goals to reduce our CO2 emissions. We'll talk more about that in just a few minutes. We've made major strides in terms of improving our environmental footprint and having modern, efficient power generation systems available for our customers. We also had, I wanted to spend just a little bit of time on this, a very good year in the state of Wisconsin for economic development. Our company, because it is at the center of a major essential service that industrial companies need, reliable natural gas supplies, reliable electricity, has been actively involved in many of the economic development opportunities that the state has been able to attract.
The first, as many of you are very aware, I'm sure, having read the newspapers, the first is Foxconn. Foxconn has just committed to making the single largest foreign investment of any company in the history of the U.S. Foxconn is just now beginning to essentially build a $10 billion high-tech manufacturing campus just 15 miles south of the Milwaukee Airport in Racine County, a $10 billion investment with the promise of 13,000 very good family-supporting jobs. The technology that Foxconn will build here, the first to be built of this kind of technology outside of Asia, will also spawn, I am confident, many other companies to come to the state of Wisconsin or to expand here in the state of Wisconsin.
I really believe the Foxconn investment will be a change in trajectory for the Wisconsin economy for many years to come. That's not all. You may have heard about Haribo. Haribo is a German company in business for more than 100 years. It's family-owned. Folks, it makes gummy bears. This will be their first North American investment. The investment is over $240 million. The campus that Haribo will build will be just about 10 miles south of where Foxconn is locating, they will add over 400 jobs at the beginning. According to recent newspaper reports, they may end up having over 1,400 jobs before all is said and done. There's Milwaukee Tool, which is a great expansion and success story. Back in 2011, Milwaukee Tool had about 300 employees on their campus in Brookfield.
Well, with their latest expansion, they are expanding their headquarters and their research and development facilities. They are going to grow to 1,650 employees on that great campus in Brookfield. Then there is ATI Ladish. Many of you just know them as Lattice. Lattice makes specialized equipment for the defense and aerospace industries. We were competing against the state of North Carolina for a significant expansion. Lattice currently employs about 700 folks in the Milwaukee area. There is going to be a $95 million expansion, and they will add some very well-paid high-tech jobs, about 125 of them in this latest expansion. Just an example of the type of business climate the state now has that is supported by the type of efficient low-cost generation and distribution network that we have in place. Where do we go from here?
Well, we have a five-year plan, and from 2018 through 2022, our plan is to invest just about $11.8 billion in infrastructure that we think is very much needed to maintain our record of reliability and low-cost performance. We have three goals with the investments of $11.8 billion. The first is continue to renew and modernize both our natural gas and our electricity delivery networks. The second, there are a number of investments that we can make that will actually lower our operating costs for customers. The third is to continue to reduce our environmental footprint. That is essentially our plan for the next five years. Very significant investment of about $11.8 billion. Now, ladies and gentlemen, I think our entire management team recognizes that we are simply today's stewards of an enduring franchise.
When you think back about it, our company and its predecessors have served this region, gosh, through depressions, through prosperity, through war, through peace, for well over 100 years. Our job is to strengthen the fabric of that enduring franchise. We do it by focusing on the fundamentals of our business, by keeping the customer at the heart of everything we do, by working every day, as you just saw, about the economic development prospects to support and help grow the communities we serve, and by valuing and developing our employees, who are truly making a difference in a mission that matters. In that spirit, ladies and gentlemen, progress is our most important product. Thank you for your attention. All right. Thank you, folks. Now what I would like to do is introduce you to some of the people that are actually helping to produce these great results.
We are going to have our own version of Oprah and Dr. Phil. We hope it does not turn into Jerry Springer, because they said they would make us pay for the chairs. I will ask three folks to come join me here on stage. First, Kevin Fletcher. Kevin is the president of our two big Wisconsin utilities, We Energies and Wisconsin Public Service. Welcome, Kevin.
Thank you.
We have the famous Charles Matthews. Charles is coming up from Chicago. He leads Peoples Gas and North Shore Gas. Good morning, Charles.
Morning.
Tom Metcalfe. Tom is heading up all of our power generation assets. We'll just chat about a few things. All right. Welcome, guys.
Yeah.
Good to see you, Kevin.
Morning.
Morning. Tom, good to see you. All right. Well, Kevin, we'll start with you. Now, true confession here, these guys and I have worked together for, like, 100 years.
Right.
Charles said it seemed like 150, right? I actually remember, Kevin and I actually go back to 1992. In 1992, Kevin and I worked together at a company called Brand A in Atlanta, or Brand X in Atlanta, actually. Charles was the assistant to the CFO at that time.
Absolutely.
At that point in time, I think that we were about to rescue Tom from a very important job he was doing in Australia.
That's right.
You'll hear some different accents here this morning, I guarantee. All right, Kevin, we'll start with you. Now, I've got everybody wondering about this big national award that we've just received. How about tell folks about how it's calculated? How does somebody decide that we're the most reliable utility in America, or for that matter, the Midwest?
It'd be my pleasure. I first want to remind you, though, on the reliability award from a region perspective, we've won that award for the last seven years in a row.
Seven years in a row.
To win that award-
How long have you been here, Kevin?
Well, almost seven years.
There you go.
That particular award, it looks at outages, the frequency and duration of outages. For the national award, it's a little bit deeper dig. They look at our operations, they look at technology and innovation, and they look at the customer experience. When PA Consulting awarded us this recognition, they said that our corporate culture was the best that they've ever seen. Our operations were best in class. What I'm most proud of, they said that our customer focus and our customer commitment was simply awesome. As a result of that, we won the national award.
That's terrific. Good for you, Kevin. That, by the way, is a South Milwaukee accent you're hearing. They don't sound like that in Rhinelander, Kevin.
That's right, Gale. That's right.
All right. Kevin, we've got a major initiative underway in northern Wisconsin at Wisconsin Public Service, again, focused on reliability. How about tell us a little about it?
Well, in the Rhinelander area, and that area where there's a lot of trees and a lot of forest.
A lot of hodags.
Exactly right as well. We're in the fifth year of an eight-year system modernization and reliability project. What we're doing there, we've already replaced 1,100 overhead lines with underground. We have plans for an additional 1,000 miles. What we're also doing is installing state-of-the-art equipment on about 400 miles of line that'll automatically identify a fault and then reroute electricity around that fault. The benefits of our work so far, if you happen to be one of those customers that are in those areas that I just mentioned that we put underground service in, you've seen about a 90% improvement in your outage minutes. If you look at the whole footprint of Wisconsin Public Service territory, by the end of the project, we'll see about a 40% improvement in net reliability.
That's just terrific. That really is. We're about halfway through the project.
That's correct, yeah.
one of the things we talked about earlier is the growing demand for natural gas. In fact, about half of that $11.8 billion of capital that I mentioned we're going to invest over the next five years will be in the natural gas side of the business. Tell us about the gas growth that we're seeing and why you think we're seeing an uptick, a significant one, in customer usage of natural gas.
Certainly. If you look at 2016, we saw a 3.7% increase in our gas volumes and an additional 3.7% again in 2017. I think a lot of that growth is being driven by the conversion market, conversion from propane to natural gas. As a matter of fact, Wisconsin, Minnesota, and Michigan are all in the top 10 states in the nation for conversions from propane to natural gas. If you think back just a few years to 2014 and the polar vortex.
propane was extremely hard to get.
Yes.
Then the prices of propane went up drastically.
Yes.
If you look at the future with the relatively stable prices and low prices of natural gas, Gale, I think this trend's going to continue, and as you just mentioned, 50% of our five-year capital plan is dedicated to our gas infrastructure.
Terrific. Outstanding. Thank you, Kevin.
Thank you, Gale.
Speaking of gas.
Okay.
Morning, Charles.
Good morning.
All right. Charles has been a lot of places. At one point in time, Charles was leading the electric utility in Jamaica.
Right. Yes.
We rescued him from that. Then we sent him to Chicago.
I thought you were going to send me back to Puerto Rico. I got Chicago.
Charles has headed up Peoples Gas and North Shore Gas since our acquisition of Integrys back in 2015, and he's doing a terrific job for us there. We have underway, Charles, as you well know, what we call our System Modernization Program in Chicago. Charles is going to be famous for, over time, digging up one out of every two streets in the city of Chicago. How about tell folks why you're digging so much.
You're right, Gale. Let me start by just talking about the goal of the SMP, or our System Modernization Program. The goal is simple: to provide our customers with a safe and reliable system. Gale, as you know, some of the pipes that we're currently using to serve our customers has been in the ground more than 100 years.
Abraham Lincoln actually signed one of those pipes.
Absolutely, even before the Great Chicago Fire, which I know we're all familiar with. The good news is a lot of that pipe survived the Chicago Fire. The bad news, it's still in the ground. We have to replace that pipe, and this is what the program's about. We're replacing all of that old cast iron and steel pipe. We're actually moving meters from inside facilities to outside to make it safer, and we're also making the system more efficient by upgrading the system from a low-pressure system to a medium-pressure system.
This is going to take quite a while. I mean, we're projecting maybe even 2035 to 2040 before we complete all this work.
That's correct.
Tell our shareholders a little bit about some of the limitations.
Yeah.
Why it's really physically not possible to do it even quicker.
Yeah. Anybody who's familiar with Chicago and construction would know it is quite difficult to manage construction projects in a very active and urban setting.
Yeah
such as Chicago. I think the mayor goes in public and brag about the number of cranes out all the time. I believe the last count was up in the 40s.
Right.
What we have to do, we have to coordinate our project through the Chicago Department of Transportation with the other utilities that also have massive projects going on as well. This allow us to mitigate the disruption to residents as well as gain some costly efficiencies. You're right. As a result of that challenge, along with some challenges with securing a labor force that's trained, this will take us until 2035, 2040 timeframe.
Terrific, we're about 22% done now?
We're closer to 25. I know Andy Helsvark out there is 25.
25, all right. Glad to hear that. Many folks, Charles, might not think that the replacement and upgrade of the natural gas piping in Chicago would have environmental benefits, but it really does. How about chat about that?
Absolutely. Our approach to replacing this old pipe is to go into those neighborhoods where the leaks are at the highest rates. We start there. We're also using a methane detection technology to help us identify where those gas leaks are. Our estimation is, once we've replaced all of that pipe, we will have removed enough natural gas emissions through those leakages to the equivalent of 240,000 metric tons of carbon dioxide. Gale, that is the equivalent of taking 48,000 cars off the street.
That's terrific.
The impact is significant.
We're going to replace those with electric cars, right, Charles?
Natural gas.
Natural gas. Charles, thank you very much. Appreciate what you're doing there. All right, good morning, Tom.
Morning, Gale.
How are you today?
Good, thank you.
Terrific. Tom is, as I mentioned, head of all of our power generation across the state of Wisconsin and into Michigan as well. We have, as many of you know, invested billions of dollars in a modern, new, efficient power generation network over the last 15 years. You've seen some of the results. In Oak Creek, where we have generated electricity from coal for, gosh, more than 50 years, we've had, over the years, some concerns about coal dust from residents, obviously. We did have an unusual occurrence back in early March, and some of our folks may have heard about this because of the news coverage. Tom, how about just briefly cover what happened and what we're going to do about it?
I'd be happy to, Gale. You're absolutely right. We've been generating electricity from coal at the site for over 50 years. During that time, we have instituted operating protocols to improve the way we operate, including in respect of coal dust. Yes, we did have an incident in early March, and I think it's worth understanding the root cause of that so that we can learn from it. Not to make any excuses. We need to do a good job here. The first thing that I would note is that we've added storage capacity at the site. That means we've added an additional coal pile, and it's a coal pile that's a little closer to a community just northwest of the property. It's known as the Barton Oak Subdivision.
We added that coal pile and the storage in response to the polar vortex, where we saw we came very close to running out of fuel.
Yep.
We need that extra storage capacity year-round so that we can ensure we keep the lights on. That was factor number one. We built the coal pile up in early March. During the overnight period on March the 5th, we had a wind that picked up from the southeast, picked up fairly quickly, and we were pushing coal at the time. Southeast winds crossed the property, crossed this new pile. New pile was a little closer to the community, and we ended up with some coal dust in the neighborhood. Not an acceptable outcome. We've got to learn from that. We're working very hard, and we've done a lot of things in the last few weeks to really tighten up on our controls. Dampening the pile is one thing.
I want to talk about just a couple other things that kind of longer term that we're going to do. We're going to encapsulate the pile. Encapsulating the pile with a product which will seal it tight. It'll be out of service except for emergency need, and that will get done. Actually, we'll let it get done fairly quickly. We're going to have that done by the 12th of May, so this month. We are planting hundreds of more trees. We're building berms to create a visual and also a wind barrier between the community and the property, and that work will start in the spring. The other thing that the really long-term solution here, Gale, I believe, is a wind barrier. I want you to imagine a very tall fence. A fence which in some places might be as much as 100 feet high.
Wait, Tom, you're going to build a wall?
I'm going to build a wall. It's going to be the Great Wall of Oak Creek. This barrier will Again, I want you to imagine these fence posts, very high, with a mesh screen pulled between them. It's not a barrier. It's a permanent, like a firm barrier. It allows air to flow through it, not to catch the dust, but to knock the wind speeds down. It's an effective solution that we've seen in other locations, other coal sites around the nation. I think it's going to work here at Oak Creek, and we think we can get this done certainly by 2019.
Terrific. Terrific. We've got a number of other initiatives underway that I want to make sure we talk about. We just announced, as Tom well knows, earlier this year, our plan to seek approval from the Wisconsin Public Service Commission to basically make the largest solar investment in the history of the state of Wisconsin. This discussion, Tom, wouldn't have even been possible five years ago. Explain to our shareholders what has happened with the economics here and why we're now looking to solar to fill a part of our needs to provide customers with reliable service.
Happy to, Gale. As you say, we've talked about this a couple of times and could not have imagined just a few years ago that we'd be talking about investments in solar. If you look at the utility scale solar projects that are available now, the price reductions have been dramatic. I mean, more than 70% reduction in the cost, the install cost for these facilities. At the same time, we've seen dramatic improvements in the efficiency, so the turning of the sun into electricity. Those two factors combined have made solar viable, and we're putting in 350 megawatts. I mean, that's bigger than by a factor of anything else right here in the state. It's a perfect match for our load. Think about it. We're a summer peaking utility.
The middle of July, those long, sunny days when it's hot, that's when the solar's going to be-
God, I hope so.
Yeah.
That's a very big step for us, and it will also complement some other things that we're doing.
Right.
Just very briefly, we have plans, and we've announced plans to retire two additional older, less efficient coal-fired power plants, one in Green Bay, one in the upper peninsula of Michigan.
Right.
That will again help us to reshape our generation portfolio for an even cleaner, reliable future.
Absolutely. In fact, it's a combination of the things that you mentioned. We're closing 1,800 megawatts of older, less efficient coal. We're adding new gas and these solar facilities you mentioned. If we start with Pleasant Prairie, those units have already been retired. They retired last month. The Pulliam units, the ones you mentioned, they'll likely come out at the end of this year. We have five units in the upper peninsula of Michigan, coal units, again, older, less efficient technology. Those will be retired late in Sorry, first half of next year once we complete the new gas-fired generation that we're building in the upper peninsula, which I'm pleased to tell you is on budget and on schedule.
Glad to hear that.
Lastly, we have 100 MW of capacity at the Edgewater 4 facility in Sheboygan, and that will also come out later this year. You take all those things together with the investments we're making and the three pillars that we keep talking about. We can do it without increasing cost to customers. We can maintain fuel diversity, which is essential, and we can meet our CO2 reduction goals. 40% reduction in CO2 by 2030 is our goal. We think we can get there ahead of that.
That's terrific. Again, just to reinforce what Tom is saying, last year, almost half of the electricity we provided to our customers came from low or no carbon sources. We're halfway to a no carbon future already, and we're taking out less efficient units that happen to burn coal, less efficient units and replacing them with very environmentally friendly capacity. Lots of work going on, lots of great work. Folks, I'll just tell you, this is kind of a special moment for me because I've known all these guys for so long. To see what they're contributing for you is special for me. Thanks, guys.
Thank you very much.
Appreciate it very much. Thank you. Charles, good to see you.
Thanks.
Tom, thanks. Good job.
Thank you.
Good job. All right. Again, guys, thanks very much. Now it's time for the question and answer portion of our meeting. If you have a question or comment, please step to the microphone nearest you, and an attendant will assist you. Now, before asking your question, please state your name and city of residence for the minutes. I'd also ask that you limit yourself to one question or comment so that others may have the opportunity to speak during the time we have together. Thank you very much. Who has the very first question? All right. Gosh, we got all kind of stuff today. That's good. Let's start with number three.
David Langseth. I am here with my wife, Carol. We're from Huntley, Illinois, about an hour west of downtown Chicago.
Okay.
We're in the world of computers. Our newspaper, which is printed in Crystal Lake, Illinois, talks about people who are interested in hacking and disrupting business in this country. Not only in the financial area but in the distribution of services. Are we vulnerable, and what might we be doing?
Well, first of all, cybersecurity is a huge priority for us. I can't give you, nobody can, a 100% guarantee that we are completely immune from hacking and cybersecurity issues. I can tell you that we have invested an enormous amount of money in terms of securing our networks, and we have a very active everyday interaction with both the Federal Energy Regulatory Commission, Homeland Security, the FBI. I mean, it is a high, high priority, both for the government and for all of our utilities across the U.S., to basically protect our networks. One fact that might be helpful to understanding where we're headed is that every company like ours has a complete 100% separation between what a customer can see on our website or what a customer can see if they pay their bill online and our distribution networks.
If you're a hacker and you try to get in through our website, you can't get there. There is no physical or cyber way to get into our distribution networks through the customer-type portals that we have. That's kind of our basic first level of protection. Then again, there is very, very strong coordination with the federal government. I'll give you an example. Just about a month ago, when we did a strategic bombing, the U.S. did in Syria, I was on the treadmill at nine o'clock at night at our house, and my phone rang, and it was the cybersecurity industry leader at our association, the industry association, who had been alerted by Homeland Security to put all of us on special weekend alert.
There's a tremendous amount of communication and a tremendous amount of behind-the-scenes effort going on to keep our networks and our customers protected. Great question. Thank you, sir. All right. Yes, number one.
Good morning, Gale.
Good morning.
Bill Fink, a retired company employee.
How are you, Bill?
Good. I don't have a question, but I have a brief comment, Gale.
All right.
I think WEC Energy Group is an outstanding company. I think you and Allen Leverett have selected and developed an exceptionally talented executive team.
Yeah, those guys clean up pretty well, don't they?
Yes. Your labor and employee relations are excellent. The company's utility subsidiaries have achieved, as we've seen this morning, high levels of service reliability and customer satisfaction. Finally, the company has provided, as we've also seen this morning, among the best total returns to stockholders in the industry in recent years. In my humble opinion, Gale, the company deserves to be and should be included in any reputable ranking of the most efficiently, effectively managed companies in the United States. I'm speaking in particular of the Drucker Institute's Management Top 250 list. That's all I have. Thank you.
Oh, terrific. Well, thank you, Bill. We'll make sure that pension check keeps coming. Thank you very much. Number two.
Good morning, Gale. Joe Dean, Port Washington.
Hello, Joe. How are you today?
Great to see you. Thanks.
Good to see you.
It's also great to see Kevin and Charles, two of our awesome guardians on the Stars and Stripes Honor Flight not long ago. Nice to see you, gentlemen. Gale, I wanted to say thank you to you and the board and the 8,000-plus employees for your stewardship of this phenomenal company. I speak as a former mayor, county board supervisor, and chairman of the Plan Commission in our community. We couldn't imagine a better neighbor in terms of helping us with balanced growth and economic development.
Thank you.
I also come here today, as you know, as a proud tree hugger and founding member of the Ozaukee Washington Land Trust and environmentalist, and I want to thank Tom specifically, but all of you for your eye toward environmental protection. When there are challenges, you take them honestly, you take them head-on. All you're doing looking to the future to continue to protect the environment is deeply appreciated.
Thank you.
The main reason I wanted to stop in this morning, Gale, was to thank the We Energies Foundation. As you know, I was blessed to publish a children's book this year. I'm not here to plug it, but why not?
Yeah.
It's called "A Dog Called Hope," it's about a little girl's journey through childhood cancer. The We Energies Foundation has been so kind to underwrite all of the costs of this book with proceeds going to Designing Dreams, which brings joy to children going through chemotherapy, half the proceeds go to the MACC Fund. Most of you know Midwest Athletes Against Childhood Cancer. Midwest Athletes Against Childhood Cancer is literally funding first-in-the-world research right here in Wisconsin, cure rates have gone from 20% to well over 80%. It's thanks to a lot of people, but also to groups like the We Energies Foundation. Your big heart is helping a lot of children.
On behalf of the book as well, so many kids, you're bringing hope to a lot of kids in this community, I want to thank the foundation for everything you've done to underwrite our book. We've donated $50,000 in the short time that the book's been out. Thank you so much.
Joe, thank you. Before we move on, I just want to add to Joe's comments. First of all, Joe is one incredible public servant. The book that he worked on, I would just encourage you. I'm sure there's a website. Isn't there, Joe?
There is either Amazon or mydognamedhope.com.
Okay. mydognamedhope.com, or you can go through Amazon. The book is incredible. It's for children who are suffering through debilitating cancer treatment. It's just amazing. I'm so glad our foundation was able to help with that, and we're going to continue to help with that. Proceeds go to childhood cancer research. Joe, thank you for what you're doing. Appreciate it very much. All right. Yes, number 3, please.
Hi, my name is Annie, and I'm a resident of the city of Milwaukee. It's interesting that you mentioned a plan to move towards solar as opposed to wind generation.
Isn't wind more cost-effective?
Good question. I'm glad you asked that question. First of all, for certain applications, wind is now quite cost-effective. When you look at what we need going forward in terms of maintaining a reliable system, solar is actually going to be more cost-effective for what we need it for today. What we're going to need is power at the highest demand time of the year. Wind generally does not blow during the hot, sultry summer afternoon when it's 100 degrees on Lake Michigan. Solar will be there when it's a hot, sunny summer afternoon. To give you an example, the regional power grid will give us, for every megawatt of solar we put into service, they'll give us credit for 70% of that capacity. They'll only give us credit for 14% of that capacity if it's wind.
If we just need energy, particularly in the wintertime, wind's very cost-effective. For where we need to fill the hole, solar is our best bet. That wouldn't have been the case just five years ago. As we talked about earlier, massive utility-scale solar developments are down in cost about 70%. We're going to be able to take advantage of that for our customers. Very good question.
Thank you.
Thank you. Yes, number 4, please.
Hi. My name is Terry Wiggins. I'm from Milwaukee. I am here to applaud your plan to continue to reduce your environmental footprint. I think that's great. I'm also concerned about the health of our environment for myself, my child, my grandchildren, and hopefully future generations, that we have a world where life as we have known it is possible. I know that seasons are really out of sync in Wisconsin. We see increasing severity of rainstorms. The length of the pollen season has increased for allergy sufferers. There's greater risk of insect-borne diseases, and even our beloved cranberry harvest is put at risk by droughts. These are worldwide problems. I believe that We Energies, WEC Energy Group has a moral responsibility as the largest consumer of fossil fuel in the state, and it's primarily coal.
We need to have more renewable energy, not gas or nuclear, but renewable. It's great that you've shut down the Pleasant Prairie coal plant, and I'm wondering when you're going to shut down the Oak Creek plants and build renewable energy to replace those.
All right. Good question. Thank you for your comment. First of all, as you mentioned, we are making significant investments in our next five-year plan in renewable energy. We are already the largest investor in renewable energy in the state of Wisconsin. We have the largest wind farms in the state of Wisconsin. We are going to invest in 350 megawatts, assuming we get the approvals for solar. We will be the largest solar investor in the state of Wisconsin. In direct answer to your question about when could we shut down Oak Creek, the Oak Creek units, or when could we convert them to natural gas, it sounds simple, but it's really not. Let me give you an example.
We do not have today in the state of Wisconsin or coming into the state of Wisconsin, enough natural gas line transmission capacity to meet the needs of our retail customers for natural gas and fuel Oak Creek with natural gas. We just don't have that capacity. It would take years and $ hundreds of millions to build transmission capacity for natural gas into the state to allow us to shut down a major workhorse plant from coal to natural gas. I would also mention one other thing, that is when we built the new Oak Creek units just a few years ago, we built them to one of the highest efficiency standards on the planet. In fact, if you look at the efficiency of our new Oak Creek units, they're top five in the country in terms of efficiency.
They emit less CO2 per unit of output than almost any other coal-fired power plant in the United States. We are going to have to have some diversity of fuel mix for a number of years to come. I can tell you, related to your concern about CO2 and the warming of the planet, we do have the goal of a 40% emission reduction by 2030. I guarantee you we'll beat that goal, and that goal, the 40% reduction by 2030, would fit that Paris Climate Accord goal for our portion of the world, for our portion of the CO2 emissions. We do take our environmental responsibility very seriously. Please know that, and I appreciate your comment. Thank you very much. All right. Yes, sir, number 1.
Steven Shellen, Sussex.
Greetings.
As one generation of three generations who've worked for Wisconsin Electric, I appreciate the efforts that you've made recently to modernize things. I noticed on the agenda that there was a senior officer order discussion that was going to take place. I'm wondering if you could speak to that. My question is mainly for retirees. Back when I retired, there was a two-year portion where retirees' donations to charities would be matched by the We Energies Foundation. I'm wondering if you could reinstate that for any number of years that retirees, rather than just the first two years. When I was on the WE Foundation board as an employee, we found that those people were more in touch with the needs for charities to serve our community.
I would appreciate if you could look at that, because given the tax cut and the good performance of the company, I think they can certainly afford that, even if there's some restriction in the amount that can be matched.
All right.
thank you.
Thank you for your question. We do have, obviously, a limited amount of funds in the foundation, but we will certainly take a look at your suggestion. Thank you very much. All right. We're going to go back to number 2.
Hi, I'm Mary, from the city of Milwaukee.
Hi, Mary.
Hi. With WEC stock closing at around $60 or $62 per share, has there been any thought about a stock split?
There's an investor for us. All right. Very good question. We don't have it in our basic plan for this year, but I can say if the stock remains above the $60 a share level, it is certainly something we would take a look at in the future. It really would be. There are many benefits to a stock split, one of which is it makes the stock more affordable. If you do, say, for example, a two-to-one split, it makes the stock more affordable for an individual investor. It is no promises for this year, but if the stock stays up at this level, we'll take a hard look at it. Thank you very much. All right. Number 4.
All right. Thank you. I'm Miranda, and I'm from Madison. I want to ask about the coal dust at Oak Creek. As recently as this weekend, residents in the Barton Oaks neighborhood have been posting videos online of new rounds of coal dust still blanketing their homes and cars. WEC has been purchasing homes around the Oak Creek plant over the last several years in response to coal dust exposure and health issues, both from the coal piles, but also from the coal trains. This indicates management is and has been aware of future liability issues. First, is the company budgeting funds to cover the future cost of lawsuits as well as medical care and possibly mortality compensation? Second, do you have a projection of how many homes will be bought in the future and the potential cost to the company? Thank you.
Well, first of all, as you may be aware, we've had nationally recognized epidemiologists take a look at all of this. There really is no major health concern. I know you don't agree with that as a member of the Clean Power Coalition, but we've had some of the most extensive expertise look at this as we possibly can. No, we're not budgeting for future lawsuits because we don't think there's a basis. As opportunities have arisen, we have tried, as you know, to have more of a buffer around the plant. We've already got a pretty considerable buffer. As opportunities arise, we'll certainly look at that. Thank you very much. All right. Number 2.
Thank you very much for coming out of your retirement again.
Thank my wife.
My name is James Brown. I'm here in the city of Milwaukee.
How are you?
Last Sunday, we had a Common Ground meeting, and they were discussing the opportunity in certain areas at 53206. They was talking about the politicians, they shows up, but the CEOs of the industry, they never shows up at these meetings. I was thinking that the CEO is the one that create the opportunity, I was thinking. Because I just remember you just mentioned about Foxconn. Here, A. O. Smith ground here, I guess we have something like 320 some acres. I'm thinking why, along the way, when we were discussing that Foxconn, they had considered having some type of pilot program here. Maybe you might have some input on this.
Okay. All right.
I appreciate it.
I think you're talking about the area that used to house the A. O. Smith plant and all of that particular area there?
Yes.
Yep. Actually, the city of Milwaukee has been trying to develop that area as well. I do know the Milwaukee 7 is also in very preliminary talks with some other companies about possibly taking advantage of that particular site. It is not something that we've forgotten or that anybody's forgotten. It's called Century City now. It would be a great area to develop. It really would. There's a really willing workforce around there. Don't give up hope. We appreciate your comment.
Thank you.
All right. Number 4.
Good morning. My name is Jim Page. I live in Shorewood, Wisconsin. I oversee corporate attraction and expansion for the Milwaukee 7, which is the regional economic development entity here in southeastern Wisconsin.
You know this gentleman over here, Jim Page?
Yes. Mr. Klappa, as you had mentioned, the region has really done a fantastic job, I think, coming together as a group and stacking a number of economic development wins here in the last 18 months. You mentioned some of the names earlier, Foxconn certainly at the top of the list. I think it's really worth mentioning, that is the largest corporate attraction project in United States history.
Yeah.
Gale, on behalf of the M7, I'd like to thank you for the time, energy, talent, devotion that you personally put into that project and many others. I also would like to thank the board of directors for the longtime support, financial and otherwise, to really help make that work possible. Thank you.
Thank you, Jim Page. This guy is really great. He's one of the best economic development folks in the nation, we're lucky to have him. Jim Page, thank you for coming today. We appreciate it. All right. Yes, number three.
Yes. Robert Babinski from South Milwaukee. That's on the south side. Also from Town of Hiles, which is near Phelps, Wisconsin. Used to be the Wishmash territory, Wisconsin Michigan Power Company. Actually, I have two small questions. The first is, where can I get a crystal ball like yours? Because it seems like you always sell your stock at the peak, and I can't do that. It's probably just coincidence, but I think last year you exercised some options and-
I did. I thought
sold them at 69.9.
Yeah.
Which-
I did. I thought I was retired. You know what they say.
I guess my question is, when is it going to peak this year?
I wish I knew.
My main question is regarding the Town of Hiles, which is in northern Wisconsin. This is my retirement home, which I may retire at sometime. I noticed Wisconsin Public Service is burying lines all over the area. I talked to the operations supervisor up there, Al Javanoski, another Polish guy like me, and he proposed burying.
Is that on the south side of the.
No, he's up in Land O'Lakes actually.
Okay.
South side. That's northern Wisconsin.
There you go.
Anyway, he proposed burying our line. I just checked, we had nine to 12 outages last year every time the trees move.
Yep.
The feeder comes out of Phelps. It's Twin Lakes feeder, just upgraded to higher voltage, it's longer, more exposure. He proposed burying the line or second, a massive tree trimming exercise.
Effort.
You know what I mean.
Anyway, they were both turned down. The end result was some trip savers, which I think are like reclosure.
Yep.
I'm wondering why or when or if this Wisconsin Public Service initiative of going underground will be extended to the neighboring areas in Wisconsin Electric.
Okay.
Maybe Mr. Fletcher
Yep
address that.
Yep. For those of you who are not really familiar with all of this gentleman's stomping grounds here, that area of northern Wisconsin is heavily tree-laden. It's a great vacation area. There are reliability issues there, which we're trying to work on. I would just suggest you talk with Kevin afterward, make sure he understands the address and the area you're looking at. We're obviously looking first at those areas that are most affected by outages. You're asking a very good question. Talk with Kevin, and we'll see where we get to.
One additional comment is the limited crews they have up there do an excellent job on restoration and service. They often don't get the recognition, but I'd like to recognize them for doing a good job.
Terrific. Thank you so much. We appreciate it. All right, number 1.
Thank you, Gale. My name is Nancy Horvat, and I'm from Muskego. I am very excited to hear about your investment in renewables and solar in particular. I thought that was really exciting to hear. I just wanted to share a customer service experience that I had with We Energies. Overall, I think you do a wonderful job at customer service, and this was an anomaly of an experience. I called about, of all things, a cookie book recipe that was wrong.
I talked to Sue, called me back a couple of two, three times, and she never had the right recipe.
I escalated to her boss, and I'm still waiting to hear back from him. It's been months. I just wanted to share that with you because overall, I think, I know customer service is important to you, and if I were in your position, I would want to know.
I appreciate that. Beth Straka is here, and I'll bet she can get you the right recipes. If you'll see Beth afterward, we'll straighten that out. Thank you, Nancy.
Thank you.
All right, and number 2.
Hi, my name is Natalie Shalu, and I'm from Racine, Wisconsin.
Hi, Natalie. How are you?
Well, thanks. I would like to applaud your efficiencies that you've been talking about, and your emphasis on clean energy. That's wonderful. I would like you to think bigger, though.
Think bigger.
40% is wonderful, you're such a leader, and we have such profitability that we need to look forward and raise that 40% goal to maybe 80% generation of solar and wind and renewables for the near future. We all know that there's no such thing as clean coal. There are a lot of different problems associated with extracting, transporting coal, and storing coal, as well as burning coal. Those are all issues. We are a family company. I heard you use that word. The families who live near Oak Creek are concerned about their health and all the external effects of burning coal in Oak Creek.
Thank you. I will make one commitment to you. We set the 40% CO2 reduction goal for 2030. This year, we are going to look toward setting a 2050 goal. By the time we gather together next year, you will probably see a very aggressive goal for CO2 reduction for 2050. Again, I would just emphasize that while it sounds really simple to be able to switch a plant from one fuel source to another, there are enormous amount of investments and complications that take place, and we have to be careful, and I know you'll appreciate this. We have to be careful about one other thing. I'll give you an example of what just happened in January of this year in the Northeastern U.S. They had a mini polar vortex. The temperatures dropped significantly in a short period of time in the Northeastern U.S.
Now there's a study going on to determine whether or not too many coal and nuclear plants have been retired. Because what happened with that sudden spike in cold temperatures in the Northeast, many of the gas-fired power plants either couldn't get as much gas as they needed, or there were pipeline constraints, or they just couldn't get the gas into the facility. We have a very broad responsibility. We take it seriously, and that is to be as environmentally friendly as we can be while providing reliability and cost-effective service. We'll continue to try to balance all three of those things with an understanding that we're going to continue to make progress in reducing our environmental footprint. Thank you very much.
Thank you.
All right. Number three.
Hi, Gale. I'm Sister Diana de Bruin.
Hi, Sister.
From the Sisters of St. Francis of Assisi in St. Francis.
Oh, well, welcome. How are you, Sister?
Doing fine.
Good.
Doing fine. We have served the Greater Milwaukee since 1849, so we've been around for a while.
No, not you personally.
No, not no. Yes. I'm preserved, but not that. On behalf of our sisters, I wish to thank you for your generous contribution toward the building of our new Saint Francis Convent. As Franciscans, we are committed to nurturing and preserving all of creation. The new Saint Francis Convent has a sustainable design, which will result in the conservation of both energy and water. We are grateful to We Energies for joining with us as we create a compassionate home that fosters the well-being of elders while reverencing Mother Earth. Be assured of our prayers. Thank you.
Thank you so much. Sister, let me just mention something to the group for you. This project that these good sisters have underway, incredibly worth your support. Many of these sisters actually taught us how to grow up. They are now in a more than 100-year-old home. Many of these elderly sisters need healthcare, and there's no fire protection. There are very few bathrooms. I mean, this is a situation that is really requiring a lot of support. We were delighted to be able to help out. If any of you have an interest in helping this great cause, how can they find out, Sister?
Well, I have cards.
You have cards.
I will definitely pass out my business card. Our elder sisters, our old motherhouse was never built to be a healthcare, there's no sprinkler system. There's great big, huge, wide stairwells, the rooms are very small. Like Gale was saying, the bathrooms are way down at the end of the hall, our sisters live long. I mean, we have a lot in their 80s and 90s, we have some that are hundreds. We need to take good care of them, we need you to help us with that.
Amen.
Amen.
They're praying for us to have a good year, it's even better.
Yes. See me, I got cards.
Thank you, Sister. We appreciate it very much. All right, one last question. Actually, we'll take two. Gentlemen, number one.
Hi, my name is Foster from Oconomowoc, Wisconsin.
How are you doing, Foster?
Good. My question is, are you planning on expanding your territory for energy?
Right now there are assigned territories, the only way we would expand our territory for energy is if we were able to merge with or acquire another company, which is exactly what we did with the acquisition of Integrys, and you saw how our service area expanded. That would be the only route.
Okay.
Thank you. One last question here with number two.
Good morning. My name is Rachel Dockal, and I'm a resident of Oak Creek. My address is 10710 South Nicholson. I'm right on the corner of Nicholson and Elm, very close to your plant. My story is actually kind of unique. I'm 41 years old, and I have lived at three addresses my whole life, this being one, 10720 South Nicholson, and 10775 South Nicholson. All on that corner. I have never moved. Two reasons. One, my ancestors were some of the first residents of the city of Oak Creek. They farmed land. It was my great-great-grandparents started. My great-grandparents built a house across the street. My grandparents then built a house across the street from them. My parents built next to them. I built next to my parents. My sister just built across the street from me.
We have a family history, but we also have had no reason to move out of that area. There has been no negative impact on us from where we live. In addition to us living all close to each other, we also work together as well.
Our family owns two businesses in the city, both of which are in with miles of your plant as well, and have had no issues.
Terrific. Terrific.
I am also a mom. I have three kids ranging from elementary to high school. They are involved in a ton of activities, and We Energies is always sponsoring what they're doing. My husband and I had a choice of do we keep them here? Do we send them to private school? What do we do? The growth and development in Oak Creek is a reason why we are staying, and I think you are a part of that.
Sure.
I just want to say thank you for I'm here as a resident, not a business owner because I don't technically own the family businesses, I work for them, but as a mom and just saying that what you're doing makes people stay in that community.
Terrific.
Thank you.
Well, thank you so much for your comment. We appreciate it, and best of luck with your business. Thank you. All right, folks. Great question and answer session today. Well, this does conclude our 2018 annual meeting. Thank you again for being part of the event today. Please be assured that our management team will work hard in the year ahead to uphold your confidence. Thank you again. Drive home safely.