CORPORATE DEVELOPMENTS
The following discussion should be read in conjunction with the accompanying financial statements and related notes and our 2019 Annual Report on Form 10-K.
Introduction
We are a diversified holding company with natural gas and electric utility
operations (serving customers in
In
Corporate Strategy
Our goal is to continue to build and sustain long-term value for our shareholders and customers by focusing on the fundamentals of our business: reliability; operating efficiency; financial discipline; customer care; and safety.
Reshaping Our Generation Fleet
The planned reshaping of our generation fleet balances reliability and customer
cost with environmental stewardship. We continue to evaluate opportunities and
actions that preserve fuel diversity, lower costs for our customers, and
contribute toward long-term greenhouse gas (GHG) emissions reductions. In 2019,
we met and exceeded our 2030 goal of reducing CO2 emissions by 40% below 2005
levels. We have re-evaluated our carbon reduction goals for our electric
generation in light of this progress. As strategies to reduce GHG emissions
continue to evolve, our updated plan is to work with elected officials,
regulatory agencies, customers, environmental groups, and other stakeholders to
reduce CO2 emissions from electricity generation by 70% below 2005 levels by
2030. Our long-term goal calls for our electric generation fleet to be net
carbon neutral by 2050. We have already retired more than 1,800 MW of coal-fired
generation since the beginning of 2018, and expect to continue adding natural
gas-fired generating units and renewable generation, including utility-scale
solar projects. The plan included the
As part of our commitment to invest in zero-carbon generation, we have received
approval to invest in 300 MW of utility-scale solar within our
06/30/2020 Form 10-Q 40 WEC Energy Group, Inc.
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In
As the cost of renewable energy generation continues to decline, these
utility-scale solar projects and the WE pilot programs have become cost
effective opportunities for
We also have a goal to decrease the rate of methane emissions from the natural
gas distribution lines in our network by 30% per mile by the year 2030 from a
2011 baseline. We were over half way toward meeting that goal at the end of
2019. In
Reliability
We have made significant reliability-related investments in recent years, and
plan to continue strengthening and modernizing our generation fleet and
distribution networks to further improve reliability. Our investments, coupled
with our commitment to operating efficiency and customer care, resulted in
Below are a few examples of reliability projects that are proposed or currently underway.
•WE plans to install approximately 46 miles of natural gas transmission main in
southeastern
•WE and
•The Peoples Gas Light and Coke Company continues to work on its Natural Gas
System Modernization Program, which primarily involves replacing old cast and
ductile iron pipes and facilities in
•WPS continues work on its
Operating Efficiency
We continually look for ways to optimize the operating efficiency of our company. For example, we are making progress on our Advanced Metering Infrastructure program, replacing aging meter-reading equipment on both our network and customer property. An integrated system of smart meters, communication networks, and data management programs enables two-way communication between our utilities and our customers. This program reduces the manual effort for disconnects and reconnects and enhances outage management capabilities.
06/30/2020 Form 10-Q 41 WEC Energy Group, Inc.
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Table of Contents We continue to focus on integrating the resources of all our businesses and finding the best and most efficient processes while meeting all applicable legal and regulatory requirements. We also strive to provide the best value to our customers and shareholders by embracing constructive change, leveraging capabilities and expertise, and using creative solutions to meet or exceed our customers' expectations.
Financial Discipline
A strong adherence to financial discipline is essential to meeting our earnings projections and maintaining a strong balance sheet, stable cash flows, a growing dividend, and quality credit ratings.
We follow an asset management strategy that focuses on investing in and acquiring assets consistent with our strategic plans, as well as disposing of assets, including property, plants, equipment, and entire business units, that are no longer strategic to operations, are not performing as intended, or have an unacceptable risk profile.
•See Note 2, Acquisitions, for information about our acquisitions or planned
acquisitions of portions of wind energy generation facilities in
•See Note 3, Disposition, for information on a disposition. In 2019, we sold
certain
Our investment focus remains in our regulated utility and non-utility energy
infrastructure businesses, as well as our investment in ATC. We expect total
capital expenditures for our regulated utility and non-utility energy
infrastructure businesses to be approximately
From 2020 to 2024, we expect capital contributions to ATC to be approximately
Exceptional Customer Care
Our approach is driven by an intense focus on delivering exceptional customer care every day. We strive to provide the best value for our customers by demonstrating personal responsibility for results, leveraging our capabilities and expertise, and using creative solutions to meet or exceed our customers' expectations.
Safety
We have a long-standing commitment to both workplace and public safety, and under our "Target Zero" mission, we have an ultimate goal of zero incidents, accidents, and injuries. We also set goals around injury-prevention activities that raise awareness and facilitate conversations about employee safety. Our corporate safety program provides a forum for addressing employee concerns, training employees and contractors on current safety standards, and recognizing those who demonstrate a safety focus.
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