Gale E. Klappa - Chairman, Chief Executive Officer, Chairman of Executive Committee, Chief Executive Officer of Wisconsin Electric Power Company, Chief Executive Officer of Wisconsin Gas LLC, President of Wisconsin Electric Power Company, President of Wisconsin Gas LLC, Chairman of Wisconsin Electric Power Company, Chairman of Wisconsin Gas LLC James Patrick Keyes - Chief Financial Officer and Executive Vice President Stephen P. Dickson - Principal Accounting Officer, Vice President and Controller Allen L. Leverett - President, Executive Vice President of Wisconsin Electric Power Company, Chief Executive Officer of We Generation Operations and President of We Generation Operations

James D. von Riesemann - CRT Capital Group LLC, Research Division Kit Konolige - BGC Partners, Inc., Research Division Jonathan P. Arnold - Deutsche Bank AG, Research Division Michael J. Lapides - Goldman Sachs Group Inc., Research Division Paul T. Ridzon - KeyBanc Capital Markets Inc., Research Division Nathan Judge - Atlantic Equities LLP Dan Jenkins Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division Andrew Bischof - Morningstar Inc., Research Division Vedula Murti Leon Dubov Michael Weinstein

Good afternoon, ladies and gentlemen. Thank you for waiting, and welcome to Wisconsin Energy's Conference Call to Review 2013 Year End Results. This conference call is being recorded for rebroadcast. [Operator Instructions] Before the conference call begins, I will read the forward-looking language. All statements in this presentation other than historical facts are forward-looking statements that involve risks and uncertainties which 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 the company'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 discussion, 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, Wisconsin Energy has posted a package of detailed financial information on its website at www.wisconsinenergy.com. A replay of our remarks will be available approximately 2 hours after the conclusion of this call. And now it's my pleasure to introduce Mr. Gale Klappa, Chairman of the Board and Chief Executive Officer of Wisconsin Energy Corporation.

Elaine, thank you. Good afternoon, everyone. It's a whopping 9 degrees at downtown Milwaukee, but we're ready to warm you up as we review our 2013 year end results. Let me begin, as always, by introducing the members of the Wisconsin Energy management team who are here with me today. We have Allen Leverett, President of Wisconsin Energy; Pat Keyes, our Chief Financial Officer; Susan Martin, General Counsel; Steve Dickson, our Controller; and Scott Lauber, our Treasurer. Pat, of course, will review our financial results in detail in just a moment. But as you saw from our news release this morning, we reported earnings of $2.51 a share for 2013. This compares with earnings of $2.35 a share in 2012. And I'm pleased to report that 2013, by virtually every meaningful measure, was an exceptional year for Wisconsin Energy. Operationally, we achieved a number of significant milestones. We were named America's most reliable utility. We also earned the best in the Midwest regional reliability award for the ninth time in the past 12 years. In early 2013, J.D. Power ranked our company the #1 large utility in the Midwest for customer satisfaction among business customers. And by year end, we attained our highest overall customer satisfaction ratings in the past decade, probably our best ever. From a financial standpoint, we continued to deliver solid earnings growth. We generated strong positive cash flow, and we made significant progress toward a dividend payout that is more competitive with our peers across the regulated sector. Of course, a number of factors contributed to our record financial performance in 2013. As always, the weather had an influence on our results. We experienced colder-than-normal weather in the first and fourth quarters of 2013, and the colder winter months more than made up for a return…

Thank you, Gale. As Gale mentioned, for 2013, our earnings rose to $2.51 a share, compared with $2.35 a share for 2012. Consistent with past practice, I will discuss operating income for our 2 business segments and then discuss other income, interest expense and income taxes. Our consolidated operating income for the full year 2013 was $1,080,000,000 as compared to $1 billion even in 2012. That's an increase of $80 million. Starting with the utility energy segment, operating income in 2013 totaled $719.4 million, an increase of $71.7 million over 2012. On the positive side, we estimate the cold winter weather increased our margins by $82.3 million. 2013 was unusually cold in the first and fourth quarters and, in 2012, we experienced a very mild first quarter. Pricing increases for our Wisconsin retail customers net of amortizations also helped by $57.8 million. Conversely, we estimate that the return to normal summer weather in the second and third quarters reduced our margins by $35.9 million when compared to the unusually hot summer of 2012. In addition, depreciation expense increased by $23.8 million, with the additional capital investment placed in service during 2012. In December of 2013, we filed a request with the federal government for a treasury grant related to our newly completed biomass plant. The grant was neutral to our net income because our Wisconsin retail customers received bill credits during the year. As discussed in prior calls, the grant did boost our fourth quarter income. Now turning to our non-utility segment. Operating income was up $8.3 million when compared to last year because of the final approval of our Power the Future plant costs in the last Wisconsin rate case. Taking the changes for these 2 segments together and a slight decrease at corporate and other, you arrive at…

Pat, thank you very much. Overall, we're on track and focused on delivering value for our customers and our stockholders.

[Operator Instructions] Your first question comes from the line of Jim von Riesemann with CRT Capital.

I'm confused. So the question is, you indicated that your 4% to 6% targeted growth rate, you -- that's was your historical growth. And today, you said you want to be amongst the best managed companies in terms of growth going forward. So what do I make of that statement? It was very wide open.

Okay. Well, let me walk you through our thinking. First of all, as you know, we -- as promised, we published today for all of you a 10-year capital spending plan to give everyone a little bit better clarity on the investment opportunities that we see, particularly in our retail utilities going forward. When we look at those investment opportunities, which are real, when we look at several other opportunities -- investment opportunities that may or may not come to pass but we're working on, when you factor in the growth from American Transmission Company and factor in potential uses of our strong cash flow, as I say, we have no reason today to change our long-term earnings growth forecast and I personally think that, that forecast will place us among the best managed, best growing companies in the industry.

Okay, super. Second question is, with this revised 10-year CapEx plan, you talked about depreciation now being in the range of, I think, $425 million a year or so on average versus $375 million previously. What does that do to rate base growth, and could you all talk about how that depreciation plays out and what your rate base growth forecasts are?

Well, if you -- I think a pretty simple way to look at that is if you start with where we are today, where our utility rate base, is about $6.6 billion at the end of 2013. We're projecting out to grow to $7.1 billion of rate base by the end of '15. And then you can just do the math in terms of looking at that lifesaver chart we have for 10 years, and then taking the $425 million of average depreciation. So you can see what the utility -- the basic utility rate base growth looks like in terms of capital investment above the rate of depreciation.

Okay, and then just one last question. Can you talk a little bit about deferred taxes and what you expect going forward?

Sure, we'll be happy to do that. Pat and Steve have all the information on deferred taxes going forward.

Yes, I think -- this is Steve Dickson. In the past, we had said that because of bonus depreciation, because of the PLR on Road, we had significant tax deductions which created significant deferred taxes, and cash taxes were low this year. And we expect to have NOLs going into 2014, which will reduce tax carry for -- or reduced cash taxes in 2014 and also into 2015. And we will have, when we file the 10-K, the detailed schedules of our NOL carryforwards and long-term deferred tax items.

Okay. I'm still confused a little bit, Gale. So I want to go back to the first question, if you guys don't mind and then I'll turn it over to somebody else. So when you're talking about this growth rate, I guess the first question is, who are you comping yourselves against? How does that growth rate accelerate going forward, and where might you be conservative on that growth rate guidance?

Well, I would look at it more who's copying us, Jim, but then I'm biased. I mean, clearly, we think we can deliver the best customer value and best shareholder value by focusing our investments on our core business. So point number one, which you've heard me reiterate time and time again is, we do not intend to diversify into unregulated businesses or to golf courses in Mexico. I mean, we're going to focus on our knitting. We're going to excel at managing investment projects and bringing them in for customers on-time and on budget. We're going to continue to try to be the most reliable utility in the nation, and that's our basic strategy. And from that strategy, we believe, at the moment, that our medium-term growth rate is 4% to 6%.

Your next question comes from the line of Kit Konolige with BGC Financial.

So to follow a little bit on Jim's line of questioning about the growth rate, what are you expecting out of ATC? If you look out 5 or 10 years, what do you think is reasonable to think when it translates into Wisconsin Energy earnings, how much of a growth rate there can be there?

Well, Allen, who's on the ATC board will give you the answer to that question. Just to frame it, though, through the past several years, the growth rate of ATC has been very supportive of our corporate-wide 4% to 6% growth rate. Allen?

Yes, Kit, this is Allen. I guess when you look at ATC, their projected rate base this year -- so 2014, their projected rate base is about $3 billion. And if you look at their 10-year capital spending plan solely for their traditional footprint, so their traditional service territory, if you will, in Wisconsin as well as in Michigan, they're projecting somewhere between $3 billion and $3.6 billion worth of capital over the next 10 years. So if you superimposed $3 billion to $3.6 billion on top of $3 billion of the current rate base, I mean, that gets you really to the mid to the upper end really of a 4% to 6%. So it's very, very supportive, meaning, net income growth rate. So it's very supportive of our Wisconsin Energy target. And then -- and although we're not including anything, Kit, over the next 3 years for additional net income contribution from projects outside of ATC's footprint, to the extent they can do some things outside their footprint, that will just go on top of really inside their footprint growth rate that's already supportive of 4% to 6%. Hopefully, that's responsive to your question.

Yes, absolutely. So if they do find -- or even adding that amount of rate base and especially if they go outside the footprint to find new projects, does that require additional equity contributions from you guys?

Well, the internal cash flow at ATC is very, very strong. So for the stuff inside the footprint, Kit, I would expect fairly minimal capital contributions being required. Now if they kill something and bring it back to the cave from outside the footprint, those -- some of those are pretty significant investments, and that would require some capital contributions from us as well as the other owners.

Right. Okay, fair enough. Good, I appreciate that. And one other area I'd like to just touch on for a second. When -- Pat, I think you were talking about sales growth. Those numbers you gave were for your 2014 estimate of sales growth. Is that correct?

Yes, Kit, that's correct. The -- I mean, I kind of walked through the deltas for '13 and then moved on to '14. So I'll just clip through them real quick. So overall, it was 0.1% decrease of normalized sales, so basically flat. With residential, up about 4/10; small commercial, down -- excuse me, up about a 1/10; and then the large C&I, down about 8/10.

And how about if you took a view of, say, 5 years? What would your growth rates look like?

Yes. I think we've kind of said over a 5-year horizon. We're looking at a long-term flattish to maybe 0.5%. Again, that's on the electric side.

Right. And how about on the gas side? I assume that's more robust.

Well, the gas side, yes, it's been interesting. I mean, if you look back from 2011 to 2012, normalized gas, we grew 1.3%-ish, and we're 2.4% 2012 to 2013, so I still don't trust our normalization completely. I mean, it was real warm here in 2012 and really cold last year. But if you look at -- since 1970s, say, that's been clear use for customers than on a steady decline. I think it's -- at minimum, we've leveled off, and you could probably make an argument that it may be creeping back.

And I would guess, to Pat's point, that the growth rate in individual customer use of natural gas, going forward, is going to depend upon whether or not gas prices stay in a reasonable and relatively stable zone, so we will see. But clearly, I think Pat is right. The outlook, in terms of growth in natural gas consumption, is stronger right now going forward than what I hope is a conservative assumption on our part on the electric side.

Your next question comes from the line of Jonathan Arnold with Deutsche Bank.

My question was answered, but thank you.

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

Can you quantify -- since it's a public filing, meaning it's at the FERC, the data should be available. Can you quantify the MISO payments and how long you expect to receive that?

Sure, I'll ask Allen to quantify. There are 3 pieces to the MISO payments, and I will say upfront that under the MISO protocol, these agreements are for 12-month periods with renewal potential after each 12-month period. So 3 pieces to the MISO payments that have been filed. Allen?

Yes. And I guess maybe just to simplify, maybe just talk about it, and the 2 components that Gale talked about. But yes, there is a fixed component, Michael, which for a 12-month period, the fixed component would be approximately $52 million. And then, as Gale mentioned, when they dispatch the units, they would pay us essentially whatever the variable cost of operation is. So $52 million of 6 payments over a 12-month period, so 12 monthly payments, and then a variable component based on the operating costs. And Michael, the operating costs of the unit is on the order of $30 a megawatt hour, approximately.

How should we think about that? And I'm thinking about it from a bridge, from 2013 to 2014, to think about what of the $52 million. Let's just say, on hypothetical, it never dispatched, so we're just doing fixed cost recovery. How we should -- how should investors think about what the impact of that is year-over-year?

Maybe, Michael, we could step back a second and take that little bit different hypothetical because that -- those units are dispatched virtually all the time. At least [indiscernible] units are dispatched virtually all the time. So I'm not sure starting at a point where they don't get dispatched is particularly helpful. Maybe the best way to look at it is that iron ore mines switched supplier September 1. The cost to us, without any reimbursement whatsoever from MISO as we just continued to dispatch the units and basically, covering our fuel costs, the cost was about $0.01 a month, $0.01 a share or about roughly $4 million a month.

Yes. So Michael, as you step back, of course, 4 times 12 is 48. I mean, you -- the $52 million and the $40 million M&Ls offset each other.

Right. So are you basically saying that the bottom line impact of this is pretty much negligible for you, or is there actually a little bit of an uptick from this because you lost the $0.04 -- the $0.01 a month from September to December? And you would get that $0.04 back effectively but not incremental?

We do not get the $0.04 back from September through December, nor will we get compensated other than what we get on the hourly market in January. Remember, these payments are effective assuming FERC approval February 1. So I think we're all kind of looking at each other. I don't see any real uptick here. It's about awash.

Yes. Because you get 11 months of the fixed payments, Michael, and then we talked about the $4 million a month loss from the mines.

Got it, okay. I'll follow up with Pat offline on this one. Allen, one question on ATC. We've talked over the years multiple times about whether alternative ownership structures for ATC make sense. And one of the things -- given just where other pure play and there's only 1 or 2 transmission companies or even pipeline companies we trade, one of the things I don't know if we've talked about is whether an alternative structure similar to like a REIT-like structure for ATC would be value enhancing or value destroying for Wisconsin Energy and some of the other companies who own it.

Yes. Well, I did not know that electric transmission, I don't know if this a verb, but is REIT-able. Whether you could put that into a REIT or in some sort of master-limited partnership. So I wasn't aware that you could put electric transmission in that kind of structure, so I can't really comment on that in detail, Michael. But as I step back, I mean, in terms of ownership structure, I mean, we and the other owners, I mean, we certainly have the cash flow to fund the growth. And as I mentioned, in response to Kit's question earlier, it's quite accretive to our growth rates from our retail business. So we still think it fits, and it fits pretty well in terms of the current ownership structure.

Got it, last question. Gale, expectations for the rate case this year and just kind of what may be some pushback from intervenors could be? I know it's early.

It's very early. As everyone probably knows, Wisconsin is on a 2-year cycle, so this would be our normal bi-annual case. We would expect to file it in the spring, and we're putting together all the details as we speak. But I would suspect that the rate request will be very modest. And in addition to that, given the very strong performance of our generating units in the MISO market during the past year, I would expect that, that rate request will also include a fuel refund to customers.

Got it, so almost a negligible impact for the customer?

I wouldn't say negligible, but very modest.

Your next question comes from the line of Paul Ridzon with KeyBanc.

I just had one detail question. Your projected consumption expectations for '14, you said $0.8 down on large C&I, but then there was a follow-up comment, some offsetting which would be up 0.5%? I missed that commentary.

Yes. What we're trying to do is kind of break out 2 things for the first time because we have now experienced, in Michigan, some customers moving to alternative suppliers. So what we're trying to do is report traditionally the way we have reported, and the 0.5% up that you're asking about is on total delivered volumes. So whether they're our supply customer or not, we still provide distribution and customer service functions to those customers. So we wanted to show you kind of from an economic standpoint or a broader economy standpoint what the world kind of looks like to us, and we're projecting 0.5% weather normal growth in delivered volumes. Then the other statistics that Pat walked through in terms of large commercial and industrial, small commercial and industrial and residential, where we're projecting a slight decrease, those are the way we would traditionally have reported both supply and distribution customer sales. Am I making any sense to you, Paul?

The megawatt-hours delivered will exceed megawatt-hours generated to certain large C&I? You'll still deliver, but someone will also generate it?

That is correct. And if you look at it that way, megawatt-hours delivered will exceed megawatt-hours generated except a lot of those megawatt-hours are coming from our Presque Isle plant. So...

Intermediary in there somewhere?

Intermediary, that's a very, very good way to look at it.

Your next question comes from the line of Nathan Judge with Atlantic Equities.

Just a couple of things on -- questions on your capital spending. When looking at your delivery gas expectations, you just made a bunch of comments about how things are -- well, first of all, it's very cold; and then second, you've had a lot of talents along the route of your new pipeline sign up for an LDC agreement. And you also have talked in the past about the success of frac-ing. I'm just wondering, first of all, number one, is there an opportunity to upsize that investments? And number two, I don't think I see anything out for us that could phase even though it seems like there are some higher growth rate coming through from delivery. Just -- could you talk through that and give me some perspective on that?

Yes, I'd be happy to. The application we've made, Nathan, as you know, for approval for an 85-mile extension of our natural gas distribution network in the Western part of the state, that application -- depending upon how the factors in terms of customer demand continue to shake out, if approved, that application could be the first phase, if you will. And we're talking in Phase I here of this 85-mile line at a $150 million to $170 million investment. I would hope that we would receive approval from the Wisconsin Commission midyear this year to begin work later in the year. And I will tell you, what we experienced in the western part of the state over the course of January has done nothing but underscore the need, as I mentioned in our prepared remarks, for this extension. We saw a Canadian -- TransCanada pipeline explode a couple of weekends ago in Canada, near Winnipeg. And that affected the flow of gas off the major pipelines into the Dakotas, Minnesota and the western part of Wisconsin. Luckily, we were able to work our way through that without customer interruption. But when that happened, the windshields were in the minus 40- and minus 50-degree area. So you're talking about life and death kind of circumstances. And as I say, the experience of this past month has done nothing but underscore the need. So we're optimistic that we will get approval in a timely way from the Wisconsin Commission. And then depending upon future demand growth, as I mentioned, that could be -- this $150 million to $170 million project could be the first of 2 phases. But we'll take it one step at a time, and we hope to have -- we hope to be able to begin construction and have this first phase in place by late '15 or early '16. Does that respond to your question, Nathan?

It does. Just trying to see if the $150 million could be perhaps upside in the near-term, given what seems to be a very favorable backdrop.

I mean, it's certainly possible, but I wouldn't expect that for 2015 or 2016. Maybe later in 2016 or 2017.

And just a little bit on the fuel blending. I believe, if I recall correctly, that you were thinking about perhaps making a filing with the commission about possible investments in 2014, and it now sounds like you're looking at 2015. Has there been a change there, and what -- on the margins, what's going on?

No real change. We've been always saying that we want to be deliberate with our testing to make sure there's no degradation of the units and to be certain of what equipment modifications really might be needed for the long term. And our plan had always been to file for anything we might need in terms of commission approval related to the fuel blending in late '14 or early '15, so that is absolutely on track, Nathan.

Okay, I missed this. So in the late '14 -- sorry. And then just going to the renewables post 2020, which is I know quite a ways away, but I wasn't clear. And your 10-year capital plan, if you've got the renewables at $250 million to $450 million, is that an additional amount on top of your $650 million to $670 million roundabout between in '21 to '23?

You are absolutely correct, Nathan. That, if it comes to pass, would be additional on top of all the bars and all the spending that you see on that page. So it would be on top of the roughly $650 million to $670 million a year.

Great. And then just finally, if you could walk us through the sale of -- potential sale of a plant. You mentioned that in your commentary, but it sounds like now something will happen in 2015. Just -- if you could just walk us, just kind of give us an update.

Well, I think the state continues to progress forward in its thinking, and our expectation is that they are in the final stage of determining which financial advisors they would like to hire. They put out an RFP for financial advisors in the fall. I know they have interviewed financial advisors, and my sense is that, in the next month or 2, they may choose their financial advisor, and then the financial advisor would help them organize the effort going forward. And that's why we're saying if the sale of state-owned assets takes place, it probably would occur, our guess would be, in 2015.

And would -- could those plants -- a lot of those plants need to run given the steam properties of the steam generation heating properties. Obviously, a lot of those plants are -- require capital investment for CapEx or for environmental ratings. Is that in your budget at all, or how would that play out as we look kind of 2017 and beyond?

It's a very good question, Nathan. And the direct answer is that would be investment upside. We have not assumed anything in the terms of capital spending for state-owned power plants. It would be an investment upside for us.

Could you give us an idea about the amount -- the plant, what kind of investment would be required for capital on environmental?

Nathan, because the state is not really at a point where any due diligence is -- has been allowed, we have, in our minds, put a placeholder, but it's simply a guesstimate, and we're guesting $250 million perhaps for an initial capital outlay to purchase the plants. But that's just simply a guesstimate at this point.

Your next question comes from the line of Dan Jenkins with State of Wisconsin Investment Board.

I just have a couple of clarification questions and then a couple of others beyond that. But I think you'd mentioned you expect $500 million of free cash flow when you're calculating that after subtracting CapEx and dividends for 2014. Did I get that right?

2014 through 2018, Dan. It's over the 5 years.

Okay. So what does 85 million -- or 85-mile pipeline for the gas line that you're talking about, is that reflective? Is that what's the boost is on your last slide there for the 2015 gas delivery? Is that in the $330 million? Is that what's causing kind of the jump up?

Yes. When you see that gas delivery bar increase, that is exactly right. That would reflect the big lump of capital spending that would be required to make progress on that project in that year.

Okay. And then I was curious on that same slide, just to kind of to clarify. You showed 2013, that's a different amount than what you're showing on Page 5 on your cash flow statement. There, you're showing $687 million. I was wondering what the difference was there.

Yes. Dan, this is Pat. The difference on the -- what Allen affectionally calls the lifesaver chart, that $668 million is only in the utilities, and what you're looking on the cash flow statement would include Power the Future. That's the difference.

So then -- companywide then, it could potentially be a little higher than this, than you're showing on the slide?

The numbers you're seeing in what we call the lifesaver chart, with the bars breaking down basically customer service generation, delivery and renewables, those bars reflect the spending that we expect in our retail utilities only. So there are additional investments that are planned, obviously, for our maintenance capital for the Power the Future units. We have a little bit of capital for some of the other business lines. But what we wanted to show you was the rate base growth that we see going forward here over the -- our best guesstimate over the course of the next 10 years. Does that respond to your question?

Sure. So that would be incremental to the Slide 13?

That is absolutely correct.

Okay. Going back to this, you mentioned on this pipeline that it would potentially -- that it would pass 9 communities that would potentially be interested in hooking on the gas service...

Dan, do you have a cabin out there or something?

No, not yet, but I might. It sounds like it might be a good plan, but...

You pay, we'll hook you up.

I was just curious what the potential -- like what's the population in that as far so we can get a sense for the potential growth.

Well, the -- these are -- as you know, Western Wisconsin is quite rural, so these are small communities, a couple of thousand people per community. But the real demand out there is really coming, as I mentioned, from 2 areas; One, potential customer growth from these communities; but secondly, overall demand growth. Propane is widely used, particularly by farmers and other businesses in that section of the state. So conversions from propane and then, of course, the tremendous growth of the sand mining industry. We've gone from something in the neighborhood of 10 sand mining and sand processing operations in 2010 to over 100 sand mining operations. Actually, Pat is saying it's a 115 licensed sand mining operations last year, and these sand mining operations have to drive the sand before it is shipped. And their preferred method for drying sand is very large natural gas-fueled dryers. So you're seeing sand mine -- you're seeing requests from sand mining operations for us to supply gas to their operations. We're seeing customers wanting to switch from propane. And you know, Dan, as you follow the news, there have been shortages of propane in more than 24 states. And the price of propane, if you can get it, particularly in Western Wisconsin, is just incredible. So we would expect the demand from customers wanting to switch to propane, we would expect that momentum to continue to grow even from where we've seen it over the past couple of years.

Okay. And then I was just curious as far as your financing plan for '14. I know you have $300 million maturing, coming up here in April 1. I expect you plan to refinance that. And is there any additional debt that you would need to issue this year?

We'll let Pat handle that question for you.

Sure, Dan. Yes, you're right. We've got that 6% coupon, $300 million coming due late March, April. That one will be replaced late Q1, early Q2. Probably about $250 million is what we're forecasting right now. And then, we've also got -- you may recall that in 2013, at Wisconsin Gas, we had a $45 million bond retired. We've not replaced that. We didn't replace that last year, but we will -- forecasting we'll replace that this year probably. So I would say Q2, Q3, maybe $100 million at Wisconsin Gas.

Okay. And then just the last, you mentioned fourth quarter that you did see some pickup x the mine. Should it see some pickup in your large industrial customers?

That is correct.

Do you anticipate that to continue, or is that maybe a reflection of onetime items? Or how should we think about the economic growth going forward?

What I can tell you, because we -- I personally look at this data every week. What I can tell you is that through January, now it's been cold, obviously. And so there is some bit of -- some small amount of weather sensitivity, even with the large industrials. But if you take a look at the 17 industrial customer segments where we have significant customer presence and where we serve, we serve industrial customers in 17 different segments of the economy. Through January, 9 of those 17 segments continued to show growth.

Your next question comes from the line of Brian Russo with Ladenburg Thalmann. Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division: Actually, my questions have been answered.

Your next question comes from the line of Andy Bischoff with Morningstar.

When you look at 5-year growth expectations for load growth of half -- of flat to 0.5%, is that consistent across residential, industrial and commercial, or is there some variation there?

No, there is some variation. I mean, again, given the fact that in total retail, we're only projecting 0.5% growth. The variation is not huge, but there is some modest variation. It's got, I think -- we're probably projecting a little stronger growth in small commercial and industrial than in a large.

Yes, a little bit stronger in the small.

Yes. So the only -- it's pretty even except a little bit stronger growth in small commercial and industrial than in large.

Your next question comes from the line of Vedula Murti from CDP Capital.

Couple of a separate things. One, you talked about the cash flow profile to 5 years through 2018. I don't -- I apologize, I don't have the slides in front of me, but does the cash flow profile in terms of free cash flow generation changed much in the outer years given that you have a 10-year CapEx plan?

We'd certainly been very thorough about running our models through the next 5 and, as Pat mentioned, our cumulative total free cash flow for '14 through '18 is approximately $500 million. I can tell you that, based on what we're seeing further out -- and again a lot of assumptions have to go into the further out, your capital spending, your returns, the growth -- in none of those periods that we turned negative cash.

You did turn negative cash?

We do not turn negative. Not turn negative. We see positive free cash throughout the entire period.

Okay. And my second question is more industry. There's been a lot of press lately in terms of cyber threats to the grid and other types of risks to the system. One, I'm wondering kind of in terms of what type of capital expenditures or other things are you seeing, that the industry is seeing? And also tying to that, is there anything going on with regards to coming up with something to kind of mirror, like Price-Anderson, like in terms of risks associated with the nuclear accident, if something were to significantly happen to a part of the grid or to specific -- to a particular operating system?

Well, to your second question, Vedula, I don't see anything on the horizon related to the distribution networks across the country or the grids across the country. I don't see anything on the horizon that would even resemble Price-Anderson, nothing like that. That may not be a bad idea, but I don't see anything quite like that at all. And then in terms of investments that we're making related to cybersecurity, the answer is yes. We are making investments related to cybersecurity, relating to protecting our networks. I would be a little reluctant to get into the specifics of those investments. But particularly on the gas distribution side of the business, I think over the course of 5, 10 years from now, over the second half of the 5-year period, you will see an increasing amount of capital spend on just security for the gas distribution networks as new pipeline safety rules come into effect. But yes, there are ongoing investments, things that we are doing, both physical security and protection from cybersecurity.

I mean, is that going to be like in the -- just in like the tens and millions of dollars annually or could they end up being more material?

Right now, it is not the lion's share anywhere close to out of our capital budget, but I would say -- my own personal belief is that as we work out 3, 5 and 10 years, that type of investment will become more and more material.

Your next question comes from the line of Leon Dubov with Luminus Management.

A couple of quick clarifications. One thing, I think Pat said, when asked about ATC, is that isn't not assuming anything outside the footprint for the next 3 years. I'm just wondering sort of more than 3 years out, are you thinking that we may see something?

Well, that was the older less handsome version of Pat. That was Allen, and we'll [indiscernible].

We're often confused. The 3 years out, you're exactly right. We've not made any assumptions that ATC would make any additional investments outside the footprint. But I can tell you, certainly, past those 3 years, I mean, ATC is very actively pursuing projects. But at this point, we're just being very conservative about how we put our projections together, and we're not assuming that they get any of those projects. But I've seen, certainly, stuff that they're pursuing that's upwards of $4 billion worth of capital investment. So I would hope that they would get some of those projects. But at this point, we haven't included them in our financial forecast.

And when Allen said that they got something and bring it back to the cave, I'm assuming we'd have to heat the cave.

And then one other thing. If -- in the new CapEx projections, in '15, the generation proportion went up by I think $55 million or so. Is that the Oak Creek fuel stuff, or is that something different?

We're looking at our chart here.

I think it used to be $102 million in your last presentation, now it's $157 million.

I guess that's largely timing.

Yes.

Yes.

Yes. Everybody is saying -- everybody is agreeing. That's largely timing from the year-to-year as we've refined our forecast going out.

Yes, okay. So is the Oak Creek fuel blending in this forecast at all or...

Very small amount, roughly $25 million worth.

In what year?

It should be in 2015, I would imagine.

Yes, but not a huge amount.

Your last question comes from the line of Serena Dackey with UBS.

Actually, this is Mike Weinstein. The renewable investments in 2021 to '23, is that just driven by RPS standards? Is that what you're...

Let me explain, and then Allen can add on anything he would like as well. The Wisconsin renewable energy standard requires statewide that 10% of retail sales come from renewables by the year 2015, but then that 10% stays in place. So if you have any load growth at all, you have to add increments of renewables to maintain your compliance with the law and with the standard. So as we -- if you think about how we've complied with the standard so far, we have built the 2 largest wind farms in Wisconsin. We have just finished, as I mentioned, on-time and on budget a significant investment in a biomass plant, and we've supplemented those investments with renewable energy credits. So as we look further out, and Allen you and I decided with Pat, that it wasn't prudent to just simply assume that we could continue to add increments with very low cost renewable energy credits that far out. So we need to start looking 2022 as the latest year we would be in compliance under our current projections for growth. We need to start looking down the road at what other potential renewable investments might work for our portfolio. Allen?

Yes. And that's, obviously, just a placeholder at this point, Mike. And I would expect that renewable technologies will -- they've changed a lot in the last 10 years, and I'm sure they'll continue to change over the next 10 years. So it's really just a placeholder at this point, but it's an indication that, at some point, we're going to need some additional renewable capacity in order to stay in compliance with the state portfolio standard.

So up through that time, you're meeting it with renewable credits?

Well, really a combination. Gale mentioned the fixed investments that we made, so the biomass, the 2 large wind farms and some other smaller renewable investments. So we have that, plus we've been buying some renewable energy credits. So really, it's a combination of those 2, Mike.

Is there any chance that you could pull that back and do it a little earlier or...

That depends upon load growth. I mean, if we -- if our load growth projections are conservative and renewable energy credits diminish in terms of their -- either their availability or their cost, then yes. But right now, that's our best guesstimate in terms of timing. All right. Well, ladies and gentlemen, I believe that concludes our conference call for today. Thank you so much for participating. If you have any other questions, the famous Colleen Henderson is available in our Investor Relations office, and her direct line is (414) 221-2592. Thank you, everyone. Good night.