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Wisconsin Energy's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Turning now to the economy. Wisconsin’s unemployment rate at 6.8% in March, remains well below the national average. And as I mentioned, electric sales to our large commercial and industrial customers rose by 3% in the first quarter of 2012. The sector is showing particular strength in the past quarter include iron ore mining, heavy equipment manufacturing, and for the first time since the recession, the producers of rubber and plastic products.

We’re also seeing a rebound in new customer connections. Compared to the low level of activity during the recession, electric customer connections were up 29% and connections of new natural gas customers rose by 33% over the 12-months ended March.

On the construction front, we have two major projects underway, the 50-megawatt biomass plant in Northern Wisconsin and the air quality control upgrade at the original Oak Creek units. We’re making excellent progress on the biomass plant in Northern Wisconsin. We’ve already topped out the structural steel for the boiler and the steel structure for the turbine and fuel storage buildings are now 90% complete. Construction of the cooling tower is underway as well as excavation work for the auxiliary boiler.

As I’ve noted before, the biomass plant will help us diversify our portfolio of renewable energy. We’ll be able to dispatch the unit in the efficient technology that will produce steam for the operating paper mill of the site will clearly enhance the economics of the project. Our investment of the biomass plant is expected to total between $245 million and $255 million excluding allowance for funds used during construction. We’re on schedule and on budget and meet the completion date by the end of 2013.

Of course, the biomass project and Glacier Hills Wind Park that we completed late last year are key components that will help us meet Wisconsin’s renewable portfolio standard for the year 2015. To refresh your memory, the standard calls for an increase in the amount of electricity delivered from renewable sources from 5% in 2010 to 10% in 2015 at a statewide level.

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