Welcome to the ALLETE first quarter 2023 financial results call. Today's call is being recorded. Certain statements contained in this conference call that are not descriptions of historical facts are forward-looking statements, such as terms defined in the Private Securities Litigation Reform Act of 1995. Because such statements can include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those discussed in filings made by the Company with the Securities and Exchange Commission. Many of the factors that will determine the Company's future results are beyond the ability of management to control or predict. Listeners should not put undue reliance on forward-looking statements, which reflect management's reviews only as of the date hereof. The Company undertakes no obligation to revise or update any forward-looking statements or to make any forward-looking statements, whether as a result of new information, future events, or otherwise. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press * one one on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, press * one one again. I would now like to turn the call over to Bethany Owen, Chair, President, and CEO. You may begin. Thank you, and good morning, everyone. We appreciate your joining us today. With me are ALLETE's Senior Vice President and Chief Financial Officer, Steve Morris, Jeff Scissons, ALLETE Clean Energy's Chief Financial and Strategy Officer, and Frank Frederickson, Minnesota Power's Vice President of Customer Experience and Engineering Services. Corresponding slides for this morning's call are available on our website at allete.com in the Investors section. We'll call out each page number as we go through today's presentation. This morning, ALLETE reported first quarter 2023 earnings of $1.02 per share on net income of $58.2 million. Last year's first quarter results were $1.24 per share on net income of $66.3 million. Although weather conditions in the quarter did affect our results, we are on track and reaffirming ALLETE's original full-year earnings guidance range of $3.55-$3.85 per share. Steve will be providing additional details on our financial performance during the quarter in a moment. Please refer to slides three through five. We continue to be recognized as a leader in advancing clean energy. In fact, for the second year in a row, an independent study has ranked ALLETE as the number one investor in renewable energy relative to market capitalization among all U.S. investor-owned utilities. We're proud of that statistic, but ALLETE's strategy is not just about adding renewable energy. It's also about making important investments in projects to help ensure we get this clean energy transition right for our customers, our communities, and the climate. This is what we mean when we describe our purpose as leading the way to a truly sustainable clean energy future. On slide four, you can see some of the details of our Sustainability in Action strategy, which is designed to meet these critical goals while providing value and supporting long-term earnings and dividend growth for our shareholders. Our Minnesota Power team is hard at work executing our more than $3 billion CapEx plan. We're making significant progress on our HVDC modernization project, including selection of the technology provider and securing key land rights. We expect to file the Certificate of Need application with the Minnesota Public Utilities Commission later this month. In addition, in the second half of this year, Minnesota Power will begin the initial phases of the RFPs for nearly all the 700 MW of wind and solar that were included in our recently approved Integrated Resource Plan. These RFPs will emphasize attributes such as meaningful reinvestment in host communities, the use of local labor, and a focus on increasing supplier and workforce diversity. All of this will help ensure these clean energy projects deliver the best overall value to customers while strengthening the communities we are privileged to serve. This is important to us at ALLETE because it will mean growing our company and advancing the energy transition in ways that are truly just and equitable. I'm looking forward to sharing additional information as these important projects progress. As we announced more recently, ALLETE Clean Energy has completed two of its build-transfer projects with the sale of its 100 megawatt Northern Wind project in Minnesota in January. In early April, the sale of its 92 megawatt Red Barn Wind facility in Wisconsin to Madison Gas and Electric and Wisconsin Public Service Corporation. Last month marked the 1-year anniversary of New Energy Equity joining the ALLETE family of companies. New Energy is one of the nation's leading solar development companies and is the top solar development company in the states of Virginia, Illinois, and Minnesota. We're very proud that the talented New Energy team had a record first quarter of project closings. They continue to grow their already strong pipeline of future projects. Now I'll turn it over to Steve for further details on our 2023 first quarter financial results. Steve? Thanks, Bethany. Good morning, everyone. I would like to remind you that we filed our 10-Q this morning. I encourage you to refer to it for more details. Please refer to slide 6 and 7 for significant variances and other items for comparison consideration. Today, ALLETE reported first quarter 2023 earnings of $1.02 per share on net income of $58.2 million. Earnings in 2022 were $1.24 on net income of $66.3 million. Net income in the first quarter of 2023 included $4.7 million after tax, or $0.09 per share, due to the timing of reserves for interim rates resulting from Minnesota Power's 2022 general rate case. As you may recall from our year-end earnings call in February, the entire 2022 interim rate reserve was recorded in the fourth quarter of 2022. You will see similar timing differences in the second and third quarters and fully reversing in the fourth quarter this year. Interim rates will continue to be collected until final rates are implemented, which is expected to occur in the third quarter this year. Overall weather conditions also impacted ALLETE's consolidated earnings by approximately $0.10 per share versus last year. ALLETE's Regulated Operation segment recorded first quarter 2023 net income of $40.6 million, compared to $51.5 million in 2022. Earnings for 2023 reflect lower net income at Minnesota Power, primarily due to the timing of interim rate reserves previously mentioned and lower kilowatt-hour sales due to milder winter weather conditions as compared to last year. Also impacting 2023 was higher operating and maintenance expense. ALLETE Clean Energy recorded first quarter 2023 net income of $8.5 million, compared to $16.5 million in 2022. Net income in 2023 reflects lower wind resources and availability across much of the fleet and higher operating and maintenance expense compared to 2022. Net income last year also included earnings from the legacy Northern Wind facilities, which were decommissioned in April 2022 as part of ALLETE Clean Energy's repower and sale of the Northern Wind project. We do expect some of the negative weather impacts in the first quarter to be offset by the profitable sale of the Red Barn project in the second quarter this year. Our corporate and other businesses, which include New Energy, BNI Energy, and our investments in renewable energy facilities, recorded net income of $9.1 million, compared to a net loss of $1.7 million in 2022. The first quarter of this year included $4.1 million of net income from New Energy and had record closings of over 30 megawatts. 2022 included transaction costs of $1.4 million after tax related to the acquisition of New Energy, which was acquired in April of 2022. We also recorded earnings from Minnesota solar projects placed into service in late 2022. Earnings per share dilution in the first quarter was approximately $0.08 due to additional shares of common stock outstanding as of March 31st, resulting from our secondary offering completed in April of last year. Next, a few comments on our outlook and 2023 guidance. Overall, regulated operations were in line with internal expectations for the quarter as higher taconite margins offset negative weather impacts on other regulated sales. Our taconite customers began the year with production levels similar to where they were the last half of 2022. With Cleveland-Cliffs' announcement last week that it had restarted part of its Northshore Mining operation and strong nominations from other taconite customers through the summer months, we now expect full-year taconite production will be higher than our initial sales forecast estimates of approximately 33 million tons. Another positive announcement came last week when Cenovus announced they have completed the rebuild of the refinery in Superior, Wisconsin, and have restarted operations and plan to be at full production by mid-year. ALLETE Clean Energy was below our expectations for the quarter by approximately $0.05 per share, primarily due to weather impacts causing lower wind resources and availability across much of the fleet. The $160 million profitable sale of the Red Barn build-transfer project in April will be a positive impact to our second quarter financial results. We are quite pleased that New Energy had another record quarter of project closings, and its growing and robust pipeline of over 2 GW further provides confidence for strong project closings in the coming quarters. New Energy is on track to achieve full-year earnings of $16 million-$17 million, as reflected in our initial guidance. Considering these items in total, we remain on track to achieve our full-year 2023 earnings guidance of $3.55-$3.85 per share. Finally, ALLETE's financial position is supported by a strong balance sheet that includes cash and cash equivalents of $30 million, $230 million in available consolidated lines of credit, and our debt-to-capital ratio was 37% as of March 31, 2023. In addition, in April, ALLETE Clean Energy received approximately $160 million in proceeds from the sale of the Red Barn project, and ALLETE issued $125 million in first mortgage bonds last month at an interest rate of less than 5%. I'll now turn it back to Bethany for additional comments. Bethany? Thanks for that update, Steve. Just a few additional comments before we open the line for your questions. Minnesota Power leads the state in providing renewable energy to our customers, and we're the only utility to exceed Minnesota's energy conservation goals for 13 consecutive years. Our team has done all of that while continuing our long track record of providing safe and reliable service to our customers and keeping rates as low as possible. Because constructive regulatory outcomes are critical to our ability to continue the clean energy transition while maintaining the financial health of Minnesota Power, we plan to file our next rate case in November of this year. In addition to transforming our generation fleet, an important part of Minnesota Power's strategy includes significant but prudent investments in our transmission and distribution, which we believe will enable us to meet our clean energy goals while maintaining and strengthening the reliability and resiliency of our system and the regional grid. As we make these investments, we're always focused on our customers and providing the best value. The Inflation Reduction Act and Infrastructure and Jobs Act are providing opportunities to help reduce costs for our customers. We recently filed requests for state and federal funding to support two innovative Minnesota Power projects to expand transmission and add energy storage. On the transmission front, the Northland Reliability Project is a $970 million, 345 kV transmission line from the Iron Range in northern Minnesota to central Minnesota, which we'll jointly own with Great River Energy. This project, which is part of MISO Tranche 1, is moving forward, and we expect to file the certificate of need and route permits with the Minnesota Public Utilities Commission later this summer. Our engagement with Grid United also continues as we make progress on the first-of-its-kind North Plains Connector project to enhance interregional reliability and transfer capacity between the middle of the country and energy markets to the west. We look forward to sharing more with you on this exciting project in the coming quarters. These are just a few examples of the progress we're making and how the very foundation of our growth strategy at ALLETE is sustainability in all of its forms: people, planet, and prosperity. As always, we're committed to doing everything in the absolutely right way. Slide 8 contains links to information on this important work, including our recently updated corporate sustainability report. Importantly, our people are the very reason for ALLETE's success, and I couldn't be more proud of our innovative, talented, strategic, diligent, and resilient team. Our team and our culture at ALLETE are unique, and just 1 example is the fact that ALLETE was recently recognized in the 2022 Minnesota Census of Women in Corporate Leadership as 1 of only 2 public companies in the state with gender parity on our board of directors and in our senior executive team. This is unique and special, not only in our state, but in the entire energy industry. I'm proud of this track record. We're continuing our work to advance diversity in all forms. This important work isn't about numbers or statistics. It's about creating and strengthening a culture where individuals are valued for their whole selves, and our team, our communities, and our company are more innovative and even stronger as a result. As you can hear, we're pleased with our execution and positioning here in early 2023 as we're setting the stage for strategic and significant growth. We look forward to updating you on our progress throughout the year. Thank you for your interest and your investment in ALLETE. At this time, I'll ask the operator to open the line for your questions. Thank you. As a reminder, to ask a question, please press * one one on your telephone and wait for your name to be announced. To withdraw your question, please press * one one again. Please stand by while we compile the Q&A roster. Our first question comes from Richard Sunderland with JP Morgan. Your line is open. Hi, good morning, and thank you for the time today. Morning, Rich. Starting with the guidance, it sounds like the industrial strength on 1Q offset the weather headwinds, and then trying to parse the Northshore and Cenovus refinery language with the ramp there, that all sounds incremental to 2Q, 3Q, and 4Q. Is that the right read here? Meaning, at least on the regulated side, net of those impacts, you're ahead of plan. How would you frame all of those factors relative to the midpoint of the guidance currently? Yeah. Hi, Rich. Steve Morris here. We did expect the other entities that you talked about, ST Paper, Cenovus, and also Cliffs, to start up roughly when they did. It's really factored in our guidance this year. Okay. Got it. The, the one Q impacts, in terms of those offsets, those are separate from these items. Could you just speak to that a little bit more in terms of what trends you saw on one Q that leave you offsetting the weather for regulated? Good morning, Rich. It's Frank Frederickson here. I'll jump in a little bit. You know, as Steve mentioned, you know, we did expect ST Paper and Cenovus to come online this year, and that was also factored into the recent outcome of our rate case in terms of that sales forecast. On the taconite side, we have seen a little stronger demand than what we budgeted. You know, we're pleased to see, as we mentioned with Northshore, starting up for Cleveland-Cliffs as well. There has been a little bit more robust than we budgeted, taconite demand as we've seen steel markets pick back up, automotive sales and a little bit of confidence from our customers with steel pricing coming back up from lows at the end of last year. That's really where we've seen that offset come and a little bit stronger in the taconite area, expecting, you know, relatively what we expected in terms of coming back online with Cenovus and Husky Refinery as well as ST Paper. Yeah. Got it. That's very helpful. I guess turning away from the regulated side, in terms of the ACE impact, since you were very clear on Red Barn as the offset, how do you think about the ACE fleet overall in terms of the performance more recently? Is there anything operationally that you're focused on in terms of driving improvement or is it really just a matter of seeing the resource availability and how that comes in? Morning, Rich. This is Jeff. Thanks for the question. I think operationally, we see the fleet being strong. We were impacted by some icing events that are somewhat out of our control and difficult to budget. What we've mentioned previously is the focus on the SPP market and our projects in there, and that continues to be a high area for us. We do have some exposure to the energy markets, and they continue to be volatile. We'll continue to pace you on the performance. Understood. Just one last one from me. You referenced some North Plains Connector updates in the coming quarters. Could you outline what the near-term priorities are there and what you might be in a position to announce over the next few quarters? Yeah, this is Bethany, Rich. We are in the process of meeting with other entities to garner interest in the project itself, and we're having kind of great conversations, initial conversations with those. We're just beginning that process and really looking forward to updating more in coming quarters. Understood, understood. Thank you for the time today. Thanks, Rich. Thank you. One moment. Our next question comes from Dariusz Lozny from Bank of America. Your line is open. Hey, guys. Good morning. Thank you for taking my question. Morning. Maybe just wanted to start off on the New Energy results that you reported. Seems like they're right in line with your full year guidance. Should we assume that results for the balance of the year would be more or less ratable? In other words, not too much seasonality. The part B of the question is your comments around sort of how that business is developing since you acquired it, I think, have been consistently rather positive. It sounds like it's exceeding expectations. Could there be a bit of conservatism baked into your full year guidance on earnings for New Energy? Good morning, Dariusz. This is Jeff. We are extremely pleased with the performance of the New Energy Group. As Bethany mentioned, the talented team has been a great add to the ALLETE family. There will be some seasonality, it's the timing of the close of projects, Dariusz, so it's not necessarily equitable across the year. We are confident in their ability to meet the guidance that's been laid out. That market does continue to grow, it does face some headwinds as well that you're aware of on the supply chain side and others. I would say that they continue to perform, that acquisition continues to be a success story for us and that we see their value. That's as far as we're going right now. Excellent. If I could just add, like, this is like a housekeeping or point of clarification question. Is there a specific reason why New Energy is reported in the corporate and other line and not in ALLETE Clean Energy? It just seems somewhat incongruent with the fact that it's obviously a key and growing part of your business now. Yeah. It... Good question, Darius. We do get that a lot. They are two different businesses, and we just didn't wanna bury it in ALLETE Clean Energy. We think you will get better clarity by keeping them separate. At one point in time, if New Energy gets big enough, it could be its own segment. Right now, it doesn't meet the threshold from accounting standpoint. By default, everything that doesn't meet the guidance from a GAAP standpoint ends up in corporate and other. A conscious effort not to bury it in ALLETE Clean Energy, two really different businesses. Excellent. Okay, thank you for clarifying that. If I could ask, just on now moving over to the ALLETE Clean Energy side of things. We've seen some of your larger cap peers in the last 18 months or so, divest of non-regulated renewable generation assets. Is some kind of portfolio recycling or otherwise reevaluating your portfolio, is that something that's on the table at all? Otherwise perhaps any opportunities around repowering that you're looking at? App for specifically for the wind portfolio? This is Jeff again, Darius. We do continuously evaluate the portfolio. You know, recently the Northern Wind project was a repower expansion and a sale. We've got what we call the legacy assets, which are strong. You know, they were developed 15 to 20 years ago, and they have strong wind resources. Some of the clarification of the IRA has helped, whether it's been energy community or other opportunities around domestic content. We continue to work on the redevelopment of those assets, and will evaluate all different methods, whether long-term PPAs or build-transfers like we've proven in the past. We're certainly aware of what some of our larger cap peers, but continue to believe that it's a strong strategic fit with ALLETE, as you see the sustainability and actions across all businesses and the clean energy platforms, provide a lot of value to the overall ALLETE organization. We will always continue to evaluate and consider it along with the ALLETE strategy, but again, seeing the value of the platform. Okay. Excellent. Sorry, just one last one. If you could just remind us, what is the approximate impact from the Red Barn sale that's embedded in your 23 EPS guidance? Darius, we haven't called it out specifically last quarter. Steve mentioned that it was in budget for a couple million dollars, and we still have a few punch list items outstanding, but we would say that it's in line or working towards making it potentially a little bit better. Okay. Thank you very much for the color. I will leave it here. Thanks, Darius. Thank you. Our next question comes from Brian Russo with Sidoti. Your line is open. Hi. Good morning. Good morning, Brian. Hey. Just to follow up on the ACE portfolio optimization efforts. If I recall, there's approximately 400 megawatts of legacy wind assets that, you know, either need to be recontracted or repowered. I'm just wondering if that's still the case. You know, are you leaning one way or the other towards, you know, recontracting it or under a PPA or, you know, doing some of these, which seem profitable build own transfers? Morning, Brian, this is Jeff. I would say still evaluating all the above at this point. You're accurate that there's over 400 megawatts of what we call the legacy fleet. That we will continue to look at what the market will provide for PPAs and evaluate the repowering opportunities. Some of the, you know, update on the energy communities. We were pleased to see, you know, Armenia Mountain as one of our prized assets included in energy community, as was Condon out in Oregon. Those provide enhanced, you know, competitiveness regardless of what direction we go. There's more to come and we'll provide those updates, but I would expect to be a combination of both. Okay. Got it. Then just on New Energy, I think your full year guidance also assumes about 100 megawatts of project closings. Is that accurate? Clearly you're already 1/3 of the way there. Is that the way to kind of frame it? That's correct, Brian. This is Jeff. Sorry. We would say that 100 megawatts is a guideline, and not every megawatt is the same. You know, depending on different region, they have different profiles, but roughly 100 megawatts and that's we are off to a good start. Okay, great. On the utility, could you just give us some more detail on the competitive RFPs that you plan for later in this year? Is it gonna be one RFP for all 700 megawatts of wind and solar, or are these gonna be numerous RFPs? You know, what would be the timeline to, you know, get final bids and then PSC approval that will line up with what I assume is the unchanged 5-year CapEx that you disclosed in the last quarterly call? Morning, Brian. Frank Frederickson here. I'll on the RFPs, you know, what we're looking at is, it's likely to be two separate RFPs as we have both a tranche of solar to get done as well as a tranche of wind. As we spelled out, we're gonna be getting those out this fall, winter time period, second half of the year. You know, regulatory process then gets into 2024, and it's all consistent and aligned with our CapEx table that we shared in February. Okay, great. Just lastly on the industrial sales, like you said, it seems to be tracking better than expected. I'm curious, the 6.5 million megawatt hours that's in your utility guidance, you're tracking better than that? That's based on better than 33 million tons of taconite production? Yep. That's correct. Frank here again. You know, we came out of winter and with strong and, you know, with the restart at Northshore, it puts us north of that 33 million ton budget and north expectations right now, you know, north of that 6.5 million megawatt hours that you quoted. Okay. Remind me, is that what's embedded in the final Minnesota Power rate order? We are, you know, we are coming up with the, you know, restart in Northshore and with some of the strength we are getting, like we are seeing stronger than 33 million tons of production and the rate order had assumed taconite production in the high 35, close to 36 million ton area. It is getting us closer to that. Okay, got it. Can you just remind us, I think, the nominations for the large power customers were due in April for the forward four months. Is that near full, you know, production as well? That's correct. Yes. We have nominations through the summer months. We're near full production there, and we'll know more about the fall come August. Okay, great. Thank you very much. Thanks, Brian. Thank you. Our next question comes from Alex Mortimer with Mizuho. Your line is open. Hi. Good morning. Thank you. Morning, Alex. I was hoping, can you touch on the dynamics of how you recognize earnings from NewEnergy? Are they recognized upon closing of projects or as a percentage of completion as you work through them? Just a little bit on sort of how those work through. Hi, Alex. Steve Morris. Yeah, you're right on these projects here, typically notice to proceed is recognized upon close. Okay. Understood. Flipping back to the utility, given the historically warm weather we've seen kind of across the industry, we've seen others state that they've used much of their contingency for the year with regards to weather and are looking for sort of normal to favorable weather for the balance of the year to be able to hit guidance. Can you touch on how much of your contingency you've run through on the weather front, to still have confidence in your ability to hit your guidance for the full year? Yeah. The, the way we look at it, Alex, the first quarter, as we talked about, we had some weather impacts on the utility. It was about $0.05, so it wasn't terribly material. As I mentioned, it was made up by higher taconite. We assume normal weather the rest of the year, on track with our guidance for the year. Okay. Understood. Just on the industrial side, given you have a larger share of your load coming from large customers as compared to many others in the industry, how do you think about your exposure to a potential decrease in C&I load if we were to enter an economic slowdown in the second half of this year? Thanks, Alex. Frank Frederickson here. you know, we're pleased, as we mentioned, that we're starting off strong, you know, with sales in the taconite industry and as well as steel is continuing and Cliffs announced their restart of Northshore. Seeing automotive sales and production pick up, which is driving a lot of that steel production, you know, we're all just as our customers watching the back half of the year, but it does very helpful that, you know, we're starting off stronger than anticipated for the first half. I don't know. Steve, do you have anything else to add on? Nope. We'll know more, when we get August, first nominations thereabout, which we will have by the time we, have our second quarter conference call. All right. Look forward to the update then, congrats again on the quarter. Thank you very much. Thanks, Alex. Thank you. I'm showing no other questions in the queue. I'd like to turn the call back to Bethany Owen for closing remarks. Thank you. Steve, Jeff, Frank, and I thank you again for being with us this morning and for your investment and interest in ALLETE. We look forward to speaking to many of you at other investor venues throughout the year, and we hope you enjoy the rest of your day. This concludes today's conference call. Thank you for participating. You may now disconnect.