WEC Energy Group Q4 2025 Earnings Report

WEC Energy Group EPS Results

• Actual EPS: $1.42
• Consensus EPS: $1.39
• Beat/Miss: Beat by +$0.03
• One Year Ago EPS: $1.43

WEC Energy Group Revenue Results

• Actual Revenue: $2.54 billion
• Expected Revenue: $2.19 billion
• Beat/Miss: Beat by +$350.22 million
• YoY Revenue Growth: -8.80%

WEC Energy Group Announcement Details

• Quarter: Q4 2025
• Date: 2/5/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, February 5, 2026
• Conference Call Time: 2:00PM ET

WEC Energy Group (NYSE:WEC) is a diversified energy holding company headquartered in Milwaukee, Wisconsin. Through its utility subsidiaries, the company generates and distributes electricity and delivers natural gas to residential, commercial, and industrial customers.

WEC Energy Group serves customers primarily in Wisconsin, Illinois, Michigan, and Minnesota. Its operating companies include We Energies, Wisconsin Public Service, Upper Michigan Energy Resources, Minnesota Energy Resources, Michigan Gas Utilities, North Shore Gas, and Peoples Gas. The company’s energy portfolio includes a mix of natural gas, renewable, hydroelectric, and other generation resources, along with transmission and distribution infrastructure.

The company traces its history to Wisconsin Energy Corporation and adopted the WEC Energy Group name in 2015 following the combination of Wisconsin Energy and Integrys Energy Group. WEC Energy Group is led by President and Chief Executive Officer Scott J. Lauber.

WEC Energy Group Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Reported full‑year 2025 adjusted EPS of $5.27, up $0.39 year‑over‑year, excluding a one‑time $0.46 per‑share charge tied to a proposed Illinois settlement.
• Negative Sentiment: Reached a proposed Illinois settlement to resolve roughly $2.3 billion of open dockets that includes a prospective $130 million rate‑base reduction and $125 million of customer bill credits over three years, subject to ICC approval.
• Positive Sentiment: Strong regional growth — Microsoft (+500 MW), Vantage/Oracle/OpenAI (~1.3 GW) and other industrial investments — lifts five‑year demand to ~3.9 GW and added ~$1 billion to the five‑year capital plan, now $37.5 billion.
• Neutral Sentiment: Updated 2026–2030 capital mix includes ~$7.4 billion for gas/LNG and ~$12.6 billion for renewables/batteries, with 2026 funding expected at $4–5 billion of debt and $900M–$1.1B of equity via the ATM, targeting 50% equity for incremental capital.
• Positive Sentiment: Reaffirmed 2026 guidance of $5.51–$5.61 EPS, reiterated a long‑term EPS CAGR target of 7%–8% (with acceleration from 2028) and raised the dividend 6.7% to an annualized $3.81.

Presentation

[Operator]

Good afternoon, and welcome to WEC Energy Group's Conference Call for Fourth Quarter and Year-End 2025 Results. This call is being recorded for rebroadcast, and all participants are in a listen-only mode at this time. After the presentation, the conference will be open to analysts for questions and answers. In conjunction with this call, a package of detailed financial information is posted at wecenergygroup.com. A replay will be available approximately two hours after the conclusion of this call. Before the conference call begins, please note that all statements in the presentation, other than historical facts, are forward-looking statements that involve risks and uncertainties that are subject to change at any time. Such statements are based on management's expectations at the time they are made.

[Operator]

In addition to the assumption and other factors referred to in connection with the statements, factors described in WEC Energy Group'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 discussions, referenced earnings per share will be based on diluted earnings per share unless otherwise noted. This call also will include non-GAAP financial information. The company has provided reconciliations to the most directly comparable GAAP measures in the materials posted on its website for this conference call. And now it's my pleasure to introduce Scott Lauber, President and Chief Executive Officer of WEC Energy Group.

[Scott Lauber, CEO at WEC Energy Group]

Good afternoon, everyone, and thank you for joining us today as we review our results for the calendar year 2025. Here with me are Xia Liu, our Chief Financial Officer, and Beth Straka, Senior Vice President, Corporate Communications and Investor Relations. As you saw from our news release this morning, we reported full year 2025 adjusted earnings of $5.27 a share. This excludes a one-time charge of $0.46 per share related to a proposed settlement in Illinois. We expect the settlement will fully resolve all open reconciliation dockets on Rider QIP, spending from 2017 to the Rider sunset in 2023. It will also resolve all open reconciliations for the uncollectible rider for the period 2019 through 2023. I'll provide more details on this in a few minutes.

[Scott Lauber, CEO at WEC Energy Group]

Across the company, I'm pleased to report that we delivered another year of solid results in virtually every meaningful measure, from customer satisfaction to financial performance, to steady execution of our capital plan. In just a few minutes, Xia will provide more details on our financial results and outlook. But first, let me highlight the strong economic growth in our region that's driving our robust capital plan. There have been many exciting announcements and developments in our state. Microsoft is making good progress on its large data center complex, with more than 2,000 acres purchased to date. We have energy flowing to the site, and the first phase of the project is expected to go online this year. Just last week, Microsoft received approval from local officials to expand the campus further with 15 additional data center buildings.

[Scott Lauber, CEO at WEC Energy Group]

Based on their updated plan, we are adding 500 MW of customer demand to the forecast. This is resulting in an estimated $1 billion of additional incremental capital to our capital plan. This brings our forecasted demand in the I-94 corridor up to 2.6 GW through 2030. Microsoft continues to be a great partner to work with. In a January statement, referred to as its Community First AI Infrastructure Plan, Microsoft pledged to be a good neighbor where it's building data centers. This includes paying its share for electricity, minimize water use, creating jobs, adding to the tax base, and investing in the community. And to the north, we have another great partner. You'll recall that Vantage Data Centers has signed on to develop facilities for Oracle and OpenAI on approximately 1,900 acres.

[Scott Lauber, CEO at WEC Energy Group]

In December, Vantage broke ground on the initial phase of the project, which is planned for 670 acres. Vantage has stated that it expects to invest $15 billion to complete this phase in 2028. The first facility could come online late next year. We currently have 1.3 GW of demand for this Vantage site in our forecast over the next five years, and looking to the future, this site has the potential to reach 3.5 GW of demand over time. We are seeing an increase in local investments by other large businesses as well. For example, south of Milwaukee, Foxconn has announced new plans to renovate and expand its Racine County campus with a focus on manufacturing data center components.

[Scott Lauber, CEO at WEC Energy Group]

Foxconn expects to invest more than $500 million in this expansion and add more than 1,300 jobs at the site. In addition, Rockwell Automation planned in November to build a new manufacturing site in Southeastern Wisconsin. The facility is expected to span more than 1 million sq ft, and Rockwell announced this site could potentially become the company's largest manufacturing campus globally. Uline, the leading North American distributor of shipping, industrial, and packaging materials, completed yet another large land purchase to further expand its business operations in Southeast Wisconsin. In summary, with the expansion of Microsoft, we are now projecting 2.6 GW of growth in the I-94 corridor and 1.3 GW to the north of Milwaukee, for a total of 3.9 GW of electric demand growth in our five-year plan.

[Scott Lauber, CEO at WEC Energy Group]

To meet our region's growing energy needs, we are focused on executing our updated $37.5 billion capital plan over the next 5 years. We are projecting long-term earnings per share growth of 7%-8% a year on a compound annual basis between 2026 and 2030. This is based on the midpoint of our 2025 adjusted guidance. We expect that growth to accelerate to the upper half of the range starting in 2028 as we put more projects into service. Our electric utilities need to maintain a reliable, balanced generation mix. Between 2026 and 2030, we expect to invest a total of $7.4 billion in modern, efficient natural gas generation and LNG storage. This includes combustion turbines, RICE units, and upgrades to existing facilities.

[Scott Lauber, CEO at WEC Energy Group]

We have a strong labor force lined up to bring our projects online. At our Oak Creek site, construction on our new 5-unit, 1,100-MW combustion turbine project is well underway. We also broke ground on a large 2 BCF LNG facility and our 7-unit Paris RICE generation site in the fourth quarter. In renewables, over the next five years, we expect to invest $12.6 billion to add 6,500 MW to our generation fleet. We currently have seve renewable generation projects and 2 battery storage facilities under construction, including two solar facilities expected to come online later this year. Overall, we have a lot of confidence in our ability to execute on our capital plan and continue our growth trajectory. Turning to regulatory matters, I have a few updates on current and upcoming rate reviews.

[Scott Lauber, CEO at WEC Energy Group]

First, let's update you on our Wisconsin and our proposed Very Large Customer tariff. As we discussed before, this tariff is designed to meet the needs of our very large load customers while protecting all of our other customers and investors. The proposed tariff remains with the Public Service Commission for review. Staff and intervener testimony was submitted in January. A commission order is expected in early May for customers to take service under the tariff in June. In April, we plan to file rate reviews in Wisconsin for forward-looking test years 2027 and 2028. We are currently pulling that filing together.

[Scott Lauber, CEO at WEC Energy Group]

In Illinois, as I mentioned earlier, Peoples Gas and North Shore Gas reached agreements on the terms of a proposed settlement with the Illinois Attorney General, that, if approved by the Illinois Commerce Commission, would resolve all issues related to 12 pending cases, that these cases represent approximately $2.3 billion of open dockets and include the Rider QIP reconciliation from 2017 to 2023, and the uncollectible rider cases from 2019 through 2023. The proposed settlement terms calls for a $130 million rate-based reduction, which would be prospective with new rates in the pending Peoples Gas case. In addition, customers would receive a $125 million over three years. This settlement is subject to commission approval, which we anticipate requesting in the coming weeks.

[Scott Lauber, CEO at WEC Energy Group]

In early January, we filed a rate request in Illinois for test year 2027. A key driver of this request is to support the pipe retirement program in Chicago. As you'll recall, the company ordered all cast iron and ductile iron pipe under 36 inches in diameter to be retired by the end of 2034. We expect the commission's review of our filing to last 11 months, with new rates starting January 1, 2027. Of course, we'll keep you updated on any future developments. Next up, Xia will provide you with more details on our financials.

[Xia Liu, CFO at WEC Energy Group]

Thanks, Scott. Turning now to earnings, our 2025 adjusted earnings were $5.27 per share, an increase of $0.39 per share over 2024 adjusted earnings. Now, let's take a closer look at our year-over-year variances. Our earnings package includes a comparison of adjusted full-year results on page 17. I'll walk through the significant drivers. Starting with our utility operations, adjusted earnings were $0.63 higher in 2025 compared to 2024. Weather positively impacted utility earnings by approximately $0.35 relative to last year. Compared to normal conditions, we estimate that weather had a $0.10 favorable impact in 2025, compared to a $0.25 unfavorable impact in 2024. Rate-based growth contributed $0.74 more to earnings. This was largely driven by the Wisconsin rate review outcomes that were effective on January 1, 2025....

[Xia Liu, CFO at WEC Energy Group]

It also includes $0.12 of incremental AFUDC equity from projects under construction. These positive drivers were partially offset by $0.46 from higher depreciation and amortization expense, day-to-day O&M, as well as tax and other items. Now, before I discuss earnings comparisons at the other segments, let me briefly comment on our weather normal electric sales. For 2025, retail electric deliveries in Wisconsin, excluding the Iron Ore Mine, increased 1.1% year-over-year. We were slightly ahead of our forecast in every segment. For 2026, we're projecting weather normal retail electric sales in Wisconsin to grow 1.6% from 2025 levels. I'll note that we expect the large commercial and industrial segment to grow 5.8%, fueled by our forecasted data center load. Now, back to our earnings comparison.

[Xia Liu, CFO at WEC Energy Group]

Regarding our investment in American Transmission Company, earnings increased $0.02 compared to 2024, driven by a $0.06 increase from continued capital investment to meet demand growth and maintain reliability, partially offset by a one-time gain we recognized in 2024. At our energy infrastructure segment, earnings increased $0.10 in 2025 from higher production tax credits associated with the acquisition of additional solar generation projects in late 2024 and early 2025. Finally, you'll see a $0.24 variance at our corporate and other segment. This was driven by higher interest expense resulting from higher debt balances, gains recorded in 2024 from early debt retirements, and a few other items. In terms of common equity, consistent with our plan, we issued approximately $800 million in 2025.

[Xia Liu, CFO at WEC Energy Group]

Overall, we grew our EPS by 39 cents per share or 8% year-over-year on an adjusted basis. Next, let's look at our earnings guidance. For the first quarter this year, we project to earn in the range of $2.27 per share to $2.37 per share. This forecast takes into account January weather and assumes normal weather for the rest of the quarter. For the full year 2026, we're reaffirming our annual guidance of $5.51 to $5.61 per share. Of course, this assumes normal weather for the rest of the year. Finally, some comments on financing. In 2026, we expect debt funding to be in the range of $4 billion-$5 billion. This includes refinancing for $1.4 billion of senior notes that mature this year.

[Xia Liu, CFO at WEC Energy Group]

Consistent with previous disclosures, we plan to issue between $900 million and $1.1 billion of common equity this year via our ATM program, as well as the dividend reinvestment and employee benefit plans. As we have mentioned before, we expect any incremental capital will be funded with 50% equity content. This applies to the incremental $1 billion of investment that Scott mentioned a few minutes ago. We don't expect it to impact our funding plans for the near term, as the spending is projected to be in 2029 and beyond. With that, I'll turn it back to Scott.

[Scott Lauber, CEO at WEC Energy Group]

Thank you, Xia. Now, as, as you may have seen, our board, at its January meeting, increased the dividend by 6.7% to an annualized $3.81 per share. This will mark the 23rd consecutive year that our shareholders will be rewarded with higher dividends. The increase is consistent with our policy of paying out 65%-70% of our earnings and dividends. Before I open it up for Q&A, I want to summarize some of the highlights of the call. We're at the top end of the 2025 earnings guidance on an adjusted basis. We reached an agreement with the Illinois Attorney General on the terms of, of a proposed settlement that would allow us to put 12 historical reconciliation dockets behind us, so we can now focus on the future.

[Scott Lauber, CEO at WEC Energy Group]

Economic growth is driving another 500 MW of forecasted demand, for a total of 3.9 GW increase in our five-year plan. This growth is adding $1 billion to our five-year capital plan, which is now at $37.5 billion. All of these developments give us even more confidence in our 7%-8% long-term EPS compound annual growth rate, with acceleration to the upper half of the range starting in 2028. Overall, we're on track and focused on providing value for our customers and our stockholders. Operator, we are now ready for the question-and-answer portion of the call.

[Operator]

Now, we will take your questions. The question and answer session will be conducted electronically.... To ask a question, please press the star key, followed by the digit one on your phone. If you are using a speakerphone, turn off your mute function to allow your signal to reach our equipment. We will take as many questions as time permits. Once again, press star and then one on your phone to ask a question. Your first question comes from the line of Julien Dumoulin-Smith with Jefferies. Your line is now open. Please go ahead.

[Julien Dumoulin-Smith, Analyst at Jefferies]

Hey, good afternoon, team. Nicely done. Gotta say, a bevy of updates here today. No doubt, nonetheless. I wanted to follow up on the commentary you guys started with at the top of the call on Microsoft here. Can you elaborate a little bit more about the 500 MW that you're putting in here now? I mean, to what extent is there even more beyond that, right? Every time you give us some, we're gonna ask about the next piece. But also, as it pertains to the CapEx, right? You talk about $1 billion of additional CapEx. To what extent does that $500 million, the 500 MW or the $1 billion stretch beyond technically the five-year period as well, and what do you know about the further ramp there, too?

[Scott Lauber, CEO at WEC Energy Group]

Sure, Julien. Thanks. Thanks for the question, and when you look at it, Microsoft is—it has been working on that first 1,364 acres, and now... And we've always talked that, you know, the growth that we have has been started in that main spot. And now they're starting to add to the north of Highway 11. Locally, it's that, it's Project North. So that's where we add at the 500. I think as you, as we continue, and when you listen to the Microsoft conference call, someone asked about the Wisconsin development, and they talked about that as a multi-year delivery. So I think there's gonna be a lot to come as we start thinking about 2031 in the future also. And remember, there's still more land that they are looking to purchase and haven't developed yet.

[Scott Lauber, CEO at WEC Energy Group]

I think there's a lot of opportunities here.

[Julien Dumoulin-Smith, Analyst at Jefferies]

Yeah, do you wanna expand on that? I mean, it seems as if the other parcel here might even be bigger than the first one. Can you just elaborate a little bit about what we understand in sort of the multi-stage? I get maybe at times folks are shy to talk about the full extent of the opportunity, but still, you know, obviously, phase one has been so large, 500 MW. Do we have any other further clues about just how big and how fast this could go? Sorry to press you so much on it, but it-

[Scott Lauber, CEO at WEC Energy Group]

Yeah.

[Julien Dumoulin-Smith, Analyst at Jefferies]

-it tantalizes.

[Scott Lauber, CEO at WEC Energy Group]

Yeah, I understand completely, and we're very excited about the development here, what they're doing here in Wisconsin. You know, I do not want to get out ahead of Microsoft and their plans. All I can really say is, you know, they're starting to do land at about 570 acres, and that's about where we put that 500 MW. There's more land, you know. That's just the start of that development when you think about the amount of megawatts people are now putting on land. And then I think there's at least another couple hundred or so that they haven't developed, and they're looking for more land, as we've talked to the paper. They have been very transparent here in Southeastern Wisconsin on their plans. So more to come, but...

[Scott Lauber, CEO at WEC Energy Group]

I don't want to get ahead of Microsoft by any means, so just very positive as we continue to see their development grow.

[Julien Dumoulin-Smith, Analyst at Jefferies]

Awesome. And then just an, I'll bring up another subject real quickly. On Point Beach, how are the negotiations progressing, and at what point do you need to make a decision about the 500 MW there for replacement power or what have you, for the 2030 piece?

[Scott Lauber, CEO at WEC Energy Group]

Yeah. Great question, and when we look at it, you know, those contracts end in 2030, and then the second one is in 2033, I think, at the beginning of 2033. So we have time. You know, we're still in communications with NextEra on the plan. We're gonna factor all that in and what we need, which I only can see as potentially upside in our plan, in our fall update. So we're going through our planning process like we do every summer, looking at, you know, how did the winter, you know, this cold spell, how did the system perform? What do we look at in the future for additional growth?

[Scott Lauber, CEO at WEC Energy Group]

Adding another year on to our sales forecast, and then, of course, factoring in this Point Beach PPA, if we need to replace it with some other generation. You know, I see that as potential upside in the plan, but we'll factor that into the fall.

[Julien Dumoulin-Smith, Analyst at Jefferies]

Awesome. Nicely done, guys. We'll talk to you soon. Take care.

[Scott Lauber, CEO at WEC Energy Group]

Sounds good.

[Julien Dumoulin-Smith, Analyst at Jefferies]

Good luck.

[Scott Lauber, CEO at WEC Energy Group]

Thank you.

[Julien Dumoulin-Smith, Analyst at Jefferies]

Yep.

[Operator]

Your next question comes from the line of Shar Pourreza with Wells Fargo. Please go ahead.

[Analyst at Wells Fargo]

Hey, good afternoon, everyone. It's actually Alex on for Shar. Thanks for taking our questions.

[Scott Lauber, CEO at WEC Energy Group]

Absolutely, Alex.

[Analyst at Wells Fargo]

So, you know, obviously, you're seeing a lot of growth on the data center front, so you've highlighted Microsoft and the Vantage projects. But can you maybe talk a little bit more, maybe to the extent that you can, are you seeing additional interest from other hyperscaler customers? And if I could just add on, you know, there's been local opposition around data centers in other parts of the state, but can you just talk about your strategy and overall confidence level around attracting customers despite some of these headwinds we've seen recently? Thanks.

[Scott Lauber, CEO at WEC Energy Group]

Sure. Sure, you have seen a little noise around the state. I think you're seeing a couple things now, and I'm very confident that other people are looking at opportunities in Wisconsin, and we have a lot of discussions. Even Microsoft has talked about even being more transparent. So I think everyone understands they need to be more transparent, working more with the communities, being much more proactive than they were two years ago. So I think that's all positive developments here. I think also our very large customer tariff that protects all our other customers, the hyperscalers understand it and like the fact that they can really point to something very transparent in protecting other customers. So...

[Scott Lauber, CEO at WEC Energy Group]

You know, we don't have a tendency to talk about a pipeline because we want to just talk about what's actually announced and developed, but there's other opportunities, and we're in multiple discussions.

[Analyst at Wells Fargo]

Got it. That's helpful. And then just sort of, you know, looking at the five-year outlook you have out there, so 2026, 2027, you're at that 6.5%-7% growth. Obviously, you're seeing a lot of growth. Is this just timing as to when data centers start coming online? Just want to get a sense on, you know, what could be holding you back from growing at that 7%-8% in the first half of the plan. Is there anything you see out there that could potentially move the needle? Thanks.

[Scott Lauber, CEO at WEC Energy Group]

Yeah. Yeah, that's a great question. And, you know, we're 6.5-7 this year, and we're consistent. We talked about 7-8 in 2027, and then in the 8 range after that. It really just mirrors our capital plan, and everyone's doing a great job getting projects identified and getting things staged. It just takes a while for all those capital to get ramped up. But we're right on time, and in fact, we've even ramped up maybe even a little faster than we anticipated here in a couple projects, which is good to see. Too early to do anything, move anything, but really positive, and it really just mirrors our capital plan.

[Scott Lauber, CEO at WEC Energy Group]

But adding this extra $1 billion, which is, as Xia said, probably in that 2029, 2030 time frame, just really is gonna strengthen the long-term outlook for our capital plan.

[Analyst at Wells Fargo]

Great. Thanks for the color. I'll leave it there.

[Scott Lauber, CEO at WEC Energy Group]

Thank you.

[Operator]

Your next question comes from the line of Nicholas Campanella with Barclays. Please go ahead.

[Nicholas Campanella, Senior Equity Research Analyst at Barclays]

Hey, good afternoon, everyone. Hope everyone's well. Thanks for taking my questions.

[Scott Lauber, CEO at WEC Energy Group]

Absolutely. Good afternoon to you-

[Nicholas Campanella, Senior Equity Research Analyst at Barclays]

I just wanted to. Yeah, absolutely. Good to get all the updates. Just wanted to ask on regulatory, just now that we kind of have, you know, all the testimonies out there on the VLC, you know, how do you feel about the potential to kind of settle this if that's important at all, and if the window is open to do so? And then I'm also just wondering the timing on the GRC filing, if that's, you know, still on track for midway through this year. Thanks.

[Scott Lauber, CEO at WEC Energy Group]

Sure. Great question. And in the very large customer tariff, I see that going the entire period that the commission makes a decision. And one of the items that we want to make sure we have when everyone talks about affordability and data center causing rate increases, this tariff is one of the best or the best out there, we think, to make sure the data centers pay their fair share. We want true transparency, and we want to go through the entire audit process and get all those questions out there. So remember, we filed it in conjunction, and Microsoft and Vantage have supported the tariff, and now we're just going through a very thorough vetting process. And I don't have any concerns going through the entire process.

[Scott Lauber, CEO at WEC Energy Group]

But once again, the goal of this is to make sure the customers pay their fair share and to make sure everyone understands how it's working, so we have true transparency on our largest customers. And then on the rate case filing, we're on track, filing in April. We're in the process of pulling the numbers together, but, you know, on track to get that filing out there.

[Nicholas Campanella, Senior Equity Research Analyst at Barclays]

Hey, great. Thanks for that. And then just maybe really quick on the financing. Just, I know that there was a comment around, you know, the $1 billion ATM for 2026. Just any thoughts on, you know, further de-risking the plan past that, or, you know, could there be any downside to this number if you guys were to lean on some additional hybrids if there is capacity? Thank you.

[Scott Lauber, CEO at WEC Energy Group]

Yeah. I'll let Xia answer that one.

[Xia Liu, CFO at WEC Energy Group]

Yeah, absolutely. We are all over that. We have very limited hybrid financing so far. We had a $600 million issuance last year, so we have a significant capacity for hybrid. But this $900 million-$1.1 billion I talked about is for common equity financing, and as I said, we're relying on the ATM, so we fully expect to get that executed throughout the year.

[Nicholas Campanella, Senior Equity Research Analyst at Barclays]

Thank you.

[Scott Lauber, CEO at WEC Energy Group]

Thank you.

[Operator]

Your next question comes from the line of Carly Davenport with Goldman Sachs. Please go ahead.

[Carly Davenport, VP of Equity Research at Goldman Sachs]

Hey, good afternoon. Thanks so much for taking the questions. Maybe to start, just can you talk a bit about how you're thinking about potential election rhetoric around affordability, just in the face of filing a rate case in Wisconsin in the next couple of months, and just how that might inform your filing or the rate case process?

[Scott Lauber, CEO at WEC Energy Group]

Sure. Sure. You know, across the country, you're hearing affordability, and in Wisconsin here, as you mentioned, you know, we do have a governor's race. It's a pretty open race. Our Governor Evers is not running again, so there are several Democrats who have thrown their hat in the ring. We're really early in the process. There's several issues that they're bringing up. You know, in addition to affordability and property taxes, they're also looking at healthcare, childcare, education. So there's a lot of topics that are being floated around. But we're definitely aware of affordability and, you know, we continue to. You know, we're pulling our numbers together, but we are doing a lot to try to keep our rates as low as possible, having a lot of initiatives to keep costs low.

[Scott Lauber, CEO at WEC Energy Group]

In fact, as we close the books this last year in Wisconsin Electric, when you look at the performance of our plants and the fuel costs, we were able to be in a positive fuel recovery, and because of the warmer weather, we got into a positive position on their sharing mechanism at Wisconsin Electric. The results is approximately $55 million that we'll be able to give back to customers. So we think about affordability every day, but that's how we're kind of factoring stuff in.

[Carly Davenport, VP of Equity Research at Goldman Sachs]

That's great. Thank you so much for the color there. And then, the follow-up, maybe just on Illinois. I know you're still early stages on the PRP, but I guess, are there any near-term milestones we should be watching there to gauge progress and also gauge the support from the commission for those investments?

[Scott Lauber, CEO at WEC Energy Group]

Sure. Great question, and you are exactly right. We are in the early stages. This year, I think we're looking at retiring approximately 35 miles, and that's ramping up every year until we get to what we think is a run rate in 2028. We are, you know, this settlement is a big step forward, as in we stopped looking backwards, and now we're looking forward. The early indications will be, I mean, we're working on the projects, and soon starts to kick off with field work. We've done a little bit last year, laying out the plans, but really in this test year, we'll have forward-looking capital plans that the commission will also have a look at.

[Scott Lauber, CEO at WEC Energy Group]

We're working very closely now that the safety monitor is on staff and has been hired and laying out our plans of what we're doing and how we're reporting to the safety monitor. So I think the indication is gonna be, probably the first one is what happens in our rate case filing that we just filed, which is really forward-looking for 2027 and how we prioritize the projects.

[Carly Davenport, VP of Equity Research at Goldman Sachs]

Got it. Great. Thanks so much for the updates.

[Scott Lauber, CEO at WEC Energy Group]

Thank you.

[Operator]

Your next question comes up from the line of Michael Sullivan with Wolfe Research. Please go ahead.

[Michael Sullivan, Director of Equity Research at Wolfe Research]

Hey, good afternoon. I'll just pick up on-

[Scott Lauber, CEO at WEC Energy Group]

Good day.

[Michael Sullivan, Director of Equity Research at Wolfe Research]

Hey, hey, Scott. I'll just pick up on the last line of questions, sticking with Illinois. Any chance you can settle these rate cases? And then also, as it relates to the riders you just settled on, I mean, it seems like the bill credits and rate base reduction creates a little bit of a headwind, so just how you're thinking about offsetting that.

[Scott Lauber, CEO at WEC Energy Group]

Sure, sure. It's really early to even think about settlements on the Illinois case yet. So we'll see where we get as we get through the audit and the staff audit and intervener. So a little bit too early on all of that. When you think about the settlement we just had in Illinois, and you look at that, really look at it, the overall picture, that's why we reaffirmed our long-term growth rate of 7%-8% with the upper end of the range in 2028 and beyond. I mean, we factored all that in as we looked at that. And as you heard on the call, we just add another $1 billion of growth.

[Scott Lauber, CEO at WEC Energy Group]

Remember, that growth is really driven by the hyperscalers, which are paying their share for the electricity cost, so it doesn't have a burden on our other customers' rates. So, you know, we were able to offset it very quickly here, but a good spot to move forward in Illinois.

[Michael Sullivan, Director of Equity Research at Wolfe Research]

Okay, great. Then maybe I'll just go there next in terms of the, what the Microsoft ramp could do. They're paying their fair share. Is it possible they actually can lower rates for customers? And maybe any sense of size you could give us on the upcoming Wisconsin rate case?

[Scott Lauber, CEO at WEC Energy Group]

Yeah, sure. I mean, you think about it, they're paying their fair share, which includes corporate allocations and other common costs, which eventually, and I think you're gonna see more of this as that bill gets bigger. Of course, the more corporate allocations you have, the less burden it is on all other customers. So it's hard to really quantify that until we start seeing actual, real stuff go into service. Remember, their first site is just starting to go into service, and a lot of that capital spending is in the later part of the plan, but long term, it's incrementally good for customers.

[Michael Sullivan, Director of Equity Research at Wolfe Research]

Okay, great. Thank you.

[Scott Lauber, CEO at WEC Energy Group]

Thank you.

[Operator]

Your next question comes from the line of Steven D'Ambrisi with RBC Capital Markets. Please go ahead.

[Steve D'Ambrisi, Analyst at RBC Capital Markets]

Hi, Scott. Hi, Xia. Thanks, very much for taking my question.

[Scott Lauber, CEO at WEC Energy Group]

Absolutely.

[Steve D'Ambrisi, Analyst at RBC Capital Markets]

I just had a quick one. You know, congratulations on increasing the Microsoft load. But I really wanted to follow on to Julien's Point Beach questions and just quickly understand, you know, to the extent you do move forward with replacing the Point Beach PPA with generation, do you have interconnect generation interconnect agreements or slots in the MISO queue, or can you participate in the [arrows] process? I think there's a rolling window where you can cycle in, and I just wasn't sure if you already had any slots or were looking to potentially add some, or if that's a place that we could watch to see potential activity on your end. Thanks.

[Scott Lauber, CEO at WEC Energy Group]

Yeah, that's, that's a good question, and, and we work alongside with a, a very good developer of energy as we develop our plans to make sure we have, you know, renewables, batteries, you know, natural gas generation. And, you know, I feel very confident in talking to our generation team, not to give you too many details here, that we can replace that power as we look at 2030 and 2033. We're gonna look, of course, at what's economic for our customers. So we're gonna really balance the economics of our customers and what makes sense as we look at Point Beach and we look at capital investments, what's overall best for our customers?

[Operator]

... Your next question comes from the line of Andrew Weisel with Scotiabank. Please go ahead.

[Andrew Weisel, Managing Director of Sell-side Equity Research at Scotiabank]

Hey, good afternoon, everybody.

[Scott Lauber, CEO at WEC Energy Group]

Hey, Andrew.

[Andrew Weisel, Managing Director of Sell-side Equity Research at Scotiabank]

First, just a quick one. The gap charge you took related to Illinois, is there a cash component to that, or might there be one going forward?

[Scott Lauber, CEO at WEC Energy Group]

Sure. There's two components, and the total is at $0.46, as you saw on that adjustment. The one component is a $130 million rate-based component that is forward-looking in perspective and will be factored in in the final rate order. That's what we're anticipating will happen. And then there's a $125 million of cash credits that go back to customers over the next three years. It's approximately $50 million in that first year, and then the last two years are split evenly for the remaining $75 million. So that's it. It'll be a little cash. It'll be a little pressure, of course, on our FFO to debt matrix, but good to get this, these old cases behind us.

[Andrew Weisel, Managing Director of Sell-side Equity Research at Scotiabank]

Got it. Thank you. Next, I'm hoping you can clarify a little the interplay between the VLC tariff and the general rate case. I've been getting enough questions. I think there's some confusion. Firstly, can you preview when you file in April, just round numbers, what kind of rate impact should we expect for the general customers now that the data center customers are being separated?

[Scott Lauber, CEO at WEC Energy Group]

Sure. Sure. And right, and we're pulling those numbers together, so I really—there's a lot of stuff that has to happen and, and look at it, but we do keep affordability in our mind as we pull this case together. But just to give you a little color on how we're looking at it, you—the total company will be provided on what our total expenses, capital spending, and then we'll have separated, just like we do for our wholesale customers, separated for these very large customers, the wholesale customers, and then what's remaining for our general rate case. So it'll be very, once again, very transparent on all the assets that the very large customers are paying for in total. So that's kind of how it's going to be broken out.

[Scott Lauber, CEO at WEC Energy Group]

And of course, you know, how the bills and stuff are set up and all the costs will be allocated that are directly assigned or allocated to those very large customers. So we're in process of laying out how that will look right now, but that's the concepts.

[Andrew Weisel, Managing Director of Sell-side Equity Research at Scotiabank]

Okay, fair enough. And then, you know, going one step further, over the longer term, beyond 2027 and 2028 test period that will be addressed, how should we think about kind of this idea: If data center activity exceeds expectations, would that help the rest of the customers by lowering their rates or just leave them unimpacted? In other words, is the idea that data centers are completely independent, or is the idea that excess data center activity should help the rest of the customers?

[Scott Lauber, CEO at WEC Energy Group]

In general, as you look at it, and it takes several years, but a lot of corporate allocations are allocated on total rate base and cost. So as you can imagine, even like we went through the acquisition of Integrys, we are able to spread common cost across a bigger footprint. Having data centers will have significant rate base. I think in our five-year plan, we're looking at that rate base to be in the 14%-15% of our earnings, so a significant part of that. So corporate allocations will get spread across a larger rate base, and you're gonna see more of that as those assets continue to build. But that's, you know, more of it's going to be in service in that 2028, 2029, 2030 timeframe.

[Andrew Weisel, Managing Director of Sell-side Equity Research at Scotiabank]

Okay, very good. One last-

[Scott Lauber, CEO at WEC Energy Group]

It does, yeah.

[Andrew Weisel, Managing Director of Sell-side Equity Research at Scotiabank]

Thank you. One last one, just on timing. I... My understanding is the VLC ruling should come pretty much around the same time as you're filing for the general rate case. Is it important that the first one concludes before the second one begins, or do you think of them as independent tracks?

[Scott Lauber, CEO at WEC Energy Group]

No, you know, we're pulling it together, assuming the filing that we have on the table right now, and we'll be two independent, because we would have to file, most likely, at, like you said, about the same time, or maybe even a little before that final decision is made on the rate, on the VLCs.

[Andrew Weisel, Managing Director of Sell-side Equity Research at Scotiabank]

Okay, great. Thank you so much.

[Scott Lauber, CEO at WEC Energy Group]

Thank you.

[Operator]

Your next question comes from the line of Paul Fremont with Ladenburg. Please go ahead.

[Paul Fremont, Managing Director at Ladenburg]

Hey, thank you very much, and congratulations. First question, is the Microsoft announcement, should we think of that as a replacement for the canceled Caledonia project, or are they still looking to do something to replace that?

[Scott Lauber, CEO at WEC Energy Group]

So a great question that, Thanks, thanks, Paul. When you look at it, they had already purchased this land before that Caledonia. They're looking for additional land beyond the Caledonia, so they're still looking for additional land to replace what they decided to pull out or remove away from in Caledonia.

[Paul Fremont, Managing Director at Ladenburg]

Great. And then, my next question has to do with sort of the pricing of Point Beach, which terminates around $120 per MWh. I would think that new build would be a savings over sort of the last years of the contract pricing. So why should we not assume that you would opt for new build versus recontracting?

[Scott Lauber, CEO at WEC Energy Group]

I think you're gluing it together a pretty good assumption there, that those prices are pretty high. And if those prices, you know, they think they should be that high, a new build, when you think about affordability, probably makes sense. But we gotta run that analysis yet, and more to come, but I do think there's upside here.

[Paul Fremont, Managing Director at Ladenburg]

Okay. Maybe last, sort of a quick follow-up to that, are there retired coal plant sites that could be sort of used as for new build?

[Scott Lauber, CEO at WEC Energy Group]

No, you know, right now, actually, the coal plant that we retired multiple years ago, that's actually an economic development use, that site. So we've already developed some of those sites for other economic development. But we're looking at other locations and opportunities. Really, you gotta think of it now as where is the natural gas line for those gas pipes, and how do you get that capacity in? So more to come, but we have, spots in mind.

[Paul Fremont, Managing Director at Ladenburg]

Great, thank you so much.

[Scott Lauber, CEO at WEC Energy Group]

Thank you.

[Operator]

Your last question comes from the line of Paul Patterson with Glenrock Associates. Please go ahead.

[Paul Patterson, Analyst at Glenrock Associates]

Hey, good afternoon.

[Scott Lauber, CEO at WEC Energy Group]

Hey, Paul.

[Paul Patterson, Analyst at Glenrock Associates]

I just have a quick few housekeeping items. Just whether the residential number looks like you're planning it going down in 2026, not by much, but just in general, is that because of energy efficiency, or is there something else we should be thinking about?

[Xia Liu, CFO at WEC Energy Group]

We always try to be a little conservative in the forecast. So the base assumption is we do see good customer growth, but there's a little bit of decline in use per customer. So overall, it's a slight reduction, but we try to be conservative in the forecast.

[Paul Patterson, Analyst at Glenrock Associates]

Okay. And then just in terms of the impairment on the Illinois thing, I see the $130 million, I think, in the income statement called out. The other $75 million, just from a geography, you know, an income statement geography, where does that show up?

[Scott Lauber, CEO at WEC Energy Group]

Yeah, the other amount goes through revenues for some accounting reasons.

[Paul Patterson, Analyst at Glenrock Associates]

Okay, fair enough.

[Scott Lauber, CEO at WEC Energy Group]

Yeah, and we'll-

[Paul Patterson, Analyst at Glenrock Associates]

Thank you so much.

[Scott Lauber, CEO at WEC Energy Group]

Yep, absolutely. All right, that concludes our conference call for today. Thank you for participating. If you have any more questions, please feel free to contact Beth Straka at 414-221-4639. Thank you.

[Operator]

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Participants

Executives

• Scott Lauber, CEO
• Xia Liu, CFO

Analysts

• Andrew Weisel, Managing Director of Sell-side Equity Research at Scotiabank
• Carly Davenport, VP of Equity Research at Goldman Sachs
• Julien Dumoulin-Smith, Analyst at Jefferies
• Michael Sullivan, Director of Equity Research at Wolfe Research
• Nicholas Campanella, Senior Equity Research Analyst at Barclays
• Paul Fremont, Managing Director at Ladenburg
• Paul Patterson, Analyst at Glenrock Associates
• Steve D'Ambrisi, Analyst at RBC Capital Markets
• Analyst at Wells Fargo