WEC Energy Group Q2 2026 Earnings Report

WEC Energy Group EPS Results

• Actual EPS: $0.91
• Consensus EPS: $0.80
• Beat/Miss: Beat by +$0.11
• One Year Ago EPS: $0.76

WEC Energy Group Revenue Results

• Actual Revenue: $2.06 billion
• Expected Revenue: $2.11 billion
• Beat/Miss: Missed by -$44.79 million
• YoY Revenue Growth: +2.60%

WEC Energy Group Announcement Details

• Quarter: Q2 2026
• Date: 7/29/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, July 29, 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 Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Second-quarter EPS rose to $0.91, up $0.15 year over year, supported by rate-base growth, transmission investment and higher energy-infrastructure earnings. Management reaffirmed 2026 EPS guidance of $5.51-$5.61, assuming normal weather.
• Positive Sentiment: Data-center demand continues to expand, with Microsoft’s first facility operational and Vantage/Oracle construction progressing. WEC is forecasting 2.6 gigawatts of regional demand from Microsoft and 1.3 gigawatts from Vantage over the next five years, supporting its $37.5 billion five-year capital plan.
• Neutral Sentiment: WEC said the Port Washington project remains on time and on budget, while Oracle works to provide credit support required under the very large customer tariff. Management believes the project would remain viable for another hyperscaler in a worst-case scenario, although Oracle’s legal challenge and collateral requirements remain areas to monitor.
• Negative Sentiment: The company expects to issue approximately $1.1 billion of common equity in 2026 and plans to fund 50% of any incremental capital with equity, creating potential dilution as data-center, transmission and generation opportunities expand.
• Neutral Sentiment: Wisconsin and Illinois rate cases are expected to be resolved by year-end, with Wisconsin decisions targeted for new rates in 2027 and 2028. Execution of Illinois’s PIPE retirement program is progressing, but labor constraints have slowed the 2026 ramp-up.

Presentation

[Operator]

Good afternoon, and welcome to WEC Energy Group's conference call for second quarter 2026 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 assumptions 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. Now it's my pleasure to introduce Scott Lauber, President and Chief Executive Officer of WEC Energy Group.

[Scott Lauber, President and CEO at WEC Energy Group]

Good afternoon, everyone, and thank you for joining us today as we review our results for the second quarter of 2026. Here with me are Xia Liu, our Chief Financial Officer, and Beth Straka, Senior Vice President of Corporate Communications and Investor Relations. As you saw from our news release this morning, we reported second quarter 2026 earnings of $0.91 a share. Our results reflect our continued focus on execution, financial discipline, and operating efficiency. We're on track to deliver results in line with our 2026 earnings guidance of $5.51-$5.61 a share. This, of course, assumes normal weather for the remainder of the year. In a few minutes, Xia will walk through our financial results and outlook in more detail. First, let me highlight the strong economic growth in our region that serves as a foundation of our robust capital plan.

[Scott Lauber, President and CEO at WEC Energy Group]

Construction continues at the Microsoft site in Pleasant Prairie, and the first data center facility is fully operational. As a reminder, Microsoft has purchased more than 2,200 acres to date in that I-94 corridor south of Milwaukee. We are preparing to serve a forecasted demand increase of 2.6 GW in this region through 2030, and an opportunity for further expansion. To the north of Milwaukee, you'll recall that Vantage Data Centers is developing facilities for Oracle on approximately 1,900 acres. Construction continues on the initial phase of its data center project, which is being built on 670 acres. Vantage has stated that it expects to invest $15 billion to complete this phase in 2028. Significant construction progress has been made with structural framework complete on multiple buildings. The first facility could come online as soon as late 2027.

[Scott Lauber, President and CEO at WEC Energy Group]

We currently have 1.3 GW of demand for this Vantage site in our forecast over the next five years. Looking to the future, this site has the potential to reach 3.5 GW of demand over time. There's other notable growth in our state. As a recent example, Rehlko, formerly known as Kohler Energy, has announced plans to expand its production operations in Kenosha. The new facility is expected to complete in 2027 to produce backup generators for data centers. In addition, Waukegan Steel, a steel fabricating company, is looking to move its headquarters from Illinois to Pleasant Prairie. Harley-Davidson has also announced plans to bring some motorcycle production operations back from overseas to Wisconsin facilities. Wisconsin continues to be an attractive location for a variety of businesses.

[Scott Lauber, President and CEO at WEC Energy Group]

We are committed to meeting the growing demand across our service area as we invest in our systems for increased reliability and capacity. Our five-year capital plan includes $37.5 billion of projected investments. It's based on projects that are low risk and highly executable, with a good portion serving our very large customers. In total, by the end of 2030, we expect approximately 15% of our asset base to be dedicated to these very large customers. As you recall, we project 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 rate to accelerate to the upper half of the range starting in 2028.

[Scott Lauber, President and CEO at WEC Energy Group]

As a reminder, on our major capital projects, construction continues on the new natural gas generation facilities in Paris and Oak Creek, Wisconsin. We expect these facilities to start coming online in late 2027. Overall, we have a high level of confidence in our ability to execute on our capital plan and continue our growth trajectory. We are in the process of updating our next capital plan, and we look forward to sharing the details with you on our third quarter call. Now turning to the regulatory front. In May, the Public Service Commission provided the written order for our very large customer tariff, or VLC. Under the tariff, the VLCs paid their full share of the cost. This is important to us, to the commission, and to our customers, including the data center companies we are working with.

[Scott Lauber, President and CEO at WEC Energy Group]

I'm sure many of you are aware of the credit support required from Oracle for the Port Washington project. Oracle has stated it remains committed to the project, paying its full share of energy and providing the financial support needed so there's no risk to other Wisconsin customers. We are actively working with Oracle to update the financial security in line with the PSCW requirements. We believe our VLC tariff provides a strong framework for data center growth in the region. For our non-VLC customers, progress continues on the rate request we filed in April for forward-looking test years 2027 and 2028. Our proposed plan would help us continue to strengthen key infrastructure and deliver the energy our customers depend on while remaining focused on affordability. Staff and intervener testimony is due in mid-August.

[Scott Lauber, President and CEO at WEC Energy Group]

We expect final orders from the commission by the end of the year, with new rates effective in January 2027 and 2028. Turning to Illinois. In May, the Illinois Commerce Commission unanimously approved the Rider QIP and bad debt rider settlements. The settlements resolve all issues relating to 12 open dockets. We also continue to make progress on the rate request for our Illinois utilities. A key driver for the Peoples Gas is to support the PIPE retirement program in Chicago. We expect a decision by the end of the year for test year 2027. In summary, we're excited about the strong economic development in our region. We're focused on execution of our capital plan that is designed to support thousands of jobs and strengthen our local economy. Next, I'll turn it over to Xia.

[Xia Liu, EVP and CFO at WEC Energy Group]

Thank you, Scott. Our second quarter 2026 earnings of $0.91 per share reflects a $0.15 increase compared to the second quarter of 2025. Our earnings package includes a comparison of second quarter results on page 15. I'll walk through the significant drivers. Starting with our utility operations, earnings were $0.06 higher versus the second quarter of 2025. Weather negatively impacted quarter-over-quarter earnings by approximately $0.05. Compared to normal conditions, we estimate that weather had a -$0.03 impact in the second quarter of 2026, compared to a $0.02 positive impact in the second quarter of 2025. Rate base growth contributed $0.13 to earnings. This includes $0.09 of incremental AFUDC equity and $0.02 of incremental cash returns associated with projects under construction, mostly from projects supporting the VLC customers. In addition, sales growth, tax, and other items contributed a total of $0.06 to earnings.

[Xia Liu, EVP and CFO at WEC Energy Group]

These positive drivers were partially offset by $0.05 from higher depreciation and amortization expense and $0.03 from higher day-to-day O&M. Next, let me provide some additional color on our weather normal retail electric deliveries. Compared to Q2 last year, total weather normal retail electric sales grew 4.2% this quarter, driven by growth from the VLCs. Excluding the iron ore mine and the VLC customers, we saw sales grow 1.2%, driven by higher volumes across all customer classes. Although results came in slightly ahead of our forecast, we expect full year 2026 weather normalized electric sales, excluding the iron ore mine and VLC customers, to be relatively even with 2025. At American Transmission Company, significant capital investment growth contributed an incremental $0.03-Q2 earnings compared to 2025.

[Xia Liu, EVP and CFO at WEC Energy Group]

Turning to our energy infrastructure segment, earnings were $0.11 higher in the second quarter of 2026 compared to the same period in 2025. Remember, in Q2 last year, we recognized a loss related to an asset impairment due to storm damages. This Q2, we received an insurance payment from some storm damages that occurred before. These two items account for a net $0.04 in total. The rest of the positive variance was largely driven by O&M timing, PTCs, and other items. Next, you'll see that earnings from the corporate and other segments decreased $0.03, driven by tax timing and higher interest expense. In terms of common equity, we locked in about $760 million in the first half of this year.

[Xia Liu, EVP and CFO at WEC Energy Group]

This includes about $40 million issued under our employee benefit plan and $720 million via the ATM program under forward contracts that we will settle in the future. In total, we expect to issue about $1.1 billion of common equity this year. Going forward, as a reminder, any incremental capital beyond the current plan is expected to be funded with 50% equity content. Finally, let me comment on guidance. As Scott mentioned earlier, we are reaffirming our 2026 earnings guidance of $5.51-$5.61 per share, assuming normal weather for the rest of the year. For the third quarter, we're expecting a range of $0.92-$0.98 per share. This accounts for July weather and assumes normal weather for the rest of the quarter. We look forward to updating you in the fall as we refresh our capital and financing plan. With that, I'll turn it back to Scott.

[Scott Lauber, President and CEO at WEC Energy Group]

Thank you, Xia. As you may recall, our board at its January meeting increased the dividend by 6.7%. This marks the 23rd consecutive year that our shareholders will be rewarded with higher dividends. The increase is consistent with our plan to grow the dividend at a rate of 6.5%-7%. We're optimistic about continued growth in our region and our company's future. Operator, we are now ready with the question-and-answer portion of the call.

[Operator]

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 Shar Pourreza with Wells Fargo. Please go ahead.

[Shar Pourreza, Analyst at Wells Fargo]

Hey, guys.

[Scott Lauber, President and CEO at WEC Energy Group]

Hey, Shar.

[Shar Pourreza, Analyst at Wells Fargo]

Hey, Scott. Scott, let me just, I know it's on everyone's mind. Just on the Port Washington project, obviously there's a lawsuit out there, and you guys seem like you're assisting them with sort of the collateral payment issue, but I guess any risk to the current site timeline and even potential expansion opportunities, and couldn't just the site be redeployed to another hyperscaler should the current customer not be able to fulfill its obligation, maybe with stronger credit? Yeah, just maybe bookend this. Thanks.

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. A little color on that. Well, we are working with the customer, Oracle, and as we said in our prepared remarks, they're working to provide the credit support that we have in the new tariff, in the updated tariff. They're working to get that, and I have confidence in that. The site construction is continuing going. They are moving along. It's on time, it's on budget. They're moving forward and talking about continuing on their timeline. No questions on that in my mind.

[Scott Lauber, President and CEO at WEC Energy Group]

You are correct. I think if you go to a worst case scenario that for some reason they decide not to expand, I think there's a lot of opportunities for that site for anyone else. At this point, I have no indication that that's the case. As long as they have the credit support with us and provide all those financial requirements, I feel good with the continued expansion.

[Shar Pourreza, Analyst at Wells Fargo]

Okay. That's good. I appreciate that. Just lastly, Scott, as we're obviously approaching Q3, maybe this will be the final time we're going to be asking on Point Beach. Is it fair to assume you're going to be filing a generation plan in lieu of the PPAs later this year?

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. We're finalizing everything in our third quarter call. Just to remind everyone, the first 500 MW comes due in that PPA in December of 2030. The next 500 MW is in March of 2033. Just as a rule of thumb, about a gigawatt is about $2 billion-$2.5 billion, so half of that for the 500 MW. As we said in the prior call, never say never. Things could always change. Capital is an option for this as we get to the fall. We'll finalize it on our third quarter call because we have to get orders out, et cetera.

[Shar Pourreza, Analyst at Wells Fargo]

Got it. Okay, great. I appreciate it, guys. See you soon.

[Scott Lauber, President and CEO at WEC Energy Group]

All right. Thank you.

[Operator]

Your next question comes from the line of Julien Dumoulin-Smith with Jefferies. Please go ahead.

[Julien Dumoulin-Smith, Analyst at Jefferies]

Hey, good afternoon, team. Thank you guys very much for the time, I appreciate it.

[Scott Lauber, President and CEO at WEC Energy Group]

Absolutely.

[Julien Dumoulin-Smith, Analyst at Jefferies]

Looking forward for that 3Q update.

[Scott Lauber, President and CEO at WEC Energy Group]

Oh, excellent.

[Julien Dumoulin-Smith, Analyst at Jefferies]

Hey. Hey, look. Yeah. Well, look, let me ask you this. How are the discussions going vis-à-vis potentially other counterparties here? Obviously, we've seen success build upon success, especially geographically in regions like your own. How are you thinking about potentially 1/3 or other hyperscalers or other data center parties following the lead here and enhancing negotiations, advancing negotiations with you? Can you give us any latest flavor as to where things stand?

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. We continue to have really good discussions with potential new, very large customers. I would have to say these customers are probably not as large as what we're seeing in our first two, more in that 400 to 500 MW size. We're having really good discussions. More to come on that. Like you said, they kind of grow in the region. I think our very large customer tariff has that transparency, has the complete openness that we're charging them their fair share. I think it's a really good step forward to have that been approved by the commission now.

[Julien Dumoulin-Smith, Analyst at Jefferies]

Yeah, absolutely. Thank you. What is the status of the VLC tariff, and what do the PCA contracts cover? Just to kind of talk a little bit about some of the nuance of this vis-a-vis Oracle and Vantage here. Also maybe just related, a sub-piece on that is, following the PSCW decision not to rehear the IG collateral requirements under the VLC, are there any other next steps there or does that basically put to bed and it's at final?

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. That's a great question. If you look at the Vantage Oracle site, currently they're under the payment cancellation agreements for them. That kicks in, so we have the credit support very similar to the tariffs. Now they're in line with the tariffs. The credit support as we spend, that we don't spend without that credit support, and then it falls into the service agreements under the very large customer tariff. In Oracle's case, as right now that site is being built by Vantage, we have the purchase cancellation or payment cancellation agreements with Oracle and getting that credit support. June 1st of next year, they'll enter into those service agreements for the site. It's just a matter of timing because the site actually doesn't really get up until the end of 2027. That's why it's just the timing.

[Scott Lauber, President and CEO at WEC Energy Group]

Construction's going on right now. On the very large customer tariff, the rehearing, we asked for a reconsideration, a rehearing. It didn't get picked up. Our tariffs are, as they stand today, with that credit requirement of an A-. There is a case that's currently in one of the courts that Oracle brought. I think they're just trying to think about going forward, where that credit need would be, and we'll see where that case goes. Regardless, a BBB- in what we filed in the rehearing request, what we actually asked for in the tariff, the original filing would require a credit support. They're in the same position with the current rating at BBB-. I don't think they're taken by surprise of that at all because we already had that as a provision in our filing.

[Scott Lauber, President and CEO at WEC Energy Group]

This is more of, if they get back to that BBB or whatever as they work through their credit, how do they think about the future more long term, I think.

[Julien Dumoulin-Smith, Analyst at Jefferies]

Awesome. Thanks for the details there, guys. Appreciate it.

[Scott Lauber, President and CEO at WEC Energy Group]

Speak to you soon.

[Julien Dumoulin-Smith, Analyst at Jefferies]

See you soon.

[Scott Lauber, President and CEO at WEC Energy Group]

Yep, thanks.

[Operator]

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

[Nicholas Campanella, Analyst at Barclays]

Hey, good afternoon. Thanks for all the updates. I just wanted to ask, maybe coming back on the VLC, but in a different manner. My understanding is the ATC line to serve the Vantage opportunity is going through the discovery phase at the commission, and I'm just wondering if you could provide an update on where that's trending. Is that in the formal capital plan today? Or as we look towards the third quarter refresh, how can we think about ATC's capital opportunity changing? Thanks.

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. Sure. This current line is in our forecast in the current ATC plan. That is proceeding at the commission. You've maybe seen some back and forth. As you can imagine, this site is on a very accelerated basis. If you go by the site, and we've talked about how that construction is progressing, there's been some updates to the filing. There's been a little noise on updating stuff and making sure the commission has all the latest and greatest information. That line in our last schedule looks like it should be decided by the end of the year to get approval to move forward with that construction. That's right now on task. I think the staff just provided some testimony the other day. Now some testimony, I think, from American Transmission Company and others is due by August 7th. That's proceeding.

[Scott Lauber, President and CEO at WEC Energy Group]

If you think about transmission, this line, not in particular, because I think the majority of it's in this forecast, but when you think about other transmission projects, I think that's an opportunity as we look at our third quarter as maybe a little more growth in the transmission area.

[Nicholas Campanella, Analyst at Barclays]

Great. Thank you for that. Then with all the kind of focus on Vantage Data Centers and Oracle and the potential expansion down the road, maybe can you provide an update on how you're thinking about Microsoft and anything you'd be willing to share there? Thank you.

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. Sure. Microsoft's been continuing to proceed. Their first unit's online. Their first data center's online. Things are moving ahead at the site. That's been progressing. Every year we've had an updated plan. There's always progression on the MW a little bit. Remember, we'll add another year to the plan. I anticipate something a little bit more as we get to the third quarter. We're working with them right now on what that number will be. Continued progression. The site's developing really well. The data centers are up and running, and electricity's flowing, and all the substations are moving actually ahead of schedule. Everything's been really positive direction down there.

[Nicholas Campanella, Analyst at Barclays]

Thank you.

[Scott Lauber, President and CEO at WEC Energy Group]

Thanks.

[Operator]

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

[Andrew Weisel, Analyst at Scotiabank]

Hey, good afternoon, everybody.

[Scott Lauber, President and CEO at WEC Energy Group]

Good afternoon.

[Andrew Weisel, Analyst at Scotiabank]

Okay, you've talked in the past about having maybe three or four potential additional data center customers. Obviously, nothing to announce today. I'm not going to push you on that. Can you speak to whether those customers would either qualify for the VLC or how your conversations are going around the implications and potential collateral obligations? Are the issues with Oracle causing any slowdown or any concerns among these customers?

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. Just to get everyone's expectations, we're talking with a variety of customers. I would imagine, really looking at just kind of do it one at a time. I just don't want everyone to think there's three or four that are going to come in any day now. We're working on that. I don't think the collateral will be an issue long term. I think what we had in our very large customer filing was good. In fact, all three rating agencies said it was really good. I think the key is we have true transparency so people know what that collateral need is, and as they look at our tariffs and look at the sites, they understand the requirements. I don't think it's going to hurt at all as we look at those new customers.

[Andrew Weisel, Analyst at Scotiabank]

Okay, great to hear. As you think about serving these data centers, how should we think about future generation capacity additions? You obviously have a lot of new build in the plan, nearly all related to various technologies around gas. You just talked about options to replace the nuke, potentially, but to whatever degree you do get incremental data center contracts, how would we think about how you'd serve those? Would it be mostly or entirely gas, or how do you think about that?

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. The data centers have signed up, both Oracle and Microsoft have signed up for the all of the above approach with renewables, batteries, and natural gas for that good backup. I think as we think going forward in this next five-year plan, versus a simple cycle, you may see a combined cycle in our plan, just because we may need a little bit more energy than just capacity. We're going through those analysis right now, our engineering and planning team, just to make sure we have the right reliability and cost for all our customers. Does that make sense?

[Andrew Weisel, Analyst at Scotiabank]

It does, yep. Very helpful. One more, if I may, on the regulatory side. You've obviously got the two rate cases in Wisconsin and Illinois, both expected to be resolved around year-end if they go to fully litigated orders. How are you thinking about the potential for settlements? Wisconsin obviously has a good history of deal-making, whereas it's a lot less common in Illinois, but you did have this settlement on the rider issue there. How are you thinking about opportunities for each, especially given the timing coinciding with election season?

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. When you think about settlement, like you said, in Wisconsin, there's been a history, and specifically with the individuals on this commission, that there's been settlement like last year in two of the cases in the state. I think there's an opportunity, but that opportunity really doesn't happen till we start seeing the staff direct testimony, and the intervener direct testimony around mid-August. I think it's August 10th and August 14th. It'll come after that. We always have discussions and hope there's an opportunity for that. In Illinois, you're exactly right. Having a settlement on those 12 cases, it was great to see, and great to see that movement forward. Illinois, a little bit historically, haven't had many settlements. I put that as a lower probability, but that doesn't mean that we won't have a discussion.

[Scott Lauber, President and CEO at WEC Energy Group]

I just would not handicap that being as a high probability, just based on history.

[Andrew Weisel, Analyst at Scotiabank]

All right. Very helpful. Thank you so much.

[Scott Lauber, President and CEO at WEC Energy Group]

All right. Thank you.

[Operator]

Your next question comes from the line of Sophie Karp with KeyBanc. Please go ahead.

[Sophie Karp, Analyst at KeyBanc]

Hi. Good afternoon. Thank you for taking my question.

[Scott Lauber, President and CEO at WEC Energy Group]

Absolutely.

[Sophie Karp, Analyst at KeyBanc]

Yeah. I was just curious if you could discuss the political environment in Wisconsin, given the elections. How would you characterize the overall atmosphere in the state, and have you engaged with any of the candidates yet, or prospective candidates, I guess, before the primaries? Just any color on that could be helpful.

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. Just to remind everyone, Wisconsin's a pretty purple state. We know the Republican candidate for the primary is Tom Tiffany. That's who's slotted there's only one real candidate out there. The Democratic candidates, there's about five of them out there. The primary is August 11th, we'll see who comes out of that primary to work in the general election against Tom Tiffany. When you think about our positions and what we've been fortunate enough to do, is we've been working with both sides of the aisle and been very successful over the last several decades, working on both sides of the aisle to promote a strong economy with a strong, reliable electric gas distribution system. I feel good. We continue to work progressively with our governor and the legislature.

[Scott Lauber, President and CEO at WEC Energy Group]

In the debates, there's been several items that have come up, talked about the inflation, economy, public safety, education, of course, infrastructure comes up. It's important for every official, the governor, as they get elected, to make sure they understand data centers, make sure they understand the economy and how that works. I think when you look at our tariffs, having very much transparency in our tariffs for the very large customers is going to be very helpful. All the customers we work with, they are committed to paying their fair share. I think when you think about the transparency, they're paying their fair share, the benefits in property taxes, they see the complete story and true transparency, I think that's going to be helpful as they look about where they govern the state of Wisconsin. We've had some discussion with some of them.

[Scott Lauber, President and CEO at WEC Energy Group]

I think as we see who the next people who are running for governor, we'll probably have more. The key is, we work with both sides. It's just a matter of how do we make Wisconsin successful from economic and for all the residents of Wisconsin. More to come, as you can imagine, through the race over the next couple of months.

[Sophie Karp, Analyst at KeyBanc]

All right. Thank you so much. That's all I had.

[Scott Lauber, President and CEO at WEC Energy Group]

Thank you.

[Operator]

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

[Michael Sullivan, Analyst at Wolfe Research]

Hey, good afternoon. Just following up on that, another on just the political front, if you could just give us some perspective on potential for data center pushback, whether it be moratoriums at the state level or local siting issues. Obviously, you have two very good and well-established sites with your existing customers. Just as you think of future new opportunities, whether you're seeing that potential pushback.

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. One of the candidates has identified that they potentially would do a moratorium on data centers. I think right now everyone's on the campaign trail. We really got to get them understanding the facts. There have been several communities that have brought up moratorium on data centers, that's, once again, they all are looking at getting those fact-finding. When you look at our rate case that we filed and you look at the cost from corporate allocations to more efficiently working with our generation fleet on how you allocate costs, there's about $100 million of savings for our customers over the next two years from the value of the data centers. There's probably more when you factor in gross receipts tax and state taxes. Then some of the other items that are out there is the narrative about water usage.

[Scott Lauber, President and CEO at WEC Energy Group]

When you think about water usage, people are looking at data centers and their closed loop systems, then they talk about generation. When we look at our generation and you look from 2015, at the time we did the Integrys acquisition, to our projections in 2030, our water consumption through generation is down about 25%-30%, we project it'll be. Water, it's not really on the generation side. We just got to make sure each of these candidates understand the facts and the economic benefits from jobs to property taxes to even cost allocations for customers. I think there's a lot of positive. We just got to make sure everyone has the facts in front of them.

[Michael Sullivan, Analyst at Wolfe Research]

Okay. Very helpful. Thanks. Just on the funding and financing side, appreciate kind of the guidance of 50% equity for anything incremental. Just as you think about the capital plan continuing to grow, does it still make sense to primarily lean on the ATM for that? We had one of your peers earlier this week do something a little strategic with non-utility renewables. I know your setup is a little bit different, but is that something you would consider as a way to recycle capital to help on the funding of higher CapEx?

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. I'll let Xia, because she's been looking at it. Over the next couple of months before we get to the third quarter, we'll be looking at it even more. Xia, your thoughts?

[Xia Liu, EVP and CFO at WEC Energy Group]

Yeah. We are very, very comfortable relying on the ATM program. I think it's very efficient. Last year, we raised $800 million. This year, we're on track to accomplish the $1.1 billion. We feel really good about the capability through the ATM program. Having said that, we're also looking at a variety of things. How do we make sure that the cash side is accumulating faster? You saw that in my prepared remarks, I called out some current returns on projects. Under our tariff, customers have the option to pay either AFUDC or we call current return, basic cash returns. If you switch to more of the cash returns, that would give you more cash. That would help us manage the funding needs. We're thinking through all the angles to try to be efficient, but nothing is off the table right now.

[Michael Sullivan, Analyst at Wolfe Research]

Okay, great. Thank you very much.

[Scott Lauber, President and CEO at WEC Energy Group]

Thanks, Michael.

[Operator]

Your next question comes from the line of Richard Sunderland with Truist Securities. Please go ahead.

[Richard Sunderland, Analyst at Truist Securities]

Hey, good afternoon. Thanks for the time today. Just turning back to Illinois, I'm curious how work is trending on the PIPE program as you've been re-ramping that. Any recent learnings or takeaways and anything there that's informing the rate proceedings in the backdrop?

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. Great question. You may have seen we updated our filings a little bit, reducing our spending in 2026. To be quite honest, things are going really well. We're moving along well. However, the hardest part is trying to get a labor force on some of the work that we need. It's just been more challenging, as you can imagine. From our conference call and other, there's a lot of economic development from data centers to generation to a variety of items that are challenging to get ramping up that workforce. We are working through a variety of methods to bring in talent and do the proper training to get the workforce ramped up, but it's going a little bit slower than we'd like in 2026 here. We anticipate to be able to ramping that up as we move forward in 2027.

[Scott Lauber, President and CEO at WEC Energy Group]

It's going fine from an execution plan, et cetera. Just a little bit hard to get those resources that we need.

[Richard Sunderland, Analyst at Truist Securities]

Got it. Appreciate the color there. I'll stick with Illinois. I guess zooming out to the topic of future of gas that we've talked about a number of ways over the past few years, how do you see that conversation currently standing? I guess how is that standing amid national and state affordability backdrops as well?

[Scott Lauber, President and CEO at WEC Energy Group]

The future of gas has been kind of moved out over the last couple of years. They're still having sessions. They're still talking about it. I think what we're learning is gas is very valuable and in the backdrop of the tremendous electricity demand, that it probably isn't as much as the pushing of the electrification at one time, just because of pure economics and cost, along with where you need the electricity. They're still having the future of gas. They're still having discussions, but I think by the end of the year, something's supposed to come out on that.

[Richard Sunderland, Analyst at Truist Securities]

Great. That's all for me. Thank you.

[Scott Lauber, President and CEO at WEC Energy Group]

Thank you.

[Operator]

Your next question comes from the line of Jeremy Tonet with JPMorgan. Please go ahead.

[Jeremy Tonet, Analyst at JPMorgan]

Hi, good afternoon.

[Scott Lauber, President and CEO at WEC Energy Group]

Good afternoon.

[Jeremy Tonet, Analyst at JPMorgan]

Just want to come back, I guess, at some of the earlier points you were discussing and see what's in the capital plan, what would be upside to the capital plan. Just want to confirm, were you talking about Point Beach replacement capital? If you're talking about another data center, a third customer there. These are all upside to the capital budget, and if any of this comes in, would you think of this as kind of like lengthening the EPS CAGR as you see it or presenting upside to the current five-year range?

[Scott Lauber, President and CEO at WEC Energy Group]

We're pulling those plans together, but you nailed the drivers. The growth in the current data centers, specifically, where do we think that I-94 corridor will go? The growth of a potential another large customer, the transmission growth, and then we talk about the generation potentially for Point Beach. All of that is upside. A lot of that, as you think about it, is in that 2030, 2031 timeframe because we'll be adding a year on and it really takes that long from a supply chain. We'll evaluate everything under FERC protocol, but feel really good about the tools that are coming in as we move forward and we pull that plan together. I think it's going to be long for sure, and we'll see where the numbers go in the next years.

[Scott Lauber, President and CEO at WEC Energy Group]

As you know, we're at the high end of our range right now in that 2028 timeframe. We'll see if there's anything more in it as we pull it together.

[Jeremy Tonet, Analyst at JPMorgan]

Got it. That's helpful. Thanks. Just want to shift gears here towards nuclear, if we could, obviously WEC is looking to make sure that shareholders are protected. The federal government is kind of pushing forward DOE loans program, other initiatives as well to support this as far as at least long lead items. Just wondering, is there a scenario where you think that WEC could participate here? Or just any thoughts on that in general?

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. We have been actively working with DOE as it relates to fossil, some of the loans, trying to get some potential loans as it relates to some of our gas generation. If you hear our name associated with it may be related to some of that fossil stuff. As we've said before, more thinking long-term, we have a site called Kewaunee that we kept through the Integrys acquisition that we have options for that land there. Longer, longer term, nuclear may be a potential. I just wouldn't to look for it in the short term here. We do think longer term nuclear across the country is a potential option.

[Jeremy Tonet, Analyst at JPMorgan]

Got it. That's helpful. I'll leave it there. Thanks.

[Scott Lauber, President and CEO at WEC Energy Group]

Thank you.

[Operator]

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

[Paul Fremont, Analyst at Ladenburg Thalmann]

Thank you very much. I guess my first question relates to just understanding the collateral a little bit better with respect to the Oracle contract. Does the collateral essentially track which phase they're going forward with? Does it track to your construction? How should we think about sort of the initial collateral requirement that's required?

[Scott Lauber, President and CEO at WEC Energy Group]

Sure. As you think about the collateral through the payment cancellation agreements or as you get to the VLC tariff, the collateral is really based on the assets and the expenditures that we're putting in. It kind of ramps up over time as more and more construction happens, just so we don't have a stranded asset or an issue for our other customers or shareholders. That kind of ramps up. Remember, when that very large customer tariff goes into service, just like the collateral on the spending, it gets to the depreciable value that they have to support.

[Scott Lauber, President and CEO at WEC Energy Group]

We look at that as very protective, and I think we have one of the most protective in the country because remember, they got to sign up for 20 years for wind and solar and the depreciable life for batteries and gas assets, and they need to come up with that net book value to make sure we have collateral in place. It's very stringent, but also very credit supportive. Like I said, all the rating agencies thought it was really good what we filed, and now even a higher rating is even stronger. That's how it kind of ramp up over time.

[Paul Fremont, Analyst at Ladenburg Thalmann]

Just to clarify that if they were to move forward into a phase II, we should assume that that would require a step up in the level of collateral. Is that sort of a logical way to look at it?

[Scott Lauber, President and CEO at WEC Energy Group]

Correct. As long as their credit rating would be at where it's at.

[Paul Fremont, Analyst at Ladenburg Thalmann]

Right. What if they're downgraded further by Moody's or S&P? How much additional collateral would that involve since they're sort of on the border here between Investment Grade and sub-Investment Grade?

[Scott Lauber, President and CEO at WEC Energy Group]

That's an interesting question. However, we're getting all the collateral we need at this level, so if it goes down, we already have all the collateral we need for the full amount.

[Paul Fremont, Analyst at Ladenburg Thalmann]

Okay.

[Xia Liu, EVP and CFO at WEC Energy Group]

Paul, we require, in the original filing as well as the PCAs, that as long as they're BBB- or worse, they would need to post collateral. We kind of already kicked that in before they go any further down. I think from that protection perspective, like Scott said, all the rating agencies recognize this. You're not requiring them to kick in collateral when they become junk, so we are actually one layer better protected. There's no more we would need to protect the entire book value on the books.

[Paul Fremont, Analyst at Ladenburg Thalmann]

Great. Where does their legal challenge currently stand? They've just filed it. Should we assume that this will take years to play out in the courts, or what would be the sort of a normal expectation?

[Scott Lauber, President and CEO at WEC Energy Group]

It would take some time, and I don't know how long it would take. It would take a while. However, even what we refiled for in our reconsideration had the requirements that they're needed to post at a triple B minus. I think they're really looking at longer term. If it takes several months or six months or so to get out and maybe ask for reconsideration, it still doesn't change anything at this moment. I think they're looking at the future.

[Paul Fremont, Analyst at Ladenburg Thalmann]

I think on the first quarter call, you talked about potentially having another announcement by the end of the year. Are you feeling sort of comfortable with that still?

[Scott Lauber, President and CEO at WEC Energy Group]

We're still having really good discussions with potential other large customers that would fall under the tariff that are probably not as big as the current two customers we have, but more in that 400 to 500 MW size. We're having some discussions, and I feel good about it, but more to come hopefully.

[Paul Fremont, Analyst at Ladenburg Thalmann]

Maybe last question from me. Sort of a lot of turmoil is on the Democrat side in terms of running for governor with Sara sort of exiting. I guess the most recent polls had the Democrats' socialist sort of ahead. Who would be sort of the other ones that would be close to Hong in terms of the primary?

[Scott Lauber, President and CEO at WEC Energy Group]

There's five right now in the primary. You have Hong. You have Mandela Barnes. You have an individual who's a previous lieutenant governor. You have Joel Brennan, who was a former state administrative secretary, Department of Administration. David Crowley is also the Milwaukee County Exec here in Milwaukee. Kelda Roys. There's five of them out there right now. They just had a debate. It's kind of interesting because a lot of activity has happened in the last couple of weeks, and the primary is August 11th, not much happened until all of a sudden we're getting into the last month here of the primary. There are several out there.

[Paul Fremont, Analyst at Ladenburg Thalmann]

Great. Thank you very much.

[Scott Lauber, President and CEO at WEC Energy Group]

Thank you.

[Operator]

Your next question comes from the line of Paul Patterson with Glenrock Associates, and this is our final question. Paul, please go ahead.

[Paul Patterson, Analyst at Glenrock Associates]

Hey, thanks for squeezing me in. Just to follow up on all this Oracle stuff. If I understand you correctly, you don't expect, and tell me if I'm wrong, you don't expect this lawsuit, and its outcome, assuming, let's say that Oracle loses, as having a significant impact on the project going forward. Am I boiling it down to its essence there? Am I misunderstanding it?

[Scott Lauber, President and CEO at WEC Energy Group]

You nailed it. You nailed it. This current project, we've talked to them several times. The construction is moving extremely well. Things are getting done. I don't think anything in this particular project is tied to that at all.

[Paul Patterson, Analyst at Glenrock Associates]

Okay. That's very helpful. Just to clean up here, and I apologize if I missed it, but on the waterfall chart on slide 15, the WECI, the infrastructure sub. Could you just give a little bit more color on the moving parts here? I think I understand the absence of the 2025 impairments, but could you give us a little more flavor about the insurance recovery on 2026 and the O&M timing issue and how that might work out going forward?

[Xia Liu, EVP and CFO at WEC Energy Group]

Sure. Happy to. As I called out, the lack of impairment in the quarter this year and the fact that we received the insurance payment this year, that accounts for a net of $0.04 out of the $0.11. We have $0.01 that's PTC, additional PTC. The rest of them are a combination of O&M timing, and there's a little bit of capacity payment from the market we sold, too. Generation was a little bit better. There's a variety of things added to the remaining $0.06. O&M timing-

[Paul Patterson, Analyst at Glenrock Associates]

Okay

[Xia Liu, EVP and CFO at WEC Energy Group]

is a big piece of that.

[Paul Patterson, Analyst at Glenrock Associates]

When will that timing come? Will that be coming back this year or next?

[Xia Liu, EVP and CFO at WEC Energy Group]

Assuming the rest, yeah.

[Paul Patterson, Analyst at Glenrock Associates]

Okay.

[Xia Liu, EVP and CFO at WEC Energy Group]

Yeah. Hopefully some of the favorability will stay, but we expect in the fourth quarter some of that would go back.

[Paul Patterson, Analyst at Glenrock Associates]

Okay. Just the insurance recovery as a part of the $0.04, how much of that was this quarter's insurance recovery? I apologize for being slow on this.

[Xia Liu, EVP and CFO at WEC Energy Group]

$0.02. $0.02 was the insurance payment.

[Paul Patterson, Analyst at Glenrock Associates]

It was $0.02. Okay.

[Xia Liu, EVP and CFO at WEC Energy Group]

Yep.

[Paul Patterson, Analyst at Glenrock Associates]

I got you.

[Xia Liu, EVP and CFO at WEC Energy Group]

Yep.

[Paul Patterson, Analyst at Glenrock Associates]

Okay. Thanks so much.

[Scott Lauber, President and CEO at WEC Energy Group]

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

[Operator]

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

Participants

Executives

• Scott Lauber, President and CEO
• Xia Liu, EVP and CFO

Analysts

• Shar Pourreza, Analyst at Wells Fargo
• Julien Dumoulin-Smith, Analyst at Jefferies
• Nicholas Campanella, Analyst at Barclays
• Andrew Weisel, Analyst at Scotiabank
• Sophie Karp, Analyst at KeyBanc
• Michael Sullivan, Analyst at Wolfe Research
• Richard Sunderland, Analyst at Truist Securities
• Jeremy Tonet, Analyst at JPMorgan
• Paul Fremont, Analyst at Ladenburg Thalmann
• Paul Patterson, Analyst at Glenrock Associates