Detailed Narrative
Regional Economic Development and Data Center Demand
WEC Energy Group is experiencing strong economic growth in its service region, particularly along the I-94 corridor between Milwaukee and Chicago. This includes Yaskawa's announced $180 million investment to build its U.S. headquarters and manufacturing operations in Wisconsin, creating 700 jobs. Progress continues on Microsoft's data center campus, and Vantage Data Centers has signed on to develop approximately 1,900 acres north of Milwaukee, with a potential to reach 3.5 gigawatts of demand over time⏳, which is not yet included in the current demand forecast. The company's 5-year demand growth forecast for the I-94 corridor remains 1.8 gigawatts.
Capital Plan Execution and Major Projects
The company is advancing its largest-ever 5-year investment plan, totaling $28 billion, focused on low-risk, highly executable projects. Key projects include the recently approved 1,100 megawatts of simple-cycle combustion turbines at Oak Creek Power Plant with a $1.2 billion investment, and 128 megawatts of RICE generation near Paris Generation Station for $300 million. Additionally, verbal approval was received for a 2 Bcf LNG storage facility at Oak Creek, with an expected investment of $456 million to be completed by the end of 2027. The battery portion of the Paris Solar-Battery Park, providing 110 megawatts of storage, came online in June.
Regulatory Updates and Tariff Development
WEC Energy Group currently has no active rate cases. In Wisconsin, the Very Large Customer (VLC) tariff is under review by the Public Service Commission, designed to meet large load customer needs while protecting other customers. This tariff proposes a fixed return on equity of 10.48% and an equity ratio of 57%, with terms of 20 years for wind and solar, and depreciable lives for natural gas and battery storage assets. A commission decision is expected by the second quarter of next year. In Illinois, the company is mapping out engineering and permitting for its pipe replacement program, targeting the retirement of 1,100 miles of older pipe by January 1, 2035.
Capacity Needs and Generation Strategy
To address tight system capacity and growing demand, the company announced the extension of operating lives for Oak Creek coal units 7 and 8 through 2026. This decision was influenced by MISO prices and summer demand, with no significant additional capital expenditures anticipated for the extension. Management is actively evaluating future generation needs, including the potential for a combined cycle plant, in addition to the current CTs, to meet the evolving demand landscape. Discussions are ongoing regarding the Point Beach PPA and Port Washington lease, with updates expected by year-end or in the fall capital plan.
Financing and Equity Issuance
The company issued approximately $425 million in common equity through the first half of 2025 via its ATM program and other plans. It remains on track to issue a total of $700 million to $800 million for the full year. This is part of a larger plan to issue $2.7 billion to $3.2 billion in common equity through 2029 to finance capital investments. Management reiterated that any incremental capital identified in the refreshed capital plan this fall will be funded with 50% equity content.