Asked about discussions with potential new hyperscalers and the status of the VLC tariff, including collateral requirements and Oracle's lawsuit.

Scott Lauber confirmed ongoing discussions with potential new large customers (400-500 MW size), noting the VLC tariff's transparency is a positive. He clarified that Vantage/Oracle are under payment cancellation agreements similar to the tariff's credit support, and Oracle's lawsuit is a long-term credit consideration, not impacting current requirements. “I would have to say these customers are probably not as large as what we're seeing in our first 2, more in that 400 to 500-megawatt size, but we're having really good discussions, more to come on that.”

Inquired about the status of the ATC line for Vantage, its inclusion in the capital plan, and an update on Microsoft's data center progress.

Scott Lauber stated the ATC line is in the current forecast, progressing through commission approval with a decision expected by year-end. He also noted continued progression at Microsoft's site, with the first data center online and substations ahead of schedule, anticipating more demand updates in Q3. “That line and our last schedule looks like it should be decided by the end of the year to get approval to move forward with that construction.”

Asked if Oracle's issues are impacting new data center customer interest regarding collateral, and how future generation capacity additions would serve incremental data center contracts.

Scott Lauber believes collateral won't be a long-term issue for new customers due to the VLC tariff's transparency. For future generation, he indicated an "all of the above" approach (renewables, batteries, natural gas), potentially including combined cycle gas plants for more energy, not just capacity. “I think what we had in our very large customer filing was good. In fact, all 3 rating agencies said it was really good. But I think the key is we have true transparency so people know what that collateral need is.”

WEC

WEC Energy Group (WEC) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Utilities· Jul 29, 2026

Source: earnings call transcript

Executive summary

WEC Energy Group Q2 FY26 — Strong Data Center Growth Drives Capital Plan and Reaffirmed Guidance

WEC Energy Group delivered solid Q2 FY26 results, reaffirming its full-year earnings guidance, primarily driven by robust economic development and significant data center demand in its service region. The company's $37.5 billion capital plan is designed to meet this growing demand, with a substantial portion dedicated to very large customers, underpinning a long-term EPS growth target of 7% to 8%. While facing some weather impacts and operational cost increases, WEC is actively managing regulatory processes and financing needs, including a substantial ATM program, to support its ambitious investment strategy and consistent dividend growth.

Highlights

Q2 FY26 earnings increased by $0.15 per share YoY to $0.91, driven by utility operations and energy infrastructure.
Reaffirmed full-year 2026 earnings guidance of $5.51 to $5.61 per share, assuming normal weather.
Robust 5-year capital plan of $37.5 billion, with 15% of asset base dedicated to very large customers by 2030.
Long-term EPS growth target of 7% to 8% annually (2026-2030), accelerating to the upper half of the range starting 2028.
Increased dividend by 6.7%, marking the 23rd consecutive year of higher dividends, consistent with 6.5% to 7% growth plan.

Concerns

Weather negatively impacted Q2 FY26 earnings by $0.05 per share compared to Q2 FY25.
Higher depreciation and amortization expense reduced Q2 earnings by $0.05 per share.
Higher day-to-day O&M reduced Q2 earnings by $0.03 per share.
Labor force challenges are slowing the pipe retirement program in Chicago, reducing 2026 spending.
Oracle's lawsuit against the VLC tariff and credit requirements, though management expresses confidence in the project's timeline.

Guidance & targets

Category	Target	Timeline	Confidence
Adjusted EPS	$5.51 to $5.61 per share high materiality	FY26	High
Long-term EPS growth rate	7% to 8% a year high materiality	2026-2030 · FY26-FY30	High
Adjusted EPS	$0.92 to $0.98 per share medium materiality	Q3 · FY26	High
Dividend growth rate	6.5% to 7% high materiality	Long-term	High

Orderbook & backlog

Microsoft Data Center Demand 2.6 GW 2026-07-29

Forecasted demand increase in Pleasant Prairie region through 2030, with opportunity for further expansion.

Vantage Data Centers (Oracle) Current Demand 1.3 GW 2026-07-29

Demand in forecast over the next 5 years for the Vantage site.

Vantage Data Centers (Oracle) Potential Demand 3.5 GW 2026-07-29

Potential demand for the Vantage site over time.

Potential New Large Customers Pipeline 400 to 500 MW 2026-07-29

Typical size of potential new very large customers currently in discussion.

Deals & partnerships

Microsoft Purchase of land for data center development more than 2,200 acres

Microsoft has purchased more than 2,200 acres to date in the I-94 corridor south of Milwaukee for data center development.

Vantage Data Centers (for Oracle) Development of data center facilities approximately 1,900 acres

Vantage Data Centers is developing facilities for Oracle on approximately 1,900 acres, with the initial phase on 670 acres. First facility could come online as soon as late 2027.

Rehlko (formerly Kohler Energy) Expansion of production operations

Plans to expand production operations in Kenosha, expected to complete in 2027, to produce backup generators for data centers.

Waukegan Steel Relocation of headquarters

Steel fabricating company looking to move its headquarters from Illinois to Pleasant Prairie.

Harley Davidson Relocation of motorcycle production operations

Plans to bring some motorcycle production operations back from overseas to Wisconsin facilities.

Capital programs

5-year Capital Plan underway $37.5 billion

Benefit:15% of asset base dedicated to very large customers by 2030

Based on low-risk, highly executable projects, with a good portion serving very large customers. The company is updating its next capital plan and will share details on the Q3 call.

Vantage Data Centers (Oracle) Phase 1 Development underway $15 billion

Vantage has stated it expects to invest $15 billion to complete this phase. Construction continues on the initial phase, with structural framework complete on multiple buildings. First facility could come online as soon as late 2027.

Natural Gas Generation Facilities underway

Construction continues on new natural gas generation facilities in Paris and Old Creek, Wisconsin. Expected to start coming online in late 2027.

Peoples Gas Pipe Retirement Program underway

Period spend: reduced spending in 2026

Key driver for Peoples Gas rate request. Spending reduced in 2026 due to labor force challenges, but anticipated to ramp up in 2027.

Risks & headwinds

Weather volatility Q2 FY26

Negatively impacted Q2 FY26 earnings by $0.05 per share compared to Q2 FY25; $0.03 negative impact vs normal in Q2 FY26.

Mitigation:Full-year guidance assumes normal weather for the remainder of the year.

Higher depreciation and amortization expense Q2 FY26

Reduced Q2 FY26 earnings by $0.05 per share.

Mitigation:Continued focus on operating efficiency.

Higher day-to-day O&M Q2 FY26

Reduced Q2 FY26 earnings by $0.03 per share.

Mitigation:Continued focus on operating efficiency.

Labor force availability and ramping up workforce 2026

Reduced spending in 2026 for Peoples Gas pipe retirement program.

Mitigation:Working through a variety of methods to bring in talent and do proper training; anticipate ramping up in 2027.

Legal challenge to Very Large Customer (VLC) tariff credit requirements Ongoing

Oracle brought a case in court regarding credit need, despite the tariff requiring A- credit support or collateral at BBB-.

Mitigation:Management confident in the tariff framework and Oracle's commitment to the project; collateral requirements are protective.

Potential political pushback or moratoriums on data centers Near-term (election season)

One gubernatorial candidate identified potential moratorium; some communities have brought up moratoriums.

Mitigation:Educating candidates and public on economic benefits (customer savings, property taxes, jobs) and addressing concerns like water usage.

What to watch in Q3 FY26

New Capital Plan Details

Q3 FY26 call

Current In the process of updating

Target Details shared on Q3 call

Why it matters

The updated capital plan will outline future investments and growth drivers, crucial for long-term EPS growth.

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.

Find out whether WEC delivers this. Inve re-checks your case every morning.

Q&A highlights

Inquired about risks to the site timeline, potential expansion, and if the site could be redeployed to another hyperscaler if Oracle fails to fulfill obligations.

Scott Lauber expressed confidence in Oracle providing required credit support and confirmed construction is on time and budget. He noted that in a worst-case scenario, the site has many opportunities for other hyperscalers, but there's no indication of that currently.

“I think there's a lot of opportunities for that site for anyone else. But at this point, I've no indication that that's the case.”

asked by Shahriar Pourreza · answered by Scott Lauber

2 min read 5 chapters

Detailed narrative

Data Center Growth and Capital Plan

WEC Energy Group is experiencing significant demand from large data center customers in its service territory. Microsoft's Pleasant Prairie site has its first facility operational, with a forecasted demand increase of 2.6 GW by 2030. Vantage Data Centers, developing for Oracle, is constructing facilities with an expected 1.3 GW demand over the next five years, potentially reaching 3.5 GW over time.

This growth underpins the company's $37.5 billion 5-year capital plan, with approximately 15% of assets dedicated to these large customers by 2030.

Regulatory Framework for Large Customers

The Public Service Commission of Wisconsin (PSCW) approved WEC's very large customer tariff (VLC), ensuring these customers pay their full share of costs and provide credit support. Oracle is actively working to update its financial security in line with PSCW requirements for its Port Washington project.

Management views the VLC tariff as a strong framework for continued data center growth, providing transparency and protecting other ratepayers.

Rate Cases and Regulatory Progress

WEC has filed rate requests for forward-looking test years 2027 and 2028 in Wisconsin, with expected final orders by year-end and new rates effective January 2027. In Illinois, the company made progress on the Rider QIP and bad debt rider settlements, resolving 12 open dockets.

A decision on the Illinois rate request, driven by the Peoples Gas pipe retirement program, is expected by year-end for test year 2027.

Financing Strategy and Equity Needs

The company issued $760 million in common equity in the first half of 2026, including $720 million via its ATM program. It expects to issue a total of $1.1 billion in common equity for the full year. For any incremental capital beyond the current plan, WEC anticipates funding with 50% equity content, leveraging its efficient ATM program and exploring options for faster cash accumulation through current returns on projects.

Political Environment and Data Center Pushback

Wisconsin's political landscape is "purple," with ongoing gubernatorial primaries. Management actively engages with both political parties to promote economic growth and reliable infrastructure. While some candidates have suggested data center moratoriums, WEC emphasizes the economic benefits, including $100 million in customer savings over two years from data center value, property taxes, and job creation, alongside addressing concerns about water usage with closed-loop systems.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.