Skip to content
    WEC
    Earnings call· Sep 2025(Q3 FY25)

    WEC ENERGY GROUP, INC. WEC

    Oct 30, 2025 Source

    Executive summary

    WEC Energy Group Q3 FY25 — Significant Capital Plan Increase Driven by Data Center Demand

    WEC Energy Group reported solid Q3 FY25 results, reaffirming its full-year EPS guidance, and unveiled a significantly expanded 5-year capital plan of $36.5 billion. This substantial increase, driven by robust data center demand and broader economic development in Wisconsin, underpins an accelerated long-term EPS growth target of 7-8% CAGR post-2027. The company is focused on executing this growth while managing regulatory processes and financing needs.

    Highlights

    5

    • Reaffirmed 2025 EPS guidance of $5.17 to $5.27 per share.

    • New 5-year capital plan (2026-2030) of $36.5 billion, an $8.5 billion increase from prior plan.

    • Long-term EPS growth rate target updated to 7% to 8% CAGR through 2030, accelerating post-2027.

    • Electric demand expected to grow 3.4 gigawatts between 2026 and 2030, a 1.6 gigawatt increase from prior plan.

    • Asset-based growth expected at an average rate of 11.3% a year.

    Concerns

    3

    • Higher depreciation and amortization expense of $0.06 per share in Q3 FY25 vs Q3 FY24.

    • Higher day-to-day O&M of $0.05 per share in Q3 FY25 vs Q3 FY24.

    • Point Beach nuclear plant contract renewal with NextEra is shifting further out, with no capital assumed in the plan for replacement if not renewed.

    Guidance & targets

    10
    CategoryTargetConfidence
    Adjusted EPS
    $5.17 to $5.27 per share
    high materiality
    High
    Long-term EPS Growth Rate
    7% to 8% a year
    high materiality
    High
    EPS Growth Rate
    6.5% to 7%
    medium materiality
    High
    EPS Growth Rate
    closer to 8%
    high materiality
    High
    Annual Electric Sales Growth
    6% and 7%
    medium materiality
    High
    Dividend Payout Ratio
    65% to 70%
    medium materiality
    High
    Dividend Growth Rate
    6.5% to 7%
    medium materiality
    High
    Common Equity Issuances
    $900 million to $1.1 billion
    medium materiality
    High
    Very Large Customer (VLC) Tariff Return on Equity (ROE)
    10.48% to 10.98%
    medium materiality
    High
    Very Large Customer (VLC) Tariff Equity Ratio
    57%
    medium materiality
    High

    Operational metrics

    24
    Adjusted EPS
    $0.83$0.01 over Q3 FY24 adjusted earnings
    Q3 FY25

    Reported earnings for the quarter.

    Utility Operations Earnings Contribution
    $0.12vs Q3 FY24 adjusted earnings
    Q3 FY25

    Significant driver of earnings.

    Weather Impact on Earnings
    $0.03relative to normal conditions
    Q3 FY25

    Compared to normal conditions.

    Rate-based Growth Earnings Contribution
    $0.15vs Q3 FY24
    Q3 FY25

    Positive driver for earnings.

    Timing of Fuel Expense, Tax and Other Items Earnings Contribution
    $0.07vs Q3 FY24
    Q3 FY25

    Added to earnings.

    Higher Depreciation and Amortization Expense Earnings Impact
    -$0.06vs Q3 FY24
    Q3 FY25

    Partially offset positive drivers.

    Higher Day-to-Day O&M Earnings Impact
    -$0.05vs Q3 FY24
    Q3 FY25

    Partially offset positive drivers.

    Weather-Normal Retail Electric Deliveries Growth
    1.8%vs Q3 FY24
    Q3 FY25

    Overall slightly ahead of annual electric sales growth forecast.

    American Transmission Company (ATC) Capital Investment Growth Earnings Contribution
    $0.02vs Q3 FY24
    Q3 FY25

    Contribution from the Energy Infrastructure segment.

    Energy Infrastructure Segment Earnings Increase
    $0.01vs Q3 FY24
    Q3 FY25

    Increased earnings.

    Corporate and Other Segment Earnings Increase
    $0.11vs Q3 FY24
    Q3 FY25

    Increased earnings.

    Common Equity Issued
    $800 million
    first 9 months FY25

    Largely satisfied common equity needs for this year.

    Asset-based Growth Rate
    11.3%average annual
    2026-2030

    Expected to nearly double asset base over the next 5 years.

    Bespoke Assets as % of Total Asset Base
    14%
    by 2030

    Projected to represent this portion of total asset base by 2030, covering renewables and other assets under the VLC tariff.

    Equity Content for Incremental Capital
    50%
    Long-term

    Expected funding split for any incremental capital.

    Incremental Equity Content
    $4 billionvs prior plan
    5-year plan

    Added due to $8.5 billion capital increase.

    Common Equity Needs
    $4.8 billion to $5.2 billion
    2026-2030

    Expected funding from common equity for the new 5-year capital plan.

    Incremental Debt
    $14 billion
    2026-2030

    Expected funding from incremental debt for the new 5-year capital plan.

    Wisconsin Current ROE
    9.8%
    Current

    Assumed for the rest of the rate base.

    Wisconsin Electric Regulated Equity Ratio
    57.5% to 58%
    Current

    Assumed for the rest of the rate base.

    American Transmission Company (ATC) Ownership
    60%
    Current

    WEC Energy Group's ownership stake in ATC.

    EPS Growth Rate (Annual)
    7% to 8%year-over-year
    2027

    Expected annual growth rate for 2027.

    EPS Growth Rate (Annual)
    closer to 8%year-over-year
    2028-2030

    Expected annual growth rate for the outer years of the plan.

    Asset Base Growth vs. EPS Growth Delta
    roughly 3%
    Long-term

    Explains the difference between asset base growth and EPS growth.

    Industry KPIs

    7
    MetricValueDetails
    Adjusted operating EPS$0.83per share
    Multi year capital plan$36.5 billionUSD
    Dividend per share growth6.5% to 7%%
    Regulatory rate base growth11.3%%
    Allowed ROE equity layer rate cases10.48% to 10.98% ROE, 57% equity ratio%
    Combined electric gas framework mandatesOver 1,000 milesmiles
    Major regulated project construction progressOn track

    Orderbook & backlog

    3
    Electric Demand Growth3.4 gigawatts2026-2030

    increase of 1.6 gigawatts compared to prior plan

    Includes 2.1 gigawatts from economic development south of Milwaukee (e.g., Microsoft) and 1.3 gigawatts from Vantage Data Centers in Port Washington in the next 5 years.

    Vantage Lighthouse Campus Demand Potential3.5 gigawattsOver time

    Total potential demand at the Port Washington campus, part of OpenAI and Oracle's Stargate expansion.

    Microsoft Mount Pleasant Data Center Demand Potential2 gigawattsOver time

    Potential scale-up for the Microsoft data center alone in Southeastern Wisconsin.

    Deals & partnerships

    2
    MicrosoftSecond phase expansion of large data center complexincremental $4 billion

    Second phase in Mount Pleasant, Wisconsin, similar in size and power to the original $3.3 billion investment. First phase on track to go online next year.

    Vantage Data Centers / OpenAI / OracleDevelopment of Lighthouse data center campus as part of Stargate expansion$15 billion

    Campus named Lighthouse in Port Washington, Wisconsin, on approximately 1,900 acres. City of Port Washington approved initial development on 670 acres. Construction planned to start this year, facility could go online late 2027, first phase scheduled for completion in 2028.

    Capital programs

    6
    5-Year Capital Planunderway$36.5 billion
    Period spend: Ramping up to almost $7 billion in 2027 and over $7.7 billion in later years
    Funding: Approximately $21 billion cash from operations, $14 billion incremental debt, $4.8 billion to $5.2 billion common equity
    Start: 2026

    Benefit: Supports 3.4 gigawatts electric demand growth; asset-based growth of 11.3% annually.

    Increased by $8.5 billion (over 30%) from prior plan. Driven by investments in regulated electric generation, transmission, distribution in Wisconsin and pipe retirement in Illinois. The $8.5 billion increase is composed of specific highlights totaling $8.1 billion, with the remaining $400 million attributed to gas distribution and other smaller generation/miscellaneous items.

    Natural Gas Generation Investmentunderwayincremental $3.4 billion
    Start: 2026

    Benefit: Modern, efficient natural gas generation (combustion turbines, reciprocating internal combustion engines, upgrades).

    Part of the 5-year capital plan to support economic growth and reliability.

    Renewable Generation and Battery Storage Investmentunderwayincremental $2.5 billion
    Start: 2026

    Increase over prior plan, part of the 5-year capital plan.

    American Transmission Company (ATC) Projectsunderway$4.1 billion
    Start: 2026

    Benefit: Enhanced transmission capabilities, connection of new generation, strengthening the system, serving data center needs.

    Represents a $900 million increase from the previous plan.

    Electric and Natural Gas Distribution Networks Investmentunderwayadditional $2 billion
    Start: 2026

    Includes significant investment in the pipe retirement program in Chicago.

    Illinois Pipe Retirement Programunderway$1.5 billion
    Start: 2026

    Benefit: Replacement of over 1,000 miles of cast iron and ductile iron pipe under 36 inches diameter.

    Ramping up, expected to reach about $500 million annually by 2028. Part of the additional $2 billion distribution investment.

    Risks & headwinds

    5
    Point Beach Nuclear Plant Contract Renewal UncertaintyBeyond 2030 and 2033 (current contract expiry)

    No capital assumed in current plan for replacement capacity if not renewed.

    Mitigation: Evaluating options for customers' best interests; potential capital upside if not renewed; access to other abilities for replacement capacity (gas, renewables).

    Higher Depreciation & Amortization ExpenseQ3 FY25

    -$0.06 per share impact in Q3 FY25 vs Q3 FY24.

    Higher Day-to-Day O&MQ3 FY25

    -$0.05 per share impact in Q3 FY25 vs Q3 FY24.

    Pace of Capital Deployment and Project Execution2026-2027

    EPS growth is back-end loaded, accelerating post-2027, due to time required for approvals and construction.

    Mitigation: Management is prudent, ensuring executability; potential for acceleration if approvals and construction proceed faster.

    Illinois Legislation ImpactOngoing

    Potential impact on pipe retirement program.

    Mitigation: Watching developments; not expected to have a significant effect.

    What to watch in Q4 FY25

    5

    VLC Tariff Approval

    early May next year
    CurrentUnder review by Public Service Commission; testimony filed.
    TargetCommission order issued

    Why it matters

    Confirms financial terms for very large customers, crucial for future data center investment and rate base growth.

    A commission order is expected by early May of next year for customers to take service in June.

    Q&A highlights

    6

    Asked about the back-end loaded EPS growth post-2027 and if there's an opportunity to accelerate or smooth it out.

    Management clarified that annual growth in 2027 is expected to be 7-8% year-over-year, accelerating to closer to 8% for 2028-2030. They acknowledged potential for acceleration if approvals and construction proceed faster but emphasized prudence and executability.

    “I think there's some opportunities that we could see as things potentially accelerate. There's a lot of stuff that we're asking for approvals for and the commission is doing a great job getting us approvals.”

    asked by Shahriar Pourreza · answered by Scott Lauber

    2 min read6 chapters

    Detailed Narrative

    01

    Economic Development & Data Center Growth

    The company is experiencing significant economic development in its service territory, particularly driven by large data center projects. Microsoft is expanding its Mount Pleasant complex with a second phase, representing an incremental $4 billion investment. Vantage Data Centers' Lighthouse campus in Port Washington, part of the OpenAI and Oracle Stargate expansion, is projected to reach 3.5 GW of demand over time⏳, with 1.3 GW expected in the next five years and an initial $15 billion investment. This growth is fostering broader commercial and residential development, with Wisconsin's unemployment rate remaining low at 3.1%.

    02

    Expanded Capital Plan

    WEC Energy Group announced a new 5-year capital plan (2026-2030) totaling $36.5 billion, an $8.5 billion increase (over 30%) from the previous plan. This plan is designed to support the robust load growth and is expected to drive asset-based growth at an average rate of 11.3% annually. The increase is primarily allocated to regulated electric generation, transmission, distribution in Wisconsin, and the pipe retirement program in Illinois.

    03

    Generation Strategy

    The capital plan includes an "all-of-the-above" approach for generation, with an incremental $3.4 billion investment in modern natural gas generation (combustion turbines, reciprocating internal combustion engines, upgrades) and a $2.5 billion increase in renewable generation and battery storage investments. This strategy emphasizes dispatchable resources for reliability.

    04

    Transmission & Distribution Investments

    American Transmission Company (ATC) projects will receive approximately $4.1 billion, a $900 million increase, to enhance transmission capabilities, connect new generation, and serve data center needs. An additional $2 billion is allocated to electric and natural gas distribution networks, including significant investment in the Chicago pipe retirement program to replace over 1,000 miles of cast iron and ductile iron pipe by 2035.

    05

    Regulatory Updates

    In Wisconsin, the proposed Very Large Customer (VLC) tariff, designed to meet large customer needs while protecting others, is under review by the Public Service Commission. It proposes a fixed ROE of 10.48%-10.98% and a 57% equity ratio, with an order expected by early May next year. In Illinois, the company continues to coordinate on the pipe retirement program and plans to file a general rate case in early 2026 for test year 2027.

    06

    Financing Plan

    The expanded capital plan will be funded with approximately $21 billion from cash from operations, $14 billion from incremental debt, and $4.8 billion to $5.2 billion from common equity over the next five years. The company expects any incremental capital to be funded with 50% equity content, split between common equity and hybrid/like-kind securities. For 2026, common equity issuances are projected to be between $900 million and $1.1 billion.

    AI-generated summary of the company’s earnings call. Not investment advice.