WEC ENERGY GROUP, INC. Q1 FY2025 earnings call

• Solid start to 2025 with $2.27 earnings per share, targeting 2025 earnings guidance of $5.17 to $5.27 per share assuming normal weather.
• Largest five-year investment plan in history totaling $28 billion for economic growth and reliability, with projects low risk and highly executable.
• Darien solar project went into service in early March, adding 225 MW of renewable generation. Two solar projects in construction (Cash Kanan 300 MW, Renegade 100 MW) expected to be in service next year. Wisconsin Public Service Commission approved purchase of 90% of High Noon solar and battery project for ~$883M, to be completed in 2027.
• Wisconsin economic development: Microsoft data center progress, Cloverleaf data center plans, Eli Lilly and Uline expansions.
• Evaluating tariff impacts on supply chain and capital plan, estimating 2% to 3% exposure, actively mitigating through contracts and suppliers.

Utility Operations

• Earnings were $0.28 higher compared to first quarter of 2024. Weather positively impacted earnings by ~$0.18, rate-based growth contributed $0.20, tax and other items added $0.04. Partially offset by $0.14 from O&M, depreciation, and fuel timing. Weather-normal retail electric deliveries (excluding iron ore mine) saw 7% growth this quarter, led by large commercial and industrial class.

American Transmission Company

• Earnings increased $0.02 compared to first quarter of 2024. $0.01 related to continued capital investment and $0.01 from selling a transmission line in California.

Energy Infrastructure

• Earnings increased $0.05 in the first quarter of 2025 compared to first quarter of 2024, largely from higher production tax credits due to completed solar projects.

Corporate and Other

• Earnings decreased $0.03, driven by higher interest expense, partially offset by favorable tax timing and other items.

• Reaffirmed 2025 earnings guidance of $5.17 to $5.27 per share assuming normal weather.
• Long-term EPS CAGR target of 6.5% to 7% supported by robust capital plan.
• Q2 guidance: range of $0.63 to $0.69 per share, accounting for April weather and assuming normal weather for the rest of the quarter.

• Tariff impacts on supply chain and capital plan, with potential 2% to 3% exposure.
• Potential phase-out of IRA tax credits affecting project economics.
• Market uncertainty affecting equity issuances, managed through ATM and employee plans.

Q: Thoughts on MISO capacity auction, data center CapEx, nuclear PPA?

A: Discussed MISO auction being tight but in right direction, working on capacity to meet large customer demand, and plans for gas generation to meet load with economic development in the region.

Q: Illinois pipeline safety program CapEx?

A: Early thoughts on ~$500M+ CapEx opportunity, ramping up in 2026-2028 with hiring, retraining, and redeploying employees.

Q: Microsoft data center progress?

A: Microsoft's development in SE Wisconsin is solid, with ongoing first-phase work and confidence in five-year demand growth forecast.

Q: Equity issuances timing?

A: Managed through ATM and employee benefit plans, confident in reaching $700-$800M for 2025, considering stock price, cash needs, and market conditions.

Q: IRA tax credit transferability?

A: Discussed phase-out of IRA tax credits, transferability benefits for customers, and active seeking of safe harboring for renewable projects.

Q: BLC tariff impact on Wisconsin?

A: The tariff is fair, straightforward, and clean, balancing the needs of very large customers and shareholders.

Q: Residential electric load growth?

A: Mainly weather-driven, with normalization after extreme warm weather in 2024.

Q: Cloverleaf data center load timing?

A: More clarity expected in the third quarter earnings call regarding load timing and generation mix.

Q: Tariff impacts on capital plan?

A: Potential impacts on batteries and solar projects, working with regulators to recover costs through prudency reviews.

Q: Reconciliation bill tax rate?

A: Lower corporate tax rate would benefit customers through regulatory models, with some earnings impact at the holding company due to reduced tax shield.

Q: Data center customers outside of data centers?

A: Cautiously optimistic, with 10 out of 16 sectors showing quarter-over-quarter positive growth in large customer segments.

Q: Illinois gas future?

A: No major changes seen from recent developments, with approval of pipe replacement program being positive.

Q: Wisconsin VLT tariff ROE?

A: Reasonable 10.48% ROE for long-term investment, providing customer certainty over 20-30 years.