WEC Energy Group Aktie

Good afternoon, and welcome to WEC Energy Group's conference call for the third quarter 2026 results. This call is being recorded for rebroadcast. [Operator Instructions] In conjunction with this call, a package of detailed financial information is posted at wecenergygroup.com. A replay will be available approximately 2 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. 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.

And now it's my pleasure to introduce Scott Lauber, Chairman, CEO and President of WEC Energy Group.

Good afternoon, everyone, and thank you for joining us today as we review our results for the third 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 in our news release this morning, we reported third quarter 2026 earnings of $1.18 per share compared to $0.83 per share in the third quarter last year. These results were driven by warmer-than-normal weather, execution of our capital plan and operating efficiency. With another solid quarter, we remain on track to deliver strong results for 2026.

Our continued focus on the fundamentals of our business is creating value for our customers and stockholders. Today, we're raising and narrowing our earnings guidance for 2026 to a range of $5.60 to $5.64 per share, assuming normal weather for the remainder of the year. This reflects 7.7% growth in earnings per share from our 2025 adjusted guidance midpoint.

As a reminder, our previous guidance was in the range of $5.51 to $5.61 per share. I'm also pleased to share our new 5-year capital plan. Let's start by talking about the economic growth that's driving it. Overall, we expect our demand -- our electric demand to grow 4.9 gigawatts between 2026 and 2031, an increase of 1 gigawatt compared to the prior plan.

Microsoft continues to make good progress on its large data center complex in Mount Pleasant, Wisconsin, with the first facility operating Construction is underway on additional facilities as Microsoft expands at the site. As a reminder, Microsoft has purchased more than 2,200 acres to date in the I-94 corridor south of Milwaukee. Just last week, Microsoft announced its purchase of an additional 70 acres next to the site.

We are preparing to serve forecasted demand of 3.2 gigawatts in the I-94 region through 2031, with opportunity for further expansion. That's up 600 megawatts from the previous plan. You'll notice an additional 400 megawatts in the new capital plan. We're making good progress with another customer, and you can expect more details in the future. Stay tuned.

And 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 the data center project, which is being built on 670 acres. Vantage said that it expects to invest $15 billion to complete the phase in 2028. We currently have 1.3 gigawatts of demand for this Vantage site in our forecast through 2031.

Looking to the future, it has the potential to reach 3.5 gigawatts of demand over time. The project is well on its way and Oracle has met its financial security obligations, which are consistent with the Wisconsin Commission's very large customer tariff requirements. To serve this project, ATC has refiled a proposal with the Public Service Commission of Wisconsin.

In addition to the transmission line, this filing includes proposed investment in an E-STATCOM system to maintain grid reliability. ATC is working through the process now with the commission. As a reminder, both Microsoft and Oracle have committed to paying their full share for energy costs.

We solidified this through our very large customer tariff, which protects other customers. Microsoft, Vantage and Oracle have made significant investments to support our communities. Just recently, we worked with Oracle to save our customers an estimated $300 million in fuel costs. Oracle agreed to subscribe to a portion of the energy we purchased from Point Beach Nuclear Power plant. We expect the full details to be submitted to the Wisconsin Commission in the coming months.

As we work with these hyperscalers, we are confident our very large customer tariff provides a strong framework for growth while maintaining affordable energy service for all our customers. We continue to see local growth in small commercial and large businesses as well. For example, both [ Janeric and Boden ] are expanding and adding jobs. We have designed our new capital plan to reliably serve our customers while supporting the significant growth we continue to see across our service areas.

As you may have seen from our announcement this morning, we expect to invest $47.5 billion in capital projects between 2027 and 2031. This is an increase of $10 billion or more than 26% above our previous 5-year plan. The majority of this increase is being driven and therefore paid for by our very large customers. The updated plan is expected to support asset-based growth at a 13.4% compound annual growth rate. This should drive compound annual earnings per share growth of 7% to 9-plus percent from 2027 to 2031. This is based off the midpoint of our original 2026 guidance.

The increase in our plan is mostly driven by investments in regulated electric generation and transmission largely due to very large customer demand. Let me give you a few more details. Over the next 5 years, we'll continue to take an all-of-the-above approach for generation to support economic growth and reliability by investing in new natural gas, batteries and renewables.

And dispatchable generation is a key component of our reliability strategy. Between 2027 and 2031, we expect to invest an incremental $6.8 billion in modern, efficient natural gas generation versus the prior plan. This includes a combined cycle turbine project that we expect to come online by the end of the 5-year forecast period as well as combustion turbines and upgrade to our existing facilities.

We are increasing planned investment in renewable generation in battery storage by $1.1 billion, with the total planned battery storage increased by $3 billion, while planned solar and wind investment decreased by $1.9 billion. Some of this decrease relates to the work already completed in 2026.

Continuing our all-of-the-above approach, we also reached an agreement with NextEra that pending regulatory approval, will support long-term electric liability and customer savings. We plan to extend our purchase power agreement for approximately 1,000 megawatts of carbon-free baseload capacity from the Point Beach Nuclear Plant. The new PPA would extend the existing agreement by 20 years.

Outside of generation, American Transmission Company plans to continue investing in transmission capabilities to serve our region's economic growth, connecting new facilities and strengthening the system. Our plan calls for us to invest approximately $5.3 billion in ATC projects between 2027 and 2031. This represents a $1.2 billion increase from the previous plan.

Adding to strength and reliability and support economic growth, we continue to invest in our electric and natural gas distribution networks. Our plan includes an additional $1 billion to improve distribution infrastructure. This supports the continued investment in our pipe retirement program in Chicago. Recall the Illinois Commerce Commission directed us to focus on retiring more than 1,000 miles of older pipe by January 1, 2035.

Now turning to the regulatory front. I have a couple of updates across our service area. In Wiscantan, progress continues on the rate request we filed in April for forward-looking test years 2027 and 2028. The procedural calendar has now been completed. We expect final orders from the commission by the end of the year with new rates effective in January '27 and 2028. We also have rate filings under review in Illinois for test years 2027 at Peoples Gas and North Shore Gas.

Recently, the administrative law judge issued a proposed order that is largely consistent with the [ SAS ] recommendation. The order recommends a 9.48% ROE and a 50% equity ratio at both utilities. We expect the final decision in December. Of course, we'll keep you updated on future developments. In summary, we're excited about the strong economic development in our region. And we believe our capital plan, along with our very large customer tariff positioned us well to support that growth. Now I'll turn it over to Xia for more details.

Thank you, Scott. Our third quarter 2026 earnings of $1.18 per share reflects a $0.35 increase compared to the third quarter of 2025. Our earnings package includes a comparison of third quarter results on Page 15. I'll walk through the significant drivers.

Starting with our utility operations, earnings were $0.28 higher versus the third quarter of 2025. Let me highlight a couple of factors. Weather favorably impacted quarter-over-quarter earnings by approximately $0.05. Compared to normal conditions, we estimate that weather had an $0.08 positive impact in the third quarter of '26 compared to a $0.03 positive impact in the third quarter of 2025.

Rig-based growth contributed $0.19 to earnings. This includes $0.15 of growth from incremental AFUDC equity and cash returns associated with projects under construction.

I'll note that $0.12 or 80% of these incremental returns are from projects for and supported by the VLCs. In addition, VLCs added $0.02 of margin quarter-over-quarter. And favorable day-to-day O&M drove an $0.08 variance. This was primarily driven by our stock-based plans, which could be timing. These positive drivers were partially offset by higher depreciation and amortization expense higher interest expense and tax and other items.

Next, let me provide some additional color on our weather-normal retail electric delivery. Compared to Q3 last year, total weather-normal retail electric sales grew 4.1%, driven by growth from the VLCs. Excluding the iron ore mine and VLC customers, we saw sales growth 0.4% during the quarter. For the year, we continue to expect weather-normalized electric sales to be relatively flat with 2025.

At American Transmission Company, Capital investment growth contributed an incremental $0.03 to Q3 earnings compared to 2025. At our Energy Infrastructure segment, earnings were $0.02 higher in the third quarter compared to the same period in 2025. This was driven by additional capital investment at [ We Power ] and a better operating income at [ Waki ].

Lastly, that earnings from the Corporate and Other segment increased $0.04 driven primarily by tax timing. In terms of common equity, we lapped in about $1.16 billion during the first 9 months of the year. This includes $50 million issued under our dividend reinvestment and employee benefit plans. The remaining $1.1 billion are under the ATM program, which includes approximately $350 million from forward contracts that have been settled and $765 million still under forward contracts that will be settled in the future.

As Scott noted, we are raising and narrowing our 2026 earnings guidance range to $5.60 to $5.64 per share, assuming normal weather for the rest of the year. Going forward, with the updated capital plan, as Scott discussed earlier, we expect our long-term EPS growth to increase. Again, based off the midpoint of the original 2026 guidance range, $5.56 per share, our long-term EPS CAGR is expected to be 7 to 9-plus percent through 2031.

Now let me comment on the financing plan that supports this growth and the new capital plan. Slide 22 of the earnings package outlines the funding sources. Over the next 5 years, we expect to generate $26 billion to $27 billion in cash from operations, funding more than half of our cash needs.

We expect $19 billion to come from incremental debt, including hybrid instruments, and we plan to fund the remaining cash needs with [indiscernible] to $5.5 billion of common equity.

Although our current capital plan increased $10 billion, we expect common equity needs to remain relatively flat with the prior plan. This is largely due to incremental cash from operations in the new plan. As projects are completed and placed in service in the planning horizon, they begin generating cash revenues. Many of which are supported by the VLCs that comes with a 10.48% to 10.98% ROE. The new plan also includes more projects for which the VLCs are expected to provide cash returns during construction rather than AFUDC.

The additional cash from operations helps us keep common equity needs at a modest 10% of total cash sources and relatively flat compared with the prior plan. In closing, a Scott discussed previously, strong economic development and load growth in Wisconsin are the foundation of our new capital plan.

As illustrated on Page 21 of the earnings package, over the next 5 years, we expect to transform our business while staying true to our fundamentals. Our asset base is expected to more than double over the next 5 years with the electric business representing 80% of the asset base by 2031.

Furthermore, with almost half of the capital plan or more than $20 billion allocated to the VLCs, the asset base dedicated to lead customers is projected to represent almost 30% of our total assets by 2031. As you know, these assets are supported by the VLC tariff, which is designed to ensure that these large customers pay their full share of the costs and are not subsidized by other customers. In addition, the tariff provides very strong financial security and credit support requirements. We are excited about our company's future and the investment opportunities ahead. With that, I'll turn it back to Scott.

Thank you, Shaw. Finally, a quick reminder about the dividend. As usual, I expect we'll provide our 2027 dividend plan and earnings guidance in December. We expect to grow the dividend at a rate of 6.5% to 7%, consistent with our past practice. This results in a projected payout ratio of 60% to 70% -- 60% to 70% due to the forecasted earnings per share growing at a faster pace. .

Before I open it up for Q&A, I want to summarize some of the key highlights of the call. Economic growth is driving another gigawatt of forecasted demand for a total 4.9 gigawatts of growth in our plan. This growth is adding $10 billion to our 5-year capital plan, which is now at $47.5 billion. These developments give us confidence in our EPS compound annual growth rate of 7 to 9 plus percent.

We remain committed to 6.5% to 7% dividend growth. We expect the total equity funding to be flat in our 5-year plan versus the 5-year plan at approximately $5.5 billion, maintaining a strong balance sheet. Overall, we're optimistic about our 5-year plan and the longer-term outlook. We look forward to discussing our plan at the EEI conference. Operator, we're now ready for the question-and-answer portion of the call.

[Operator Instructions] The first question is from the line of Shar Pourreza, with Wells Fargo.

Just the updated guidance, obviously, you now see 7% to 9% plus. Just help us frame what is assumed in the plus? That's always the question mark you get when you come out with the plus. The $10 billion is included in the range. But just help us frame the plus and obviously why [ you even keep ] the 7% to 8% at this point?

Sure. Sure. It's a great question. And as we look at it and we look at the capital projects we have and you saw our growth of another gigawatt, we felt really confident with that 7% to 9% range and feel confident not only in this 5-year plan that we think it will continue. The second part is when you think about the plus, you really got to look at the pattern of our growth of our capital plan that's illustrated in our handout.

There's a lot of projects that need regulatory approval. But if there's an opportunity that we can get the approvals and move faster than we anticipate, there's an opportunity that the growth may be a little faster in a couple of years, maybe like in '28 or '29. So it really depends on a lot of stuff, but I think there's an opportunity as we continue to execute on plan for potential upside in some of those years.

Got it. No, that's perfect. That's what I was trying to get into. That's perfect. And then, Scott, switching to Oracle, the ATC line project to serve the Vantage side in its second application filing. It appears the filing is still under review with the commission. So I guess what's the time line there? And do you see a potential delay to the start of the project or can the site start taking the megawatts before the line is completed?

So great question. And they're still working feverishly on the construction. So listening to the Oracle conference call, the last quarter, I don't think it's going to delay any of their projects in the time line. We expect we'll get a complete this year, and it will get approval, and we'll be right back on schedule.

Just to put it in perspective, I mean, remember, this filing is a big filing. In addition, we just added the [ E STATCOM ] to the filing to make sure we have true transparency. When you think about it, there's over 20,000 pages in the filing. So the commission having 35 questions, I think that's pretty reasonable. So it's really a complete filing and understand we wanted to ask those questions upfront and work it through so we can get a quick result here. So everything is on schedule here, although we had a little pause with that refiling, I feel good where we're at.

Your next question is from the line of Nicholas Campanella with Barclays.

I just wanted to ask, you're raising the capital plan pretty significantly, and this is for about 1 gigawatt of incremental load in the forecast period. You also talked about progress with another customer. You also talked about the fact that Microsoft and Oracle could be expanding. Just does this capital plan build into that load? Or would those expansions result in incremental capital?

Sure, sure. And when you look at it, there'll be potential expansions. We factored in the 400 megawatts on this to be announced, and we're making progress on those customer -- on that customer there. But we do have some long lead time equipment in here anticipating we'll have some spending done, but those megawatts probably won't come in until like a 2032, '33.

But true transparency. We think this growth will extend beyond 2031 and opportunities in 2032 and '33. So we have a little bit of long lead time equipment, as you can see in some of the public filings of [ plans ] being filed. So more to come on that. So I think as we grow, there will continue to be upside if there's additional data center growth beyond 2031.

Okay. And then just with the plan being out to 2031 now, you talked about the long lead time equipment, and you still have some chunky generation, you're probably going to be building in 2032. You also have some load ramping by then how do equity needs look like kind of beyond this plan? Just is there something idiosyncratic that's causing you to basically have flat-to-declining needs on the CapEx raise? Or is this type of CapEx increase to equity needs sustainable on a roll forward, if you understand my point.

Yes, it's a great question, and I'll start and then Xia will back clean up as we're in the brewer fever here. When you think about it, we really worked hard getting more cash upfront and getting some cash returns with some of our very large customers. And as we always said, having [ plants ] still into service was also going to help with our cash.

So this was kind of a step change to get into that realign our cash needs and working with our very large customers who have been great partners here. As we go forward, though, Xia has looked at what additional capital would mean and potential there.

Yes. So just to build on that, we think that we traditionally guided you that every $1 million of incremental capital will require $0.50 with equity content with the factors that Scott just outlined, we expect that number to come down over time. So I would be comfortable to say it could be around 40%. So every incremental dollar would come with 40% of equity content comfortably.

So that would be the going forward guidance for you, Nick.

If I could just squeeze 1 more in just in response to kind of Shar's question before on the plus, just is it really with the capital plan essentially peaking here in '28. Is is '29 and beyond that you'd really be in that plus range if things go correctly. We're just trying to make sure we heard that right. I'm sorry.

Sure, sure. I think it all depends upon when we get the regulatory approvals, potentially '28, more likely '29. And as we continue, you can see our capital plan actually falls down a little bit in 2030 and '31. I wouldn't read too much into that because as we look at 2032, et cetera, there will be more opportunities there. So I felt the most confident in that '28, '29 time frame, but '30 and '31 aren't that far off. So we have some time here to look at those also.

Your next question is from the line of Stephen D’Ambrisi with RBC Capital Markets.

Scott, just had a quick one -- a couple of quick ones. Just in terms of Microsoft and the 600-megawatt expansion to [indiscernible] load, can you just talk maybe at a high level about how much of the acreage that relates to or they keep adding acreage, but it also seems like power density per acre is moving up with newer generations of racks. But just how we can think about -- you've given a good estimate of what Vantage could potentially size to, but just interested about Microsoft on the other side.

Sure, sure. And Microsoft hasn't disclosed anything in particular, this is more us just looking at other comparable sites. I think those sites -- and they've talked about -- you just saw them buying another 70 acres right next door. I think the opportunity for these sites to have another -- not another, but in total, 4.5 to 5 gigawatts.

So right now, Southeastern Wisconsin is about 3.2 gigawatts, potentially that could get up to 4.5 gigawatts to 5 gigawatts. As you see, they just bought some more land. So I agree with you. I think the technology continues to get more capacity on the same location. So more to come on that, but those are just our kind of rough estimates. But right now, we're very comfortable with the 3.2 gigawatts that's in the plan for Southeastern Wisconsin.

And then just obviously, more to come, I guess, on the 400 megawatts. But can you talk about whether it's within [ WABCO or WPS ] service territory? Or any color on just what that could look like? Understand that we'll get more details there.

Yes. We'll get more details too. I know people are looking at locations in both territories. So once again, you got to make sure you have a community that's excited about it and interested in it. You got to make sure the transmission lines are available and the capacity. So there's a lot of factors going in. So I don't want to really get much more there, more to come on this, though.

Your next question is from the line of Michael Sullivan with Wolfe Research.

Sorry, I got to try 1 more -- Scott, I got to try 1 more on the growth rate. So is the takeaway here, the plus as it stands now is for 1, maybe 2 years and then you're back within more the [ 7 to 9 ] and all the other years?

So I feel good that we're going to get a couple of years out of here. But once again, we'll have another update in a year here on our capital plan or maybe interim as we get more customers here. So a little too early to tell, but feel really good that it'll be into that 9 plus probably the upper end or a plus sign based on where we're all at. .

Okay. And on the equity piece, can you just maybe unpack a little more about what changed here for the nearer term that you were able to -- I mean because you really have 2 large customers. And so I guess there was a negotiation on -- with 1 or both that brought the needs down and then like why that wouldn't sustain if they -- if you expand with those same customers out in future years?

Yes, Michael, I'll take that one. So remember, the tariff allows us to recognize AFUDC or current returns. So we have the options there. We've been assuming conservatively before that most of the projects would come with AFUDC. And in this plan, to your point, we've been working with our VOC customers to try to charge more cash returns.

So as a result, you're basically reducing the AFUDC originally assumed in the prior year plan and increasing cash returns in this plan. So it's kind of like a -- like Scott mentioned, it's a step change. So that's why it's -- that's why it's a relative equity even though we have added $10 billion.

Going forward, you wouldn't be doing this unwinding AFUDC and adding cash return thing, but we will continue to encourage the customers to pay cash returns. So incrementally, you would need a little more equity as a result. I don't know if that makes sense.

It does. And the last thing just for me, the 400 megawatts, is that all with 1 customer? And then just any detail on the gating items there?

Sure. And right now, it's anticipated to be all with 1 customer. More to come on this. They're still working with the different communities on this. So it's anticipated to be with one customer, but more to come. .

Your next question is from the line of Andrew Weisel with Scotia Bank.

Congrats to the Brewers, not a lot of love there, but quite a world series. Congrats to the brewers and congrats to you guys. They're not the only ones winning in Milwaukee. Great updates.

Thank you. Thank you. The Brewers have been exciting and fun to watch and glad to bring a World Series home..

That's great.

So my first question is on the sales growth. You add a gigawatt to the outlook there and yet the forecast still shows 6% to 8%. Why wouldn't that be increasing the 6% to 8%? I understand there's a roll forward. But why didn't that number come up? And can you talk a little bit about why the pace of gas growth came down a little bit from the prior forecast? Is it all in Wisconsin, I believe, not Illinois. So could you please talk to the 2 numbers?

Sure. Happy to. So on the first one, remember, we continue to add sales along the way between now and 2029. So when you look at '29 to '31, the base is very high. So when you grow from a very high base, you continue to have a 6% to 8%. So it's really just a timing of the growth rate.

On the gas sales side, nothing to read too much into it. We forecasted a pretty flat gas sales this year. And we -- through the 3 quarters, remember, we had a mild quarter in the first quarter and the next 2 quarters were really not gas focused. I mean our normalization process is never perfect. So there's a little bit of that in there, but we don't see any trend in the gas sales side to make us question the growth rate. So just don't read too much into it.

Yes. And remember, on the electric side, the very large customers are really -- remember the way our tariff is set up, the very large customers, you got to really look at the returns on the assets versus the volumetric. The volumetric does make a difference, but a lot of that volumetric is completely passed through as it relates to energy prices, et cetera. It's really the return on those assets is where the earnings come from. .

Great. That makes a lot of sense on the electric side. Sorry, Shah for gas, I was talking about the '29 to '31 outlook. You're now saying 0.5%. You previously said [ 0.7 to 0.1 ]. Is it the same story about the '28, for '29.

Yes, it's still in that neighborhood. As I said, from last year to this year, we're expecting that to be even -- so growing from that, we feel good about the 0.5 to 0.8. It could be better than that.

Yes. I think we're just making sure we factor in conservation where the price of gas be go factoring in what could happen. Usually, use per customer continues to go down a little bit. This is largely driven by customer growth. So I'm not too concerned about it. And remember on those gas sales, we'll factor all that into your rate cases as we look at it.

Right. Good point. That's all rate case cycle away. Okay. Then 1 more on equity, if I may. How should we think about the timing of this? Your commentary on the magnitude and the customers was pretty clear. But given all of that, how should we think about the timing of when the equity would be drawn down? And common equity versus JASN within the cycle? Should it be ratable? Or would it be more back-end loaded within the 5-year plan?

We always say that equity comes -- goes with capital. So it could be a little bit front-end loaded because we are still in the construction phase in the front end of the planning horizon. So again, as we continue to place the projects in service, you have more cash coming in, in the latter part of the plan. So overall, it's a little bit front-end loaded on the equity.

Your next question is from the line of Anthony Crowdell with Mizuho.

I reiterate Andrew's comments. Congrats on the World Series, must be nice. I think I wanted to follow up on Steve's questions earlier on Microsoft and Oracle. I think Steve was kind of talking on the Microsoft angle. I guess my question is between Microsoft and Oracle or Vantage, which customer has the greatest potential to exceed the load currently in your plan right now? And what would trigger that?

Sure. And that's hard -- I mean they're both building extremely fast. They're both going -- they're both have their construction sites under construction extremely fast here. So I think when you look at it, probably Microsoft has a lot more individual construction sites going. Oracle is really concentrated on that first 670 acres, really concentrated on that first 1.3 gigawatts. As you noticed, we didn't increase anything in the plan here. They want to get that up and running, get that transmission line. So I would say right now, potential Microsoft has a little more opportunity, especially as they continue to buy more land if you think of our current 5-year plan.

Great. And just one follow-up. I guess, it's on -- and I hope I have these numbers right, like customer concentration, I think by like 2031, nearly like 30% of your assets would be supporting very large customers. I mean, is there a point maybe. .

[Audio Gap]

Your next question is from Brian Russo with Jefferies. .

Just a follow-up on like the cadence of the EPS growth. Is it kind of following the same pattern as the prior 7% to 8% and kind of follows the capital plan on Slide 22. But as the VLT generation investments ramp up, that requires in theory less equity because you're getting some upfront cash recovery from those customers? Is that how to think about it?

Yes, I would really go with the pattern of the capital plan, I think. And if we can do something and some more capital could come in a little earlier, I think there's opportunities to be in that plus section. So I would look at the capital plan because that's a return on those assets. .

And then the equity, as we've talked about, it's really a step change here to get more of that cash flow from our very large customers to stick to that balanced approach here. And then I think as you go forward, as we get more in service, the equity needs will continue to go lower.

Okay. Understood. And then could you be more specific on the actual construction time needed for that ATC line. I could see on the CapEx, it looks like majority might be in '27 and '28. Just with the being complete CCN filing and refiling. I just want to make sure that there's adequate time, which is an already condensed time line for construction.

Yes. And I don't have the exact time line in my mind here. I imagine it's going to take 12 to 15 months. I have not fleshed that out completely. But I know American Transmission Company is ready. They have people working on other projects, so we're maintaining the workforce so that when this project does get approved, if we have to go ahead, we're ready to go with -- we have the equipment, just ready to go with the construction. So as soon as we get approval, there will be no delay [indiscernible], we're going to keep moving. So it's probably about 12 to 15 months.

Okay. Great. And then lastly, any insights into this B&R environmental review following the Port Washington settlement, it seems like it's not an obstacle for this new 400-megawatt customer. Just wondering what you're hearing or seeing on the ground related to that.

Yes. So this environmental review. I don't see it as an obstacle at all. And actually, we kind of welcome having a reasonable environmental review to get the facts out. So having a study, getting all the clarity on the facts and the environmental impact, I think is positive. And hopefully, there's even clarity of what rules have to be filed for future environmental reviews.

So there's less interpretation. So we see this as net positive. It shouldn't affect any of the current sites. I think everyone thinks it's going to be very manageable. We expect the environmental review to be on a reasonable basis. It sounds like it should be done very quickly by beginning of '28. So I think all of that and having the facts out there and having the true on an environmental review is all net positive.

Your next question is from the line of Jeremy Tonet with JPMorgan.

This is Diana Niles on the call for Jeremy.

If you could elaborate more on the relatively unchanged equity plan and maybe more broadly on the financing plan, [indiscernible] considering the allocation of debt equity under a higher rate environment, it would be possible to speak to that and potentially speak to rate exposure?

Sure, sure. And Xia will kind of look at how it's all laid out and some concepts here. But in reality, we kind of look at it every day, we're going to do some financing. What's the most efficient. So Xia, why don't you kind of lay out some of our base concepts?

Oh, absolutely. so on the debt front, we are keenly aware of the increase in the interest rates and as a matter of fact, [Audio Gap] so we have taken into consideration all of that related to the cost of debt. On the equity front, I don't know if you have a specific question you wanted me to address? .

I think that generally covers. That it was more or less the decision to increase the percentage of the debt in the financing plan while decreasing the percentage of equity, but understand the puts and takes there.

Yes. It's all driven by the cash flow forecast. So as we pick up more cash from operations, and that could be in the form of current returns, as we talked about or incremental revenue in cash or selling the ITCs and PTCs whatever we do in the plan that increases the cash flows. That gives us the capacity to increase a little bit of the debt until maintain really strong financial metrics, credit metrics. It's really a function of the cash flows.

Okay. Got it. if I may ask 1 more.

Sure.

Are there any particularities to consider when it comes to cash inflows from VLC customers, either in terms of upfront payments or cash recovery when it comes to how the rating agencies look at your cash flow statements?

In the plan, we're not assuming any of the upfront payment from the VLCs. We are assuming that they would pay cash returns on CWIP. So it would be really just like earning a return on the rate base. but nothing like upfront payment from the VLC.

But we think those cash returns and receivable receive positively from the rating agencies. I think they'll consider that very positive.

Your next question is from the line of Steve Fleishman with Wolf Research.

Sorry for the double teaming question here. And congrats on the Brewers, by the way. Just to kind of tie up maybe some of the questions on the growth rate and CAGR. Instead of looking year-by-year or looking more at the 5-year CAGR? Is the plus on the table with the plan as it is for the 5-year growth rate? Or is the plus more representative of '28 or '29, so to speak?

So right now, I would say the plus is more representative of the '28 to '29, but feel comfortable over that 5-year growth rate, assuming we don't have any wild cards here would be at that upper end of the 9%.

Got it. And then, of course, as you update plans, you probably fill in more in the latter parts as well.

Exactly. Exactly. As we update plans and give more clarity on a very large customer and very large customers...

Your next question is from the line of Carly Davenport with Goldman Sachs.

Just 1 quick one for me. Just on the capital plan. I think you quantified the amount of distribution and generation CapEx tied to the VLCs. Do you have a comparable number that you're sharing for the transmission piece of the plan?

I think in our plan right now for the transmission, specifically related to economic development is about $1.4 billion in our plan right now. So I think as you look across the state of Wisconsin, I think there's potential upside as more VLCs come in, it all depends upon how much -- of course, they're going to be substation, but what kind of transmission will be needed or their location of it. So right now, we only have $1.4 billion.

Your next question is from the line of Richard Sunderland with Truist Securities.

Just one clean-up question on the VLC side, the disclosures there. That 29% asset-based component in 2031, does that include the 400 megawatts kind of unidentified customer and that longer lead time equipment, I think you called out for like a 2032, 2033 basis. Is that all in that 29%?

Yes, it is. Yes, it is. It's all a part that we think is going to be paid for by those very large customers, and that's all part of the 29%. .

Then how that's informing kind of rate case discussions as well. Could you speak a little bit to the workflows there?

Sure. Sure. And so the Illinois -- and you've seen a couple of updates in our Illinois filing that the capital amount has gone down a little bit this year just because we're ramping up and it's been hard to get resources or some of the occupations since the economy is strong and there's a lot of construction progress going on across the country, largely in Wisconsin and other places also.

So it's been hard to ramp that up. We're beginning -- we've updated the forecast, trying to have that true transparency to the commission down there of the time line of that. But we're making really good progress. It's going to continue to ramp up and the plans in here ramp up to about $500 million a year spending starting in that '28 time frame as we continue to ramp. So making progress. It's been a little slower than what we'd like.

But we got to make sure we have the quality and the right resources to do it. And we've put in programs to help get new resources in by working with trade associations and other colleges and training to get more beginning workers up to speed to be able to help us on the program.

the final question will be from the line of Paul Patterson with Glenrock Association.

So my -- just to sort of follow up, and I apologize, but just trying to connect all the dots. The 1 gigawatt of demand and the $10 billion of CapEx incremental CapEx, the $10 billion, it sounds if I heard you guys correctly, the 1 gigawatt is not directly -- there's more than just the 1 gigawatt of demand because you're getting more demand that's not in the forecast period in 2032 and what have you. Am I thinking about that correctly?

So there's a combination. You have to -- we've got the -- we've got the 1 gigawatt of demand. That 1 gigawatt demand, we need to get about 1.4 gigawatts, 1.5 gigawatts to make sure we make the MISO requirement. So it's a little bit more to make sure we have the MISO requirements for that capacity need. We also have the transmission in there to serve this. That's up plus there's a little bit of long lead time equipment in addition to that, plus we have some distribution.

So significantly related to generation, but a lot of it's in or some of it is in transmission also and a little bit in this long lead time equipment. So kind of all of the above.

Okay. But most of that $10 billion is associated with VLCC customers.

That is right.

And could you guys just -- I saw the rate base pie charts and everything, but just in general, when we think about that incremental number, how much should we think about as roughly speaking, associated with the VLCC guys?

I think as you look about the $10 million increase, probably about $8 million plus is related to the VLTs. .

And the entire 47.5% of the capital, about 45% is VLC. That's another way to look at it.

Of the total capital, not the incremental?

Correct. .

Okay. And then when we -- and I think this question was answered, but you mentioned that really the OpEx differentials really have to do simply with Quip versus AFUDC. And there's no deposits or collateral or anything like that in that large CapEx, OpEx, excuse me, that large OpEx increase other than obviously some growth, but is that the way that might -- I understood that correctly?

So there is no like customer deposit or prepayment for that. It's all related to our current return on AFUDC. However, as you think of the credit requirements, we do if there's a credit requirement need, we do have letter of credits or whatever is required under the commission order to make sure we have the credit requirements met. So you got to think of 2 different ones. One is credit requirement and one is the cash flow to support it.

And our credit department is just on the side for security, that's not part of our financials anywhere in the financials that we represent to you.

Awesome. And then I just noticed on the footnote on Page 20. Electric distribution includes $200 million in substations dedicated to VLCCs, a portion of which whatever. Is there any [ Kayak ] or anything in any of these things that we should be thinking about? Or is this pretty much minus any or contribution native construction or anything like that?

Yes. That's really just -- there's no contributions in that. That is just some miscellaneous distribution capital. We needed to serve some of the very large customers. That's dedicated We just want to make sure as you tie stuff out, you recognize that.

All right. Thank you. Well, thank you, everyone. That concludes our conference call today. Thank you for participating. If you have more questions, feel -- please feel free to contact [ Best Track ] at (414) 221-4639. Thank you. .

This concludes today's call. Thank you for attending. You may now disconnect.

Good afternoon, and welcome to WEC Energy Group's Conference Call for Second Quarter 2026 results. This call is being recorded for rebroadcast [Operator Instructions] In conjunction with this call, a package of detailed financial information is posted at wecenergygroup.com. A replay will be available approximately 2 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. 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. And now it's my pleasure to introduce Scott Lauber, President and Chief Executive Officer of 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 Shaw 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 to $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. But first, let me highlight the strong economic growth in our region that serves as a foundation of our robust capital plan. 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 gigawatts in this region through 2030 and an opportunity for further expansion. And 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. We currently have 1.3 gigawatts of demand for this Vantage site in our forecast over the next 5 years. Looking to the future, this site has the potential to reach 3.5 gigawatts of demand over time.

And 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. We are committed to meeting the growing demand across our service area as we invest in our systems for increased reliability and capacity. Our 5-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% to 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. And as a reminder, on our major capital projects, construction continues on the new natural gas generation facilities in Paris and Old 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. I'm sure many of you are aware of the credit support required for 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. We expect final orders from the commission by the end of the year with new rates effective in January '27 and 2028. Turning to Illinois. In May, the Illinois Commerce Commission unanimously approved the Rider QIP and bad debt writer 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 the 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, designed to support thousands of jobs and strengthen our local economy. Next, I'll turn it over to Xia.

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 negative impact in the second quarter of 2026 compared to a $0.02 positive impact in the second quarter of 2025. Grid-based 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. 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 whether-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 to Q2 earnings compared to 2025. Turning to our Energy Infrastructure segment. Earnings were $0.11 higher in the second quarter of '26 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 2 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 segment 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. 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 to $5.61 per share, assuming normal weather for the rest of the year. For the third quarter, we are expecting a range of $0.92 to $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 plans.

With that, I'll turn it back to Scott.

Thank you, Xia. Now 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 reported with higher dividends. The increase is consistent with our plan to grow the dividend at a rate of 6.5% to 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 Instructions]

Your first question comes from the line of Shar Pourreza with Wells Fargo. .

Scott, let me just 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 time line and even potential expansion opportunities? And couldn't just the site be redeployed to another hyperscaler the current customer not be able to fulfill its obligation maybe with stronger credit. Yes, just maybe [indiscernible]

Sure, 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 tariffs. So they're working to get that, and I have confidence in that. That 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 time line. So no questions on that in my mind.

You are correct. I mean I think if you go to a worst-case scenario that for some reason, they decided not to expand. 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. And as long as they have the credit support with us and provide all those financial requirements, I feel good with the continued expansion.

Okay. That's good. I appreciate that. And then just lastly, Scott, 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?

Shar, I mean, we're finalizing everything on our third quarter call. And just to remind everyone, the first 500 megawatts comes due in that PPA in December of 2030, the next 500 megawatts is in March 2033. And just as a rule of thumb about a gigawatt is about $2 billion to $2.5 billion. So half of that for the 500 megawatts. As we said in the prior call, never say never. Things could always change. But capital is an option for this as we get to the fall, but we'll finalize on our third quarter call because we have to get orders out, et cetera.

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

Look forward for that 3Q update. Let me ask you this. I mean, how are the discussions going vis-a-vis potentially other counterparties here? Just Obviously, we've seen success build upon success, especially geographically in regions like your own. How are you thinking about potentially a third 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?

Sure, sure. And 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 2, more in that 400 to 500-megawatt size, but we're having really good discussions, more to come on that. But like you said, they kind of grow in the region, they grow. And I think our very large customer tariff has that transparency, has the complete openness that we're charging them their fair share.

So I think it's a really good step forward to have that be approved by the commission now.

Yes, absolutely. And then 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. And then also maybe just related to subpiece on that is following the PRC decision not to rehear the IG collateral requirements under the VLC. Are there any other next steps there? Or is that basically put to bed and is that final?

Sure. That's a great question. So if you look at the Vantage Oracle site, currently, they're under the payment calculation agreements for them. So that kicks in. So we have the credit support very similar to the tariffs. Now that are in line with the tariffs. So 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, it's 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. And then June 1 of next year, they'll enter into those service agreements for the site. So it's just a matter of timing because the site actually doesn't really get up until the end of '27. So that's why it's just the timing. Construction is going on right now.

And the very large customer tariff, the rehearing, we asked for a reconsideration or 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 1 of the courts that Oracle brought. I think they're just trying to think about going forward where their 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.

So they're in the same position with the current rating of BBB-. So I don't think they're taken by surprise of that at all because we already had that as a provision in our filing. So this is more of getting back to that BBB or whatever as they work through their credit, how do they think about the future more long term, I think.

Your next question comes from the line of Nick Campanella with Barclays.

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? And 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?

Sure. And 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, I think, is 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. So there's been a little noise on updating stuff to make sure the commission has all the latest and greatest information.

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. So that's right now on task, I think the staff just provided some testimony the other day and now some testimony. I think from American Transmission Company and others is due by the August 7. So that's proceeding. If you think about transmission, this line, not in particular, because I think the majority of it is 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.

Great. And then with all the kind of focus on Vantage 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? .

Sure. Sure. And Microsoft's been continuing to proceed. Their first units online, the 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 megawatts a little bit. Remember, we'll add another year to the plan. So I anticipate something a little bit more as we get to the third quarter, and we're working with them right now on what that number will be. So continued progression. The site is developing really well. The data centers are up and running and electricity is flowing and all the substations are moving actually ahead of schedule. So it's all -- everything has been really positive direction down there.

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

Okay. So you've talked in the past about having maybe 3 or 4 potential additional data center customers. Obviously, nothing to announce today. I'm not going to push you on that, but can you speak to whether those customers would either qualify or for the VLC or how your conversations are going around the implications and potential collateral obligations. Are these issues with Oracle causing any slowdown or any concerns among these customers?

Sure, sure. Just to get everyone expectations, we're talking with a variety of customers. I would really looking at just kind of do it one at a time. So I just don't want everyone to think there's 3 or 4 are going to come in any day. so 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 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. And as they look at our tariffs, they look at the sites, they understand the requirements. So I don't think it's going to hurt at all as we look at those new customers.

Okay. Great to hear. Then 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?

Sure. And the data centers have signed up, both Oracle and Microsoft has 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 5-year plan, you may see 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.

So 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?

It does, yes. Very helpful. One more, if I may, on the regulatory side. You've actually got the 2 rate cases in Wisconsin and Illinois, both expected to be resolved around year-end if they were 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 the settlement on the rider there. So how are you thinking about opportunities for you, especially given the timing coinciding election season?

Sure. Sure. And 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 2 of the cases in the state. So I think there's an opportunity but that opportunity really doesn't happen until we start seeing the staff direct testimony and the intervenor direct testimony around mid-August.

I think it's August 10 and August 14. So I'll come after that. We always have discussions and hope there's an opportunity for that. In Illinois, you're exactly right. Having the settlement on those 12 cases, I mean it was great to see and great to see that movement forward. Illinois is a little bit historically haven't had many settlements. So I don't -- I put that as a lower probability, but it doesn't mean that we won't have a discussion, but I just would not handicap that as a high probability just based on history.

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

Yes. So 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 yet before the primary. Just any color on that could be helpful.

Sure, sure. So just to remind everyone, Wisconsin is a pretty purple state. We know the Republican candidate for the primary is Tom Tiffany that's -- who's slotted there. There's only 1 real candidate out there. And then the democratic candidate, there's about 5 of them out there. They are -- the primary is August 11, and we'll see who comes out of that primary to work against in the general election against Tom Tiffany.

When you think about our positions and what we've been fortunate enough to do is that we've been working with both sides of the aisle and been very successful over the last decade -- several decades working on both sides of the aisle to promote a strong economy with a strong, reliable distribution, electric gas distribution system. So I feel good. We continue to work progressively with our governor and the legislature.

In the debates, I mean, there's been several items that have come up, talk about inflation, economy, public safety, education and then, 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 that 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. And all the customers we work with, they are committed to paying their fair share. So I think when you think about the transparency they're paying their fair share, the benefits and property taxes and they see the complete story and through 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. I think as we get to the -- 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 Presidents of Wisconsin. So more to come, as you can imagine, through the rate over the next couple of months.

your next question comes from the line of Michael Sullivan with Wolfe Research. .

Just following up on that, another on just like 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 site issues. Obviously, you have 2 very good and well-established sites with their existing customers, but just as you think of future new opportunities whether you're seeing that potential pushback?

Sure. Sure. And One of the candidates has identified that they potentially would do a moratorium on data centers. I think right now, everyone is on the campaign trail that we really got to get them understanding the facts. There have been several communities that have brought up moratorium on data centers, but that's -- once again, they all are looking at getting those fact finding.

And when you look at like our rate case that we filed and you look at the cost from corporate allocations to more efficiently working with our generation fleet and how you allocate costs, there's about $100 million of savings for our customers over the next 2 years from the value of the data centers. And there's probably more when you factor in grocer receipts tax and state taxes.

And then some of the other items that are out there is the narrative about water usage. And when you think about water usage, people are looking at data centers under closed loop systems. And then they talk about generation. But 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% to 30%, we project it will be. So water, it's not really on the generation side.

So 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. So I think there's a lot of positive. We just got to make sure everyone has the facts in front of them.

Okay. Very helpful. And then just on the funding and financing side, I 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? And then we had one of your peers earlier this week do something a little strategic with nonutility renewables. I know you're setup is a little bit different, but is that something you would consider as like a way to recycle capital to help on the funding of higher CapEx?

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

Yes. 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. So we feel really good about the capability through the ATM program. Having said that, we are 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. So in -- under our tariffs, 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. So we're thinking through all the angles to try to be efficient. But nothing is off the table right now.

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

Just turning back to Illinois. I'm curious how work is trending on the pipe program as you've been reramping that. Any recent learnings or takeaways and anything there that's informing the rate proceedings in the backdrop?

Sure, sure. Great question. And 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 labor force and some of the work that we need. It's just been more challenging, as you could imagine.

And 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 would like in 2026 here, but we anticipate to be able to ramping that up as we move forward in '27. So it's going fine from an execution plan, et cetera, just a little bit hard to get those resources that we need.

Got it. Appreciate the color there. And 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? And I guess how is that standing amid national and state affordability backdrops as well?

Yes. 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 costs along with where do you need the electricity. So they're still having the future of gas. They're still having discussions, but that's getting, I think, by the end of the year, something is supposed to come out on that.

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

Just want to come back, I guess, to some of the earlier points you were discussing and see what's in the capital plan, what will be upside to the capital plan. I just want to confirm when you talk 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 this comes in, would you think of this as kind of like with the EPS CAGR as you see it or presenting upside to the current 5-year range?

So 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 of another large customer, the transmission growth -- all of that is all -- and then we talked about the generation potentially for Point Beach. So all that is upside.

A lot of that, as you think about it, is in that 2030, 2031 time frame because it will be adding a year on, and it really takes that long from a supply chain. But we're going to -- we'll evaluate everything on the third quarter call, but feel really good about the tools that are coming in as we move forward and we pull that plan together. So I think it's going to be long for sure, and we'll see where the numbers go in the next years. As you know, we're at the high end of our range right now in that '28 time frame. So we'll see if there's anything more in it as we pull it together.

Got it. That's helpful. And just want to shift gears here towards new nuclear, if we could. And obviously, WEC is looking to make sure that shareholders are protected but the federal government is kind of pushing forward the OE 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 what could participate here? Or just any thoughts on that in general?

Sure, sure. And we have been actively working with DOE as it relates to fossil, some of the loans trying to -- potential loans as it relates to some of our gas generation. So that's -- if you hear our name associated with it, it may be related to some of that fossil stuff. As we've said before and more thinking long term, we have a site called [ Kiwani ] that we kept through the Integrys acquisition that we have options for that land there. Longer, longer term, nuclear may be a potential. But I just want to look forward in the short term here. But we do think longer term, nuclear across the country is a potential option.

Your next question comes from the line of Paul Fremont with Ladenburg.

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? Did it track to your construction? How should we think about sort of the initial collateral requirement that's required?

Sure, sure. The collateral -- 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.

So that kind of ramps up. But 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. And 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 in gas assets, and they need to come up with that net book value to make sure we have collateral in place.

So it's very stringent, but very -- 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. So that's how it kind of ramp up over time.

So just to clarify that -- if they were to move forward into a Phase 2 that 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?

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

Right. And then 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 grant, subinvestment grant?

Yes, it'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, we require in the original filing as well as the PCA that as long as their BBB- or worse, they would need to post collateral. So we kind of already kicked that in before they go any further down. So I think from that protection perspective, all the -- 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. So there's no more we would need to protect the entire book value on the books.

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

So 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 BBB-. So I think they're really looking at longer term. So if it takes several months or 6 months or so to get out and maybe ask for reconsideration, it still doesn't change anything at this moment. But I think you're looking at the future.

And then 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?

Yes, 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 2 customers we have, but more in that 400 to 500-megawatt size. So we're having some discussions and I feel good about it, but more to come, hopefully.

And maybe last question for me. Sort of a lot of turmoil on the Democrat side in terms of running for Governor, with Rodriguez sort of exiting. I guess the most recent polls had the Democrat social sort of ahead, is that who would be sort of the other ones that would be close to [ Hong ] in terms of the primary?

So there's 5 right now in the primary. You have Hong, you have Mandela Barnes, You have an individual who's a previous Lieutenant Governor. You have Joe Brennan, who was a former State Administrative Secretary, Department of Administration. David Crowley is also the Milwaukee County Exec here in Milwaukee and Kelda Roys. So there's 5 of them out there right now. They just had a debate. So it's kind of interesting because a lot of activity has happened in the last couple of weeks and the primary is August 11. So not much happened until all of sudden we're getting into the last month here of the primary. But there are several out there.

Your next question comes from the line of Paul Patterson with Glenrock Associates. And this is our final question.

Just to follow up on all this Oracle stuff. I mean 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. Is that -- am I boiling it down to its essence there? Or am I misunderstanding it?

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

Okay. So that's very helpful. And then just to clean up here, and I apologize if I missed it. But on the waterfall chart on Slide 15, the WECI, the infrastructure, 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 '26 and the O&M timing issue and how that might work out going forward?

Sure. Happy to. So as I called out, the impairment, the lack of impairment in the quarter this year and the fact that we received the insurance payment this year. So that accounts for a net of $0.04 out of the 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 2, generation was a little bit better. So it's a variety of things added to the remaining $0.06. But I want to understand the big piece of that.

So when will that come -- will that timing come -- will that be coming back.

Yes. Hopefully, some of the favorability will stay, but we expect in the fourth quarter, some of them will go back.

Okay. And then just the insurance recovery from the -- as a part of the $0.04 is, how much of that was this quarter's insurance recovery? I apologize for being slow on that.

$0.02, $0.02 was insurance payments.

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.

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

Hello, and welcome to the WEC Energy Group Annual Meeting of Stockholders. Please note that today's meeting is being recorded. [Operator Instructions]

It is now my pleasure to turn today's meeting over to Gale Klappa. Mr. Klappa, the floor is yours.

Thank you, and good afternoon, ladies and gentlemen. It's just past 1:30 p.m. Central Daylight Time, the time set for convening WEC Energy Group's 2026 Annual Meeting of Stockholders. I'm Gale Klappa, Chairman of the Board of WEC Energy, and I will serve as Chairman for today's meeting.

Before we begin, I'd like to call your attention to the rules of conduct for our meeting. They are available by clicking on the Documents icon and that's at the top right of your screen. A copy of the proxy material can be found there as well.

And now it's time to call our 2026 Annual Meeting to order. I've been given the inspector's report, which indicates that more than 88% of the company's outstanding shares are represented. This constitutes a quorum under the company's bylaws, and this meeting, therefore, is duly convened to conduct business. At the end of the formal program, we will be happy to answer your questions.

As always, some of the information you will receive at this meeting is forward-looking in nature and is based on our current expectations. Our projections, of course, involve risks and uncertainties. Factors discussed in the company's latest Form 10-K and in subsequent reports filed with the Securities and Exchange Commission could cause our actual results to differ materially from those discussed today.

And now we'll begin our business session. All members of our Board of Directors who are standing for election are joining us today. Also attending is Abby Cowart from Computershare, that's the company that serves as our transfer agent and registrar. Abby has been appointed as the Inspector of Election for our meeting. Also with us today are Brian Douce and [ Tyler Cole ]. There from Deloitte & Touche, our independent auditors.

And now I'll call on our Executive Vice President, General Counsel and Corporate Secretary, Peggy Kelsey, to discuss the proposals that we have before us and to conduct the voting. Peggy?

Thank you, Gale. On March 26, 2026, a notice of this meeting was sent to all stockholders of record as of March 4, 2026. The polls for the 2026 Annual Meeting remain open. If you previously voted your proxy, your vote has already been recorded. If you entered the meeting using your control number and have not yet voted or you wish to change your vote, you may do so now by clicking on the Vote icon at the top right of your screen. We will close the polls shortly.

As set forth in your proxy statement, there are 5 management proposals and 1 stockholder proposal on which stockholders have been asked to vote. The 5 management proposals are: number one, election of 12 directors to serve for terms expiring at the Annual Meeting of Stockholders in 2027, including Warner Baxter, Ave Bie, Danny Cunningham; William Farrow III, Cristina Garcia-Thomas; Maria Green, Thomas Lane, John Lange, Scott Lauber, Ulice Payne, Jr., Mary Ellen Stanek, and Glen Tellock.

Number two, ratification of Deloitte & Touche LLP as independent auditors for 2026. Number three, an advisory vote to approve compensation of the named executive officers, otherwise known as Say-on-Pay. Number four, amendments to our Restated Articles of Incorporation to eliminate super majority voting requirements. And number five, amendments to our bylaws to eliminate super majority voting requirements.

Finally, there is 1 stockholder proposal to govern by majority vote. At this time, I invite Mr. John Chevedden to present his proposal. Mr. Chevedden, you will be allowed up to 3 minutes for this presentation. After your remarks, we will proceed to the proxy vote. Mr. Chevedden, the floor is yours.

This is John Chevedden. Proposal 6 governed by majority vote. There has requested the Board of Directors take the necessary steps so that each voting requirement in our charter and bylaws that calls for a greater than simple majority vote be replaced by a requirement for a majority of the votes cast for and against proposals or a simple majority. This proposal topic as a shareholder proposal won 95% of the for and against votes at the 2024 WEC Annual Shareholder Meeting. However, WEC has since been playing games with this 95% vote and WEC shareholders need to be outraged at this.

After this 95% vote, ,WEC did the bare minimum and put this topic on the 2025 WEC ballot as a binding WEC proposal. As a binding proposal, this topic needed an 80% vote from all WEC shares outstanding, and it came so close with a 77% vote. WEC could have easily have made a small effort to get more shares to vote as the incoming votes were at an overwhelming pace of 98% in favor. So WEC has another chance at this meeting today to obtain 80% vote from the WEC -- but from the WEC statement next to this proposal, WEC is apparently dead set committed to make no extra effort in regard to its proposals 4 and 5 on the same topic as this proposal.

It's like throwing a drink in the face of WEC shareholders when WEC shareholders give 98% support to a proposal topic and WEC will not make any extra effort to simply get more shares to vote in order to equal the required 80% support from all shares outstanding. The ultimate blame for this insensitivity to overwhelming shareholder votes of more than 95% and falls on William Farrow, who chairs the WEC Governance Committee. Mr. Farrow was apparently retired from a day job and his most recent day job was 13 years with Winston and Wolf LLC. I asked my computer about the number of employees of Winston and Wolf and the answer was 1 employee. This compares to 7,000 employees for WEC. Perhaps, Mr. Farrow can give an update on the number of employees at Winston and Wolf during his 13 years of experience and how his experience with the staff at Winston and Wolf qualifies him to be the Chair of a Board committee at a company that has 7,000 employees like WEC.

Please vote for all 3 of the govern majority vote proposals on the ballot today. Proposals 4, 5 and 6.

Thank you, Mr. Chevedden. As noted, the Board is recommending a vote against this proposal as described in the Board's response to Proposal 6 on Page 77 of the proxy statement. I have been appointed to vote all of the shares represented by the proxy votes sent in by our stockholders. I have submitted the proxy ballot that reflects your instruction to the inspector of election. The polls are about to close. So if you have not finished voting, please do so now.

[Voting]

Thank you. The online voting is now closed. The preliminary inspector's report has been completed and the preliminary results show that each of the nominees for the Board of Directors has been elected to serve a 1-year term expiring at next year's annual meeting. The appointment of Deloitte & Touche as independent auditors for 2026 has been ratified. The advisory vote to approve the compensation of the named executive officers has passed. The proposals to amend our restated articles of incorporation and/or bylaws to eliminate supermajority voting did not receive the required shareholder vote and, therefore, have not passed, and the stockholder advisory proposal to governed by majority vote has not passed. A final report on our meeting will be filed with the Securities and Exchange Commission in the next few days.

Gale, back to you.

Peggy, thank you very much. On a personal note, today's session marks my last annual meeting as Chairman of WEC Energy. It has truly been a privilege to help lead this company over the past 23 years. and I know that our future will be shaped by strong and experienced hands. After today's meeting, Scott Lauber, our President and Chief Executive, will serve as Chairman. I'd like to thank that literally thousands of men and women across our family of companies for striving every day to deliver the best care anywhere. And I'd like to thank all of you for your investment, your support and your continued confidence in our company. Formal business portion of our meeting is adjourned.

And now I'll turn the meeting over to Scott for an update on our progress. Scott, all yours.

Thank you, Gale, and thank you for your service to our company, your vision, dedication and leadership have been key to bringing us to a strong position we are in today. I'd also like to share that in recognition all of his accomplishments, the Board has given Gale the honorary title of Chairman Emeritus, following today's meeting. This is the first such honor in the company's more than 125-year history. Again, Gale, thank you for all contributions to our company and our community.

Turning now to our progress over the past year. As you know, we delivered another year of solid results from customer satisfaction to financial performance, the study execution of our capital plan. But first, I'd like to provide you with an update on our dividend. In January of this year, the Board of Directors raised our dividend by 6.7%. This marks the 23rd consecutive year that our company has rewarded shareholders with higher dividends. And the Board's action is consistent with our plan to grow the dividend at a rate of 6.5% to 7%.

Turning now to our earnings. As you may have seen earlier this week, we reported first quarter 2026 earnings of $2.45 a share. We're off to a good start to the year. We remain laser focused on reliability, financial discipline and customer satisfaction, and we're on track to deliver another year of strong results, in line with our earnings guidance for 2026. As a reminder, we're guiding to a range of $5.51 to $5.61 a share, assuming normal weather for the rest of the year.

Turning now to economic development opportunities. Opportunities that point to significant growth and demand for electricity in the years ahead. Along the I-94 corridor between Milwaukee and Chicago, Microsoft is making good progress on its large data center complex. The more than 2,200 acres purchased to date, we have energy flowing to the site and the first data center is now online ahead of schedule. Microsoft released plans in January to expand the campus further with 15 additional data center buildings. In total, this would bring Microsoft's investment to more than $20 billion in the area, including $7.3 billion in Phases 1 and 2 of the campus.

Turning north of Milwaukee to the City of Port Washington, Vantage Data Centers has signed on to develop facilities for Oracle on approximately 1,900 acres. Last December, Vantage broke ground on the initial phase of the project, which is planned for 670 acres. Vantage has stated that it is expected to invest $15 billion to complete this phase in 2028. The first facility could come online later next year. We currently have 1.3 gigawatts of demand for this Vantage site in our forecast over the next 5 years. And looking to the future, this site has the potential to reach 3.5 gigawatts of demand over time.

We are also seeing an increase in local investments by other large companies, such as Rockwell Automation, Foxconn, Uline, Eli Lilly and Milwaukee Tool. And these are just a few of the exciting projects driving the need for investment in our infrastructure. To that end, we have announced a $37.5 billion capital plan to support safety, reliability and growth between 2026 and 2030. It's the largest 5-year investment plan in our company's history. A balanced power generation mix is a significant forecast for our electric utilities. Our plan calls for us to invest a total of $7.4 billion in modern, efficient natural gas generation and LNG storage. In renewables, over the next 5 years, we expect to invest $12.6 billion to add approximately 6,500 megawatts to our generation fleet.

To help ensure the energy security for our customers, we're also focused on strengthening our distribution network and investing in needed transmission across the region. This plan supports our pledged our projected long-term earnings per share growth of 7% to 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 as we place more projects into service. Overall, we are very confident in our ability to execute on our capital plan and continue our growth trajectory. Our future is bright. Our investment opportunity has never been greater, and we're focused on execution.

Now it's time for the question-and-answer portion of the meeting. Stockholders may submit questions online by clicking on the Q&A icon and Peggy Kelsey has agreed to read them to us.

[Operator Instructions] But at this time, there are no questions in the queue. So again, we'll just give it a few seconds in case anybody submits one.

And Scott, I confirm still no questions in the queue. So I'll turn it back to you.

Thank you, Peggy. This concludes our 2026 Annual Meeting. If you have any questions or would like more information, feel free to e-mail us at [email protected], thank you again for your confidence and your support. Good afternoon, everyone.

You may now disconnect.

[Audio Gap]

Vantage has stated that it is expected to invest $15 billion to complete this phase in 2028. Construction continues and the first facility could come online late in 2027. We currently have 1.3 gigawatts of demand for this Vantage site in our forecast over the next 5 years. Looking to the future, this site has the potential to reach 3.5 gigawatts of demand over time. And there's other notable growth in the state. As a recent example, Milwaukee Tool has announced plans to further expand its campus in our territory, including a new research and development facility. Waukesha Engine also announced plans to expand upon its local operation and employee base.

In addition, we're starting to see good housing development. In fact, realtor.com recognized Racine County, Home of the Microsoft side as 1 of the nation's hottest housing markets. We're committed to meeting the growing demand across our service areas as we invest in our system for increased capacity and reliability. Our 5-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 dedicated to the very large customers. In total, by the end of 2030, we expect approximately 15% of our asset base to be attributable to these very large customers.

As you recall, we project long-term earnings per share growth of 7% to 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.

Now let me give you an update on our capital projects. This March, we had a solar facility going to service with total capital of about $225 million. The Wisconsin Commission has approved the purchase of 3 additional solar projects and a battery storage project. In total, we plan to invest approximately $730 million in these newly approved projects. Construction continues on the new natural gas facilities in Paris and Old Creek, Wisconsin, -- we have our labor force and supply chain lined up to bring these projects online according to schedule. We expect the Paris Race units in the Yield Creek combustion turbines to start coming online in late 2027. Also at our Old Creek site, we recently announced plans to extend the operating lives of units 7 and 8. We expect to have units available to meet high energy demand periods through 2027 rather than retiring them at the end of this year. The decision is based on 2 critical factors: reliability and affordability for our customers.

Overall, we have a highly -- a high level of confidence in our ability to execute on our capital plan and continue our growth trajectory. Now turning to the regulatory front. First, let's update you on Wisconsin and our VLC tariff. After completing its review, the Public Service Commission verbally approved the tariff structure on April 24. We expect the written order in the few weeks. As a reminder, this tariff provides a balanced approach, reliable electric service for our very large customers with a predictable cost profile, protection of other customers from bearing any cost to serve these very large customers, protection of the company's financial health and support for economic development and growth in the region.

The commission approved the return on equity in the range of 10.48% to 10.98% and an equity ratio of 57%. For our non-VOC customers, on April 1, we filed rate request with the Wisconsin Commission for forward-looking test years 2027 and 2028. Our proposed plans would help us continue to strengthen key infrastructure and deliver the energy our customers depend on while remaining focused on affordability for our customers. We expect final orders by the end of the year with new rates effective in January 2027 and 2028.

And in Illinois, just last week, we filed a proposed settlement with the Illinois Congress Commission if approved, these agreements will resolve all open proceedings related to the customers' uncollectible and QIP riders. As you recall, we filed a rate request for our Illinois utilities in January for test year 2027. A key driver of this request is support the pipe retirement program in Chicago. The Illinois Commerce Commission continues to review our filings, we expect the decision by the end of the year. In summary, we remain focused on executing our capital investment plan.

Now I'll turn things over to Shaw.

Thank you, Scott. Our first quarter 2026 earnings of $2.45 per share reflects an $0.18 increase compared to the first quarter of 2025, our earnings package includes a comparison of first quarter results on Page 12. I'll walk through the significant drivers.

Starting with our utility operations, earnings were $0.17 higher versus the first quarter of 2025. Let me highlight a couple of key drivers. Weather negatively impacted quarter-over-quarter earnings by approximately $0.02. Compared to normal conditions, we estimate that weather had a $0.01 negative impact in the first quarter of 2026 versus a $0.01 positive impact for the same period in 2025. Rate-based growth contributed $0.17 to earnings, including $0.09 of incremental AFUDC equity from projects under construction. Day-to-day O&M was $0.05 favorable in the first quarter. This includes a $0.02 gain from a planned asset sale in Illinois during first quarter of this year. The rest of the favorability was largely due to the timing of certain maintenance and benefit costs, which we expect to reverse throughout the rest of the year.

For 2026, we continue to expect day-to-day O&M to increase 3% to 5% when compared to 2025 actuals. Next, let me give you some color on our weather-normal retail electric deliveries, excluding the iron ore mine. Compared to Q1 last year, we saw 1.3% growth this quarter led by the large commercial and industrial costs, which grew 3%. This is in line with our forecast. For the year, we still expect electric sales to grow around 1.5%. At American Transmission Company, earnings increased $0.01 compared to the first quarter of 2025 as a result of continued capital investment.

Turning to our Energy Infrastructure segment. Earnings were $0.04 higher in the first quarter of '26 compared to the same period in 2025 driven largely by higher operating income from WEC infrastructure. WEC also benefited from a full quarter of operations from the Harden 3 solar projects acquired in February 2025. Next, you'll see that earnings from the Corporate and Other segment increased $0.03 driven by favorable tax timing. In terms of common equity, we locked in about $455 million in Q1 this year. This includes $25 million issued under our employee benefit plan and $430 million via the ATM program under forward contracts that we will settle in the future. Remember, we expect to issue up to $1.1 billion of common equity this year. So through the first quarter, we have accounted for almost half of our expected equity needs for 2026.

Going forward, as a reminder, any incremental capital beyond the current plan is expected to be funded with 50% equity content. Now let me comment on guidance. As Scott mentioned earlier, we are reaffirming our 2026 earnings guidance of $5.51 to $5.61 per share, assuming normal weather for the rest of the year. For the second quarter, we're expecting a range of $0.76 to $0.82 per share. This accounts for April weather and assumes normal weather for the rest of the quarter.

With that, I'll turn it back to Scott.

Thank you, Shaw. Now as you may recall, our Board this 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 rate at the 6.5% to 7%. We're optimistic about continued growth in the region and our company's future.

Operator, we are now ready for the question-and-answer portion of the call.

[Operator Instructions] Your first question comes from the line of Shar Purreza with Wells Fargo.

It's actually Alex on for Shar. Janis good, Alex. So just obviously, you're seeing a lot of growth on the data center front. You have Microsoft and Vantage projects and you kind of highlighted some upsides there. But can you maybe talk a little bit more to the extent that you can? Are you seeing additional interest from other hyperscaler customers in the state -- and just to add on, there's been obviously a lot of local opposition in some parts of the state. So can you just talk about your strategy and overall confidence level around attracting new customers despite some of the headlines we've seen.

Sure, sure. Let me kind of phrase this and look at it in total. When you think about -- we've got Microsoft and the Southeastern Wisconsin region and then North and Advantage site -- when you look at that, we have about 3.9 gigawatts in our 5-year plan. And if you just look at the acreage and do some back of the envelope math, you could see how these sites which have already been approved and have the ability to put data centers on could add another 4 to 5 gigawatts of capacity on those sites alone. So we see tremendous growth on already the available sites that we have in the works and construction is starting on a good portion of them.

And then you think of the other data centers, we are in discussions with a few others. I think very optimistic now that we have the final VLC tariff, and we'll see that final order come out in the next few weeks, a little more clarity. I expect to have more information on our third quarter call and anticipate we hopefully we'll have another announcement debate on that third quarter call.

Got it. That's very helpful. I guess just switching gears here. Just want to touch on Point Beach. You've obviously mentioned in discussions there. Just if you were to go ahead with building sort of incremental generation, can you maybe provide some sort of sensitivity around the CapEx opportunity there and just maybe any sense on possible timing.

Sure. And we're going through the planning process right now, we always go through the summer and go through our generation planning process and working with our very large customers to factor in additional growth along with what we need on the generation side to serve our native load. And as we talked about in the last call, the Point Beach PPA, the prices are pretty high. We're going to look at affordability for our customers. At this time, we're planning that we're going to have to replace that, and we'll put that in our 5-year plan this fall, most likely replace it with some gas, perhaps a combined cycle. -- remember that PPA ends -- the first unit end in like 2030 and the second unit ends in 2033.

So we have some time, but it'll start working into our planning cycle. As just a lot it's about $2 billion to $2.5 billion, and this is over those 2 units, it's about 500 for each. So that's about a gigawatt. But when we look at our planning assumptions, it's about $2 million to $2.5 million.

Picking up some of the commentary on the VLC tariffs. I think the revisions from the commission saw the threshold move down to a lower level, maybe 100 megawatts if I'm recalling correctly. Curious if that captures more load than you were expecting to run through the VLC tariff and any ramifications on your plan as a result of that? And then it sounds like sort of customer interest overall, now that you've gotten to the other side of a VLC outcome, is sort of firming up. But again, just curious more broadly in the context of that load side revision, how you're thinking about the tariff impacting economic development going forward?

Sure. And great question. And when you think about it, we proposed 500 megawatts, which is smaller than the 2 data centers that we have going right now. the load going down to the 100 megawatts, we don't have any current customers that fall into that range. So it doesn't affect any of our current customers. And we'll see as we talk to a future load -- is there something in that 200 megawatt? How does that deal? And how does it look at the economics with our tariff and we'll address that if we see something at the time. But right now, moving to 100 does not affect our economic development in either direction, maybe a little positive that it actually opened up the door for some smaller data centers and we can show that they're paying their full share. So not concerned at all about going to 100 megawatt.

Perfect. And then turning to Illinois, it sounds like, again, more progress that you've been able to put up in the state, although still more to come on the rate case as well. Could you speak a little bit more to the data points that are sort of emerging along the way here? How you see conversations trending overall in the state and kind of what you have an eye to over the balance of the year to get those rate orders?

Sure. So a couple of things. We just filed the settlement, which I think has taken off 12 cases related to uncollectibles in the previous QIP rider. So an extremely long period. We filed that just the other day that had the support of the AG the ICC staff and the Citizens Utility Board was involved in that signing. So it's great to see that sign and that in front of the commission now. We have our rate case in front of the commission. Of course, 1 of the key elements there is going to be the pipe retirement plan and as we're ramping that up. That we expect to see the first testimony from our the ICC staff and other interveners I think by the end of the day to day, we'll see where that comes out.

And then we're just executing on our plan, starting to ramp up the pipe replacement program that we've talked about. We're ramping it up this year. It will get about 200 -- I think we're about $200 million this year, and it will ramp up in 2027 and 2028. And we're just going to execute on the program. We're following along all the direction that we received in the order from the pipe retirement program on having workshops in working through those workshops and really have a lot of transparency on our program. So we're hitting the ground running feel really good about the progress we're having in our communication with our customers and keeping the ICC informed along with the safety monitor. So those are kind of the 3 key elements, and that will evolve during the summer here as we start seeing the testimony and more results of the settlement with Illinois.

Your next question comes from the line of Nick Campanella with Barclays.

Hey, good afternoon, and hope everyone is doing well. Can you hear me? Nick. Great. So I just wanted to ask on the -- you talked about the acreage that you have that is kind of fully permitted and ready to go. And I think you said like up to 4 gigawatt potential number. And maybe just acknowledging the fact that the hyperscaler CapEx is continuing to kind of increase here -- and if customers want to kind of maximize that, can you just kind of talk about your ability to execute on that from a supply chain and equipment standpoint? And then just how do we kind of think about how much could actually fall into the plan in the third quarter just based on the conversations you're having? And now that the DLC is finalized and it seems that everyone is happy with that. Maybe you could just expand on that a little bit more.

Sure, sure. So as we kind of peel back that question, and we've been working with these very large customers, as you know, behind the scenes for years and working with our developer and our generation and planning team, and we feel very confident we can deliver all that needed to supply the load growth as we ramp this up. It's a little early before I talk about what gave you on that third quarter call, but feel for sure, there'll be increment add it in our third quarter. It's just -- we're still working with them on this individual amounts and a little more to come on third quarter, but feel good about the update we'll have there.

Great. And then just maybe just 1 more thing, just keeping with the megawatts here on Point Beach. Is it the base idea that you're going to bring in the full replacement? Or could you just be kind of targeting half of that to start? And then on the next plan, look at the next part of the PPA that rolls off, I think, in the mid-2030 time frame?

Yes, that's a great question. And when you think about that first 1 is -- so for sure, that first 1 will be in this plan and then probably some dollars as it relates to long lead time equipment for that 2033. So you may start to see a little bit tweak in on that last 500 in this plan.

Great. Great. And then maybe if I could just 1 more. The GRC just given all that's kind of in front of you and you had a successful VLC with this commission, we're still very early innings of this case, but is this something that you expect to go fully litigated? Or do you think there could be an opportunity to settle depending on where the starting points of testimony are?

Sure. As you look at it, and remember, we filed the case at the beginning of April. I think we have a real -- a modest increase out there on our base rates in the electric side of 4.7% and 4.5% in each of the -- in '27 and '28. -- we'll we don't even have a procedural schedule out, but I think we'll get through the staff audit sometime this summer. And when we see that audit and probably the first run to testimony, that will be an opportunity for us to take a step and see if there's an opportunity to settle you noticed last year, this commission did sell cases with a couple other utilities in the state.

So optimistic that we're going to have a reasonable audit and then we can make progress later in the year, but a little early before we can make any decisions on that.

Your next question comes from the line of Julian Damon Smith with Jefferies.

Appreciate the time. Nicely done. Again, I got to hand it to you on the ICC backdrop here with the QIP resolution.

Excellent. Thanks, Julien.

Absolutely. Just a couple of things if I can come back to the VLC tariff with that approved here, at least verbally, -- are you having other discussions with other days developers? I know this was asked a little bit earlier in a different permutation, but -- how is this enabling or catalyzing developments? And can you speak to the expansion opportunity a little bit more specifically again, just if I can link this to another subject, how do you think about Point Beach enabling data centers as well. I just want to ask that explicitly here, if I can.

Sure, sure. Well, the VLC and when we see the final order, I think that's just going to be a lot more transparency for everyone. And we wanted to make sure we filed as a tariff to make sure it's transparent not only for other VLC customers, but also for the public and the community to see that they're paying their full share. So very happy about that. It's good. I think all the people we've been talking to are well aware of what the VLC filing was and what the tariff and the discussion from the commission. So a lot of people are watching that decision to see what was going on in that.

As you think about Point Beach, there's -- that's in 2030, 2033, we'll see what opportunities are there. But potentially, right now, we're looking at it, how do we serve our native load and actually provide a capital investment and probably some bill headroom as you think about affordability in that 2030 and '33 time frame.

Yes. Yes, absolutely. I hear you here. And then just to ask it explicitly, I know it's brought up a little bit earlier. But given this rate case, I mean, it seems fairly benign in many respects, my words. How do you think about settlement and any specific items that might stand out here in the filing, right? I mean mid-single-digit increase, it seems fairly down the fairway.

It's too early. We want to see what the final audit is. But when you think about our rate case filing, it's really balanced. There are some a little bit of new generation. There's a little bit of transmission. There's a little bit of reliability that we put in on the distribution system, some general inflation, some truing up for sales. So it's sprinkled throughout -- so it's not like we are having any 1 big initiative here. And remember, when we filed our case now, we laid out that those very large customers are paying a significant amount of our capital additions that we're putting into our plan. So you're not seeing it come through to these individual non-VOC customers. It's all being paid for by the large customers. But too early to talk about.

Your next question comes from the line of Andrew Weisel with Scotiabank. Your next question comes from the line of Sophie Karp with KeyBanc.

I wanted to ask you guys, yes, not a bit this horse to that, but I wanted to ask about Point Beach, and it sounds like since you're thinking about replacing that power that you're contemplate a scenario where it won't be available to serve our retail customers. And I just kind of -- can you give us some reminder what other options the owners of this asset would even have on the Wisconsin or which, and I don't think they're able to serve retail directly themselves. So what kind of an outcome is actually contemplated here with respect to point Beach?

I can't speak with -- for NextEra. So you'd have to ask them that question. They could always enter into a financial transaction or something like that. But you'll have to run that by NextEra on to what their thoughts are.

All right. And then I guess, on the VLC, what kind of feedback, if any, have you heard so far from the existing hyperscale customers and the potential others, just given the modifications that were made at the commission.

Yes. And we've been talking -- and you could kind of see it through the testing only where those potential adjustments will be made. So the initial indication is -- there's nothing major right now. But of course, we all want to see the written order to see what's really in that final written order, but nothing surprising at this time.

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

Okay, terrific. I don't know what happened there, but thanks for giving it a second track. Okay. So I first want to ask another -- the Port Washington situation. My question is, to what degree do you see the referendum on data centers? Is there either challenging the current 1.3 gigawatt build-out? Do you see that at all being at risk? Or do you think it might make it harder for the customers to expand to the full 3.5 gigawatts or could this potentially defer other customers from looking into opportunities in or around that area or across Wisconsin more broadly?

Well, I think you're referring to the referendum related to the TIF district. And when you look at that, it should not affect any of our any of that site up to the 3.5 gigawatts based on all of our understanding, it potentially could affect not just data centers, but any other just economic development in an area that would need a TIF district for that particular county. So more of a challenge just in general for economic development, but it should not affect any of the data center growth we had outlined in our script.

Okay. So not only the $1.3 billion, but the full $3.5 million you think would be safe. Okay, great. And then do you think it's isolated to that specific area? Do you think other -- from your conversation with customers, -- do you think it's isolated? Or do you think it's more of a broad issue in your conversations?

We haven't seen any other issues out there as it relates to like a referendum. We have seen a couple of areas across the state, just put like a 1-year moratorium on reviewing data centers just because I think everyone wants to understand a little bit more of the facts in the data centers to get the facts out, but we have -- I have not seen any other type of referendum like that.

Great. Very helpful. And just a final 1 maybe for Shaw. The weather-adjusted natural gas deliveries were down over 2 point--or down 2.1% year-on-year. I know the weather was extremely mild that always messes with the normalization models. But volumes were also down 0.5% for the full year in -- what are you seeing in terms of trends or patterns? Is there anything worth calling out? Or was the 1Q maybe just a blip with the models?

Yes, Andrew, we looked at that. I think we expected some usage of decline in the forecast. So what played out was a little worse than what we expected by not much. But we filed in the test year '27, '28, the expected decline in the filing. So hopefully, we catch it up for the future. And there's some details about in which metropolitan area, you see a little more decline. So as people continue to come back to the office or reduce their residential usage, so you may see that naturally happen in the metropolitan area. So nothing surprising in the first quarter.

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

Good afternoon. Scott, maybe I'll just try in Illinois, and this might be unfair because we're about to get the testimony, but is there any scenario where you think you can settle in that jurisdiction? And maybe just longer term, like how you think about the future of rate case cadence in that state?

Sure. And you're right, we haven't even seen the testimony yet. So pretty hard to handicap anything there. Historically, Illinois has been a hard place to actually settle when you look across other jurisdictions. So I don't know all the opportunities there, but we got to see the testimony, but very happy as you could see, we actually got a settlement on those old historical riders. So that's a step in the right direction.

And your second question was...

Just like the future rate case like is this going to be like every year, every other year? How do you think about that?

Yes. I anticipate, especially as we ramp up this rider, and we start getting increases in 27, 28 and then an ongoing. I expect that it'll be more of an annual rate case kind of cadence as you think of Illinois specifically as it relates to putting in this pipe retirement program.

Okay. Very helpful. And then we saw -- I think you mentioned pushing out the retirement dates on some of your coal units. Just as you think about your remaining coal fleet holistically. What are kind of some of the options like in terms of conversions, further push outs? How you're thinking about some of those many units holistically?

Sure, sure. And we're going to look at conversion of those to natural gas. For the most part, as you think about the EPA rules, we need to be in compliance with the current EPA rules. We'll see will those EPA rules go -- at this time, the reason we pushed out 7 and 8, we just wanted to make sure we get other dispatch a generation online and those parasites and the new CTs will start to come online at the end of '27. So we wanted to make sure we had -- as we retire old dispatches capacity, we had new capacity online. We also reviewed this to make sure there was no significant capital investments we had to make to keep these units running another year.

And basically, they're only running on days that we really need it. So we're really running on a limited basis but we just want to make sure we have that capacity around to make sure we had that reliability. But as you look at the other units, we're still looking at converting to natural gas, and we'll follow the EPA rules as they evolve.

Our next question comes from the line of Carly Davenport with Goldman Sachs.

Just 1 for me. Just wanted to check in kind of on -- I know you've talked about the construction activity at the Vantage site. -- has sort of started. Just any color you could provide on how execution is kind of tracking there relative to the time line, I think that the company has laid out? And perhaps just if you do see any slippage there, maybe can you refresh us kind of on the protections in place on if timing slips there related to the investments that WEC is making?

And we don't see any slippage in we're in contact with the site. We have like a beating every other week with them on the site. We don't see any slippage there. And the other significant item is approval of a transmission line to serve that site, which there is data request and information going around with the commission right now. We expect to get approval for that in the fall of this year. So we don't think there's any issues in the slippage of that in service at this time. So things are going well there.

If you think about in service, some of the fixes and fine-tuning that happened in the VLC tariff as it relates to transmission, will be more on a nominated basis, which will make sure that everyone pays their fair share and full cost as we build this cost and put that in. So it's not getting subsidized by anyone else. And it should not be a slippage also for any of our generation plan. So we feel good about the tariff and the protection plus but more importantly, we feel really good about the execution of that site and getting it online.

Your final question comes from the line of Paul Fremont with Ladenburg.

When I look at the $2 billion to $2.5 billion for 1 gigawatt in terms of replacement capacity, should I assume that what you're looking at is a combination of renewables and gas Point Beach.

Yes. I think you got to kind of think about all of the above as we think -- and we'll look at our entire generation plan, it may be a combination of renewables and TT, but we also may be looking at a combined cycle as we look at our plan to continue to get more energy since it also provides a lot of energy. So we're going through that process. We look at it every year, not just as it relates to like the Point Beach, but also adding additional load on for our very large customers and the other economic development in the region. So we're going through that process right now and what makes sense and cost-effective value for our customers.

Great. And then in terms of the nonregulated renewables, I imagine you're getting to a point where you're reaching sort of the end of the on some of the units. For those units, what type of uplift, if any, are you seeing in recontracting those assets? And does that sort of -- should we assume that, that offsets the BTC? Or how should we think about that?

Great question. So 2 things. One is we're going through the process right now. And in fact, last year, we had safe harbored a lot of the materials to make sure those early PTCs that fall off. We have safe harbor materials so we could actually repower them to get to another 10 years of -- so we're evaluating that right now, and we'll talk about that on our third quarter conference call, but an opportunity to get another 10 years of PTCs. And then as those contracts come up, the value of renewable resources today and capacity across the country, it's more valuable than when we initially contracted those.

So you also see some upside as those contracts come due. Now they just remind you, they don't all come due at the same time as the PTC. So there's a different timing there. But I think there's value on both sides of it.

Great. And then I guess, last question that I have is, is it was the Microsoft Council plant, was that to be located near where the Oak Creek plant is located? Or was that in a different vicinity?

Well, there was a potential option to purchase some land by the Oak Creek plant for a potential Microsoft expansion that is no longer moving forward but I mean, in total, they still have about 2,200 acres and that was by the Oak Creek site.

So I guess my question, has there been any reconsideration by that community of potential benefits for having a data center located in their community?

I haven't talked specifically with them, but I think every community is looking at potential for data centers or the discussion of data centers because there's a lot of discussion in the region. And I think a lot of these communities are looking at like Port Washington and Mt Pleasant look at the value of property taxes and the other value these hyperscalers bring to the community, especially when you talk about affordability and people talking about property taxes. So I think there's opportunities there. We haven't had direct discussions with them, but there's potential there. I think it's a great site. It requires very little transmission and is right by our power plant. So it's a great power supply with very little transmission, an ideal spot for something like that.

All right. That concludes our conference call for today. Thank you for participating. If you have any more questions, please feel free to contact Beth Straka at (414) 221-4639. Thanks, everyone.

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

Good afternoon, and welcome to WEC Energy Group's Conference Call for Fourth Quarter and Year-end 2025 Results. This call is being recorded for rebroadcast.

[Operator Instructions]

In conjunction with this call, a package of detailed financial information is posted at wecenergygroup.com. A replay will be available approximately 2 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. 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 decisions, referenced earnings per share will be based on diluted earnings per share unless otherwise noted. This call also will include non-GAAP financial information. The company has provided reconciliations to the most directly comparable GAAP measures in the materials posted on its website for this conference call.

And now it's my pleasure to introduce Scott Lauber, President and Chief Executive Officer of WEC Energy Group.

Good afternoon, everyone, and thank you for joining us today as we review our results for the calendar year 2025. Here with me are Xia Liu, our Chief Financial Officer; and Beth Straka, Senior Vice President, Corporate Communications and Investor Relations.

As you saw from our news release this morning, we reported full year 2025 adjusted earnings of $5.27 a share. This excludes a onetime charge of $0.46 per share related to a proposed settlement in Illinois. We expect the settlement will fully resolve all open reconciliation dockets on Rider QIP spending from 2017 to the rider sunset in 2023. It will also solve all open reconciliations for the uncollectible rider for the period 2019 through 2023.

I'll provide more details on this in a few minutes. Across the company, I'm pleased to report that we delivered another year of solid results in virtually every meaningful measure, from customer satisfaction to financial performance to steady execution of our capital plan.

In just a few minutes, Xia will provide more details on our financial results and outlook. But first, let me highlight the strong economic growth in our region that's driving our robust capital plan. There are many exciting announcements and developments in our state. Microsoft is making good progress on its large data center complex with more than 2,000 acres purchased to date.

We have energy flowing to the site and the first phase of the project is expected to go online this year. Just last week, Microsoft received approval from local officials to expand the campus further with 15 additional data center buildings. Based on our updating plan, we are adding 500 megawatts of customer demand to the forecast. This is resulting in an estimated $1 billion of additional incremental capital to our capital plan. This brings our forecasted demand in the I-94 corridor up to 2.6 gigawatts through 2030.

Microsoft continues to be a great partner to work with. In a January statement, referred to as its community first AI infrastructure plan, Microsoft pledged to be a good neighbor or it's building data centers. This includes paying its share for electricity, minimize water use, creating jobs, adding to the tax base and investing in the community. And to the north, we have another great partner. You'll recall that Vantage data centers is signed on to develop facilities for Oracle and open AI on approximately 1,900 acres.

In December, Vantage broke ground on the initial phase of the project, which is planned for 670 acres. Vantage has stated that it expects to invest $15 billion to complete this phase in 2028. The first facility could come online late next year. We currently have 1.3 gigawatts of demand for this vantage site in our forecast over the next 5 years.

And looking to the future, this site has the potential to reach 3.5 gigawatts of demand over time. We are seeing an increase of local investments by other large businesses as well. For example, Southern Milwaukee, Foxconn has announced new plans to renovate and expand its Racine County campus. -- with a focus on manufacturing data center components.

Foxconn expects to invest more than $0.5 billion in this expansion and add more than 1,300 jobs at the site. In addition, Rockwell Automation planned in November to build a new manufacturing site in Southeastern Wisconsin. The facility is expected to span more than 1 million square feet and Rockwell announced this site could potentially become the company's largest manufacturing campus globally.

And U-Line, the leading North American distributor of shipping, industrial and packaging materials completed yet another large land purchase to further expand its business operations in Southeast Wisconsin. In summary, with the expansion of Microsoft, we are now projecting 2.6 gigawatts of growth in the I-94 corridor and 1.3 gigawatts to the north of Milwaukee. For a total of 3.9 gigawatts of electric demand growth in our 5-year plan.

And to meet our region's growing energy needs, we are focused on executing our updated $37.5 billion capital plan over the next 5 years. We are projecting long-term earnings per share growth of 7% to 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 to accelerate to the upper half of the range starting in 2028 as we put more projects into service.

Our electric utilities need to maintain a reliable, balanced generation mix between 2026 and 2030, we expect to invest a total of $7.4 billion in modern, efficient natural gas generation and LNG storage. This includes combustion turbines, race units and upgrades to existing facilities.

We have a strong labor force lined up to bring our projects online, at our Oak Creek site construction and our new 5-unit 1,100-megawatt combustion turbine project is well underway. We also broke ground on a large 2 Bcf LNG facility and our 7-unit Paris rice generation site in the fourth quarter.

In renewables over the next 5 years, we expect to invest $12.6 billion to add 6,500 megawatts to our generation fleet. We currently have 7 renewable generation projects and 2 battery storage facilities under construction, including 2 solar facilities expected to come online later this year.

Overall, we have a lot of confidence in our ability to execute on our capital plan and continue our growth trajectory.

Turning to regulatory matters. I have a few updates on current and upcoming rate reviews. First, let's update you on our Wisconsin and our proposed very large customer tariffs. As we discussed before, this tariff is designed to meet the needs of our very large load customers while protecting all of our other customers and investors.

The proposed tariff remains at the Public Service Commission for review. Staff and intervener testimony was submitted in January, a commission order is expected in early May for customers to take service under the tariff in June. In April, we plan to file rate reviews in Wisconsin for forward-looking test years 2027 and 2028. We are currently pulling that filing together.

And in Illinois, as I mentioned earlier, Peoples Gas and North Shore Gas reach agreements on the terms of a proposed settlement with the Illinois Attorney General that, if approved by the Illinois Commerce Commission would resolve all issues related to 12 pending cases that these cases represent approximately $2.3 billion of open dockets and include the Rider QIP reconciliation from 2017 to 2023 in the uncollectible rider cases from 2019 through 2023.

The proposed settlement terms calls for $130 million rate base reduction, which would be prospective with new rates in the pending people's gas case. In addition, customers would receive $125 million over 3 years. This settlement is subject to commission approval, which we anticipate requesting in the coming weeks.

In early January, we filed a rate request in Illinois for test year 2027. A key driver of this request is to support the pipe retirement program in Chicago. As you'll recall, the company ordered all cast iron and Ductile Iron Pipe under 36 inches in diameter to be retired by the end of 2034. We expect the commission's review of our filing to last 11 months with new rates starting January 1, 2027. Of course, we'll keep you updated on any future developments.

Next up, Xia provide you with more details on our financials.

Thanks, Scott. Turning now to earnings.

Our 2025 adjusted earnings were $5.27 per share, an increase of $0.39 per share over 2024 adjusted earnings. Now let's take a closer look at our year-over-year variances. Our earnings package includes a comparison of adjusted full year results on Page 17.

I'll walk through the significant drivers. Starting with our utility operations, adjusted earnings were $0.63 higher in 2025 compared to 2024. Weather positively impacted utility earnings by approximately $0.35 relative to last year. Compared to normal conditions, we estimate that weather had a $0.10 favorable impact in 2025 compared to a $0.25 unfavorable impact in 2024.

Rate-based growth contributed $0.74 more to earnings. This was largely driven by the Wisconsin rate review outcomes that were effective on January 1, 2025. It also includes $0.12 of incremental AFUDC equity from projects under construction. These positive drivers were partially offset by $0.46 from higher depreciation and amortization expense, day-to-day O&M as well as tax and other items.

Now before I discuss earnings comparisons at the other segments, let me briefly comment on our weather-normal electric sales. For 2025, retail electric deliveries in Wisconsin, excluding the iron ore mine, increased 1.1% year-over-year. We were slightly ahead of our forecast in every segment. For 2026, we're projecting weather-normal retail electric sales in Wisconsin to grow 1.6% from 2025 levels.

I'll note that we expect the large Commercial and Industrial segment, to grow 5.8% fueled by our forecasted data center load. Now back to our earnings comparison. Regarding our investment in American Transmission Company, earnings increased $0.02 compared to 2024, driven by a $0.06 increase from continued capital investment to meet demand growth and maintain reliability partially offset by a onetime gain we recognized in 2024.

And at our Energy Infrastructure segment, earnings increased $0.10 in 2025 from higher production tax credits associated with the acquisition of additional solar generation projects in late 2024 and early 2025.

Finally, you'll see a $0.24 variance at our Corporate and Other segment. This was driven by higher interest expense resulting from higher debt balances, gains recorded in 2024 from early debt retirement and a few other items.

In terms of common equity, consistent with our plan, we issued approximately $800 million in 2025. Overall, we grew our EPS by $0.39 per share or 8% year-over-year on an adjusted basis.

Next, let's look at our earnings guidance. For the first quarter this year, we project to earn in the range of $2.27 per share to $2.37 per share. This forecast takes into account January weather and assumes normal weather for the rest of the quarter. And for the full year 2026, we're reaffirming our annual guidance of $5.51 to $5.61 per share. Of course, this assumes normal weather for the rest of the year.

Finally, some comments on financing. In 2026, we expect debt funding to be in the range of $4 billion to $5 billion. This includes refinancing for $1.4 billion of senior notes that mature this year. And consistent with previous disclosures, we plan to issue between $900 million and $1.1 billion of common equity this year via our ATM program as well as the dividend reinvestment and employee benefit plans.

As we have mentioned before, we expect any incremental capital will be funded with 50% equity content. This applies to the incremental $1 billion of investment that Scott mentioned a few minutes ago. We don't expect it to impact our funding plans for the near term as the spending is projected to be in 2029 and beyond.

With that, I'll turn it back to Scott.

Thank you, Xia. As you may have seen, our Board at its January meeting, increased the dividend by 6.7% to an annualized $3.81 per share. This marked the 23rd consecutive year that our shareholders will be rewarded with higher dividends. The increase is consistent with our policy of paying out 65% to 70% of our earnings and dividends.

Before I open up for Q&A, I want to summarize some of the highlights of the call. We at the top end of the 2025 earnings guidance on an adjusted basis. We reached an agreement with the Illinois Attorney General and the terms of a proposed settlement that would allow us to put 12 historical reconciliation dockets behind us, so we can now focus on the future.

Economic growth is driving other 500 megawatts of forecasted demand for a total of 3.9 gigawatt increase in our 5-year plan. This growth is adding $1 billion to our 5-year capital plan, which is now at $37.5 billion. All of these developments give us even more confidence in our 7% to 8% long-term EPS compound annual growth rate with acceleration to the upper half of the range starting in 2028.

Overall, we're on track and focused on providing value for our customers and our stockholders.

Operator, we are now ready for the question-and-answer portion of the call.

Now we will take your questions.

[Operator Instructions]

Your first question comes from the line of Julien Dumoulin-Smith with Jefferies.

Nicely done. I got to say a bevy of updates here today. No doubt, nonetheless. I wanted to follow up on the commentary you guys started with at the top of the call on Microsoft here. Can you elaborate a little bit more about the 500 megawatts that you're putting in here now? I mean, to what extent is there even more beyond that, right? Every time you give us some, we're going to ask about the next piece.

But also as it pertains to the CapEx, right, you talk about $1 billion of additional CapEx to what extent does that 500 megawatts or the $1 billion stretch beyond technically the 5-year period as well? And what do you know about the further ramp there, too?

Sure, Julien. Thanks for the question. And when you look at it, Microsoft has been working on that first 1,364 acres. And now -- and we've always talked -- the growth that we have has been started in that mean spot. And now they're starting to add to the north of Highway 11 locally. It's a Project North. So that's where we added the $500 million. I think as you -- as we continue and when you listen to the Microsoft conference call, someone asked about the Wisconsin development, and they talked about that as a multiyear delivery. So I think there's going to be a lot to come as we start thinking about 2031 in the future also and remember, there's still more land that they are looking to purchase and haven't developed yet.

So I think there's a lot of opportunities here.

Do you want to expand on that? I mean it seems that the other parcel here might even be bigger than the first one. Can you just elaborate a little bit about what we understand in sort of the multistage. I get maybe at times folks are shy to talk about the full extent of the opportunity. But still, obviously, Phase 1 has been so large, 50 megawatts. Do we have any other further crews about just how big and how fast this could go? Sorry to press you so much on it, but it stabilizes.

Yes. I understand completely, and we're very excited about the development here, what they're doing here in Wisconsin. I do not want to get out ahead of Microsoft and their plans -- all I can really say is that starting to do land at about 570 acres, and that's about where we put that 500 megawatts. There's more land. That's just the start of that development.

When you think about the amount of megawatts people are now putting on land. And then I think there's at least another couple of hundred or so that they haven't developed, and they're looking for more land as we've talked to the paper. They have been very transparent here in Southeast Wisconsin on their plan.

So more to come, but and I don't want to get a croft by any means. So just very positive as we continue to see their development growth.

Awesome. And then just -- I'll bring up another subject grow quickly. On Point Beach, how are the negotiations progressing? And at what point do you need to make a decision about the 500 megawatts there for replacement power or what have you for the 2030 piece?

Yes. It's a great question. And when we look at it, those contracts and -- and then the second one is in 2033, I think, at the beginning of 2033. So we have time. We're still communications with NextEra on the plant. We're going to factor all that in and what we need, which I only can see is potentially upside in our plan in our fall update.

So we're going through our planning process like we do every summer, looking at how did the winter, this cold spell, how did the system perform, what do we look at in the future for additional growth adding another year on to our sales forecast and then, of course, factoring in this beach PPA, if we need to replace it with some other generation, I see that as potential upside in the plan, but we'll factor that into the fall.

Awesome. Nicely done, guys. We'll talk to you soon.

Your next question comes from the line of Shahriar Pourreza with Wells Fargo.

It's actually Alex on for Shahriar.

Absolutely, Alex.

So obviously, you're seeing a lot of growth on the data center front. -- you've highlighted Microsoft and Vantage projects. But can you maybe talk a little bit more, I mean to the extent that you can, are you seeing additional interest from other hyperscaler customers?

And if I could just add on, there's been local opposition around data centers in other parts of the state. But can you just talk about your strategy and overall confidence level around attracting customers despite some of these headwinds we've seen recently?

Sure. Sure. And you have seen a little noise around the state. I think you're seeing a couple of things now, and I'm very confident that other people are looking at opportunities in Wisconsin, and we have a lot of discussions -- and even Microsoft has talked about even being more transparent. So I think everyone understands they need to be more transparent, working more with the communities proactive than they were 2 years ago.

So I think that's all positive developments here. I think also our very large customer tariff that protects all our other customers the hyperscalers understand it and like the fact that they can really point to something very transparent and protecting other customers. So we don't have a tendency to talk about a pipeline because we want to just talk about what's actually announced and developed, but there's other opportunities, and we're in multiple discussions.

Got it. That's helpful. And then just sort of looking at the 5-year outlook you have out there, so 26%, 27%, you're at that 6.5% to 7% growth. Obviously, you're seeing a lot of growth -- is this just timing as to when data centers start coming online. Just want to get us what could be holding you back from growing at that 7% to 8% in the first half of the plan. Is there anything you see out there that potentially move the needle?

Yes, that's a great question. And we're 6.5% to 7% this year and were consistent. We talked about 7 to 8 in '27 and then in the 8% range after that. it really just mirrors our capital plan. And everyone is doing a great job getting projects identified and getting things staged. It just takes a while for all those capital to get ramped up. But we're right on time. And in fact, we've even ramped up maybe even a little faster than we anticipated here in a couple of projects, which is good to see, too early to do anything, move anything but really positive and it really just bears our capital plan but adding this extra $1 billion, which is, as Xia said, probably in that 2930 time frame, just really is going to strengthen the long-term outlook for our capital plan.

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

Good to get all the updates. Just wanted to ask on regulatory. Just now that we kind of have all the testimonies out there on the VLC, how do you feel about the potential to kind of settle this if if that's important at all and if the window is open to do so? And then I'm also just wondering the timing on the GRC filing, if that's still on track from midway through this year.

Sure. Great question. And the very large customer tariff, I see that going the entire period that the commission makes a decision. And one of the items that we want to make sure we have, when everyone talks about affordability and data center causing rate increases, this tariff is one of the best or the best out there, we think, to make sure the data centers pay their fair share. We want true transparency, and we want to go through the entire audit process and get all those questions out there.

So remember, we filed it in conjunction and Microsoft and Vantage have supported the tariff. And now we're just going through a very thorough vetting process. And I don't have any concerns going through the entire process. But once again, the goal of this is to make sure the customers pay their fair share and to make sure everyone understands how it's working. So we have true transparency on our largest customers.

And then on the rate case filing, we're on track, filing in April. We're still -- we're in the process of pulling the numbers together, but on track to get that filing out there.

Great. And then just maybe really quick on the financing. Just I know that there was a comment around the $1 billion ATM for '26. Just any thoughts on further derisking the plan past that? Or could there be any downside to this number if you guys were to lean on some additional hybrids that there is capacity.

I'll let Xia answer that one.

Yes. Absolutely. We are all over that. So we have a very limited hybrid financing so far. We had a $600 million issuance last year. So we have a significant capacity for hybrids. But this $900 million to $1.1 billion I talked about is for common equity financing. And as I said, we're relying on the ATM. So we fully expect to get that executed throughout the year.

Your next question comes from the line of Carly Davenport with Goldman Sachs.

Maybe to start, just can you talk a bit about how you're thinking about potential election rhetoric around affordability just in the face of filing a rate case in Wisconsin in the next couple of months? And just how that might inform your filing or the rate case process.

Sure. Sure. You're across the country, you're hearing affordability. And in Wisconsin here, as you mentioned, we do have a governor's race. It's a pretty open race. Our governor eaters is not running again. So there are several Democrats who are throwing their hat in the ring. We're really early in the process. There are several issues that they're bringing up. in addition to affordability and property taxes, they're all looking at health care, child care, education.

So there's a lot of topics that are being floated around. But we're definitely aware of affordability, and we continue to -- we're pulling our numbers together. But we are doing a lot to try to keep our rates as low as possible, having a lot of initiatives to keep costs low. And in fact, as we closed the books this last year in Wisconsin Electric, when you look at -- the performance of our plants and the fuel cost, we were able to be in a positive fuel recovery and because of the warmer weather, we got into a positive position on their sharing mechanism at Wisconsin Electric.

The results are approximately $55 million that we'll be able to give back the customer. So we think about affordability every day, but that's how we're kind of factoring stuff in.

That's great. And then the follow-up maybe just on Illinois. I know you're still early stages on the PRP. But I guess, are there any near-term milestones we should be watching there to gauge progress and also gauge the support from the commission for those investments?

Sure. great question, and you are exactly right. We are in the early stages this year. I think we're looking at retiring approximately 35 miles, and that's ramping up every year until we get to what we think is a run rate in 2028. This settlement is a big step forward as we stop to looking backwards and now we're looking forward. The early indications will be -- I mean, we're working on the projects and soon starts to kick off with field work. We've done a little bit last year laying out the plans but really, in this test year, we'll have forward-looking capital plans that the commission will also have a look at.

And we're working very closely now that the safety monitor is on is on staff and has been hired in laying out our plans of what we're doing and how we're reporting to the safety monitor. So I think -- the indication is going to be probably the first 1 is what happens in our rate case filing that we just filed, which is really forward-looking for 2027 and how we prioritize the projects.

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

I'll just pick up on the last I'll just pick up on the last line of questions, sticking with Illinois. Any chance you can settle these rate cases? And then also as it relates to the riders you've just settled on? I mean it seems like the bill credits and rate base reduction creates a little bit of a headwind. So just how you're thinking about offsetting that?

Sure, sure. And it's really early to even think about settlements on the Illinois case yet. So we'll see where we get as we get through the audit and the staff audit and intervenors. So a little bit too early on all of that. When you think about the settlement we just had in Illinois, you look I really look at it at the overall picture, that's why we reaffirmed our long-term growth rate of that 7% to 8% with percent growth with the upper end of the range in 2028 and beyond.

I mean, we factored all that in as we looked at that. And as you heard on the call, we just add another $1 billion of growth and remember, that growth is really driven by the hyperscalers, which are paying their share for the electricity cost. So it doesn't have a burden on our other customers' rates. So we were able to offset it very quickly here, but a good spot to move forward in Illinois.

Okay. Great. And then maybe I'll just go there next in terms of the -- what the Microsoft ramp could do. They're paying their fair share. Is it possible they actually can lower rates for customers? And maybe any sense of size you could give us on upcoming Wisconsin rate case?

Yes, sure. I mean you think about it, they're paying their fair share, which includes corporate allocations and other common costs. which eventually and I think you're going to see more of this as that build gets bigger. Of course, the more corporate allocations you have, the less burden it is on all other customers. So it's hard to really quantify that until we start seeing actual real stuff going to service.

Remember, their first site is just starting to go into service. And a lot of that capital spending is in the later part of the plan. But long term, it's incrementally good for customers.

Your next question comes from the line of Stephen DAmbrisi with RBC Capital Markets.

I just had a quick one. Congratulations on increasing the Microsoft load -- but I really wanted to follow on to Julian's Point Beach question and just quickly understand to the extent you do move forward with replacing the Point Beach PPA with generation. Do you have interconnect generation interconnect agreements or slots in the MISO queue or can you participate in the ARRIS process? I think there's a rolling window where you could cycle in? And I just wasn't sure if you already had any slots or we're looking to potentially add some or if that's in place that we could watch to see potential activity on your end?

Yes, that's a good question. And we work alongside with a very good developer in Energy as we develop our plans to make sure we have renewables, batteries, natural gas generation. And I feel very confident in talking to our generation team not to give you too many details here that we can replace that power as we look at 2030 and '33.

We're going to look, of course, at what's economic for our customers. So we're going to really balance the economics of our customers and what makes sense as we look at Point Beach and we look at capital investments, what's overall best for our customers.

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

First, just a quick one. The GAAP charge you took related to Illinois, is there a cash component to that? Or might there be one going forward?

Sure. There's 2 components, and the total is that $0.46 as you saw in that adjustment. The one component is $130 million rate base components that is forward-looking in perspective, it will be factored in the final rate order. That's what we're anticipating will happen. And then there's $125 million of cash credits that go back to customers over the next 3 years, it's approximately $50 million in that first year and then the last 2 years has split evenly for the remaining 75%.

So that's -- it will be a little cash, it wil be a little pressure, of course, on our FFO to debt metric, but good to get this -- these old cases behind us.

Got it. I'm hoping you can clarify a little the interplay between the VLC tariff in the general rate case. I've been getting enough questions. I think there's some confusion. Firstly, can you preview when you file in April, just round numbers, what kind of rate impact should we expect for the general customers now that the data center customers are being separated?

Sure. Sure. And we're pulling those numbers together. So I really -- there's a lot of stuff that has to happen and look at it. But we do keep affordability in our mind as we pull this case together. But just to give you a little color on how we're looking at the total company will be provided on what our total expenses, capital spending and then we'll have separated just like we do for our wholesale customers, separated for these very large customers the wholesale customers and then what's remaining for our general rate case.

So it will be very -- once again, very transparent on all the assets that the very large customers are paying for in total -- so that's kind of how it's going to be broken out. And of course, how the builds and stuff are set up and all the costs will be allocated that are directly assigned or allocated to those very large customers. So we're in process of laying out how that will look right now, but that's the concept.

Okay. Fair enough. And then going one step further over the longer term, beyond '27 and '28 test period that will be addressed. How should we think about kind of this idea, if data center activity exceeds expectations, would that help the rest of the customers by lowering their rates or just leave them unimpacted. In other words, is the idea that data centers are completely independent? Or is the idea that excess data center activity should help the rest of the customers?

In general, as you look at it, and it takes several years but a lot of corporate allocations are allocated on total rate base and costs. So as you can imagine, even like we went through the acquisition of Integrys, we were able to spread common costs across a bigger footprint. -- having data centers will have significant rate base. I think in our 5-year plan, we're looking at that rate base to 14% to 15% of our earnings. So a significant part of that.

So corporate allocations will get spread across a larger rate base. And you're going to see more of that as those assets continue to build. But that's more of it's going to be in service in that '28, '29, '30 time frame.

Okay. Very good. One last -- it does, yes. One last 1 just on timing. My understanding is the VLC ruling should come pretty much around the same time as your filing for the general rate case. Is it important that the first 1 concludes before the second 1 begins? Or do you think of them as independent tracks?

No, we're pulling it together, assuming the filing that we have on the table right now and will be too independent because we'd have to file most likely, like you said, at about the same time or maybe even a little before that final decision is made on the VLCs.

Your next question comes from the line of Paul Fremont with Ladenburg.

Congratulations. First question, is the Microsoft announcement, should we think of that as the replacement for the canceled Caledonia project? Or are they still looking to do something to replace that?

So a great question. Thanks, Paul. When you look at it, they had already purchased this land before that Caledonia they're looking for additional land beyond California. So they're still looking for additional land to replace with the decided to pull out or remove away from in Caledonia.

Great. And then my next question has to do with sort of the pricing of Point Beach terminates around $120 per megawatt hour. I would think that new build would be a savings over sort of the last years of the contract pricing? So why should we not assume that you would opt for new build versus recontracting?

I think you're gluing it together, a pretty good assumption there that those prices are pretty high and if those prices, they think they should be that high, a new build when you think about affordability, probably makes sense. But we've got to run that analysis yet, and more to come, but I do think there's upside here.

Okay. And maybe last, sort of a quick follow-up to that. Are there retired coal plant sites that could be sort of used as for a new build?

No. Right now, actually, the coal plant that we retired multiple years ago that's actually an economic development use that site. So we've already developed some of those sites for other economic development. But we're looking at other locations and opportunities. Really, you got to think of it now is where is the natural gas line for those gas types and how do you get that capacity. And so more to come, but we have spots in mind.

Your last question comes from the line of Paul Patterson with Glenrock Associates.

I just have a quick few housekeeping items. Just whether the residential number looks like you're planning it going down in 2026, not by much, but just in general, is that because of energy efficiency? Or is there something else we should be thinking about?

We always try to be a little conservative in the forecast. So the base assumption is we do see good customer growth, but there's a little bit of decline in use per customers. Overall, it's a slight reduction, but we try to be conservative in the forecast.

Okay. And then just in terms of the the impairment on the Illinois thing. I see the $130 million, I think, in the income statement called out. The other $75 million, just from a geography income statement geography. Where does that show up?

Yes. The other amount goes through revenues for some accounting reasons.

Okay. Fair enough.

Yes, absolutely. All right. That concludes our conference call for today. Thank you for participating. If you have any more questions, please feel free to contact at 414-221-4639. Thank you.

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

Good afternoon, and welcome to WEC Energy Group's Conference Call for Third Quarter 2025 Results. This call is being recorded for rebroadcast. [Operator Instructions] In conjunction with this call, a package of detailed financial information is posted at wecenergygroup.com. A replay will be available approximately 2 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. In addition to the assumptions and other factors referred to in connection with the statements, factors described in WEC Energy Group 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.

This call also will include non-GAAP financial information. The company has provided reconciliations to the most directly comparable GAAP measures in the materials posted on its website for this conference call.

And now it's my pleasure to introduce Scott Lauber, President and Chief Executive Officer of WEC Energy Group. Please go ahead.

Good afternoon, everyone, and thank you for joining us today. as we review our results for the third quarter of 2025. 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 third quarter 2025 earnings of $0.83 per share. With this solid quarter, we remain on track for strong 2025 results. Our focus on executing the fundamentals of the business is creating real value for our customers and stockholders.

Today, we are reaffirming our earnings guidance for the year at a range of $5.17 to $5.27 a share. Of course, this assumes normal weather through the remainder of 2025.

In addition, I'm excited to share our new 5-year capital plan. Let's start talking by talking about the economic growth that's driving the plan. We continue to see major business building a future in our region. Overall, our electric demand is expected to grow 3.4 gigawatts between 2026 and 2030, an increase of 1.6 gigawatts compared to the prior plan.

Microsoft is making good progress on its large data center complex in Mount Pleasant, Wisconsin. The company has stated that the first phase of that project is on track to go online next year.

In addition, Microsoft also recently announced plans for a second phase in Mount Pleasant that will be similar in size and power. Its projected investment is an incremental $4 billion on top of the original $3.3 billion investment. The economic development south of Milwaukee is supporting approximately 2.1 gigawatts of our overall 3.4 gigawatt demand growth.

And as you recall, Vantage Data Centers has signed on to develop data center facilities on approximately 1,900 acres north of Milwaukee in Port Washington. Just last week, Vantage has announced that this campus named Lighthouse will be part of open AI and Oracle's partnership on the Stargate expansion. Vantage has reported that the site has the potential to reach 3.5 gigawatts of demand over time.

Right now, we're focused on providing generation for an estimated 1.3 gigawatts of demand at the site in the next 5 years. The city of Port Washington approved Vantage is planned in August for the initial development on 670 acres. Vantage has stated that it expects to invest $15 billion in the project. The campus will feature 4 data centers and construction is planned to start this year. Vantage has announced that the facility could go online in late 2027 with this first phase of the project scheduled for completion in 2028.

Of course, the growth of large customers is also fostering small commercial and residential development throughout our service territory. And Wisconsin's unemployment rate stands at 3.1% continuing a long-running trend below the national average. This significant economic development is driving our capital plan. As you may have seen from our announcement this morning, we expect to invest $36.5 billion in capital projects between 2026 and 2030, an increase of $8.5 billion above our previous 5-year plan. That's more than a 30% increase.

With this updated capital plan, we expect asset-based growth at an average rate of just over 11% a year. We expect that strong asset base growth to support our updated long-term projected earnings per share growth of 7% to 8% a year on a compound annual basis between 2026 and 2030, This is based on the midpoint of our 2025 guidance.

For the next few years, however, we expect to maintain our existing EPS growth rate of 6.5% to 7% on a compound basis and then accelerate starting in 2028 to the upper half of the new guidance range on a compound basis. As you are well aware, we're in the early stages of deploying the capital required to support the robust growth in our region, and it takes time to fully put the projects in service.

The increase in our plan is driven by investments in regulated electric generation, transmission and distribution in Wisconsin and the pipe retirement program in Illinois.

Let me give you a few more details. Over the next 5 years, we'll utilize an all-of-the-above approach for generation to support the economic growth and reliability by investing in new natural gas, batteries and renewables. The key for reliability is dispatchable resources. Between 2026 and 2030, we expect to invest an incremental $3.4 billion in modern, efficient natural gas generation versus the prior plan. This includes combustion turbines, reciprocating internal combustion engines or race units and upgrades to existing facilities.

We also will continue to invest in renewable generation and battery storage increasing our projected investment by $2.5 billion over our prior plan.

In addition, American Transmission Company plans to continue to invest in our transmission capabilities to serve our region's economic growth, connect new generation and strengthen the system. Part of that new transmission is planned to serve customers and new data center needs.

Our plan calls for us to invest approximately $4.1 billion in ATC projects between 2026 and 2030. This represents a $900 million increase from the previous plan. And to help assure reliability and support economic growth, we're continuing to invest in our electric and natural gas distribution networks with an additional $2 billion in the plan. This includes significant investment in our pipe retirement program in Chicago.

Recall that the Illinois Commerce Commission directed us to review -- directed us to focus on retiring all cast iron and ductile iron pipe with a diameter under 36 inches by January 1, 2035. We expect that over 1,000 miles of older pipe will need to be replaced.

Turning to the regulatory front. I have just a few updates across our service areas. In Wisconsin, our proposed very large -- or BLC tariff remains with the Public Service Commission for a review. As we discussed earlier this year, this tariff is designed to meet the needs of our very large customers while protecting all of our other customers and investors.

As currently proposed, and in our testimony filed earlier this month, the tariff would provide for a fixed return on equity in an updated range of 10.48% to 10.98% and an equity ratio of 57%.

These financial terms have been agreed upon with the customers. The proposed terms of the agreements are 20 years for wind and solar and the depreciable lives for natural gas and battery storage assets. We worked with a very large customer in designing the tariff, including the financial parameters, and we believe the tariff is a key component to making Wisconsin a prime spot for data center investment.

We have a procedural schedule and provided our direct testimony earlier this month. A commission order is expected by early May of next year for customers to take service in June.

And in Illinois, we are continuing to coordinate with the City of Chicago and our Pipe retirement program. As we are ramping up these efforts, we will continue to have regulatory reviews of the process. This includes the forecast in the general rate case proceeding, which we are planning to file in early 2026 for test year 2027. Of course, we'll keep you updated on any further developments.

Now I'll turn it to Xia to provide you more details on the financial results and our financial plans.

Thank you, Scott. Our third quarter 2025 earnings were $0.83 per share $0.01 over third quarter 2024 adjusted earnings. Our earnings package includes a comparison of third quarter results on Page 16. I'll walk through the significant drivers.

Starting with our utility operations, earnings were $0.12 higher when compared to third quarter 24 adjusted earnings. Weather positively impacted earnings by about $0.01 relative to last year. Compared to normal conditions, we estimate that weather had a $0.03 favorable impact in the third quarter of 2025 and compared to a $0.02 favorable impact in 2024.

Rate-based growth contributed $0.15 more to earnings and timing of fuel expense tax and other items added another $0.07. These positive drivers were partially offset by $0.06 from higher depreciation and amortization expense and $0.05 from higher day-to-day O&M.

In terms of our weather-normal retail electric deliveries, excluding the iron ore mine, we saw a 1.8% increase compared to the third quarter of 2024. This was led by the large commercial and industrial segment, which grew 2.9%. The residential and small commercial and industrial segments grew 1.3% and 1.4%, respectively. Overall, we are slightly ahead of our annual electric sales growth forecast.

Looking ahead, with the updated load growth, we now expect our annual electric sales growth to be between 6% and 7% for the period 2028 through 2030, that's up from the 4.5% to 5% we previously forecasted.

Turning to American Transmission Company. Capital investment growth contributed an incremental $0.02 to Q3 earnings versus 2024. And at our Energy Infrastructure segment, earnings increased $0.01 in the third quarter of 25% from higher production tax credits.

Next, you'll see that earnings from the Corporate and Other segment increased $0.11. This was largely driven by tax timing and higher interest expense.

In terms of common equity, we issued about $800 million through the first 9 months via our ATM program as well as the dividend reinvestment and employee benefit plans. This largely satisfied our common equity needs for this year.

As Scott noted, we're reaffirming our 2025 earnings guidance of $5.17 to $5.27 per share. This includes October weather and assumes normal weather for the remainder of the year.

Going forward, with the updated capital plan, we expect our EPS growth to accelerate post 2027. Overall, based off the midpoint of the 25% guidance range, our long-term growth rate CAGR is expected to be 7% to 8% through 2030.

Now let me comment on the financing plan that supports this growth and the new capital plan. As we have consistently guided you we expect any incremental capital will be funded with 50% equity content. When compared to the prior plan, we added $8.5 billion of capital and about $4 billion of incremental equity content equally split between incremental common equity and hybrid or icon securities.

So here are the details of the funding sources. Over the next 5 years, we expect cash from operations to be approximately $21 billion, funding more than half of our cash needs. Approximately $14 billion of the funding is expected to come from incremental debt, and the remaining cash is expected to be funded by approximately $5 billion of common equity.

As a reminder, the cadence of common equity is a function of capital expenditures. For 2026, we expect common equity issuances to be between $900 million to $1.1 billion.

In closing, as Scott discussed previously, the strong economic development and low growth in Wisconsin is the foundation of our new 5-year plan. With the asset base forecasted to grow at 11.3% a year on average, we expect to nearly double our asset base over the next 5 years.

It's important to note that the bespoke assets allocated to our very large customers, are projected to represent 14% of our total asset base by 2030. As a reminder, the tariff is designed so these customers pay their fair share are not being subsidized by other customers. We're very excited about our company's future and the investment opportunities ahead of us.

With that, I'll turn it back to Scott.

Thank you, Xia. Finally, a quick reminder about the dividend. As usual, I expect we'll provide our 2026 dividend plan and earnings guidance in December. We continue to target a payout ratio of 65% to 70% of earnings, and we're currently positioned well within that range. We expect to grow the dividend at a rate of 6.5% to 7% and consistent with our past practice.

Overall, we're optimistic about our 5-year plan and the longer-term outlook. I think we're in the early stages of the growth cycle as we continue to see opportunities in economic development in our region, including data centers. We look forward to providing additional details on our plan in just over a week at the EEI conference.

Operator, we are now ready for questions-and-answer portion of the call.

[Operator Instructions] We'll take our first question from Shahriar Pourreza at Wells Fargo.

Just on the -- obviously, just on the updated growth outlook, I mean there is that inflection post 27. I guess some would be surprised it's more back-end loaded. Can you maybe just walk us through how the CAGR shapes kind of in that back half of the plan? Can it be accelerated? -- other incrementals? Is there an opportunity to smooth this out a little bit?

Sure, sure. Great question. And remember, as we historically have done, we've always taken the midpoint of the current year's guidance, the 2025 guidance and looked at a compound annual growth rate I think it will help if I give you a little color of what we're seeing year by year and think about it as you look at our capital plan.

So in the first year in '26, we're seeing [6.5 to 7]. I think as you start looking in '7 then, you can see our capital plans are ramping up to a little almost 7% and over $7.7 billion. When you have that, you're going to see part of those earnings coming in. So in 2027, we're seeing 7% to 8% probably on that annual basis year-over-year growth versus looking at it on a compound basis. And then when you look at those outer years, '28 through '30, I'm seeing closer to 8%. That's kind of where we're seeing. It just takes a while to ramp up really lines up well with what our capital plan is -- and that's how you get that compound growth rate that 7% to 8% at the upper end of our plan here. Does that add a little color?

No, it does. And is there any opportunity, Scott, to smooth it out a little bit? Or is this the plan is the plan.

Well 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. There's just a lot of activity and we want to be very prudent -- what it takes to get approvals, what it takes to actually get everything to start building those plans.

So I think there's opportunity there. We're just -- we don't like to have any white space, we want to make sure we can execute and we want to make sure we can deliver. And we feel this is very, very executable.

Perfect. I appreciate that. And then just my perennial question for you is just around the point Beats conversations just with NextEra. I guess any sort of sense of timing around an announcement? Are you still to have an Analyst Day coming up in early December. Are you still thinking about year-end? Or are the conversations kind of shifting a little bit further out?

Yes, that's a great question. And the conversations are still going on. They're maybe shifting a little bit further out. I just wanted you to know in this plan, we haven't assumed 1 way or the other. So we have no capital in here if we had to replace that capacity.

In the end, we're really looking at what's the best for our end-use customers and what value we have for the customers. We just got to be very prudent. We have a lot of opportunities, we think, in fact, -- if we don't renew something, I think there's potentially capital upside. We're just going to really look at it from the perspective of the customer and what makes sense overall.

We'll take our next from Julien Dumoulin-Smith at Jefferies.

I am wearing the rally cap for you guys here today on this one.

I appreciate that.

Of course. With that said, there's a lot to take on here. Let me come back to the question on this Microsoft expansion in the second phase. Obviously, they made some headlines recently. how should we interpret that as being incremental or not to the plan if eventually there's something folds in there? I mean, to what extent is it or isn't it fully reflected here?

So -- and we work with Microsoft, along with all the other customers in Southeast Wisconsin that we gained up to that 2.1 gigawatts for Southeastern Wisconsin. And I can't really divulge individual customer information -- but let's just say, I'm very confident in the growth we have in Southeastern Wisconsin, and I think there's more growth in the remaining 5 years when you think about the next 5 years of our plan.

And I don't know if you had a chance to listen to the Microsoft conference call, they actually called out the growth in Southeastern Wisconsin. They call the data center Fair water. It's the world you expect to go online next quarter or this quarter, they announced it expects to go online next year. And they say it could scale up to 2 gigawatts alone.

So I think -- and I can't speak for them, but when you look at the overall picture, I think there's a lot of opportunities as you think about the next 5 years also.

Got it. Excellent. If I can needle you on a couple of details here. One thing that stood out here, you raised the transmission CapEx by slightly less than $1 billion. But I think the Port Washington transmission project itself with ATC was 1.3%. Is that fully in there? Again, I know it's a partial ownership for you guys, et cetera, but -- just wanted to clarify that here.

Sure. And we're a 60% owner of American Transmission Company. So it's all kind of factored in here. I think there's maybe a little bit more upside as we see other data centers in there. I think it's probably the basic is factored in our plan. So there's probably a little more upside at that $1.4 billion.

I think that even came out after the original ATC forecast has pulled together. So I think there's a little bit more runway there. Remember, there's only so much transmission you kind of do on the system at a time. So it's maybe limited a little bit by that.

Got it. And sorry, I need one more here. The ramp in Illinois seems a little bit more than perhaps some were expected. Again, it's a pretty healthy number here with the $1.5 billion. Can you speak a little bit to what what's taking place there? And also if you have any latest thoughts about what could happen with the Illinois legislation, if it has any meaningful impact for you guys?

Sure, sure. It's very consistent with what we've been laying out that it's going to ramp up some in 2026, then in 27, and we expect we'll be up to about that $500 million in 2028 and going forward. Remember, we had about $90 million a year on the plan. So it falls in line between that $1.4 billion and $1.6 billion. We have $1.5 billion in here.

So that all is kind of consistent with what we've been saying. The Illinois legislation, we'll see where that goes is a little bit on the efficiencies in there. I don't think you'll have a significant effect on us, but we, of course, are watching it.

We'll move next to Michael Sullivan at Wolfe Research.

Scott, I wanted to start with Slide 22. If you could just help on the just bridging the asset base growth to earnings growth? Is the delta there from 11% to 7%? Is it all just equity dilution? Or is there anything else we should be thinking about it? And then on that same slide, of asset base with the bespoke customer? Is that like a proxy for like earnings attached to those projects as well?

So a couple of items, and we'll let Xia address it, too. At a high level, the bespoke portion there that's to identify people had asked how much of the potential rate base in those outer years will be tied to that very large customer tariff. And that's the current projection. And it's about 14% of our asset base up in 2030, dealing with that, the renewables and other stuff that the VLC payer will cover. And then the 11.3% to our growth rate, a large of it is just dealing with Chase. I think it looks like what we do with the financing and the dilution from the equity issuance.

Yes. I think roughly 3% is from the equity and the rest is the little bit holding company, Terry, Michael? .

Okay. That's very helpful. And then sticking with the financing plan, any sense of where you are in terms of capacity for junior subs and hybrids? Like are there any thresholds that eventually you're run into at some point or still a lot the runway?

Still a lot of runway. And as you know, the agencies have a slightly different definition for the capacity, SMT uses percentage of the total capitalization and Moody's uses a percentage of the total debt capacity. The 5-year plan with the planned juniors up, we still have billions of dollars capacity left. So we're good.

We'll take our next question from Nicholas Campanella at Barclays.

I wanted to ask just a very large increase in the capital plan and the rate base growth following that. That's obviously coming with a financing need, and you are in a lot of different states and jurisdictions. I noticed that you also, as part of this plan, put some capital out of WAC infrastructure. Just wondering what the appetite is to recycle capital to replace common equity needs or other financing needs in the plan?

Sure. That's a great question. And -- if there was an attitude that came along, we, of course, would look at it. We just want to make sure that it's our financial parameters, it would be good for investors. But we really like the performance of our of some of our smaller companies, they perform very well. They don't take a lot of work, and we continue to execute on them. We've got a great team there. So it's not like we're looking to sell them at all.

But if an opportunity would exist we would always look at that opportunity. We just want to make sure it's good for our investors.

Okay. Great. And then I guess just as we think about the ability for current customers to gross up commitments in your territory or potential new customers. I guess wondering referred through this earnings season from some other companies, they talked about just available turbine capacity what their advantage in the supply chain would be to kind of deliver on those incremental deals. How do you kind of think about that from the WEC side if Vantage was to come in and do an increased commitment or Microsoft was to come or other large load customers, do you have the turbines or maybe the renewable agreements to kind of execute on that?

Sure. Great question. And we have a team that works with our very large customers and potential additional customers on how we could supply either an accelerated load on their basis or additional load or new growth. So we are working with them every day. We have a robust supply chain and working with developers to have a path to be able to serve that. So feel very confident it's a logo increase. and we could work with them. So we have been working with them behind the scenes for several years on this to stay ahead of it. What you're seeing in the plan, though, is what they have firm commitments to.

Maybe if I could just sneak 1 more in quickly. Just on Point Beach. Just recognizing the license extension there just recently happened in the last few months. what's just the state of urgency from state stakeholders to kind of further lock up this capacity through the end of the decade or the end of 2030 now? And is that something that you think we could see by year-end?

So I mean, we've got the capacity, I think it's your 2030 and 2033. So we have a lot of time. We've been working with NextEra. We just got to make sure that we have the right the rate agreement for our customers. But as I said, we do have access to other abilities if we need to replace that capacity.

So we're working with them. We just got to get to a right position and -- if we get there great, if we don't get there, there's a lot of opportunities for us, too.

Next, we'll move to Andrew Weisel at Scotiabank.

First question -- sorry, if I'm getting 2Q here, but for '28 to '30, are you implying 8% or like 7.5% to 8%? And if it is the latter, doesn't the math suggest that the overall 5-year period would be below the midpoint?

Well, I don't think it will be below the midpoint. I think we're going to look at probably in that 8% area that will get us to the midpoint on a compound basis.

I think there's a little confusion Andrew, in terms of the upper half on the slide, I think that's a compound number off the midpoint of 2025. What Scott is talking about is on an annual basis, if you look at it from '27 to '28, '28 to '29, we're seeing that range. And if you compound it back, that's the 7% to 8% off the midpoint of 2025. .

Okay. Great. Just wanted to clarify. So it's about 8% for the later years, right?

On an annual basis. .

Okay. Great. Just wanted to clarify that. Next question, on the CapEx update, first of all, very impressive numbers, a huge increase. What I want to understand, though, is it's an $8.5 billion increase. But when I add up the pieces on Page 18, I'm calculating in a total of $8.1 billion. So I don't know if it's rounding or if there's some pieces missing, but can you help me bridge that gap? Where is the extra $400 million coming from?

Yes. That's -- I mean we just kind of picked out a couple of the highlights there. I guess if you do the specific reconciliation with the bar chart, you have a little bit more gas distribution of a couple of hundred million. And then I think it's kind of cats and dogs and generation and everything else. We just called out the significant ones. .

Okay. That's what I thought. I just wanted to be sure. And lastly, in terms of demand, again, a big increase, you're forecasting 3.4 gigawatts by 2030, up from 1.8 gigawatts in '29 previously. Is that increase related to data center projects you've been talking about ramping up? Or is it some of the other manufacturing activity you've discussed in the past? I know there's a lot going on along the I-94 corridor how much of that is like existing projects ramping versus new incremental projects coming online?

Yes, great question. So when you look at -- it's about 1.6 gigawatt growth, 1.3% is the Vantage data center in Port Washington. And then in Southeastern Wisconsin, as you can imagine, a significant part is from the data center in Southeastern Wisconsin, but it really is all the customers in that area. We have Eli Lilly expanding. We've got Amazon, we've got other companies coming to the region. And then that's not even counting all the residential load we're starting to see in new construction starting in the area. So I think -- it's all of the above, but definitely significantly related to database or data center growth.

We'll take our next question from Sophie Karp of KeyBanc.

Comprehensive update today. So if I may just dig in a little bit on the data center announcements, right? There's been a 3 of announcements greatly, some assets traded hands. So I think there's confusion, what's incremental, what's in the plan. So could you make it very clear to us what's actually in the plan of the recent gigawatts of announcement? And what yet is not in the plan yet?

Sure. Sure. So what's in the plan, and we have Southeastern Wisconsin, so there's 2.1 gigawatts down there that includes the Microsoft of what they have told us to factor into this 5-year plan. And then in Northern in that Port Washington site, it's really -- I would look at it as the Vantage and Vantage has worked with Oracle. So those are the same megawatts at 1.3 gigawatts, okay?

So Vantage Oracle is 1.3. That's what's in the plan. What's not in the plan is there's additional land of about 1,200 acres in Port Washington that potentially could house another 2 gigawatts plus of additional capacity -- and then in Southeastern Wisconsin, when you think about the Microsoft site, there's additional 700-plus acres that they have there that I think, could be for future development that also could add into the overall gigawatt usage. So I think there's a lot of opportunity for future growth here. I hope that helped clarifies it.

Yes. So it sounds like the plan as it stands right now is just like super conservative.

Yes. We only put what the other -- what the customers are announced and provide us the information then.

Got it. Okay. And my other question was this like when you -- with very helpful color, when you talk about 14% of your rate base being under the large customer tariff by the end of 2030 or by 2030. What do you, I guess, expect and the economics of never pretty clear, right, is a premium economics on that chunk of rate base, what do you expect the economics to be for the rest of the rate base?

Like when you formulate your plan, do you expect that, I guess, the overall average will be similar to what you have today in the trajectory of what you have today? Or for the lack of a better word and deterioration in the economics of the rest of the rate base? Or do you expect the take the rest to be unaffected by the presence of this like new premium product rate base?

Right. So we assume the rest of the rate base earns the current authorized return that we currently have in all -- each of the jurisdictions when you look at them separately. And then when you look at Wisconsin, the Wisconsin right now, we're at that ROE and depending upon the utility, like 57.5%, 58% regulated ratio on Wisconsin Electric that each of those earn their separate return.

Remember, the foundation of our tariffs is that the large customers don't get subsidized or subsidize the other customers, they pay their fair share. So we keep them as separate.

We'll take our next question from Ryan Levine at Citigroup.

Just 2 quick questions. Just in terms of the execution or state of conversations for some of the Vantage expansion beyond the 1.3. Any color you could share around maybe the engagement level or the time line that conversations are progressing through?

Sure. So we're always in our discussions with Vantage Microsoft and potential others. But right now, Vantage, as we said in the prepared remarks, are really concentrating on that first 1.3 gigawatts. I think they had a press release out there. They're going to have construction of about 4,000 construction workers out there when they're able to start construction. So I think everyone's concentrating on that. We'll have more discussions over the next -- probably next year.

But I think everyone is just concentrating on the first part of the load, which is what we want to make sure we can achieve to -- there's opportunity long term.

Okay. And then there was a lot of mention about Microsoft and Oracle. But beyond those 2 customers, the engagement level fairly broad? Or is it really focused on a more narrow group of potential customers expansion?

We have other customers that we're talking to, but those are the 2 main ones that are already in the area and made a public announcement. So we're talking to others. I don't want to jump that like I try to play it pretty close to let them make the announcements or them sign purchase cancellation agreements before we get ahead of our skis and potential. But we are talking to others. .

Okay. And then unrelated, just to clarify around your plan, is the assumption embedded in the plan conservative and that doesn't assume an outcome for -- or doesn't assume the higher very large load tariff? ROE and to the extent that you were to be successful in that application that, that would be additive to plan or help provide additional buffer?

No. I mean, we're assuming the very large tariff is implemented. What we talked about on the call, there is a range of ROEs, 10.48% to 10.98%, which we really stayed with the fundamentals of making sure -- we don't have a secondary effect that hurts our other customers. And those are more on a -- we're working individually, and we can't give more details. But on a higher return on some of it to 10.98%, but more to come on that as we continue to work with our customers on it. .

We'll move next to Paul Fremont at Ladenburg.

First question has to do with the Microsoft announcement where they canceled the Caledonia side. But what they said, I think was that they would continue to look for alternative sites in Southeastern Wisconsin and your service territory. What other locations do they have land? Or do you potentially have land that you would be able to sell to them?

Okay. Good question. So you are correct. They're looking for a different site than what was their original plan. We really don't have that significant type of land available elsewhere. But I don't know their specific plans. But I know they said they're looking at other places in Southeastern Wisconsin, probably more to come in that area. It's just good that they're -- this is really great for the area when you think about property taxes and good paying jobs. So I know they're early in their look, so we'll see where that goes. But that once again, that's the potential for more upside on our load.

Great. And the timing of how long it would take for them to find sort of a replacement type scenario, would it be like 12 months? Or what would you -- what would be sort of a reasonable assumption? .

Yes. And I can't talk for Microsoft, but they move pretty fast. I think a year is may be reasonable, but we'll see where it goes.

Okay. My next question on Point Beach would be if you're unable to reach an accommodation with NextEra, what type of generation would you build -- and when would you have to start building it?

Yes. That's a good question. And we'll look at it, but it would have to be something that would be dispatchable that we could cover the dispatch so it has to be some type of gas. We'll see where the EPA rules. Do we eventually look at a combined cycle maybe and maybe some renewables in there.

So we like the all of the above approach and I know some people don't like renewables, but when you think of gas prices at times when they're high, renewables are very popular when gas prices are high. And also, we look at all of the above mix. So -- and you think about it, the contracts are 2030 and 2033, so there's still plenty of time. And like we said, we work with all our large customers and our planning team is looking at how do we replace this, and I'm sure we have several options available.

And then last question for me. When we look at the $4.8 billion to $5.2 billion of common equity, would some of that be junior subordinated debt? Or would any junior subordinated debt issuances be incremental?

It's the latter. The 4.8% to 5.2% would be common equity?

And then is there a junior subordinated debt contemplated that as part of your incremental debt?

Correct. As I said in the prepared remarks, we added $4 billion of equity content. So 2 more of common and the other 2 would come from the junior subordinated debt or like-kind securities.

We'll take our next question from Anthony Crowdell at Mizuho.

Just one quick one. I'm curious with all the load and growth that we haven't seen for years in this sector, I'm curious if this is making earnings forecasting and rate base growth forecasting easier or harder? Like is it chunkier with these large loads coming in and it's becoming more of a challenge of forecasting out? Or is this all this flow just such a tailwind and it's making life a lot easier on the forecasting?

Well, it's sure nice to have load to drive the capital plan, which makes it a lot nicer, but there's a lot of stuff that we have to keep into account, including the timing of in-service, the timing of the load, and we have a whole team working at staying ahead to make sure we have the turbines and the renewable sites located.

So we always like growth we'll take on that challenge. It just takes a lot of people, a lot of bodies monitoring and keeping on top of everything and the key is execution. So we have a whole group executing on the capital projects as we're as we got commission approval this summer, we're working on those projects right now. So it's just different. Let's put it that way.

Next, we'll go to Steve D'Ambrisi at RBC Capital Markets.

I just had a quick one. Just about -- a lot of the questions today have been about 2 existing hyperscale sites expanding and when. But I think what's interesting to me is realistically you guys are relatively unique in the fact that you don't really talk about a sales funnel of other customers.

And so I guess what I would most be interested in is, do you think that getting the VLC tariff through the Public Service Commission will help potentially broaden the customer base. Like clearly, you've had success citing some of the biggest data centers in your service territory that we've seen across the country. And so just interested to hear about potential other people?

Yes. That's a good question. I think the very large customer [indiscernible] in fact, we attract some of our -- several of the first customer before we even ahead of tariffs. So I think if you think about location, the ability for WEC and American transmission company to be able to deliver and provide the generation and renewables and transmission to help energize their sites and move fastly in the Wisconsin environment and in the MISO footprint, I think that is a great advantage I think also being in Wisconsin, you got a cooler environment for air storage cooling. So I think that's an advantage. We don't have the natural disasters that other parts of the country have.

So I think all of those are positive our customers, our very large customers. We work with them as we filed the very large customer tariffs. So I think they considered -- I've heard several times how it's fair. I think that's also a plus once it gets approved, I think that would definitely be helpful.

I think the key is and all our large customers make sure that we do not affect any other customers' rates. So that was good as a foundation for it. So having it approved, I think, can only help, but we're really excited about the pipeline we are talking to now and the potential growth at the significant sites that we have already going in Wisconsin.

We'll go next to Bill Appicelli at UBS.

Most of the questions have been asked. Just 1 question for fine. Just on the step-up in the asset base growth, was there any additional offsets there or anything that came out? Just thinking because the back of the low math maybe would have supported given the $8.5 billion of CapEx, something maybe a little bit closer to 12%. So I'm just curious there's anything else different in the bridge there?

No, I think the only thing we took out is we don't have any investments in [indiscernible] for the most part. But overall, I don't think there's much other changes there which is more back-end loaded. -- starting more in '27, I guess. .

Okay. And then just what -- from an affordability perspective, what's embedded in this plan in terms of the electric side in terms of average annual rate increases for residential customers. .

So we will be filing a rate case in Wisconsin for our biannual process. So we're pulling those numbers together now that we'll file sometime in the end of the first quarter, most likely the beginning of the second quarter. We're looking at inflation type increases, but it's early in the process.

Now the key is none of it's going to be costs that are coming in from any of the hyper salers they're paying their fair share.

And our final question today comes from Carly Davenport with Goldman Sachs.

I just had one clarification. Just on some of the other growth opportunities -- as you think about the next 5 years, do you see incremental capacity and potential on the system for more load to be added in the course of the current plan? Or would that be largely beyond the 2030 time frame as you think about these opportunities?

So I think as we work with these very large customers, I think at the end of our current 5-year plan, we potentially could see additional growth come in. depending upon how they look at their individual development. So I think there's a potential for both on the current plan plus in the next 5 years.

Sounds good. I'll leave it there.

All right. 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.

And this concludes today's conference call. Thank you for your participation. You may now disconnect.