WEC Energy Group Q4 2025 WEC Energy Group Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 WEC Energy Group Inc Earnings Call
Operator: Good afternoon, and welcome to WEC Energy Group's conference call for Q4 and year-end 2025 results. This call is being recorded for rebroadcast, and all participants are in a listen-only mode at this time. After the presentation, the conference will be open to analysts for questions and answers. 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.
Operator: Good afternoon, and welcome to WEC Energy Group's conference call for Q4 and year-end 2025 results. This call is being recorded for rebroadcast, and all participants are in a listen-only mode at this time. After the presentation, the conference will be open to analysts for questions and answers. 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.
Speaker #2: 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, and all participants are in a listen-only mode at this time.
Speaker #2: After the presentation, the conference will be open to analysts for questions and answers. In conjunction with this call, a package of detailed financial information is posted at wecenergygroup.com.
Speaker #2: A replay will be available approximately two 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.
Speaker #2: 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
Operator: 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. 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. Now it's my pleasure to introduce Scott Lauber, President and Chief Executive Officer of WEC Energy Group.
Operator: 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. 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. Now it's my pleasure to introduce Scott Lauber, President and Chief Executive Officer of WEC Energy Group.
Speaker #1: To the assumption and other factors referred to in with the connection statements . Factors described in WEC Energy Group latest form 10-K . 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 .
Speaker #1: Referenced earnings per share will be based on diluted earnings per share, unless otherwise noted. This call also will include non-GAAP financial information.
Speaker #1: 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.
Scott Lauber: 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 one-time 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 resolve all open reconciliations for the uncollectible rider for the period 2019 through 2023. I'll provide more details on this in a few minutes.
Scott Lauber: 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 one-time 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 resolve all open reconciliations for the uncollectible rider for the period 2019 through 2023. I'll provide more details on this in a few minutes.
Speaker #2: Good afternoon , everyone , and thank you for joining us today . As we review our results for the calendar year 2025 . Here with me are Sha Liu , our chief Financial Officer , and Beth Straka , senior vice president , corporate communications and investor relations you saw from our news release this morning , we reported full year 2025 adjusted earnings of $5.27 a share .
Speaker #2: This excludes a one-time 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 riders spending from 2017 to the riders' sunset in 2023.
Speaker #2: It will also resolve and open reconciliations for the Uncollectible Rider for the period 2019 through 2023. I'll provide more details on this in a few minutes.
Scott Lauber: 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, Shaw 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 have been 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.
Scott Lauber: 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, Shaw 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 have been 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.
Speaker #2: 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.
Speaker #2: In just a few minutes, Shar 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 have...
Speaker #2: There have been 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.
Speaker #2: 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 updated plan.
Scott Lauber: Based on their updated 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 where 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. To the north, we have another great partner. You'll recall that Vantage Data Centers has signed on to develop facilities for Oracle and OpenAI on approximately 1,900 acres.
Scott Lauber: Based on their updated 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 where 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. To the north, we have another great partner. You'll recall that Vantage Data Centers has signed on to develop facilities for Oracle and OpenAI on approximately 1,900 acres.
Speaker #2: We are adding 500 MW of customer demand to the forecast. This is resulting in an estimated $1 billion of additional incremental capital to our capital plan.
Speaker #2: This brings our forecasted demand in the I-95 corridor up to 2.6 GW 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 where it's building data centers.
Speaker #2: 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 .
Speaker #2: North, we have another great partner. You'll recall that Vantage Data Centers has signed on to develop facilities for Oracle and OpenAI on approximately 1,900 acres in December.
Scott Lauber: 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 five 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 in local investments by other large businesses as well. For example, south of Milwaukee, Foxconn has announced new plans to renovate and expand its Racine County campus, with a focus on manufacturing data center components.
Scott Lauber: 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 five 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 in local investments by other large businesses as well. For example, south of Milwaukee, Foxconn has announced new plans to renovate and expand its Racine County campus, with a focus on manufacturing data center components.
Speaker #2: 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.
Speaker #2: The first facility could come online late next year. We currently have 1.3 GW of demand for this Vantage site in our forecast over the next five years, and looking to the future, this site has the potential to reach 3.5 GW of demand over time.
Speaker #2: We are seeing an increase in local investments by other large businesses as well. For example, south of Milwaukee, Foxconn has announced new plans to renovate and expand its Racine County site with a center, data campus, and components manufacturing.
Scott Lauber: Foxconn expects to invest more than half a billion dollars 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 sq ft, and Rockwell announced this site could potentially become the company's largest manufacturing campus globally. Uline, the leading North American distributor of shipping, industrial, and packaging materials, completed yet another large land purchase to further expand its business operations in Southeastern 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 five-year plan.
Scott Lauber: Foxconn expects to invest more than half a billion dollars 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 sq ft, and Rockwell announced this site could potentially become the company's largest manufacturing campus globally. Uline, the leading North American distributor of shipping, industrial, and packaging materials, completed yet another large land purchase to further expand its business operations in Southeastern 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 five-year plan.
Speaker #2: Foxconn expects to more than invest a half billion dollars in this expansion , and add more than 1300 jobs at the site . In addition , Rockwell Automation plans plans in November to build a new manufacturing site in southeastern Wisconsin .
Speaker #2: The facility is expected to span more than 1,000,000 ft², and Rockwell announced this site could potentially become the company's largest manufacturing campus globally.
Speaker #2: And Uline, 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.
Speaker #2: In summary, with the expansion of Microsoft, we are now projecting 2.6 GW of growth in the I-94 corridor and 1.3 GW to the north in Milwaukee, for a total of 3.9 GW of electric demand growth in our five-year plan.
Scott Lauber: 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, RICE units, and upgrades to existing facilities.
Scott Lauber: 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, RICE units, and upgrades to existing facilities.
Speaker #2: And to meet our region's growing energy needs, we are focused on executing our updated $37.5 billion capital plan over the next five years.
Speaker #2: We are projecting long-term earnings per share growth of 7% to 8% a year on a compound annual basis between 2026 and 2030.
Speaker #2: 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.
Speaker #2: As we put more projects into service, our electric utilities need to maintain a reliable, balanced generation mix between 2026 and 2030.
Speaker #2: We expect to invest a total of $7.4 billion in modern, efficient natural gas generation and LNG storage. This includes existing upgrades to facilities, strong units and turbines, and race combustion.
Scott Lauber: We have a strong labor force lined up to bring our projects online. At our Oak Creek site, construction on our new 5-unit, 1,100-MW 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 Q4. In renewables, over the next 5 years, we expect to invest $12.6 billion to add 6,500 MW 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.
Scott Lauber: We have a strong labor force lined up to bring our projects online. At our Oak Creek site, construction on our new 5-unit, 1,100-MW 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 Q4. In renewables, over the next 5 years, we expect to invest $12.6 billion to add 6,500 MW 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.
Speaker #2: We have a labor force lined up to bring our projects online at Creek site construction, and our new five-unit, 1,100-megawatt combustion turbine project is well underway.
Speaker #2: We also broke ground on a large two Bcf LNG facility and our seven-unit Paris Rice generation site in the fourth quarter. In renewables,
Speaker #2: Over the next five years, we expect to invest $12.6 billion to add 6,500 MW to our generation fleet. We currently have seven renewable generation projects and two battery storage facilities under construction, including two solar facilities expected to come online later this year.
Speaker #2: 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 do have a few updates on current and upcoming rate reviews.
Scott Lauber: First, let's update you on our Wisconsin and our proposed very large customer tariff. 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 with 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. In Illinois, as I mentioned earlier, Peoples Gas and North Shore Gas reached agreements on the terms of a proposed settlement with the Illinois Attorney General.
Scott Lauber: First, let's update you on our Wisconsin and our proposed very large customer tariff. 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 with 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. In Illinois, as I mentioned earlier, Peoples Gas and North Shore Gas reached agreements on the terms of a proposed settlement with the Illinois Attorney General.
Speaker #2: First, let's update you on our Wisconsin and our proposed Very Large Customer Tariff. As we discussed before, this tariff is designed to meet the needs of our very large load customers.
Speaker #2: While protecting all of our other customers and investors. The proposed tariff remains at the Public Service Commission for review. Staff and intervenor testimony was submitted in January.
Speaker #2: 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 .
Speaker #2: We are currently pulling that filing together and in Illinois , as I mentioned earlier , people's Gas and North Shore Gas reach agreements on the terms of a proposed settlement with the Illinois Attorney General approved by that , if the Illinois Commerce Commission , would resolve all 12 pending cases issues related to that these cases represent approximately $2.3 billion of open dockets and include the ridership reconciliation from 2017 to 2023 and the Uncollectible rider cases from 2019 through 2023 .
Scott Lauber: 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, and the uncollectible rider cases from 2019 through 2023. The proposed settlement terms call for a $130 million rate-based reduction, which would be prospective with new rates in the pending Peoples 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.
Scott Lauber: 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, and the uncollectible rider cases from 2019 through 2023. The proposed settlement terms call for a $130 million rate-based reduction, which would be prospective with new rates in the pending Peoples 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.
Speaker #2: The proposed settlement terms call for a $130 million rate base reduction, which would be prospective with new rates in the pending People's Gas case.
Speaker #2: In addition, customers would receive $125 million over three years. This settlement is subject to commission approval, which we anticipate requesting in the coming weeks.
Speaker #2: Early in 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.
Scott Lauber: 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 1 January 2027. Of course, we'll keep you updated on any future developments. Next up, Xia will provide you with more details on our financials.
Scott Lauber: 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 1 January 2027. Of course, we'll keep you updated on any future developments. Next up, Xia will provide you with more details on our financials.
Speaker #2: 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.
Speaker #2: 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.
Speaker #2: Next up, I shall provide you with more details on our financials.
Xia Liu: 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 1 January 2025.
Xia Liu: 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 1 January 2025.
Speaker #3: Thanks , Scott . Turning now to earnings , our 2025 adjusted earnings were $5.27 per share . An increase of $0.39 per share over 2024 .
Speaker #3: 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 .
Speaker #3: Our walk through the significant drivers , starting with our utility operations , adjusted earnings were $0.63 higher in 2025 compared to 2024 . Whether positively utility impacted earnings by approximately $0.35 relative to last year , compared to normal conditions .
Speaker #3: We estimate that weather had a $0.10 favorable impact in 2025 compared to a $0.25 unfavorable impact in 2024. Rate base growth contributed $0.74 more to earnings.
Speaker #3: 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.
Xia Liu: 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.
Xia Liu: 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.
Speaker #3: 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 .
Speaker #3: Now, before I discuss earnings comparisons at the other segments, let me briefly comment on our weather. Normal electric sales for 2025.
Speaker #3: 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.
Speaker #3: We are projecting weather-normal retail electric sales in Wisconsin to grow 1.6% from 2025 levels. I would note that we expect the large commercial and industrial segment to grow 5.8%, fueled by our forecasted data center load.
Speaker #3: Now , back to our earnings comparison regarding our investment in American transmission company earnings increased $0.02 compared to 2024 , driven by a six cent increase from continued capital investment to meet demand growth and maintain reliability partially offset by a one time gain .
Xia Liu: Regarding our investment in American Transmission Company, earnings increased 2 cents compared to 2024, driven by a 6-cent increase from continued capital investment to meet demand growth and maintain reliability, partially offset by a one-time gain we recognized in 2024. And at our energy infrastructure segment, earnings increased 10 cents 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 24-cent 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 retirements, and a few other items. In terms of common equity, consistent with our plan, we issued approximately $800 million in 2025.
Xia Liu: Regarding our investment in American Transmission Company, earnings increased 2 cents compared to 2024, driven by a 6-cent increase from continued capital investment to meet demand growth and maintain reliability, partially offset by a one-time gain we recognized in 2024. And at our energy infrastructure segment, earnings increased 10 cents 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 24-cent 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 retirements, and a few other items. In terms of common equity, consistent with our plan, we issued approximately $800 million in 2025.
Speaker #3: 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.
Speaker #3: Finally , you'll see a 24 cent 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 retirements and a few other items equity , consistent with terms of common .
Speaker #3: plan , we issued our approximately $800 million in 2025 . Overall , we grew our EPs by $0.39 per share , or 8% year over year on an adjusted basis .
Xia Liu: Overall, we grew our EPS by 39 cents per share, or 8% year-over-year on an adjusted basis. Next, let's look at our earnings guidance. For Q1 this year, we project to earn in the range of $2.27 to $2.37 per share. This forecast takes into account January weather and assumes normal weather for the rest of the quarter. 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 to 5 billion. This includes refinancing for $1.4 billion of senior notes that mature this year.
Xia Liu: Overall, we grew our EPS by 39 cents per share, or 8% year-over-year on an adjusted basis. Next, let's look at our earnings guidance. For Q1 this year, we project to earn in the range of $2.27 to $2.37 per share. This forecast takes into account January weather and assumes normal weather for the rest of the quarter. 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 to 5 billion. This includes refinancing for $1.4 billion of senior notes that mature this year.
Speaker #3: 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.
Speaker #3: This forecast takes into account January weather and assumes normal weather for the rest of the quarter and for the full year 2026. We are reaffirming our annual guidance of $5.51 to $5.61 per share, of course.
Speaker #3: All of this assumes normal weather for the rest of the year. Finally, comments on some financing: we expect debt funding to be in the range of $4 to $5 billion.
Speaker #3: 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.
Xia Liu: 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.
Xia Liu: 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.
Speaker #3: 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.
Speaker #3: 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.
Speaker #3: With that, I'll turn it back to Scott.
Scott Lauber: Thank you, Sha. Now, 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 will mark 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 it up for Q&A, I want to summarize some of the highlights of the call. We are at the top end of the 2025 earnings guidance on an adjusted basis. We reached an agreement with the Illinois Attorney General on 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.
Xia Liu: Thank you, Sha. Now, 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 will mark 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 it up for Q&A, I want to summarize some of the highlights of the call. We are at the top end of the 2025 earnings guidance on an adjusted basis. We reached an agreement with the Illinois Attorney General on 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.
Speaker #2: Thank you . Sha . Now , as you may have seen , our board at its January meeting increased the dividend by 6.7% to an annualized $3.81 per share .
Speaker #2: This will mark 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 in dividends.
Speaker #2: Before I open up for Q&A, I want to summarize some of the highlights of the call. We are at the top end of the 2025 earnings guidance on an adjusted basis. We reached an agreement with the Illinois Attorney General on 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 another forecasted demand of 500 MW, for a total of 3.9 GW increase in our five-year plan.
Scott Lauber: Economic growth is driving another 500MW of forecasted demand, for a total of 3.9GW increase in our five-year plan. This growth is adding $1 billion to our five-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.
Xia Liu: Economic growth is driving another 500MW of forecasted demand, for a total of 3.9GW increase in our five-year plan. This growth is adding $1 billion to our five-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.
Speaker #2: This growth is adding $1 billion to a five 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 .
Speaker #2: 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.
Speaker #2: Operator, we are now ready for the question and answer portion of the call.
Operator: Now we will take your questions. The question-and-answer session will be conducted electronically. To ask a question, please press the star key, followed by the digit one on your phone. If you are using a speakerphone, turn off your mute function to allow your signal to reach our equipment. We will take as many questions as time permits. Once again, press star and then one on your phone to ask a question. Your first question comes from the line of Julien Dumoulin-Smith with Jefferies. Your line is now open. Please go ahead.
Operator: Now we will take your questions. The question-and-answer session will be conducted electronically. To ask a question, please press the star key, followed by the digit one on your phone. If you are using a speakerphone, turn off your mute function to allow your signal to reach our equipment. We will take as many questions as time permits. Once again, press star and then one on your phone to ask a question. Your first question comes from the line of Julien Dumoulin-Smith with Jefferies. Your line is now open. Please go ahead.
Speaker #1: Now , we will take your questions . The question and answer session will be conducted electronically . To ask a question , please press the star key , followed by the digit one on your phone .
Speaker #1: If you are using a speakerphone, please turn off your mute function to allow your signal to reach our equipment. We will take as many as time permits, again.
Speaker #1: Once again, to ask a question, please press star, then one, on your phone. Your first question comes from the line of Julian Dumoulin-Smith with Jefferies.
Speaker #1: Your line is now open. Please go ahead.
Julien Dumoulin-Smith: Hey, good afternoon, team. Nicely done. Gotta 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 five-year period as well, and what do you know about the further ramp there, too?
Julien Dumoulin-Smith: Hey, good afternoon, team. Nicely done. Gotta 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 five-year period as well, and what do you know about the further ramp there, too?
Speaker #4: Hey . Good afternoon , team . Nicely done . Gotta say a bevy of updates here today . No doubt . Nonetheless , I wanted to follow up on the commentary you started with guys at the top of the call on Microsoft here .
Speaker #4: Can you elaborate a little bit more about the 500 MW that you're putting in here now? I mean, to what extent is there even more beyond that?
Speaker #4: Every time you give us some, we're going to ask about the next piece, but also as it pertains to the CapEx.
Speaker #4: Right . You talk about $1 billion of additional CapEx . To what extent does that 500 , the 500MW or the billion dollars stretch beyond technically the five year period as well ?
Speaker #4: And what do you know about the further ramp there to.
Scott Lauber: Sure, Julien. Thanks. Thanks for the question, and when you look at it, Microsoft is-- has been working on that first 1,364 acres, and now... And we've always talked that, you know, the growth that we have has been started in that main spot. And now they're starting to add to the north of Highway 11. Locally, it's that, it's Project North. So that's where we add at the 500. 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.
Scott Lauber: Sure, Julien. Thanks. Thanks for the question, and when you look at it, Microsoft is-- has been working on that first 1,364 acres, and now... And we've always talked that, you know, the growth that we have has been started in that main spot. And now they're starting to add to the north of Highway 11. Locally, it's that, it's Project North. So that's where we add at the 500. 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.
Speaker #2: Sure . Julien , thanks . Thanks for the question . And when you look at it , Microsoft is has been working on that first 1364 acres and now and we've always talked , you know , the growth that we have has been started in that main spot .
Speaker #2: And now they're starting to add to the north of Highway 11. Locally, that's a Project North. So that's where we added the 500.
Speaker #2: 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 multi-year delivery.
Speaker #2: 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.
Scott Lauber: I think there's a lot of opportunities here.
Scott Lauber: I think there's a lot of opportunities here.
Speaker #2: So, I think there's a lot of opportunities here.
Julien Dumoulin-Smith: Yeah, do you want to expand on that? I mean, it seems as if 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, you know, obviously, phase one has been so large, 500 megawatts. Do we have any other further clues about just how big and how fast this could go? Sorry to press you so much on it, but it tantalizes.
Julien Dumoulin-Smith: Yeah, do you want to expand on that? I mean, it seems as if 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, you know, obviously, phase one has been so large, 500 megawatts. Do we have any other further clues about just how big and how fast this could go? Sorry to press you so much on it, but it tantalizes.
Speaker #4: Yeah. You want to expand on that? I mean, it seems as if the other parcel here might even be bigger than the first one.
Speaker #4: Can you just elaborate a little bit about what we understand in sort of the multi-stage , I get , I get about the of the times full extent folks are maybe at shy to talk but still , you phase one has been so obviously know , large , 500MW .
Speaker #4: Do we have any other further clues about just how big and how fast this could go? Sorry to press you so much on it, but it's tantalizing.
Scott Lauber: Yeah, I understand completely, and we're very excited about the development here, what they're doing here in Wisconsin. You know, I do not want to get out ahead of Microsoft and their plans. All I can really say is, you know, they're starting to do land at about 570 acres, and that's about where we put that 500 megawatts. There's more land, you know, 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 200 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 Southeastern Wisconsin on their plans.
Scott Lauber: Yeah, I understand completely, and we're very excited about the development here, what they're doing here in Wisconsin. You know, I do not want to get out ahead of Microsoft and their plans. All I can really say is, you know, they're starting to do land at about 570 acres, and that's about where we put that 500 megawatts. There's more land, you know, 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 200 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 Southeastern Wisconsin on their plans.
Speaker #2: Yeah , I understand completely . And we're very excited about the development here . What they're doing here in Wisconsin , you know , I do not want to get out ahead of Microsoft and their plans .
Speaker #2: All I can really say is, you know, that's to do land at about 570 acres. And that's about where we put that 500 MW.
Speaker #2: There's more land. You know, that's just the start of that development. When you think about the amount of megawatts people are now putting on land.
Speaker #2: And then I think there's at least another couple hundred or so that they haven't developed, and they're looking for more land. As we talked to the paper, they've been very transparent here in southeastern Wisconsin and their plans.
Scott Lauber: So more to come, and I don't want to get ahead of Microsoft by any means, so just very positive as we continue to see their development grow.
Scott Lauber: So more to come, and I don't want to get ahead of Microsoft by any means, so just very positive as we continue to see their development grow.
Speaker #2: So, more to come. But, and I don't want to get ahead of Microsoft by any means. So, very positive as we continue to see their development grow.
Julien Dumoulin-Smith: Awesome. And then just an, I'll bring up another subject real quickly. On Point Beach, how are the negotiations progressing, and at what point do you need to make a decision about the 500MW there for replacement power or what have you, for the 2030 piece?
Julien Dumoulin-Smith: Awesome. And then just an, I'll bring up another subject real quickly. On Point Beach, how are the negotiations progressing, and at what point do you need to make a decision about the 500MW there for replacement power or what have you, for the 2030 piece?
Speaker #4: Awesome . And then just I'll bring up another subject real on quickly Point Beach . How are the negotiations progressing and at what point do you need to make a decision ?
Speaker #4: About the 500 MW there, for replacement power or what have you? For the 2030 piece?
Scott Lauber: Yeah, great question, and when we look at it, you know, those contracts end in 2030, and then the second one is in 2033, I think, at the beginning of 2033. So we have time. You know, we're still in communications with NextEra on the plant. We're going to factor all that in and what we need, which I only can see as potentially upside in our plan, in our fall update. So we're going through our planning process like we do every summer, looking at, you know, how did the winter, you know, this cold spell, how did the system perform? What do we look at in the future for additional growth?
Scott Lauber: Yeah, great question, and when we look at it, you know, those contracts end in 2030, and then the second one is in 2033, I think, at the beginning of 2033. So we have time. You know, we're still in communications with NextEra on the plant. We're going to factor all that in and what we need, which I only can see as potentially upside in our plan, in our fall update. So we're going through our planning process like we do every summer, looking at, you know, how did the winter, you know, this cold spell, how did the system perform? What do we look at in the future for additional growth?
Speaker #2: Yeah , great question . And when we look at you know , those contracts end in 2030 . And then the second one is in 2033 I think at the beginning of 2033 .
Speaker #2: So we have time , you know , we're still communications with with with NextEra on the plant . We're going to factor all that in .
Speaker #2: And what we need, which I can only see as potential upside in our plan, is in our fall update. So we're going through our planning process like we do every summer.
Speaker #2: Looking at , you know , how did the winter you know , these cold spell , how did the system perform . What do we look at in the future for additional growth ?
Scott Lauber: Adding another year onto our sales forecast, and then, of course, factoring in this Point Beach PPA, if we need to replace it with some other generation. You know, I see that as potential upside in the plan, but we'll factor that into the fall.
Scott Lauber: Adding another year onto our sales forecast, and then, of course, factoring in this Point Beach PPA, if we need to replace it with some other generation. You know, I see that as potential upside in the plan, but we'll factor that into the fall.
Speaker #2: Adding another year on to our sales forecast . And then of course , factoring in this this point , beach . to PPA , if replace it with some other generation .
Speaker #2: You know, I see that as potential upside in the plan. But we'll factor that into the fall.
Julien Dumoulin-Smith: Awesome. Nicely done, guys. We'll talk to you soon. Take care.
Julien Dumoulin-Smith: Awesome. Nicely done, guys. We'll talk to you soon. Take care.
Speaker #4: Awesome. Nicely done, guys. We'll talk to you soon. Take care.
Scott Lauber: Sounds good.
Scott Lauber: Sounds good.
Julien Dumoulin-Smith: Good luck.
Julien Dumoulin-Smith: Good luck.
Scott Lauber: Thank you. Yep.
Scott Lauber: Thank you. Yep.
Speaker #2: Good luck. Thank you. Yep.
Operator: Your next question comes from the line of Shahriar Pourreza with Wells Fargo. Please go ahead.
Operator: Your next question comes from the line of Shahriar Pourreza with Wells Fargo. Please go ahead.
Speaker #1: Your next question comes from the line of Shah Pourreza with Wells Fargo. Please go ahead.
Carly Davenport: Hey, good afternoon, everyone. It's actually Alex on for Shar. Thanks for taking our questions.
Carly Davenport: Hey, good afternoon, everyone. It's actually Alex on for Shar. Thanks for taking our questions.
Speaker #5: Hey. Good afternoon, everyone. It's actually Alex on for Shar. Thanks for taking our questions.
Scott Lauber: Absolutely, Alex.
Scott Lauber: Absolutely, Alex.
Carly Davenport: So, you know, obviously, you're seeing a lot of growth on the data center front, so you've highlighted Microsoft and the Vantage projects. But can you maybe talk a little bit more, maybe to the extent that you can, are you seeing additional interest from other hyperscaler customers? And if I could just add on, you know, 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? Thanks.
Alex Papsan: So, you know, obviously, you're seeing a lot of growth on the data center front, so you've highlighted Microsoft and the Vantage projects. But can you maybe talk a little bit more, maybe to the extent that you can, are you seeing additional interest from other hyperscaler customers? And if I could just add on, you know, 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? Thanks.
Speaker #2: Absolutely , Alex .
Speaker #5: , you know , So obviously you're seeing a lot of growth on the data center front . So you've highlighted Microsoft and the vantage projects , but can you maybe talk a little bit more and maybe to the extent that you can , are you seeing additional interest from other hyperscaler customers .
Speaker #5: And if I can just add on, you know, 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 customers, despite attracting some of these headwinds we've seen recently? Thanks.
Scott Lauber: Sure, and you have seen a little noise around the state. I think you're seeing a couple 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, being much more proactive than they were two 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 in protecting other customers.
Scott Lauber: Sure, and you have seen a little noise around the state. I think you're seeing a couple 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, being much more proactive than they were two 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 in protecting other customers.
Speaker #5: .
Speaker #2: 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 .
Speaker #2: So, I think everyone understands they need to be more transparent, working more with the communities, being much more proactive than they were two years ago.
Speaker #2: 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.
Speaker #2: And, like, the fact that they can really point to something very transparent and protecting other customers. So, you know, we don't have a tendency to talk about a pipeline, because we want to just talk about what's actually announced and developed.
Scott Lauber: You know, we don't have a tendency to talk about a pipeline because we wanna just talk about what's actually announced and developed, but there's other opportunities, and we're in multiple discussions.
Scott Lauber: You know, we don't have a tendency to talk about a pipeline because we wanna just talk about what's actually announced and developed, but there's other opportunities, and we're in multiple discussions.
Speaker #2: But there are other opportunities, and we're in multiple discussions.
Carly Davenport: Got it then. That's helpful. And then just sort of, you know, looking at the five-year outlook you have out there, so 2026, 2027, 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 wanna get a sense on, you know, 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 could potentially move the needle? Thanks.
Alex Papsan: Got it then. That's helpful. And then just sort of, you know, looking at the five-year outlook you have out there, so 2026, 2027, 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 wanna get a sense on, you know, 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 could potentially move the needle? Thanks.
Speaker #5: Got it . helpful . That's And then just sort of , you know , looking at the five year you have outlook there .
Speaker #5: Out, so 2,627—you're at that six and a half to 7% growth. Obviously, you're seeing a lot of growth. Is this just timing as to when data centers start coming online?
Speaker #5: Just want to get a sense on, you know, what could be holding you back from growing at that 7 to 8% in the first half of the plan?
Speaker #5: Is there anything you see out there that could potentially move the needle? Thanks.
Scott Lauber: Yeah. Yeah, that's a great question. And, you know, we're 6.5 to 7 this year, and we're consistent with... We talked about 7 to 8 in 2027, and then in the 8 range after that. It really just mirrors our capital plan, and everyone's 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 projects, which is good to see. Too early to do anything, move anything, but really positive, and it really just mirrors our capital plan.
Scott Lauber: Yeah. Yeah, that's a great question. And, you know, we're 6.5 to 7 this year, and we're consistent with... We talked about 7 to 8 in 2027, and then in the 8 range after that. It really just mirrors our capital plan, and everyone's 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 projects, which is good to see. Too early to do anything, move anything, but really positive, and it really just mirrors our capital plan.
Speaker #2: Yeah , yeah , that's a great question . And you know , we're six and a half to seven this year . And we're consistently we talked about 7 to 8 in 27 .
Speaker #2: And then in the eight range after that, it really just mirrors our capital plan. And everyone's great, doing a job getting projects identified and getting things staged.
Speaker #2: 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 projects , which is good to see .
Speaker #2: Too early to do anything , move anything . But really . And it positive really just mirrors our capital plan . But this extra billion , which is , as Shar said , probably in that 2930 time frame , just really is going to strengthen the long term outlook for our capital plan .
Scott Lauber: But adding this extra $1 billion, which is, as Sha said, probably in that 2029, 2030 timeframe, just really is gonna strengthen the long-term outlook for our capital plan.
Scott Lauber: But adding this extra $1 billion, which is, as Sha said, probably in that 2029, 2030 timeframe, just really is gonna strengthen the long-term outlook for our capital plan.
Carly Davenport: Great. Thanks for the color. I'll leave it there.
Alex Papsan: Great. Thanks for the color. I'll leave it there.
Speaker #5: Great. Thanks for the color. I'll leave it there.
Scott Lauber: Thank you.
Scott Lauber: Thank you.
Speaker #2: Thank you .
Operator: Your next question comes from the line of Nicholas Campanella with Barclays. Please go ahead.
Operator: Your next question comes from the line of Nicholas Campanella with Barclays. Please go ahead.
Speaker #1: Your next question comes from the line of Nicholas Campanella with Barclays. Please go ahead.
Nicholas Campanella: Hey, good afternoon, everyone. Hope everyone's well. Thanks for taking my questions.
Nicholas Campanella: Hey, good afternoon, everyone. Hope everyone's well. Thanks for taking my questions.
Speaker #6: Hey. Good afternoon, everyone. Hope everyone's well. Thanks for taking my questions.
Scott Lauber: Absolutely. Good afternoon to you, too.
Scott Lauber: Absolutely. Good afternoon to you, too.
Nicholas Campanella: I just wanted to. Yeah, absolutely. Good to get all the updates. Just wanted to ask on regulatory, just now that we kind of have, you know, all the testimonies out there on the VLC, you know, how do you feel about the potential to kind of settle this, 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, you know, still on track for midway through this year. Thanks.
Nicholas Campanella: I just wanted to. Yeah, absolutely. Good to get all the updates. Just wanted to ask on regulatory, just now that we kind of have, you know, all the testimonies out there on the VLC, you know, how do you feel about the potential to kind of settle this, 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, you know, still on track for midway through this year. Thanks.
Speaker #2: Absolutely. Good afternoon to you too.
Speaker #6: Just . Yeah , absolutely . Good to good to get all the updates . I just wanted to ask on regulatory just now that we kind of have , you know , all the testimonies out there on the VLC .
Speaker #6: How do you feel about the potential to kind of settle this, if that's important at all? And if the window is open to do so.
Speaker #6: And then I'm also just wondering on the timing of the GRC filing, if that's still on track for this year— for midway through. Thanks.
Scott Lauber: Sure. Great question. The Very Large Customer tariff, I see that going the entire period that the commission makes a decision. One of the items that we wanna 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 wanna 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. I don't have any concerns going through the entire process.
Scott Lauber: Sure. Great question. The Very Large Customer tariff, I see that going the entire period that the commission makes a decision. One of the items that we wanna 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 wanna 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. I don't have any concerns going through the entire process.
Speaker #2: Sure . Great , great question . And the very large customer tariff I see that going the entire period that the commission makes a decision .
Speaker #2: And one of the items that we want to make sure we have when everyone talks about affordability and data centers causing rate increases, this tariff is one of the best, or the best, out there.
Speaker #2: We think to make sure the data centers pay their fair share . We want to and we transparency want to go through the entire audit process and get all those questions out there .
Speaker #2: So remember, we filed it up in conjunction, and Microsoft Vantage have supported the tariff. And now we're just going through a very thorough vetting process.
Speaker #2: 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 transparency on working.
Speaker #2: 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 transparency on how it's true. So we have our, on our largest customers and then on the, on the rate case filing.
Scott Lauber: 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 in the process of pulling the numbers together, but you know, on track to get that filing out there.
Scott Lauber: 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 in the process of pulling the numbers together, but you know, on track to get that filing out there.
Speaker #2: We're on track filing in April . We're still we're in the process of pulling the numbers together . But , you know , on on track to get that filing out there .
Nicholas Campanella: Hey, great. Thanks for that. And then just maybe really quick on the financing. I know that there was the comments around, you know, the $1 billion ATM for 2026. Just any thoughts on, you know, further de-risking the plan past that, or, you know, could there be any downside to this number if you guys were to lean on some additional hybrids if there is capacity? Thank you.
Nicholas Campanella: Hey, great. Thanks for that. And then just maybe really quick on the financing. I know that there was the comments around, you know, the $1 billion ATM for 2026. Just any thoughts on, you know, further de-risking the plan past that, or, you know, could there be any downside to this number if you guys were to lean on some additional hybrids if there is capacity? Thank you.
Speaker #6: Hey , great . Thanks for thanks for that . And then just maybe really quick on the financing . Just I know that there was the comments around , you know , the 1 billion ATM for 26 .
Speaker #6: Just any thoughts on further de-risking the plan past that, or could there be any downside to this number if you guys were to lean on some additional hybrids?
Speaker #6: If there is capacity? Thank you.
Scott Lauber: Yeah. I'll let Sha answer that one.
Scott Lauber: Yeah. I'll let Xia answer that one.
Xia Liu: Yeah, 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.
Xia Liu: Yeah, 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.
Speaker #2: Yeah, let Shaw answer that one.
Speaker #3: Yeah , absolutely . We are all over that . So we have a limited hybrid financing . So far . We had a $600 million issuance last year .
Speaker #3: So, we have a significant capacity for— But this hybrids. The $900 million to $1.1 billion I talked about is for common equity financing. And as I said, we're relying on ATM.
Speaker #3: So, we fully expect to get that executed throughout the year.
Nicholas Campanella: Thank you.
Nicholas Campanella: Thank you.
Speaker #6: Thank you .
Scott Lauber: Thank you.
Scott Lauber: Thank you.
Speaker #2: Thank you .
Operator: Your next question comes from the line of Carly Davenport with Goldman Sachs. Please go ahead.
Operator: Your next question comes from the line of Carly Davenport with Goldman Sachs. Please go ahead.
Speaker #1: Your next question comes from the line of Carly Davenport with Goldman Sachs. Please go ahead.
Carly Davenport: Hey, good afternoon. Thanks so much for taking the questions. 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?
Carly Davenport: Hey, good afternoon. Thanks so much for taking the questions. 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?
Speaker #7: Hey . Good afternoon . Thanks so much for taking the questions . Maybe to to start just can you talk a bit about how you're thinking about potential election rhetoric around affordability ?
Speaker #7: 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.
Scott Lauber: Sure. Sure, and you know, across the country, you're hearing affordability. And in Wisconsin here, as you, as you mentioned, you know, we do have a governor's race. It's a pretty open race. Our Governor Evers is not running again. So there are several Democrats who have thrown their hat in the ring. We're really early in the process. There's several issues that they're bringing up. You know, in addition to affordability and property taxes, they're also looking at healthcare, childcare, and education. So there's a lot of topics that are being floated around. But we're definitely aware of affordability and, you know, we continue to. You know, 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.
Scott Lauber: Sure. Sure, and you know, across the country, you're hearing affordability. And in Wisconsin here, as you, as you mentioned, you know, we do have a governor's race. It's a pretty open race. Our Governor Evers is not running again. So there are several Democrats who have thrown their hat in the ring. We're really early in the process. There's several issues that they're bringing up. You know, in addition to affordability and property taxes, they're also looking at healthcare, childcare, and education. So there's a lot of topics that are being floated around. But we're definitely aware of affordability and, you know, we continue to. You know, 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.
Speaker #2: Sure , sure . And you're , you know , across the country , you're hearing affordability . And in Wisconsin here , as you mentioned , you know , we as you do have a governor's race that's pretty open race .
Speaker #2: Our Governor Evers is not running again, so there are several Democrats who have thrown their hat in the ring. We're really early in the process.
Speaker #2: There's several issues that they're bringing up . You know , in addition to affordability and property also taxes , they're looking at health care , child care , education .
Speaker #2: So there's a lot of topics that are b that are being floated around . But we're definitely aware of affordability . And you know , we continue to you know , we're pulling our numbers together .
Speaker #2: But a lot of our rates are doing a keep—we keep them as low as possible. We have a lot of initiatives to keep costs low.
Scott Lauber: 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 costs, 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 to customers. So we think about affordability every day, but that's how we're kind of factoring stuff in.
Scott Lauber: 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 costs, 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 to customers. So we think about affordability every day, but that's how we're kind of factoring stuff in.
Speaker #2: And in fact, as we close the book, this is the last books this year in Wisconsin Electric. When you look at the performance of our plants and the fuel costs, we were able to be in a positive fuel recovery.
Speaker #2: And because of the warmer weather, we got into a positive position on their sharing mechanism at Wisconsin Electric. That results in approximately $55 million that we will be able to give back to the customers.
Speaker #2: So we think about affordability every day, but that's how we're kind of factoring stuff in.
[Analyst] (Goldman Sachs): That's great. Thank you so much for the color there. 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?
Carly Davenport: That's great. Thank you so much for the color there. 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?
Speaker #7: That's great . Thank you so much for the color there . And then the follow up , maybe just on Illinois . No , you're still early stages on on the PRP .
Speaker #7: But I guess there are any near-term milestones we should be watching there to gauge progress, and also gauge the support from the commission for those investments.
Scott Lauber: 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. You know, this settlement is a big step forward, as in we stopped to look, 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.
Scott Lauber: 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. You know, this settlement is a big step forward, as in we stopped to look, 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.
Speaker #2: 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 .
Speaker #2: We are , you know , this settlement is a big step forward , as we start to look , looking backwards . And now we're looking forward the early indications will be and we were working on the kick starts to , it soon projects off with field work .
Speaker #2: We've done a little bit last year laying out the plans, but really in this test we'll have forward-looking capital plans that the commission will also have a look at.
Scott Lauber: We're working very closely now that the safety monitor is on staff and has been hired and laying out our plans of what we're doing and how we're reporting to the safety monitor. So I think the indication is gonna be, probably the first one 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.
Scott Lauber: We're working very closely now that the safety monitor is on staff and has been hired and laying out our plans of what we're doing and how we're reporting to the safety monitor. So I think the indication is gonna be, probably the first one 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.
Speaker #2: And we're working very closely now that the safety monitor is on, is on staff and has been hired, and laying out our plans of what we're doing and how we're reporting to the safety monitor.
Speaker #2: So I think the indication is going to be probably the first one is what happens in our rate case filing just that we filed , which really is forward looking for 2027 and how we prioritize the projects .
[Analyst] (Goldman Sachs): Got it. Great. Thanks so much for the updates.
Carly Davenport: Got it. Great. Thanks so much for the updates.
Speaker #7: It got it. Great. Thanks so much for the updates.
Scott Lauber: Thank you.
Scott Lauber: Thank you.
Speaker #2: Thank you .
Operator: Your next question comes from the line of Michael Sullivan with Wolfe Research. Please go ahead.
Operator: Your next question comes from the line of Michael Sullivan with Wolfe Research. Please go ahead.
Speaker #1: Next, your question comes from the line of Michael Sullivan with Wolfe. Please go ahead.
Michael Sullivan: Hey, good afternoon. I'll just pick up on-
Michael Sullivan: Hey, good afternoon. I'll just pick up on-
Speaker #8: Hey , good afternoon . I'll just pick up on the last hey , Scott , I'll just pick up on the last line of questions .
Scott Lauber: Can you hear me?
Scott Lauber: Can you hear me?
Michael Sullivan: Hey, hey, Scott. 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 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.
Michael Sullivan: Hey, hey, Scott. 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 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.
Speaker #8: with Sticking Illinois , any chance you can settle these rate relates and then cases also , as it the riders , you just settled on , I mean , it seems like the bill credits and rate based reduction creates a little headwind .
Speaker #8: So, just thinking about offsetting that a bit—how you're...
Scott Lauber: 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 the intervener. So a little bit too early on all of that. When you think about the settlement we just had in Illinois, and you look at that, really look at it, the overall picture, that's why we reaffirmed our long-term growth rate of that 7% to 8% or 7% to 8% 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.
Scott Lauber: 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 the intervener. So a little bit too early on all of that. When you think about the settlement we just had in Illinois, and you look at that, really look at it, the overall picture, that's why we reaffirmed our long-term growth rate of that 7% to 8% or 7% to 8% 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.
Speaker #2: 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.
Speaker #2: And the staff audit and Interveners . So a little bit too early on on all of that , when you think about the settlement , we just had in Illinois and you look and I really look at it , the overall picture , that's why we reaffirmed our long term rate growth of that 7 to 8% , with 7 to 8% growth , with the upper end of the range in 2028 and beyond .
Speaker #2: I mean , we factored all that in as we as we looked at that and as you heard on the call , we just add another billion dollars of growth .
Scott Lauber: 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, you know, we were able to offset it very quickly here, but a good spot to move forward in Illinois.
Scott Lauber: 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, you know, we were able to offset it very quickly here, but a good spot to move forward in Illinois.
Speaker #2: And remember that growth is really driven by the hyperscalers , which are paying their share for the electricity have a it doesn't So burden on our other customers rates .
Speaker #2: So, you know, we were able to offset it very quickly here. But a good spot to move forward in Illinois.
Michael Sullivan: Okay, great. Then maybe I'll just go there next in terms of what the Microsoft ramp could do. They're paying their, their fair share. Is it possible they actually could lower rates for, for customers? And maybe any sense of size you could give us on the upcoming Wisconsin rate case?
Michael Sullivan: Okay, great. Then maybe I'll just go there next in terms of what the Microsoft ramp could do. They're paying their, their fair share. Is it possible they actually could lower rates for, for customers? And maybe any sense of size you could give us on the upcoming Wisconsin rate case?
Speaker #8: 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 .
Speaker #8: Is it possible they actually can lower rates for customers, and maybe any sense of size you could give us on the upcoming Wisconsin rate case?
Scott Lauber: Yeah, 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 gonna see more of this as that bill 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 go into 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.
Scott Lauber: Yeah, 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 gonna see more of this as that bill 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 go into 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.
Speaker #2: Yeah , 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 bill gets bigger .
Speaker #2: 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.
Speaker #2: Remember, into their starting first site is just service, and a lot of that capital spending is in the later part of the plan.
Speaker #2: But long term, it's incrementally good for customers.
Michael Sullivan: Okay, great. Thank you.
Michael Sullivan: Okay, great. Thank you.
Scott Lauber: Thank you.
Scott Lauber: Thank you.
Speaker #8: Okay, great. Thank you.
Speaker #2: Thank you .
Operator: Your next question comes from the line of Steve D'Ambrisi with RBC Capital Markets. Please go ahead.
Operator: Your next question comes from the line of Steve D'Ambrisi with RBC Capital Markets. Please go ahead.
Speaker #1: Next, your question comes from the line of Steven D'Ambrosi with RBC Capital Markets. Please go ahead.
Steve D'Ambrisi: Hi, Scott. Hi, Shaw. Thanks, very much for taking my question.
Stephen D'Ambrisi: Hi, Scott. Hi, Shaw. Thanks, very much for taking my question.
Speaker #9: Hi, Scott. Hi. Thanks very much for taking my question.
Scott Lauber: Absolutely.
Scott Lauber: Absolutely.
Steve D'Ambrisi: I just had a quick one. You know, congratulations on increasing the Microsoft load. But I really wanted to follow on to Julien's Point Beach questions and just quickly understand, you know, to the extent you do move forward with replacing the Point Beach PPA with generation, do you have generation interconnect agreements or slots in the MISO queue, or can you participate in the eras process? I think there's a rolling window where you can cycle in, and I just wasn't sure if you already had any slots or were looking to potentially add some, or if that's a place that we could watch to see potential activity on your end. Thanks.
Stephen D'Ambrisi: I just had a quick one. You know, congratulations on increasing the Microsoft load. But I really wanted to follow on to Julien's Point Beach questions and just quickly understand, you know, to the extent you do move forward with replacing the Point Beach PPA with generation, do you have generation interconnect agreements or slots in the MISO queue, or can you participate in the eras process? I think there's a rolling window where you can cycle in, and I just wasn't sure if you already had any slots or were looking to potentially add some, or if that's a place that we could watch to see potential activity on your end. Thanks.
Speaker #2: Absolutely .
Speaker #9: I just had a quick one. Congratulations on increasing the Microsoft load. But I really wanted to follow on to Julian's beach.
Speaker #9: Point Questions and just quickly understand , you know , to the extent you do move forward with replacing the point beach PPA with generation , do you do you have interconnect generation , interconnect agreements or slots in the Miso or can you participate in the Eras process ?
Speaker #9: I think there's a rolling window where you can cycle in, and I just wasn't sure if you already had any slots or were looking to potentially add some, or if that's the place where we could watch to see potential activity on your end.
Scott Lauber: Yeah, that's, that's a good question, and, and we work alongside with a, a very good developer of energy as we develop our plans to make sure we have you know, renewables, batteries, you know, natural gas generation. And, you know, 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 2033. We're gonna look, of course, at what's economic for our customers. So we're gonna 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?
Scott Lauber: Yeah, that's, that's a good question, and, and we work alongside with a, a very good developer of energy as we develop our plans to make sure we have you know, renewables, batteries, you know, natural gas generation. And, you know, 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 2033. We're gonna look, of course, at what's economic for our customers. So we're gonna 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?
Speaker #9: Thanks .
Speaker #2: Yeah , that's a good question . And we work alongside with a very good developer of energy as we develop our plans to make sure we have , you know , renewables , batteries , you know , natural gas generation .
Speaker #2: And , you know , I feel very confident in talking to our generation team , not to give you too many details here that we can replace that power .
Speaker #2: Look at 20. As we [look at] 30 and 33, we're going to look, of course, at what's economic for our customers.
Speaker #2: 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.
Operator: Your next question comes from the line of Andrew Weisel with Scotiabank. Please go ahead.
Operator: Your next question comes from the line of Andrew Weisel with Scotiabank. Please go ahead.
Speaker #1: next Your question comes from Weisel with of Andrew the line Scotiabank . Please go ahead .
Andrew Weisel: Hey, good afternoon, everybody.
Andrew Weisel: Hey, good afternoon, everybody.
Speaker #10: Hey, good afternoon, everybody.
Scott Lauber: Hey, Andrew.
Scott Lauber: Hey, Andrew.
Andrew Weisel: 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?
Andrew Weisel: 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?
Speaker #2: Hey , Andrew .
Speaker #10: First, just a quick one. The gap charge you took related to Illinois— is there a cash component to that, or might there be one going forward?
Scott Lauber: Sure. There's two components, and the total is that $0.46, as you saw on that adjustment. The one component is a $130 million rate-based component that is forward-looking in perspective and will be factored in 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 three years. It's approximately $50 million in that first year, and then the last two years are split evenly for the remaining $75 million. So that's. It'll be a little cash. It'll be a little pressure, of course, on our FFO, the debt matrix, but good to get this, these old cases behind us.
Scott Lauber: Sure. There's two components, and the total is that $0.46, as you saw on that adjustment. The one component is a $130 million rate-based component that is forward-looking in perspective and will be factored in 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 three years. It's approximately $50 million in that first year, and then the last two years are split evenly for the remaining $75 million. So that's. It'll be a little cash. It'll be a little pressure, of course, on our FFO, the debt matrix, but good to get this, these old cases behind us.
Speaker #2: Sure . There's there's two components in the total . Is that $0.46 that you saw on that adjustment . The one component is $130 million rate .
Speaker #2: Base components . That is forward looking and perspective will be factored in in the final rate order . That's what we're anticipating will happen .
Speaker #2: And then there's $125 million of cash credits that go back to customers over the next three years. It's approximately $50 million in that first year.
Speaker #2: And then the last two years is evenly for the split remaining 75 . So be a that's it'll little cash , it'll be a little debt course , pressure , of on our FFO to matrix , but good to get this .
Speaker #2: These old cases behind us.
Andrew Weisel: Got it. Thank you. Next, I'm hoping you can clarify a little the interplay between the VLC tariff and 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?
Andrew Weisel: Got it. Thank you. Next, I'm hoping you can clarify a little the interplay between the VLC tariff and 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?
Speaker #10: Got it. Thank you. Next, I'm hoping you can clarify a little the interplay between the VLC tariff and the general rate case.
Speaker #10: I've been getting enough questions . I think there's some confusion . Firstly , can you preview when you file in April ? Just round numbers .
Speaker #10: What kind of rate impact should we expect for the customers in general now that the data center customers are being separated?
Scott Lauber: 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 it, you—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'll 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 gonna be broken out.
Scott Lauber: 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 it, you—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'll 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 gonna be broken out.
Speaker #2: Sure , sure . And and we're pulling those numbers together . So I really there's a lot of stuff that has to happen .
Speaker #2: 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 separate it , just like we do for our wholesale these customers , very large separated for customers .
Speaker #2: The wholesale customers . And then what's remaining for our general rate case . So it'll be very once again , very transparent on all the assets that the very large customers are paying for .
Speaker #2: In total. So that's kind of how it's going to be broken out. And, of course, you know how the bills and stuff are set up and all the costs will be allocated that are directly assigned or allocated to those very large customers.
Scott Lauber: Of course, you know, how the bills 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 concepts.
Scott Lauber: Of course, you know, how the bills 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 concepts.
Speaker #2: So we're in the process of laying out how that will look right now. But that's the concept.
Andrew Weisel: Okay, fair enough. And then, you know, going one step further, over the longer term, beyond 2027 and 2028 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?
Andrew Weisel: Okay, fair enough. And then, you know, going one step further, over the longer term, beyond 2027 and 2028 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?
Speaker #10: Okay, fair enough. And then, going one step further, over the longer term, beyond the '27 and '28 test period, that will be addressed.
Speaker #10: How should we think about this idea: if data center activity exceeds expectations, would that help the rest of the customers by lowering their rates, or would it just leave them unimpacted?
Speaker #10: In other words, is the idea that data centers are completely independent, or is the idea that the excess from the center is what helps the rest?
Speaker #10: In other words, is the idea that data centers are completely independent, or is the idea that excess from the center—data the rest help should?
Scott Lauber: 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 cost. 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 five-year plan, we're looking at that rate base to be in a, 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 gonna see more of that as those assets continue to build. But that's, you know, more of it's gonna be in service in that 2028, 2029, 2030 timeframe.
Scott Lauber: 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 cost. 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 five-year plan, we're looking at that rate base to be in a, 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 gonna see more of that as those assets continue to build. But that's, you know, more of it's gonna be in service in that 2028, 2029, 2030 timeframe.
Speaker #2: general ? As you In look at it and I take several years , but a lot of corporate allocations are allocated on total rate , base and costs .
Speaker #2: So, as you can imagine, even as we went through the acquisition of Entegris, we were able to spread common costs across a bigger footprint.
Speaker #2: Having data centers will have significant rate base . I think , in our five year plan , we're looking at that rate base to be to 14 to 15% of our earnings .
Speaker #2: 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.
Speaker #2: But that's, you know, more of it is going to be in service. And that 2028–2029–2030 time frame, okay.
Andrew Weisel: Okay, very good. One last-- It does, yeah. Thank you. One last one, just on timing. I... My understanding is the VLC ruling should come pretty much around the same time as you're filing for the general rate case. Is it important that the first one concludes before the second one begins, or do you think of them as independent tracks?
Andrew Weisel: Okay, very good. One last-- It does, yeah. Thank you. One last one, just on timing. I... My understanding is the VLC ruling should come pretty much around the same time as you're filing for the general rate case. Is it important that the first one concludes before the second one begins, or do you think of them as independent tracks?
Speaker #10: Very good . One last , it does . Yeah . Thank you . One last one . Just on timing . My understanding is the VLC ruling should come pretty much around the same time as you're for the filing general rate case .
Speaker #10: Is it important, you think, that the first one concludes independent of the second one before it begins? Or do the tracks overlap?
Scott Lauber: No, you know, we're pulling it together, assuming the filing that we have on the table right now and will be two independent, 'cause we would have to file, most likely, at, like you said, about the same time, or maybe even a little before that final decision is made on the rate, on the VLCs.
Scott Lauber: No, you know, we're pulling it together, assuming the filing that we have on the table right now and will be two independent, 'cause we would have to file, most likely, at, like you said, about the same time, or maybe even a little before that final decision is made on the rate, on the VLCs.
Speaker #2: No , you know , we're pulling it together , assuming the filing that we have on the table right now . And and we'll be two , two independent because we'd have to file most likely , like you said , about the same time , or a little maybe even before that final decision is made on the rate on the VLC .
Andrew Weisel: Okay, great. Thank you so much.
Andrew Weisel: Okay, great. Thank you so much.
Speaker #10: Okay, great. Thank you so much.
Scott Lauber: Thank you.
Scott Lauber: Thank you.
Speaker #2: Thank you .
Operator: Your next question comes from the line of Paul Fremont with Ladenburg Thalmann. Please go ahead.
Operator: Your next question comes from the line of Paul Fremont with Ladenburg Thalmann. Please go ahead.
Speaker #1: Your next question comes from the line of Paul Freeman with Ladenburg. Please go ahead.
Paul Fremont: Hey, thank you very much, and congratulations. First question, is the Microsoft announcement, should we think of that as a replacement for the canceled Caledonia project, or are they still looking to do something to replace that?
Paul Fremont: Hey, thank you very much, and congratulations. First question, is the Microsoft announcement, should we think of that as a replacement for the canceled Caledonia project, or are they still looking to do something to replace that?
Speaker #11: Hey, thank you very much. And congratulations. First question is the Microsoft, and should we think of that as a replacement for the cancelled Caledonia project, or are they still looking to do something to replace that?
Scott Lauber: So a great question that, thanks, thanks, Paul. When you look at it, they had already purchased this land before that Caledonia. They're looking for additional land beyond the Caledonia. So they're still looking for additional land to replace what they decided to pull out or remove away from in Caledonia.
Scott Lauber: So a great question that, thanks, thanks, Paul. When you look at it, they had already purchased this land before that Caledonia. They're looking for additional land beyond the Caledonia. So they're still looking for additional land to replace what they decided to pull out or remove away from in Caledonia.
Speaker #2: So a question . Thanks . Thanks , Paul great . When you look at it , they had already purchased this land before that Caledonia .
Speaker #2: They, they're looking for additional land beyond that Caledonia. So they're still looking for additional land to replace what they decided to pull out or move away from in Caledonia.
Paul Fremont: Great. And then, my next question has to do with sort of the pricing of Point Beach, which 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?
Paul Fremont: Great. And then, my next question has to do with sort of the pricing of Point Beach, which 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?
Speaker #11: Great. And then my next question has to do with sort of the pricing of Point Beach, which terminates around $120 per megawatt-hour.
Speaker #11: I would think that new build would be a savings over sort of the the last years of of of the contract pricing . So why should we not assume that you would opt for new build versus Recontracting ?
Scott Lauber: I think you're gluing it together a pretty good assumption there, that those prices are pretty high, and if those prices, you know, they think they should be that high, a new build, when you think about affordability, probably makes sense. But we gotta run that analysis yet and more to come, but I do think there's upside here.
Scott Lauber: I think you're gluing it together a pretty good assumption there, that those prices are pretty high, and if those prices, you know, they think they should be that high, a new build, when you think about affordability, probably makes sense. But we gotta run that analysis yet and more to come, but I do think there's upside here.
Speaker #2: I think , I think gluing it together a pretty good assumption there that prices those And high . are pretty if and if those prices , you know , they think they should be that high , a new you think about affordability , probably makes sense .
Speaker #2: But we got build. When to run that analysis yet. And more to come. But I do think there's upside here, okay.
Paul Fremont: 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 new build?
Paul Fremont: 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 new build?
Speaker #11: Maybe last sort of a quick follow up to that . Are there retired coal plant sites that could be sort of used as for new build .
Scott Lauber: No, you know, 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 gotta think of it now as where is the natural gas line for those gas pipes, and how do you get that capacity in? So more to come, but we have spots in mind.
Scott Lauber: No, you know, 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 gotta think of it now as where is the natural gas line for those gas pipes, and how do you get that capacity in? So more to come, but we have spots in mind.
Speaker #2: No. You know, right now, actually, the coal plant that we retired multiple years ago—that's actually an economic development use at that site.
Speaker #2: 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 as where is the natural gas line for those gas pipes , and how do you get that capacity in ?
Speaker #2: So, more to come. But we have spots in mind.
Paul Fremont: Great. Thank you so much.
Paul Fremont: Great. Thank you so much.
Scott Lauber: Thank you.
Scott Lauber: Thank you.
Speaker #11: Great. Thank you so much.
Speaker #2: you Thank .
Operator: Your last question comes from the line of Paul Patterson with Glenrock Associates. Please go ahead.
Operator: Your last question comes from the line of Paul Patterson with Glenrock Associates. Please go ahead.
Speaker #1: Your last question comes from the line of Paul Patterson with Glenrock Associates. Please go ahead.
Paul Patterson: Hey, good afternoon.
Paul Patterson: Hey, good afternoon.
Speaker #12: Hey good afternoon .
Scott Lauber: Hey, Paul.
Scott Lauber: Hey, Paul.
Paul Patterson: 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?
Paul Patterson: 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?
Speaker #2: Hey , Paul .
Speaker #12: Just have a quick few housekeeping items . Just whether the residential number looks like you're you're planning on it going down in 2026 , not by much , but just in general .
Speaker #12: Is that because of energy efficiency, or is there something else we should be thinking about?
Xia Liu: 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 customer. So overall, it's a slight reduction, but we try to be conservative in the forecast.
Speaker #12: ?
Xia Liu: 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 customer. So overall, it's a slight reduction, but we try to be conservative in the forecast.
Speaker #3: We always try to
Speaker #3: 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 customer. Overall, it is a slight reduction.
Speaker #3: But we try to be conservative in the forecast, okay.
Paul Patterson: Okay. And then just in terms of 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, you know, income statement geography, where does that show up?
Paul Patterson: Okay. And then just in terms of 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, you know, income statement geography, where does that show up?
Speaker #12: 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 a $75 million just from geography , you know , a AA a income statement , geography .
Scott Lauber: Yeah, the other amount goes through revenues for some accounting reasons.
Speaker #12: Where does that show up?
Scott Lauber: Yeah, the other amount goes through revenues for some accounting reasons.
Speaker #2: Yeah , the other 70 . Yeah . The the other the the the other amount goes through revenues for some accounting reasons .
Paul Patterson: Okay, fair enough.
Paul Patterson: Okay, fair enough.
Scott Lauber: Yeah, and we'll-
Scott Lauber: Yeah, and we'll-
Speaker #12: Okay . Fair enough .
Paul Patterson: Thanks so much.
Paul Patterson: Thanks so much.
Scott Lauber: Yep, 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 Beth Straka at 414-221-4639. Thank you.
Scott Lauber: Yep, 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 Beth Straka at 414-221-4639. Thank you.
Speaker #2: And we'll . Yep . 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 vestmarka at (414) 221-4639 .
Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
Speaker #2: Thank you . .
Speaker #1: Ladies and gentlemen . That concludes today's call . Thank you all for joining . You may now disconnect . .
Operator: Please wait. The conference will begin shortly.
Operator: Please wait. The conference will begin shortly.
