01—Abstract
Summary
Summary of the 8-K filed March 26, 2024. Cited figures are marked; the original filing is the authoritative source.
WEC Energy Group, Inc. (WEC) filed this Form 8-K under Item 7.01 (Regulation FD Disclosure) on March 26, 2024 to reaffirm its 2024 annual earnings guidance of $4.80 to $4.90a per share, assuming normal weather for the rest of the year.
The company lowered its first-quarter 2024 guidance to $1.89 to $1.91b per share from the previous $1.96 to $2.00, citing one of the warmest winters in history in the Upper Midwest. First-quarter 2023 earnings were $1.61 per share, and all per-share amounts are on a fully diluted basis. The filing attaches an investor update presentation (Exhibit 99.1) for upcoming investor meetings.
The presentation highlights a 2024-2028 capital plan increased by $300 million to $23.7 billionc, a projected compound annual EPS growth rate of 6.5% to 7.0%, a dividend increase of 7.0% to an annual rate of $3.34 per share in January, and an accelerated coal exit, with coal to be eliminated as an energy source by end of 2032. The presentation also discusses regulatory developments in Illinois, where the Illinois Commerce Commission ordered Peoples Gas to pause spending under its Safety Modernization Program and opened a docket on the future of gas in the state. The company booked a non-cash charge of 41 cents per share in 2023 related to a disallowance of construction costs, and it plans to appeal the decision in court at the appropriate time.
02—Key points
Key Highlights
- 2024 EPS guidance of $4.80 to $4.90 per share reaffirmed, assuming normal weather for the remainder of the year
- First-quarter 2024 EPS guidance lowered to $1.89 to $1.91 from $1.96 to $2.00 due to unusually warm winter weather; Q1 2023 EPS was $1.61
- 2024-2028 capital plan increased by $300 million; the presentation cites $22.5 billion of projected capital spend and a 'Growth' of asset base from $29.4 billion in 2023 to $43.4 billion in 2028E
- Expected compound annual EPS growth of 6.5% to 7.0%, with dividend raised 7.0% in January to an annual rate of $3.34 per share
- Coal exit accelerated to end of 2032, with coal used only as backup fuel by end of 2030; planned regulated renewables investment of $7.0 billion, covering 3,830 MW
- Illinois Commerce Commission ordered Peoples Gas to pause Safety Modernization Program spending; decision on the rehearing requested by the company is expected by June 1, 2024
- Investor presentation attached as Exhibit 99.1 for use in upcoming investor meetings
03—Questions
Frequently Asked Questions
Did WEC Energy Group change its full-year 2024 earnings outlook?
No. The company reaffirmed its 2024 annual earnings guidance of $4.80 to $4.90 per share, assuming normal weather for the remainder of the year.
Why was first-quarter 2024 guidance lowered?
The company lowered first-quarter 2024 guidance to $1.89 to $1.91 per share, from $1.96 to $2.00, in light of one of the warmest winters in history in the Upper Midwest.
What is the status of the Illinois Safety Modernization Program?
The Illinois Commerce Commission ordered Peoples Gas to pause all spending on the program until it determines the optimal method of pipe replacement and investment level. The commission granted a limited rehearing seeking to restore $145 million of costs, and the company expects an order by June 1, 2024. The company booked a non-cash charge of 41 cents per share in 2023 related to a disallowance and plans to appeal in court at the appropriate time.
What are the company's long-term growth and capital plans?
The presentation projects compound annual EPS growth of 6.5% to 7.0%, supported by a 2024-2028 capital plan that was increased by $300 million. The asset base is expected to grow from $29.4 billion in 2023 to $43.4 billion in 2028E.
What is WEC's plan for coal-fired generation?
The company plans to eliminate coal as an energy source by end of 2032, three years earlier than previously planned. Coal is to be used only as a backup fuel by end of 2030, with retirements planned for Oak Creek Units 5-6 in May 2024, Oak Creek Units 7-8 in late 2025, Columbia Units 1-2 by June 1, 2026, and Weston Unit 3 at end of 2031.
04—Continue