01—Abstract
Summary
Summary of the 8-K filed April 15, 2024. Cited figures are marked; the original filing is the authoritative source.
WEC Energy Group, Inc. filed this Form 8-K under Item 7.01 (Regulation FD Disclosure) to furnish investor presentation slides (Exhibit 99.1) for upcoming investor meetings.
The slides address the April 12, 2024 rate requests filed with the Public Service Commission of Wisconsin by Wisconsin Electric Power Company, Wisconsin Gas LLC and Wisconsin Public Service Corporation, covering electric and natural gas rates for 2025 and 2026, with Wisconsin Electric also requesting steam rates. The presentation proposes 2025 revenue increases of 6.9% for Wisconsin Electric electric, 10.0% for Wisconsin Electric natural gas, 8.2% for Wisconsin Gas natural gas, 8.5% for Wisconsin Public Service electric and 6.8% for Wisconsin Public Service natural gas, with a Commission order expected in Q4 2024. The presentation reaffirms 2024 adjusted earnings guidance of $4.80 to $4.90a per share, lowers first-quarter 2024 guidance to $1.89 to $1.91 per share from $1.96 to $2.00 due to a warm winter, and raises the five-year 2024-2028 capital plan by $300 million.
It also reports a 7.0% dividend increase to an annual rate of $3.34b per share and a projected 2024-2028 compound annual EPS growth rate of 6.5% to 7.0%. Illinois proceedings remain a watch item, including a pause on Peoples Gas' Safety Modernization Program and a limited rehearing that could restore $145 million of costs, with an order expected by June 1, 2024. For investors, the key items are the pending Wisconsin rate requests, the reaffirmed guidance and growth outlook, and the updated capital plan and coal-exit timeline, which the presentation accelerates to end of 2032.
02—Key points
Key Highlights
- Wisconsin rate requests filed April 12, 2024 for 2025 and 2026, with proposed 2025 electric increases of 6.9% (Wisconsin Electric) and 8.5% (Wisconsin Public Service), and natural gas increases of 10.0%, 8.2% and 6.8% across the three utilities
- 2024 adjusted EPS guidance of $4.80 to $4.90 affirmed; first-quarter 2024 guidance lowered to $1.89 to $1.91 per share from $1.96 to $2.00 due to one of the warmest winters in history
- 2024-2028 capital plan increased by $300 million; the presentation cites $22.5 billion of projected capital spend
- Quarterly dividend of 83.5 cents, with the January dividend raised 7.0% to an annual rate of $3.34 per share, the 21st consecutive annual increase
- Projected compound annual EPS growth of 6.5% to 7.0%, with estimated year-end average asset base growing from $29.4 billion in 2023 to $43.4 billion in 2028
- Coal exit accelerated to end of 2032, with coal used only as backup fuel by end of 2030; planned retirements include Oak Creek Units 5-6 in May 2024
- Illinois regulatory risk: ICC ordered Peoples Gas to pause Safety Modernization Program spending, with an order on the limited rehearing expected by June 1, 2024
03—Questions
Frequently Asked Questions
What rate increases did the Wisconsin utilities request?
The Wisconsin utilities proposed 2025 revenue increases of 6.9% for Wisconsin Electric electric, 10.0% for Wisconsin Electric natural gas, 8.2% for Wisconsin Gas natural gas, 8.5% for Wisconsin Public Service electric and 6.8% for Wisconsin Public Service natural gas. The 2026 proposed increases range from 3.3% to 4.6%. Electric proposals include fuel, which will be updated in Q4. The filing states that the Commission's order is expected in Q4 2024, with new rates effective January 1, 2025.
Did WEC change its 2024 earnings guidance?
WEC affirmed its 2024 adjusted earnings guidance of $4.80 to $4.90 per share, assuming normal weather going forward. It lowered first-quarter 2024 guidance to $1.89 to $1.91 per share from $1.96 to $2.00, citing one of the warmest winters in history. First-quarter 2023 earnings were $1.61 per share.
How is the capital plan changing?
The 2024-2028 capital plan was increased by $300 million versus the November 2023 plan, with key drivers including $800 million for Illinois gas delivery, $800 million for energy infrastructure, $200 million for regulated renewables and $100 million for electric delivery. The presentation also plans to build and own 3,800 MW of regulated renewables with a $7.0 billion investment.
What is the Illinois risk to the company?
The Illinois Commerce Commission ordered Peoples Gas to pause all Safety Modernization Program spending until it determines the optimal method of pipe replacement. It granted a limited rehearing seeking to restore $145 million of costs, with an order expected by June 1, 2024. In 2023, the company booked a non-cash charge of 41 cents per share related to a disallowance of construction costs, and it plans to appeal that decision in court.
What dividend and growth outlook does WEC present?
In January, WEC raised its dividend by 7.0% to an annual rate of $3.34 per share, marking the 21st consecutive year of higher dividends. The presentation projects compound annual EPS growth of 6.5% to 7.0%, with a five-year cash from operations forecast of $16.5 to $17.5 billion for 2024-2028.
04—Continue