WEC Lifts Five-Year Capital Plan $10 Billion To $47.5 Billion, Yet Sees Equity Needs Roughly Flat
The CFO credits cash returns from very large customers, and the CEO teases an unnamed 400-megawatt customer.
WEC Energy Group, the Milwaukee holding company behind Wisconsin's electric and gas utilities, raised its 2027-2031 capital plan by $10 billion to $47.5 billion, and CFO Xia Liu said on the company's earnings call Thursday that common equity needs should stay relatively flat. CEO Scott Lauber, on the same call, pointed to an unnamed new customer behind an added 400 megawatts and said: "Stay tuned."
Why equity stays flat
Liu said the plan leans on cash from operations of $26 billion to $27 billion over five years, with about $19 billion from incremental debt, including hybrid instruments. Common equity is about 10% of total cash sources, and Lauber put total equity funding at roughly $5.5 billion, flat with the prior plan.
The driver is a shift in how very large customers pay. Liu said the plan assumes they pay cash returns on construction work in progress instead of the company accruing financing credits, which Lauber called a "step change." Liu added that the unwinding will not repeat, so "incrementally, you would need a little more equity."
Asked by a Barclays analyst about later years, Liu said each incremental dollar of capital should carry about 40% equity content, down from the 50 cents WEC has traditionally guided. She said equity would be a little front-end loaded. She also said the company has locked in about $1.16 billion of common equity in the first nine months of 2026.
A mystery 400 megawatts
Lauber said the plan includes an additional 400 megawatts for another customer the company is making progress with. He later said it is anticipated to be one customer, still working with different communities.
An RBC Capital Markets analyst asked where the load would sit. Lauber said locations in both of WEC's territories are being considered, and that community interest, transmission lines and capacity all matter. He said some long-lead-time equipment is in the plan for load that probably arrives around 2032 or 2033.
Lauber said about eight-plus of the $10 billion increase relates to very large customers, as the call transcript renders it. Liu said about 45% of the whole $47.5 billion plan does, with more than $20 billion going to them. She said those assets would be almost 30% of the asset base by 2031.
Quarter, guidance and rate cases
WEC reported third-quarter earnings of $1.18 per share, against 83 cents a year earlier. Lauber attributed the result to warmer-than-normal weather, execution of the capital plan and operating efficiency. He raised and narrowed 2026 guidance to $5.60 to $5.64, from $5.51 to $5.61.
Lauber said long-term earnings growth should be 7% to 9% plus a year from 2027 to 2031. He said the "plus" is more representative of 2028 to 2029 and depends on regulatory approvals. He also expects the dividend to grow 6.5% to 7%.
In Wisconsin, Lauber expects final rate orders by year-end, with new rates effective in January 2027 and 2028. In Illinois, a judge's proposed order recommends a 9.48% return on equity and a 50% equity ratio for Peoples Gas and North Shore Gas, with a final decision expected in December. The company's market value was $36.0 billion in Thursday trading.
Lauber said WEC will provide its 2027 dividend plan and earnings guidance in December.
Sources
- WEC Q3 Earnings Beat Estimates on Strong Demand, Revenues Rise Y/Y — Yahoo Finance
- WEC Energy GAAP EPS of $1.18 beats by $0.20, revenue of $2.29B beats by $90M (WEC:NYSE) | Seeking Alpha — seekingalpha.com
- WEC Energy Group (WEC) Surpasses Q3 Earnings and Revenue Estimates — Yahoo Finance
- WEC Energy: Q3 Earnings Snapshot – WTOP News — wtop.com
- PWR Stock: These Energy Players Get A Jolt After Earnings Beats | Investor's Business Daily — investors.com
