WEC Q2 2025: $28B CapEx Plan Supports 1.3GW to 2027 Amid Tight Supply
- Robust Regional Growth: WEC is benefiting from strong economic development in its region, highlighted by multiple large projects such as the eventual 3.5 GW capacity at the Vantage site (with an initial target of about 1.3 GW by 2027) and ongoing developments from Microsoft, which underline solid long‑term load growth prospects.
- Proactive Capacity Management: The company has extended the operating lives of key assets—extending the coal units at Oak Creek into 2026—to address tight capacity conditions, demonstrating agility in meeting near‑term demand while transitioning to new generation assets.
- Aggressive, Diversified Capital Plan: With a $28 billion five‑year investment plan focused on low‑risk, high‑execution projects ranging from natural gas turbines to renewables safe harbor initiatives, WEC is well‑positioned to capitalize on regional demand growth and evolving market opportunities.
- Regulatory and execution uncertainty on renewables: The delay in finalizing Treasury guidance for renewable safe harbor could postpone project approvals and negatively affect planned renewable capacity expansion.
- Reliance on aging assets: Extending the operating lives of coal units into 2026 instead of investing immediately in new capacity raises concerns about long‐term reliability and potential environmental liabilities.
- Tight capacity and early-stage projects: The system is described as very tight with new large-scale projects like the Vantage site only partially underway (e.g., targeting 1.3 GW by 2027 against a 3.5 GW long-term potential), which implies execution risk and potential supply chain delays.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
EPS | FY 2025 | $5.17 to $5.27 per share | $5.17 to $5.27 per share | no change |
Long-term EPS Growth | FY 2025 | 6.5% to 7% | 6.5% to 7% | no change |
Common Equity Issuance | FY 2025 | $700 million to $800 million | $700 million to $800 million | no change |
Dividend | FY 2025 | no prior guidance [N/A] | $3.57 per share | no prior guidance |
EPS | Q3 2025 | no prior guidance [N/A] | $0.74 to $0.80 per share | no prior guidance |
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Capacity Planning
Q: How is capacity meeting demand?
A: Management explained that the Vantage site is targeted for a long-term capacity of 3.5 GW, with an expected delivery of about 1.3 GW by 2027 through bilateral agreements and by extending coal unit operations to bridge near-term gaps, showing a tightly balanced system. -
CapEx Outlook
Q: What are current near-term CapEx plans?
A: They described a robust $28B five-year capital plan that includes significant investments in new gas turbines at Oak Creek and planned upgrades like Peoples Gas pipeline retirements, reflecting ongoing infrastructure modernization. -
Generation Strategy
Q: Will you add combined cycle or CT units?
A: Management noted that while coal units were extended into 2026 for immediate capacity, new simple cycle combustion turbines are being built and combined cycle units are under consideration as demand grows, indicating an evolving generation mix. -
Renewable Safe Harbor
Q: How far is safe harbor progress?
A: They mentioned that 40–50% of renewable projects are already safe harbored, and they are actively working to meet new Treasury guidelines, while also considering battery solutions to further enhance renewable capacity. -
Microsoft Data Center
Q: What’s the update on Microsoft data centers?
A: Management confirmed that the first Microsoft data center site is under construction on about 1,300 acres, with other identified sites still in early stages and no pause announced, reflecting steady progress in expanding the data center footprint.
Research analysts covering WEC ENERGY GROUP.