WEC Energy Group, Inc. (WEC) Earnings

Management highlights

### Regional Economic Growth & Large Customer Development - Strong economic growth in WEC Energy's Wisconsin service region supports robust capital plan execution. The first Microsoft data center in Pleasant Prairie is fully operational, with 2,200 acres purchased to date, and WEC forecasts 2.6 GW of additional demand in the region by 2030 with room for further expansion. - Vantage Data Centers' 1,900-acre development for Oracle north of Milwaukee is progressing: the initial 670-acre phase has completed structural framing on multiple buildings, with the first facility expected online by late 2027. WEC forecasts 1.3 GW of demand for the site over the next five years, with long-term potential for up to 3.5 GW. - Multiple additional manufacturing and industrial projects are expanding in Wisconsin, including RELCO (Kohler Energy) data center generator production, Keegan Steel headquarters relocation, and Harvard Lee-Davidson motorcycle production repatriation. ### Capital Plan - The current five-year capital plan includes $37.5 billion in projected low-risk, highly executable investments, a large share of which serve VLCs. By the end of 2030, approximately 15% of WEC's asset base is expected to be dedicated to VLCs. - Two new natural gas generation facilities in Paris and Oak Creek, Wisconsin remain on track to come online in late 2027. WEC will release details of its updated next capital plan on the Q3 2026 earnings call. - WEC maintains a long-term target of 7% to 8% compound annual EPS growth between 2026 and 2030, with growth expected to accelerate to the upper half of the range starting in 2028. ### Regulatory Updates - Wisconsin's Public Service Commission (PSC) issued a final written order approving the VLC tariff, which requires VLCs to pay their full share of infrastructure costs. WEC is working with Oracle to meet PSC-required credit support requirements for the Vantage project; Oracle has reaffirmed its commitment to the project, and no risk to other customers is expected. - WEC's April 2026 rate request for 2027 and 2028 test years for non-VLC customers is progressing. Testimony is due mid-August, with a final order expected by end of 2026 and new rates effective January 2027 and 2028. The request prioritizes infrastructure investment while maintaining customer affordability. - In Illinois, the Commerce Commission unanimously approved settlements for Rider QIP and Bad Debt Rider, resolving 12 open dockets. A rate case for Peoples Gas' pipe retirement program in Chicago is pending, with a decision expected by end of 2026 for the 2027 test year. ### Capital & Dividend Update - WEC locked in $760 million in common equity issuance in H1 2026: $40 million via employee benefit plans and $720 million via the ATM program (to be settled via future forward contracts). Full-year 2026 common equity issuance is targeted at $1.1 billion. Any incremental capital beyond the current plan is expected to be funded with 50% equity. - The board approved a 6.7% dividend increase in January 2026, marking the 23rd consecutive year of dividend growth. The increase aligns with the target 6.5% to 7% annual dividend growth rate.

Guidance

- Management reaffirms full-year 2026 EPS guidance of $5.51 to $5.61, which assumes normal weather for the remainder of 2026. - Q3 2026 EPS guidance is set at $0.92 to $0.98, which accounts for observed July weather and assumes normal weather for the rest of the quarter. - Full-year 2026 weather-normalized electric sales, excluding the iron ore mine and VLC customers, are expected to be roughly flat vs 2025 despite Q2 results coming in slightly ahead of forecast.

Segment performance

WEC Energy Group reported Q2 2026 diluted earnings per share (EPS) of $0.91, a $0.15 increase year-over-year (YoY) vs Q2 2025: 1. **Utility Operations**: Q2 2026 earnings were $0.06 higher YoY. Weather had a net $0.05 negative impact on YoY results: $0.03 negative vs normal conditions in Q2 2026, compared to a $0.02 positive impact in Q2 2025. Rate-based growth contributed $0.13 to EPS (including $0.09 of incremental AFUDC equity and $0.02 of incremental cash returns from VLC projects). Sales growth, tax items, and other factors contributed an additional $0.06. Gains were partially offset by $0.05 from higher depreciation and amortization and $0.03 from higher O&M expense. Weather-normalized retail electric sales grew 4.2% YoY, driven by very large customer (VLC) growth; excluding VLCs and an iron ore mine, sales grew 1.2% across all customer classes. 2. **American Transmission Company**: Significant capital investment growth contributed an incremental 3 cents to Q2 2026 EPS YoY. 3. **Energy Infrastructure Segment**: Q2 2026 earnings were 11 cents higher YoY. A net $0.04 of this gain came from the absence of 2025's storm-related asset impairment and a $0.02 insurance payout for prior storm damage. The remaining 7 cents of gain came from O&M timing, higher production tax credits (PTCs), stronger generation market prices, and other minor items. 4. **Corporate and Other Segments**: Q2 2026 earnings decreased 3 cents YoY, driven by tax timing differences and higher interest expense.

Risks & headwinds

- Unusual weather for the remainder of 2026 could cause full-year earnings to deviate from the guided range. - Labor constraints have slowed the pace of the Illinois pipe replacement (PIPE) program in 2026, with spending reduced from original plans as WEC works to ramp up trained workforce. - Oracle has filed a legal challenge to the VLC tariff's credit collateral requirements, which could take months or years to resolve; however, the project itself is proceeding as planned. - A Wisconsin gubernatorial candidate has proposed a state-level data center moratorium, and local siting pushback has emerged in some communities, requiring outreach to share economic and environmental facts with candidates and stakeholders. - Supply chain and regulatory timelines for new large capital projects mean upside from new VLC contracts and generation additions is mostly concentrated in the 2030-2031 timeframe.

Analyst Q&A

• Q: What is the risk to the Port Washington (Oracle-Vantage) project timeline from the ongoing credit requirement lawsuit, and could the site be redeployed to another customer if Oracle exits? /

  A: Management stated Oracle is actively working to meet the required credit support, and the project remains on time and on budget with construction continuing as planned. Management has confidence Oracle will fulfill its obligations, and in a worst-case exit scenario, the site has strong demand from other hyperscalers, so redeployment would be possible. No material timeline risk is expected at this time.

• Q: How are discussions with potential new additional VLCs progressing, and has the Oracle collateral issue caused any slowdown or concerns among these prospective customers? /

  A: Management is in active discussions with multiple potential new VLCs, most in the 400-500 MW range (smaller than the existing Microsoft and Oracle projects). The approved VLC tariff provides full transparency on collateral and cost requirements, which all parties can evaluate clearly. Management does not expect the Oracle collateral discussion to slow down new customer discussions long term, as the requirements are clear and prospective customers understand the framework.

• Q: How would incremental VLC demand be met in terms of new generation capacity, and what technologies are being considered? /

  A: Existing VLC customers (Microsoft and Oracle) have already signed on for an all-of-the-above approach: renewables, battery storage, and natural gas for reliable backup. For future capacity needs to serve new VLC demand, WEC's engineering team is currently evaluating adding combined cycle gas generation (rather than just simple cycle capacity) to meet both energy and capacity needs, while ensuring reliability and low cost for all customers. Details will be included in the updated Q3 capital plan.

• Q: What is the status of the ATC transmission line to serve the Vantage project, and is it included in the current capital plan? /

  A: The transmission line is already included in the current ATC capital forecast. The permitting process is proceeding at the PSC, with staff testimony recently submitted and additional testimony due August 7. A final approval decision is expected by the end of 2024, which aligns with the project's accelerated construction timeline. Management notes that broader transmission development overall may see moderate upside in the upcoming Q3 capital plan refresh.