AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · The disclosed avoidance of duplicative natural gas facilities directly supports an existing efficient-scale barrier. Regulated utility operations establish its business relevance, although the evidence does not establish exclusive rights across the group.
durability · 2/4 · Network duplication economics and prudently incurred commodity-cost recovery support persistence. Actual impairment from regulatory settlement and supplier choice constrain the durability of shareholder returns.
customer dependency · 2/4 · Dependence on established distribution facilities is supported indirectly by duplication economics. Actual service switching and third-party supplier options demonstrate weaker dependency for the gas supply component; no retention rate is supplied.
erosion resilience · 2/4 · Cost-recovery mechanisms and continuing profitable utility operations provide evidence of resilience. The finalized Illinois impairment demonstrates realized erosion of investment recovery; renewable PPA replacement risk remains a possibility rather than a demonstrated renewal failure.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Reported capacity revenue increased $4.9 million because of strong capacity pricing, and REC revenue benefited from higher contracted prices as well as timing. These establish favorable outcomes in part of the business, not broad discretionary pricing power. Wisconsin increases for 2027–2028 were requests.
retention · 2/4 · Infrastructure economics and continuing utility revenues indirectly support repeat demand for network service. Actual switching among supply arrangements limits supply retention, while long initial PPA terms do not establish successful renewals.
margin resilience · 2/4 · Commodity recovery and transmission-cost deferral cushion cost movements. Protection is incomplete: Wisconsin second-quarter operating income fell from $356.3 million to $346.9 million despite higher revenue, and the Illinois impairment demonstrates an actual recovery loss. These results assess resilience without using margins to infer the moat.
contractual freedom · 1/4 · Retail rate changes require regulatory proceedings, deferred-cost recovery requires approval, and FERC determines allowed transmission returns. Non-utility contracts provide some negotiated pricing exposure, but expiring PPAs face competitive replacement terms.
Predictability64
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 10.11
- Positive FCF years (%)
- 40.00
- FCF margin volatility (pp)
- 6.45
Financial strength3
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 13.71
- currentRatioGrade
- 0.00
- Net debt / operating income (x)
- 9.76
- Interest coverage (x)
- 2.51
- Current ratio (x)
- 0.59
Capital allocation53
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 6.56
- 3-year average dilution (%)
- 0.69
- 3-year average SBC / revenue (%)
- 0.35
- cashConversionGrade
- 0.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual transmission earnings and distributions, first-half capital spending and disclosed equity financing permit assessment. However, the $130 million impairment demonstrates unsuccessful capital recovery, shares have increased, and the large future investment plan raises funding demands. Consolidated operating cash-flow coverage and full-cycle returns are missing.
incentive alignment · 3/4 · Adopted incentives weight EPS and cash flow, performance-unit payouts use relative shareholder return and other defined measures, and ownership requirements and clawbacks are disclosed. Actual 2026 equity awards confirm implementation. Cash-settled performance units and missing beneficial ownership detail limit conclusions about personal capital exposure and exceptional alignment.
execution · 2/4 · First-half diluted EPS rose from $3.02 to $3.36, fixed-cost service agreements reduced operating expenses, and the customer-platform migration was completed. These are demonstrated outcomes, although earnings are an indirect measure of execution. Regulatory impairment and weaker Wisconsin quarterly operating income prevent an unqualified strong grade.
governance · 3/4 · Disclosed independent committees, an independent lead director, annual director elections, majority voting in uncontested elections, proxy access and clawbacks support strong formal safeguards. The 11-of-12 independence figure concerns nominees. Eliminating supermajority provisions was proposed in March 2026; supplied evidence does not establish adoption or exceptional governance effectiveness.
Evidence
However, natural gas utilities have customarily avoided competing for existing customers of other utilities, as there would be duplicative utility facilities and/or increased costs to customers.
Business competition: avoidance of duplicative natural gas utility facilities · Filed 20/02/2026
Table of Contents ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CORPORATE DEVELOPMENTS Introduction We are a diversified holding company with natural gas and electric utility operations (serving customers in Wisconsin, Illinois, Michigan, and Minnesota), an approximately 60% equity ownership interest in ATC (a for-profit electric transmission company regulated by the FERC and certain state regulatory commissions), and non-utility energy infrastructure operations through We Power (which owns generation assets in Wisconsin that it leases to WE), Bluewater (which owns underground natural gas storage facilities in Michigan), and WECI (which holds ownership interests in several renewable generating facilities).
MD&A corporate developments: operating businesses and regulated transmission investment · Filed 20/02/2026
Prudently incurred fuel and purchased power costs are recovered dollar-for-dollar from our Michigan retail electric customers and our wholesale electric customers.
Commodity risk: recovery of prudently incurred Michigan retail and wholesale electric costs · Filed 20/02/2026
Our natural gas utilities receive dollar-for-dollar recovery of prudently incurred natural gas costs from their natural gas customers.
Commodity risk: natural gas cost recovery · Filed 20/02/2026
If this approach were to change, it could lead to a greater level of competition amongst utilities to obtain customers and potentially adversely impact our results of operations.
Business competition: potential change in utility competitive behavior · Filed 20/02/2026
Customers continue to switch between firm system supply, interruptible system supply, and transportation service each year as the economics and service options change.
Business competition: actual switching among natural gas service arrangements · Filed 20/02/2026
MERC has provided its commercial and industrial customers with the option to choose a third-party natural gas supplier since 2006.
Business competition: Minnesota commercial and industrial supplier choice · Filed 20/02/2026
Michigan The option to choose a third-party natural gas supplier has been provided to UMERC’s natural gas customers (formerly WPS’s Michigan natural gas customers) since the late 1990s and MGU's customers since 2005.
Business competition: Michigan natural gas supplier choice · Filed 20/02/2026
The Peoples Gas Light and Coke Company Impairment In the fourth quarter of 2025, PGL recorded a $130.0 million impairment to property, plant, and equipment related to the terms of a proposed settlement that was finalized in May 2026, resolving its open proceedings related to the QIP Rider.
Note 7: Peoples Gas impairment and settlement finalized in May 2026 · Filed 04/08/2026
Although initial agreements are often ten years or more, in the future we may not be able to replace expiring PPAs related to our non-utility renewable energy facilities with contracts on acceptable terms, including at prices that support profitable operation of the facility.
Risk factors: initial non-utility PPA duration and replacement risk · Filed 20/02/2026
•A $4.9 million increase in capacity revenues due to strong capacity pricing.
MD&A non-utility infrastructure: realized capacity-pricing revenue improvement · Filed 04/08/2026
•A $1.9 million increase due to higher amounts recognized for REC sales in 2026 at Blooming Grove, driven by higher contracted REC prices, as well as timing of REC contract execution.
MD&A non-utility infrastructure: higher contracted REC prices and contract timing · Filed 04/08/2026
The requests reflected the following: WE WPS WG Proposed 2027 rate increase Electric (2) $ 175.8 million / 4.7% $ 86.1 million / 6.3% N/A Gas $ 2.1 million / 0.3% (3) $ 21.7 million / 4.9% $ 59.4 million / 6.8% Steam $ 0.1 million / 0.2% N/A N/A Proposed 2028 rate increase (1) Electric (2) $ 179.5 million / 4.5% $ 50.8 million / 3.5% N/A Gas $ 33.3 million / 4.9% (3) $ 6.9 million / 1.5% $ 37.2 million / 4.0% Steam $ 1.2 million / 3.8% N/A N/A Proposed ROE 9.9% 9.9% 9.9% Proposed common equity component average on a financial basis 53.5% 55.0% 53.5% (1) The proposed 2028 rate increases are incremental to the currently authorized revenue plus the requested rate increases for 2027.
Note 24: proposed 2027 and 2028 Wisconsin rate increases · Filed 04/08/2026
As a result, WE and WPS defer as a regulatory asset or liability, the difference between actual transmission costs and those included in rates until recovery or refund is authorized in a future rate proceeding.
MD&A Wisconsin: transmission-cost deferral pending recovery or refund authorization · Filed 04/08/2026
Three Months Ended June 30 (in millions) 2026 2025 B (W) Operating revenues $ 1,621.5 $ 1,587.2 $ 34.3 Operating expenses Cost of sales (1) 498.1 520.2 22.1 Other operation and maintenance 459.9 416.0 (43.9) Depreciation and amortization 268.1 250.2 (17.9) Property and revenue taxes 48.5 44.5 (4.0) Operating income 346.9 356.3 (9.4) Other income, net 52.2 19.8 32.4 Interest expense 161.8 157.9 (3.9) Income before income taxes 237.3 218.2 19.1 Income tax expense 28.8 35.5 6.7 Preferred stock dividends of subsidiary 0.3 0.3 — Net income attributed to common shareholders $ 208.2 $ 182.4 $ 25.8 (1) Cost of sales includes fuel and purchased power and cost of natural gas sold.
MD&A Wisconsin: second-quarter 2026 and 2025 operating results · Filed 04/08/2026
Recovery of the deferred costs in future rates is subject to the review and approval by those regulators.
Regulatory recovery: future-rate recovery requires regulator review and approval · Filed 04/08/2026
American Transmission Company LLC Allowed Return on Equity Complaint For transmission owners such as ATC, the ROE allowed by the FERC helps determine how much can be earned on their transmission assets as well as how much consumers pay for those assets.
Regulatory matters: FERC allowed return determines transmission earnings · Filed 04/08/2026
Table of Contents Utility Operations (in millions) Wisconsin Illinois Other States Total Utility Operations Electric Transmission Non-Utility Energy Infrastructure Corporate and Other Reconciling Eliminations WEC Energy Group Consolidated Six Months Ended June 30, 2026 External revenues $ 3,959.8 $ 1,011.9 $ 341.6 $ 5,313.3 $ — $ 183.0 $ — $ — $ 5,496.3 Intersegment revenues — — — — — 243.3 — (243.3) — Fuel and purchased power 833.5 — — 833.5 — — — — 833.5 Cost of natural gas sold 637.4 307.7 185.9 1,131.0 — 5.2 — (23.1) 1,113.1 Other operation and maintenance 910.1 221.1 53.6 1,184.8 — 48.6 (2.1) (5.5) 1,225.8 Depreciation and amortization 530.8 132.3 26.2 689.3 — 121.4 10.9 (56.9) 764.7 Property and revenue taxes 99.8 22.3 13.7 135.8 — 10.5 0.1 — 146.4 Equity in earnings of transmission affiliates — — — — 122.1 — — — 122.1 Other income, net (1) 95.3 4.1 0.3 99.7 — 1.2 25.6 (16.8) 109.7 Interest expense 324.1 42.2 10.2 376.5 7.9 60.6 187.0 (174.6) 457.4 Income tax expense (benefit) 102.5 82.0 13.5 198.0 28.1 (61.0) (85.0) — 80.1 Preferred stock dividends of subsidiary 0.6 — — 0.6 — — — — 0.6 Net income attributed to noncontrolling interests — — — — — (2.9) — — (2.9) Net income (loss) attributed to common shareholders $ 616.3 $ 208.4 $ 38.8 $ 863.5 $ 86.1 $ 239.3 $ (85.3) $ — $ 1,103.6 Other Segment Disclosures Capital expenditures and asset acquisitions $ 1,832.1 $ 148.5 $ 44.7 $ 2,025.3 $ — $ 46.6 $ 11.0 $ — $ 2,082.9 (1) Includes amounts that are not material for interest income and other equity earnings from investments other than from transmission affiliates.
Segment information: first-half 2026 earnings and actual capital expenditures · Filed 04/08/2026
At June 30, 2026, we could have settled our outstanding forward sales contracts as follows: (Dollars in millions) Physical Share Settlement Net Settlement Forward Sale Contract Effective Date Cash Proceeds Cash Payments Shares Issued Fourth quarter - 2025 $ 6.5 $ (0.4) (3,045) First quarter - 2026 428.3 (6.8) (57,815) Second quarter - 2026 290.8 (13.6) (116,720) We had the following changes to our outstanding common stock during the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30 Six Months Ended June 30 2026 2025 2026 2025 Common stock shares outstanding at beginning of period 325,725,678 319,133,501 325,461,519 317,680,855 Shares issued: At-the-market offering program — 2,526,543 — 3,504,367 Stock-based compensation 23,102 47,403 174,312 390,114 401(k) 16,340 71,800 47,274 115,100 Stock investment plan 84,263 87,148 166,278 175,959 Common stock shares outstanding at end of period 325,849,383 321,866,395 325,849,383 321,866,395 On July 16, 2026, our Board of Directors declared a quarterly cash dividend of $0.9525 per share, payable on September 1, 2026, to shareholders of record on August 14, 2026.
Note 8: forward equity contracts and actual share issuance · Filed 04/08/2026
We expect total capital expenditures for our regulated utility businesses to be approximately $33.4 billion from 2026 to 2030.
Corporate strategy: planned regulated utility capital expenditures for 2026–2030 · Filed 20/02/2026
The following tables provide a reconciliation of the changes in our investments in ATC and ATC Holdco: 2025 (in millions) ATC ATC Holdco Total Balance at January 1 $ 2,085.1 $ 23.8 $ 2,108.9 Add: Earnings from equity method investment 209.7 6.1 215.8 Add: Capital contributions 142.4 — 142.4 Less: Distributions 180.2 6.4 186.6 Less: Other 0.1 — 0.1 Balance at December 31 $ 2,256.9 $ 23.5 $ 2,280.4 2025 Form 10-K 144 WEC Energy Group, Inc.
Note 21: actual transmission investment earnings, contributions and distributions · Filed 20/02/2026
Table of Contents Earnings Per Share The following table shows the computation of our basic and diluted EPS for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30 Six Months Ended June 30 (in millions) 2026 2025 2026 2025 Numerator: Net income attributed to common shareholders $ 299.2 $ 245.4 $ 1,103.6 $ 969.6 Denominator: Weighted average basic shares outstanding 325.8 320.3 325.7 319.3 Dilutive effect of stock-based compensation awards 0.6 0.6 0.6 0.5 Dilutive effect of convertible senior notes 2.4 1.3 2.3 0.9 Dilutive effect of forward equity sales contracts 0.1 — — — Weighted average diluted shares 328.9 322.2 328.6 320.7 Basic EPS $ 0.92 $ 0.77 $ 3.39 $ 3.04 Diluted EPS $ 0.91 $ 0.76 $ 3.36 $ 3.02 NOTE 9—SHORT-TERM DEBT AND LINES OF CREDIT The following table shows our short-term borrowings and their corresponding weighted-average interest rates: (in millions, except percentages) June 30, 2026 December 31, 2025 Commercial paper Amount outstanding $ 1,929.3 $ 1,921.3 Weighted-average interest rate on amounts outstanding 3.97 % 3.89 % Operating expense loans Amount outstanding (1) $ 4.8 $ 3.4 (1)Coyote Ridge Wind, LLC, Tatanka Ridge, Samson I, Thunderhead, and Jayhawk have entered into operating expense loans.
Notes 8 and 9: comparative earnings, diluted EPS and short-term borrowings · Filed 04/08/2026
In December 2024, the Compensation Committee approved WEC Energy Group’s earnings per share (75% weight) and cash flow (25% weight) as the primary performance measures to be used in 2025.
Compensation discussion: adopted 2025 EPS and cash-flow incentive weights · Filed 26/03/2026
•The 2025 Performance Unit Plan award payouts (including dividend equivalents) are based on the following measures selected by the Compensation Committee at the time of the award: 1) stockholder return as compared to an appropriate peer group, 2) authorized return on equity, and 3) price to earnings ratio as compared to an appropriate peer group.
Compensation discussion: 2025 performance-unit payout measures · Filed 26/03/2026
Governance Framework Board Independence/Composition •11 of 12 director nominees are independent •Independent Lead Director with defined duties, elected by other independent directors •Independent Audit, Compensation, Finance and Governance Committees •Opportunity for executive sessions at every board and committee meeting •50% of Board nominees are diverse by gender or race/ethnicity Board Oversight •Short- and long-term strategy and major strategic initiatives •Risk Management Process •Leadership succession planning •Code of Business Conduct •Corporate sustainability, including risks and opportunities created by climate change •Regular reporting from Board committees on specific risk oversight responsibilities Board and Committee Practices •Ongoing Board refreshment, resulting in an average tenure of 7 years •Annual Board and committee evaluations •Strategy and risk oversight discussion at every regular Board meeting •Ongoing education programs by internal and third-party experts •Stock ownership requirements for directors and executives •Recoupment (“clawback”) policies for incentive-based compensation to executives and other officers •Responsible overboarding restrictions Stockholder Rights •Annual election of all directors •Majority voting standard for uncontested elections •One-share, one-vote standard •Proxy access and special meeting provisions in bylaws •Annual “say-on-pay” advisory vote Oversight of 2025 Strategic Initiatives The Board is actively engaged in the oversight of the Company’s strategy, providing advice and counsel as warranted and holding management accountable for making sound decisions in executing important matters affecting its stakeholders.
Governance highlights: board practices, ownership requirements, clawbacks and stockholder rights · Filed 26/03/2026
All performance units are settled in cash.
Long-term incentive compensation: cash settlement of performance units · Filed 26/03/2026
NOTE 8—COMMON EQUITY Stock-Based Compensation During the six months ended June 30, 2026, the Compensation Committee of our Board of Directors awarded the following stock-based compensation to our directors, officers, and certain other key employees: Award Type Number of Awards Stock options (1) 269,085 Restricted shares (2) 75,222 Performance units 182,146 (1)Stock options awarded had a weighted-average exercise price of $106.09 and a weighted-average grant date fair value of $21.20 per option.
Note 8: stock-based compensation actually awarded in first-half 2026 · Filed 04/08/2026
4.Amendments to our Restated Articles of Incorporation to eliminate supermajority voting requirements.
Annual meeting agenda: proposed elimination of articles' supermajority requirements · Filed 26/03/2026
5.Amendments to our Bylaws to eliminate supermajority voting requirements.
Annual meeting agenda: proposed elimination of bylaws' supermajority requirements · Filed 26/03/2026
•A $6.4 million reduction in operation and maintenance expenses due primarily to having fixed cost full service agreements in place in 2026 compared to the same period in 2025.
MD&A non-utility infrastructure: realized operating-cost reduction under fixed-cost service agreements · Filed 04/08/2026
We have moved all utilities to a common platform for all customer-facing self-service options.
Customer care: completed migration to a common customer self-service platform · Filed 20/02/2026
