stockrowWhat it does
WEC Energy Group is a holding company whose subsidiaries generate and distribute electricity and deliver natural gas. They serve households, businesses and other customers in Wisconsin, Illinois, Michigan and Minnesota. WEC also invests in electric transmission and energy infrastructure, including renewable generation and natural gas storage.
Its electric utilities generate power at their own plants and deliver it through local distribution networks. They also buy power under contracts and in the regional electricity market. Their customers include residential users, commercial and industrial businesses, utilities and energy marketers. WEC’s gas utilities buy and deliver natural gas, while also transporting gas for customers that choose another supplier.
Beyond its local utilities, WEC owns an interest in American Transmission Company, which operates high-voltage electric transmission systems. Its non-utility operations include generating facilities leased to a WEC utility, underground gas storage and interests in renewable energy facilities.
WEC was founded in 1896 and is headquartered in Milwaukee, Wisconsin. Scott J. Lauber is chairman, president and chief executive officer. The company had 7,151 employees in FY2025.
How it makes money
WEC earns utility revenue by supplying electricity and natural gas and by charging customers for using its distribution networks. Regulators set retail rates, and the company works to earn allowed rates of return through cost control and investment. Electric utilities also sell power to wholesale customers and into the regional market when generation and market conditions allow.
The Wisconsin segment includes electric and natural gas utilities serving Wisconsin and part of Michigan’s Upper Peninsula. The Illinois segment distributes natural gas in Chicago and its northern suburbs. The Other States segment includes gas utilities in Minnesota and Michigan.
Gas customers may buy their fuel directly from another supplier and pay WEC’s utilities to transport it. WEC continues to earn distribution revenue in those cases. For certain gas customer classes, rate mechanisms allow utilities to recover or refund differences between actual and authorized margins.
WEC also has an approximately 60% equity interest in American Transmission Company, a regulated transmission business. Its non-utility energy infrastructure segment includes We Power, which leases generating facilities to a WEC utility; Bluewater, which owns gas storage; and interests in renewable generation. We Power’s lease is between WEC subsidiaries, rather than a sale to an outside customer.
Electricity and heating demand recur, although weather affects usage. WEC’s gas revenue collections are typically concentrated from January through June.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Wisconsin | $7.3 billion | 71.0% | 15.2% |
| Illinois | $1.7 billion | 16.4% | 5.07% |
| Non-Utility Energy Infrastructure | $770.2 million | 7.49% | 11.4% |
| Other States | $527.5 million | 5.13% | 17.3% |
| Corporate and Other | $0.00 | 0.00% | — |
Customers and how it sells
WEC serves 4.8 million customers across Wisconsin, Illinois, Michigan and Minnesota. Its utility customers include households and commercial and industrial businesses, as well as wholesale electricity buyers such as cooperatives and municipal utilities. Industries served include manufacturing, food, health services, real estate, education and restaurants.
Wisconsin is WEC’s largest reported segment, accounting for 71.0% of FY2025 revenue. Its electric and gas operations cover areas including metropolitan Milwaukee and northeastern and central Wisconsin. In Illinois, the gas utilities serve Chicago and its northern suburbs. Other gas utilities serve communities throughout Minnesota and in southern and western Michigan; WEC also serves customers in Michigan’s Upper Peninsula.
WEC is preparing to supply large data centers in Wisconsin. Microsoft’s first facility in Mount Pleasant is operating, with additional facilities under construction. Vantage Data Centers is developing facilities for Oracle north of Milwaukee. WEC says Oracle has met financial security obligations under Wisconsin’s very large customer tariff, and that Microsoft and Oracle have committed to paying their full share of energy costs.
In addition to direct utility service, WEC offers gas transportation to customers who buy their fuel from third parties. Its electric utilities also sell excess power through the regional electricity market.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Wisconsin | $7.3 billion | 71.0% | 15.2% |
| Illinois | $1.7 billion | 16.4% | 5.07% |
| Non-Utility Energy Infrastructure | $770.2 million | 7.49% | 11.4% |
| Other States | $527.5 million | 5.13% | 17.3% |
| Corporate and Other | $0.00 | 0.00% | — |
Suppliers and costs
WEC obtains electricity from its own generating fleet, long-term power purchase agreements and spot purchases in the regional market. Its plants use natural gas, coal and renewable resources, and the company also purchases nuclear and renewable power. It sells excess supply into the market when economical, offsetting purchased-power costs.
WEC buys coal from several mines and uses long-term contracts for some purchases. It buys natural gas for its plants on the spot market from marketers, utilities and producers, and arranges transportation and storage. Its gas utilities use a combination of fixed-price and index-priced purchases, storage and other supply arrangements.
Wisconsin retail electric rates include base amounts for fuel and purchased power. Rules generally allow WEC to defer under- or over-collections beyond a specified variance for later recovery or refund. WEC also uses approved hedging programs to reduce some fuel-price exposure.
Other costs include plant operation and maintenance, depreciation, transmission and interest. WEC invests in generation, distribution networks and gas storage, and uses operating cash and external financing to meet its cash requirements.
- Revenue$9.8B
- Cost of revenue−$3.3B
- Selling, general and administrative−$2.7B
- Other operating costs−$1.6B
- Operating income$2.2B
Competitive position
WEC’s electric utilities face competition from customer self-generation and alternative energy sources. They also compete with other utilities for sales to municipalities and cooperatives, and with utilities and marketers for wholesale electric business. The cost of WEC’s generation relative to competing generation affects how often its plants are dispatched in the regional market.
Its gas utilities face competition from other energy sources. Many large commercial and industrial customers can switch between natural gas and alternative fuels, while most gas customers can choose a different fuel supplier. WEC’s utilities can still earn distribution revenue when those customers use their networks to transport gas.
No individual competing company is named in the supplied discussion of these markets. WEC’s electric utilities are authorized to serve designated Wisconsin territories under permits and boundary agreements, and certain Michigan territories under municipal franchises.
Our reading: Those service territories provide a substantial local protection for distribution, because the utilities have established rights to serve customers in defined areas. Our reading: That protection is less complete for energy supply and wholesale sales, where customers or market operators can choose among alternative sources. Our reading: WEC’s existing networks also support its gas transportation business, although customers can buy the gas itself elsewhere.
Growth opportunities
WEC expects electric demand to grow by 4.9 gigawatts between 2026 and 2031, driven in part by very large customers. Its updated plan includes forecast demand of 3.2 gigawatts in the I-94 region south of Milwaukee through 2031, and 1.3 gigawatts at the Vantage site through 2031. WEC says the Vantage site has the potential to reach 3.5 gigawatts over time.
To serve demand and maintain its system, WEC expects to invest $47.5 billion in capital projects between 2027 and 2031. The plan includes natural gas generation, batteries, renewables, transmission and distribution. WEC also plans to invest approximately $5.3 billion in American Transmission Company projects during that period.
WEC plans to extend its Point Beach nuclear power purchase agreement for approximately 1,000 megawatts of capacity by 20 years, subject to regulatory approval. Oracle has agreed to subscribe to a portion of the energy WEC purchases from the plant.
The company expects the updated plan to support compound annual earnings per share growth of 7% to 9+% from 2027 to 2031. It expects operating cash, incremental debt and common equity to fund its cash needs over the next five years. WEC also continues to invest in replacing aging gas pipes in Chicago and upgrading its electric and gas distribution systems.
- $8.3BFY2021
- $9.6BFY2022
- $8.9BFY2023
- $8.6BFY2024
- $9.8BFY2025
Structural risks
- Regulation and cost recovery: WEC’s business is significantly affected by legislation, regulation and oversight. Higher fuel costs, bad debt and interest expense can reduce profitability if they are not recovered through rates. Illinois regulators will evaluate the prudency of costs incurred under the Chicago pipe retirement program in future rate cases.
- Financing: WEC depends on access to credit and capital markets on competitive terms. Market conditions, a rating downgrade or other factors could restrict access or increase its cost of capital while it carries out its investment plan.
- Demand and weather: Electricity and gas demand can vary with customer growth, economic conditions and weather. Heating demand is generally higher in winter, and weather also affects renewable generation output.
- Large-customer projects: WEC expects almost 30% of total assets to be dedicated to very large customers by 2031. Its tariff includes financial security and credit support requirements; the company says customer commitments are matched to the lives of relevant assets.
- Fuel and supply: Commodity price changes can raise working capital requirements or make generation uneconomic. WEC also identifies the risk that inadequate coal supply could limit operation of its coal-fired facilities.
Bottom line
Our reading
WEC is principally a regulated utility business, with recurring distribution service and a geographic concentration in Wisconsin. Its growth plan increasingly depends on building generation and transmission for large electricity users, alongside investment in existing networks. The scale of that plan brings financing, regulatory and customer-concentration exposure, even as the company has established security requirements for very large customers.