WEC Energy Group, Inc.
Analysis
WEC's growth now comes from two data-center campuses rather than its old utility base. Management has raised the five-year capital plan twice to $37.5 billion, and says the earnings arrive after the spending, so growth stays slow until 2028.How much of the 3.9 gigawatts is under signed contract today?
- The demand behind the plan is contracted, not a forecast.
Microsoft's first data center in the state is running and it has bought more than 2,200 acres; Vantage broke ground north of Milwaukee on a campus it says will cost $15 billion. The two sites take five-year demand to 3.9 gigawatts.
- The spending runs years ahead of the earnings it is meant to produce.
Earnings growth stays in the mid-single digits through 2027, reaching 8% only after 2028, while the asset base grows 11% a year. Capital spending tops the cash the business brings in, so the gap is funded with debt and new shares.How much of the five-year plan is funded by selling new shares?
- The tariff keeps the data centers' risk off ordinary customers.
Wisconsin regulators approved the very large customer tariff in April, making the data centers pay their own way. The live issue is collateral: Oracle's credit sits below what the tariff requires, and it is working to post support.What happens to the Port Washington build if Oracle cannot post collateral?
- Both campuses keep expanding on the timelines the tenants gave. Signed, steady demand is what turns this into a faster-growing company, so the whole plan rests on it.
- The approved tariff draws the next wave of large customers. New signings come in under rules already settled, so growth continues without a fresh fight over who pays for it.
- Regulators approve the pipeline and settle both rate cases on time. The company only earns on what it is allowed to charge, so slow approvals leave money already spent earning nothing.
- Data center demand stalls, from a tenant pullback or local opposition. The plan is sized to two customers, so the spending would be committed before the sales it was built for arrive.
- Oracle fails to post the collateral the tariff requires. WEC would carry that site's cost itself, the exact outcome the tariff was written to prevent.
- Labor and equipment shortages stretch the build past its dates. Costs land long before the plants sell any power, so each delay pushes the payoff further out.
| Politician | Transaction | Amount | Traded | Filed |
|---|---|---|---|---|
Donald Trump Republican · Executive | Sale | ≥$1K | Aug 10 | Oct 8 |
Donald Trump Republican · Executive | Purchase | ≥$100K | Jul 31 | Sep 22 |
Donald Trump Republican · Executive | Purchase | ≥$1K | May 15 | Jul 1 |
Donald Trump Republican · Executive | Purchase | ≥$15K | Mar 2 | May 13 |
Donald Trump Republican · Executive | Purchase | ≥$1K | Jan 23 | May 13 |
Congressional trading data provided by QuiverQuant
How WEC Energy Group turned $9.8B of revenue into $2.2B of operating income.
| Revenue | ||
|---|---|---|
| Wisconsin | $7.3B | ▲ 15.24% YoY |
| Illinois | $1.7B | ▲ 5.07% YoY |
| Non-Utility Energy Infrastructure | $770.2M | ▲ 11.41% YoY |
| Other States | $527.5M | ▲ 17.27% YoY |
| Total revenue | $9.8B | |
| Gross profit | $6.5B | 66.7% |
| Operating income | $2.2B | 22.9% |