WEC ENERGY GROUP INC
For the period ended Mar 31, 2025. Filed May 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 7, 2025
WEC$115.87-2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-01.
0000107815-24-000248
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0000107815-25-000182
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 463 previous paragraphs and 313 current paragraphs.
141 unchanged; 120 reworded; 46 added; 161 removed; 41 previous and 6 current paragraphs rearranged.
Tables are not compared: 88 previous and 52 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (46)
Current report
On February 20, 2025, the ICC issued an order setting expectations for PGL's prospective replacement of its aging natural gas infrastructure. The ICC directed us to focus on replacing all cast and ductile iron pipe that has a diameter of less than 36 inches by January 1, 2035. PGL will replace this cast and ductile iron pipe through its PRP. For more information, see Note 23, Regulatory Environment, and Factors Affecting Results, Liquidity, and Capital Resources - Regulatory, Legislative, and Legal Matters - Illinois Proceedings.
Current report
Earnings increased $101.9 million during the first quarter of 2025, compared with the same quarter in 2024. The significant factors impacting the $101.9 million increase in earnings were:
Current report
•A $93.5 million increase in net income attributed to common shareholders at the Wisconsin segment, driven by higher margins from the impact of the Wisconsin rate orders approved by the PSCW, effective January 1, 2025, and higher retail sales volumes. See Note 26, Regulatory Environment, in our 2024 Annual Report on Form 10-K, for more information on the 2025 rate orders. These positive impacts were partially offset by higher operating expenses, primarily due to increases in depreciation and amortization expense and transmission expense.
Current report
These increases in earnings were partially offset by a $9.4 million decrease in earnings at the Illinois segment, driven by higher operating expenses. The quarter-over-quarter impact from a favorable settlement of a legal claim during 2024, along with higher property and revenue taxes, an increase in natural gas distribution and maintenance costs, and higher benefit costs in the first quarter of 2025, all contributed to the increase in operating expenses.
Current report
Gross margin (GAAP) at the Wisconsin segment increased $129.0 million during the first quarter of 2025, compared with the same quarter in 2024, and utility margin (non-GAAP) increased $163.3 million during the first quarter of 2025, compared with the same quarter in 2024. Both measures were driven by:
Current report
•A $19.0 million increase in depreciation and amortization expense;
Current report
•A $10.1 million increase in transmission expense; and
Current report
Other operating expenses at the Wisconsin segment increased $42.9 million during the first quarter of 2025, compared with the same quarter in 2024. The significant factors impacting the increase in other operating expenses were:
Current report
•A $19.0 million increase in depreciation and amortization expense, driven by assets being placed into service as we continue to execute on our capital plan.
Current report
•A $10.1 million increase in transmission expense as approved by the PSCW in our Wisconsin rate orders, effective January 1, 2025. See the notes under the other operation and maintenance table above for more information.
Current report
Other Income, Net
Current report
Other income, net at the Wisconsin segment decreased $15.8 million during the first quarter of 2025, compared with the same quarter in 2024, driven by a $22.5 million negative impact from the non-service components of our net periodic pension and OPEB costs. See Note 16, Employee Benefits, for more information on our benefit costs. This decrease was partially offset by a $4.3 million positive impact from higher AFUDC-Equity due to continued capital investment and a $1.5 million increase in interest income.
Current report
Interest expense at the Wisconsin segment increased $4.0 million during the first quarter of 2025, compared with the same quarter in 2024, driven by the impact of WE, WPS, and WG issuing long-term debt in 2024. Partially offsetting the increase was lower average short-term debt balances and lower short-term debt interest rates.
Current report
Income tax expense at the Wisconsin segment increased $7.1 million during the first quarter of 2025, compared with the same quarter in 2024, driven by higher pre-tax income. Partially offsetting this increase was an increase in PTCs and the increased benefit from the flow through of tax repairs in connection with the Wisconsin rate orders approved by the PSCW, effective January 1, 2025.
Current report
The Illinois segment's contribution to net income attributed to common shareholders was $178.1 million during the first quarter of 2025, representing a $9.4 million, or 5.0%, decrease in earnings over the same quarter in 2024. The lower earnings were driven by higher operating expenses. The quarter-over-quarter impact from a favorable settlement of a legal claim during 2024, along with higher property and revenue taxes, an increase in natural gas distribution and maintenance costs, and higher benefit costs in the first quarter of 2025, all contributed to the increase in operating expenses.
Current report
•A $2.3 million increase in revenues related to the impact of the NSG rate order issued by the ICC, effective February 1, 2024.
Current report
•A $2.3 million increase in property and revenue taxes; and
Current report
Interest expense at the Illinois segment decreased $1.8 million during the first quarter of 2025, compared with the same quarter in 2024, due primarily to lower average short-term debt balances and lower short-term debt interest rates.
Current report
Income tax expense at the Illinois segment decreased $2.9 million during the first quarter of 2025, compared with the same quarter in 2024, driven by a decrease in pre-tax income.
Current report
The other states segment's net income attributed to common shareholders was $43.1 million during the first quarter of 2025, representing a $4.5 million, or 11.7%, increase over the same quarter in 2024. The increase was driven by higher margins related to an increase in sales volumes and positive impacts from MERC's rate increase that was effective March 1, 2024 and MGU's approved rate increase that was effective January 1, 2025. These increases in earnings were partially offset by higher bad debt expense and higher natural gas operations and customer services expense.
Current report
Gross margin (GAAP) increased $12.3 million during the first quarter of 2025, compared with the same quarter in 2024, and utility margin (non-GAAP) increased $15.7 million during the first quarter of 2025, compared with the same quarter in 2024. Both measures were driven by:
Current report
•A $4.4 million increase related to MERC's rate increase that was effective March 1, 2024 and MGU's approved rate increase that was effective January 1, 2025.
Current report
•A $2.3 million increase in natural gas operations and customer services expense.
Current report
Other operating expenses at the other states segment increased $9.2 million during the first quarter of 2025, compared with the same quarter in 2024. The significant factors impacting the increase in operating expenses were:
Current report
•A $3.3 million increase in bad debt expense at MERC and MGU. Bad debt expense was lower in the first quarter of 2024 due to reserve adjustments related to improved loss rates.
Current report
Operating income at the non-utility energy infrastructure segment increased $9.1 million during the first quarter of 2025, compared with the same quarter in 2024, driven by these items at WECI:
Current report
•Recognition of $2.5 million of business interruption insurance proceeds related to storms at our Samson I solar facility.
Current report
•A $2.0 million improvement in revenue related to lower congestion related costs.
Current report
Interest expense at the non-utility energy infrastructure segment increased $6.5 million during the first quarter of 2025, compared with the same quarter in 2024, driven by the impact of WECI Energy Holding III issuing long-term debt in December 2024.
Current report
Income Tax Benefit
Current report
Other Income, Net
Current report
Other income, net at the corporate and other segment decreased $10.5 million during the first quarter of 2025, compared with the same quarter in 2024. The significant factors impacting the decrease in other income, net were:
Current report
Income Tax Benefit
Current report
•A $36.3 million increase in cash from lower payments for environmental remediation related to work completed on former manufactured gas plant sites during the first quarter of 2025, compared with the same quarter in 2024.
Current report
•A $20.1 million increase in cash from higher distributions from ATC during the first quarter of 2025, compared with the same quarter in 2024.
Current report
•A $30.2 million increase in capital contributions paid to transmission affiliates during the first quarter of 2025, compared with the same quarter in 2024. See Note 18, Investment in Transmission Affiliates, for more information.
Current report
•A $17.5 million increase in cash related to a higher number of stock options exercised during the first quarter of 2025, compared with the same quarter in 2024.
Current report
As part of our capital plan, we plan to build additional natural gas-fired combustion turbines capable of producing approximately 675 MWs at an estimated cost of $960 million. In addition, we plan to add natural gas-fired RICE units that would be capable of producing approximately 114 MWs at an estimated cost of $250 million.
Current report
In accordance with the November 2023 rate order, the ICC initiated a proceeding in January 2024 to determine the optimal method and a prudent investment level for replacing aging natural gas infrastructure. On February 20, 2025, the ICC issued an order setting expectations for PGL's prospective operations. For more information on regulatory proceedings related to this matter, see Note 23, Regulatory Environment, and Factors Affecting Results, Liquidity, and Capital Resources – Regulatory, Legislative, and Legal Matters – Illinois Proceedings.
Current report
order and the related disallowance. PGL and NSG subsequently petitioned the Illinois Supreme Court seeking review and reversal of the May 2023 order; however, their petition was denied on March 26, 2025.
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Removed paragraphs (161)
Previous report
In May 2024, WE completed the acquisition of an additional 100 MWs of capacity in West Riverside, a combined cycle natural gas plant operated by an unaffiliated utility. See Note 2, Acquisitions, for more information.
Previous report
•WE and WG have completed the construction of their respective LNG facilities. Each facility provides approximately one Bcf of natural gas supply to meet anticipated peak demand, without requiring the construction of additional interstate pipeline capacity. The WE LNG facility was commercially operational in November 2023 and the WG LNG facility was commercially operational in February 2024.
Previous report
On January 3, 2024, the ICC granted PGL a limited-scope rehearing, which was limited to the authorized spending for the completion of SMP projects that started in 2023 and the authorized spending for emergency repairs needed to ensure the safety and reliability of PGL's delivery system. On May 30, 2024, the ICC issued a written order on the rehearing. The order approved $28.5 million of additional spending for emergency work, representing a $1.6 million increase to PGL's annual revenue requirement. See Note 25, Regulatory Environment, for more information.
Previous report
Earnings decreased $75.9 million during the third quarter of 2024, compared with the same quarter in 2023. The significant factors impacting the $75.9 million decrease in earnings were:
Previous report
•A $73.3 million decrease in earnings at the Illinois segment, driven by lower margins related to the impacts of the PGL and NSG rate orders issued by the ICC, effective December 1, 2023 and February 1, 2024, respectively. SMP costs that were previously being recovered under PGL's QIP rider are now included in PGL's base rates. As base revenues are lower during the third quarter when natural gas usage is lower, this rate design change drove a decrease in third quarter 2024 earnings. See Note 25, Regulatory Environment, for more information on the rate orders. Higher operating expenses and a $25.3 million pre-tax charge to income related to the ICC's disallowance of certain capital costs in PGL's 2016 rider QIP reconciliation also contributed to the lower
Previous report
earnings. See Factors Affecting Results, Liquidity, and Capital Resources – Regulatory, Legislative, and Legal Matters – Regulatory Recovery and Note 25, Regulatory Environment, for more information on the ICC disallowance.
Previous report
•A $19.2 million increase in the net loss attributed to common shareholders at the corporate and other segment, driven by a negative impact from an increase in an interim income tax expense recorded to adjust consolidated income tax expense to the projected, annualized consolidated effective income tax rate. Higher interest expense also contributed to the increase in the net loss.
Previous report
•A $5.3 million decrease in net income attributed to common shareholders at the Wisconsin segment, driven by higher depreciation and amortization expense and an increase in interest expense on both short-term and long-term debt. These decreases in earnings were partially offset by an increase in margins due to higher retail sales volumes and lower income tax expense due to an increase in PTCs.
Previous report
The Wisconsin segment's contribution to net income attributed to common shareholders was $237.8 million during the third quarter of 2024, representing a $5.3 million, or 2.2%, decrease over the same quarter in 2023. The decrease was driven by higher depreciation and amortization expense and an increase in interest expense on both short-term and long-term debt. These decreases in earnings were partially offset by an increase in margins due to higher retail sales volumes and lower income tax expense due to an increase in PTCs.
Previous report
Gross margin (GAAP) at the Wisconsin segment increased $19.8 million during thethird quarter of 2024, compared with the same quarter in 2023, and utility margin (non-GAAP) increased $21.8 million during thethird quarter of 2024, compared with the same quarter in 2023. Both measures were driven by:
Previous report
•A $12.4 million increase in margins related to higher electric and natural gas retail sales volumes, including the impact of warmer summer weather in WPS's service area during the third quarter of 2024, compared with the same quarter in 2023. As measured by cooling degree days, the third quarter of 2024 was 15.6% warmer than the same quarter in 2023 in the Green Bay area.
Previous report
•A $17.1 million increase in depreciation and amortization expense;
Previous report
This increase was partially offset by:
Previous report
•An $11.6 million decrease in property and revenue taxes; and
Previous report
•A $3.3 million decrease in other operation and maintenance expense related to the We Power leases.
Previous report
•A $17.1 million increase in depreciation and amortization expense, driven by assets being placed into service as we continue to execute on our capital plan.
Previous report
•A $4.0 million increase in expenses associated with legal claims.
Previous report
•A $3.3 million increase in regulatory amortizations and other pass through expenses, as discussed in the notes under the other operation and maintenance table above.
Previous report
•An $11.6 million decrease in property and revenue taxes driven by a favorable adjustment related to a sales tax audit at WE.
Previous report
•A $3.3 million decrease in other operation and maintenance expense related to the We Power leases, as discussed in the notes under the other operation and maintenance table above.
Previous report
Interest expense at the Wisconsin segment increased $11.6 million during the third quarter of 2024, compared with the same quarter in 2023, driven by the impact of WE's $350.0 million long-term debt issuance in May 2024 and $600.0 million long-term debt issuance in September 2024. See Note 11, Long-Term Debt, for more information. Also contributing to the increase was higher average short-term debt balances and increased average short-term debt interest rates.
Previous report
Income tax expense at the Wisconsin segment decreased $6.0 million during the third quarter of 2024, compared with the same quarter in 2023, driven by an increase in PTCs and lower pre-tax income.
Previous report
The Illinois segment's net loss attributed to common shareholders was $48.6 million during the third quarter of 2024, representing a $73.3 million decrease in earnings over the same quarter in 2023. The lower earnings were driven by a decrease in margins related to the impacts of the PGL and NSG rate orders issued by the ICC, effective December 1, 2023 and February 1, 2024, respectively. SMP costs that were previously being recovered under PGL's QIP rider are now included in PGL's base rates. As base revenues are lower during the third quarter when natural gas usage is lower, this rate design change drove a decrease in third quarter 2024 earnings. See Note 25, Regulatory Environment, for more information on the rate orders. Higher operating expenses and a $25.3 million pre-tax charge to income related to the ICC's disallowance of certain capital costs in PGL's 2016 rider QIP reconciliation also contributed to the lower earnings. See Factors Affecting Results, Liquidity, and Capital Resources – Regulatory, Legislative, and Legal Matters – Regulatory Recovery and Note 25, Regulatory Environment, for more information on the ICC disallowance.
Previous report
(2)See Factors Affecting Results, Liquidity, and Capital Resources – Regulatory, Legislative, and Legal Matters – Regulatory Recovery and Note 25, Regulatory Environment, for more information on the ICC disallowance.
Previous report
Gross margin (GAAP) at the Illinois segment decreased $66.8 million during the third quarter of 2024, compared with the same quarter in 2023, and utility margin (non-GAAP) decreased $50.8 million during the third quarter of 2024, compared with the same quarter in 2023. Both measures were driven by:
Previous report
•A $47.6 million decrease in margins related to the impacts of the PGL and NSG rate orders issued by the ICC, effective December 1, 2023 and February 1, 2024, respectively. PGL’s rate order includes the recovery of costs related to PGL’s SMP in base rates. Previously, these costs were being recovered under its QIP rider. As base revenues are lower during the third quarter when natural gas usage is lower, this rate design change drove a decrease in third quarter 2024 margins. See Note 25, Regulatory Environment, for more information on the rate orders.
Previous report
•A $12.9 million decrease in revenues driven by an ICC order received in August 2024 related to PGL's 2016 Rider QIP reconciliation prudency review, which requires refunds to ratepayers for amounts previously collected related to the disallowance of certain capital costs. See Factors Affecting Results, Liquidity, and Capital Resources – Regulatory, Legislative, and Legal Matters – Regulatory Recovery and Note 25, Regulatory Environment, for more information on the ICC disallowance.
Previous report
Additionally, the larger decrease in gross margin (GAAP) as compared to the decrease in utility margin (non-GAAP), was driven by the following items that are further described in Other Operating Expenses below:
Previous report
•A $5.5 million increase in property and revenue taxes;
Previous report
•A $4.6 million increase in depreciation and amortization;
Previous report
•A $3.1 million increase in natural gas distribution and maintenance costs; and
Previous report
•A $3.0 million increase in customer service expense.
Previous report
•A $12.1 million impairment driven by an ICC order received in August 2024 related to the 2016 annual prudency review of PGL's 2016 Rider QIP, which included a disallowance of certain capital costs. See Factors Affecting Results, Liquidity, and Capital Resources – Regulatory, Legislative, and Legal Matters – Regulatory Recovery and Note 25, Regulatory Environment, for more information on the ICC disallowance.
Previous report
•A $4.9 million increase in benefit costs, partially driven by higher costs related to stock-based compensation and deferred compensation.
Previous report
•A $4.6 million increase in depreciation and amortization expense, driven by assets being placed into service as we continue to execute on our capital plan.
Previous report
Income Tax Expense (Benefit)
Previous report
At the Illinois segment, $19.0 million of income tax benefit was recorded during the third quarter of 2024, compared with $8.9 million of income tax expense recorded during the same quarter in 2023. This change was driven by the recognition of a pre-tax loss in the third quarter of 2024, compared to pre-tax earnings in the third quarter of 2023.
Previous report
The other states segment's net loss attributed to common shareholders was $3.7 million during the third quarter of 2024, representing a $2.3 million, or 38.3%, reduction in net loss over the same quarter in 2023. The reduction in net loss was driven by lower property and revenue taxes and an increase in margins related to higher sales volumes.
Previous report
Gross margin (GAAP) increased $4.3 million during the third quarter of 2024, compared with the same quarter in 2023, and utility margin (non-GAAP) increased $1.6 million during the third quarter of 2024, compared with the same quarter in 2023. Both measures were driven by:
Previous report
•A $0.6 million increase related to MGU's rate increase approved by the MPSC that was effective January 1, 2024. See Note 26, Regulatory Environment, in our 2023 Annual Report on Form 10-K for more information.
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Reworded paragraphs (120)
Previous wording
Our goal is to continue to build and sustain long-term value for our shareholders and customers by focusing on the fundamentals of our business: environmental stewardship; reliability; operating efficiency; financial discipline; exceptional customer care; and safety. Our capital investment plan for efficiency, sustainability and growth, referred to as our ESG Progress Plan, provides a roadmap for us to achieve this goal. It is an aggressive plan to cut emissions, maintain superior reliability, deliver significant savings for customers, and grow our investment in the future of energy.
Current wording
Our goal is to continue to build and sustain long-term value for our shareholders and customers by focusing on the fundamentals of our business: environmental stewardship; reliability; operating efficiency; financial discipline; exceptional customer care; and safety. Our capital plan provides a roadmap for us to achieve this goal. It is an aggressive plan to cut emissions, maintain superior reliability, deliver significant savings for customers, and grow our investment in the future of energy.
Previous wording
Our ESG Progress Plan includes the retirement of older, fossil-fueled generation, to be replaced with zero-carbon-emitting renewables and clean natural gas-fired generation. The retirements will contribute to meeting our goals to reduce CO 2 emissions from our electric generation. When taken together, the retirements and new investments in renewables and clean natural gas generation should better balance our supply with our demand, while maintaining reliable, affordable energy for our customers.
Current wording
Our capital plan includes the retirement of older, fossil-fueled generation, to be replaced with zero-carbon-emitting renewables and reliable, efficient natural gas-fired generation. The retirements are intended to address compliance with the EPA Clean Air rules as well as contribute to meeting our goals to reduce CO 2 emissions from our electric generation. When taken together, the retirements and new investments in renewables and reliable, efficient natural gas generation should better balance our supply with our demand, while helping to address compliance and maintaining reliable, affordable energy for our customers.
Previous wording
As part of our path toward these goals, we have started implementing co-firing with natural gas at the ERGS coal-fired units and plan to co-fire with natural gas at Weston Unit 4. By the end of 2030, we expect to use coal as a backup fuel only, and we believe we will be in a position to eliminate coal as an energy source by the end of 2032.
Current wording
As part of our path toward these goals, we have started implementing co-firing with natural gas at the ERGS coal-fired units and plan to begin testing co-firing with natural gas at Weston Unit 4 in 2025. By the end of 2030, we expect to use coal as a backup fuel only and to be in a position to eliminate coal as an energy source by the end of 2032.
Previous wording
We have already retired nearly 2,500 MWs of fossil-fueled generation since the beginning of 2018, which includes the retirement of OCPP Units 5 and 6 in May 2024, the 2019 retirement of the Presque Isle power plant, and the 2018 retirements of the Pleasant Prairie power plant, the Pulliam power plant, and the jointly-owned Edgewater 4 generating unit. We expect to retire approximately 1,200 MWs of additional fossil-fueled generation by the end of 2031, which includes the planned retirement of OCPP Units 7 and 8, the planned retirement of the jointly-owned Columbia Units 1 and 2, and the planned retirement of Weston Unit 3. For more information on the retirement of OCPP Units 5 and 6, see Note 6, Regulatory Assets and Liabilities. See Note 7, Property, Plant, and Equipment, for more information related to planned power plant retirements.
Current wording
We have already retired nearly 2,500 MWs of fossil-fueled generation since the beginning of 2018, which includes the retirement of OCPP Units 5 and 6 in May 2024, the 2019 retirement of the PIPP, and the 2018 retirements of the Pleasant Prairie power plant, the Pulliam power plant, and the jointly-owned Edgewater Unit 4 generating unit. We expect to retire approximately 1,200 MWs of additional coal-fired generation by the end of 2031, which includes the planned retirements of OCPP Units 7 and 8, the jointly-owned Columbia Units 1 and 2, and Weston Unit 3. See Note 6, Property, Plant, and Equipment, for more information related to planned power plant retirements.
Previous wording
In addition to retiring these older, fossil-fueled plants, we expect to invest approximately $9.1 billion from 2025-2029 in regulated renewable energy in Wisconsin. Our plan is to replace a portion of the retired capacity by building and owning zero-carbon-emitting renewable generation facilities that are anticipated to include the following new investments:
Current wording
In addition to retiring these older, fossil-fueled plants, we expect to invest approximately $9.1 billion from 2025-2029 in regulated renewable energy in Wisconsin. Our plan is to replace a portion of the retired capacity by building and owning zero-carbon-emitting renewable generation facilities that are anticipated to include the following investments:
Previous wording
We also plan on investing in a combination of natural gas-fired generation, to be owned by WE, including:
Current wording
We also plan on investing in a combination of clean, natural gas-fired generation, including:
Previous wording
In December 2018, WE received approval from the PSCW for two renewable energy pilot programs. The Solar Now pilot is expected to add a total of 35 MWs of solar generation to WE's portfolio, allowing non-profit and governmental entities, as well as commercial and industrial customers, to site utility owned solar arrays on their property. Under this program, WE has energized 28 Solar Now projects and currently has another two under construction, together totaling more than 30 MWs. The second program, the DRER pilot, is designed to allow large commercial and industrial customers to access renewable resources that WE would operate. The DRER pilot is intended to help these larger customers meet their sustainability and renewable energy goals, and could add up to 35 MWs of renewables to WE's portfolio. In July 2023, the PSCW approved the Renewable Pathway Pilot, the third renewable energy program. This program allows WE and WPS commercial and industrial customers to subscribe to a portion of a utility-scale, Wisconsin-based renewable energy generating facility for up to 125 MWs at WE and 40 MWs at WPS. Under this program, WE has signed up five customers for a total of 44 MWs of generation capacity.
Current wording
In December 2018, WE received approval from the PSCW for two renewable energy pilot programs. The Solar Now pilot is expected to add a total of 35 MWs of solar generation to WE's portfolio, allowing non-profit and governmental entities, as well as commercial and industrial customers, to site utility owned solar arrays on their property. Under this program, WE has energized 30 Solar Now projects, totaling more than 30 MWs. The second program, the DRER pilot, is designed to allow large commercial and industrial customers to access renewable resources that WE would operate. The DRER pilot is intended to help these larger customers meet their sustainability and renewable energy goals, and could add up to 35 MWs of renewables to WE's portfolio. WE has signed up one customer under this program for 4 MWs of generation capacity. In July 2023, the PSCW approved the Renewable Pathway Pilot, the third renewable energy program. This program allows WE and WPS commercial and industrial customers to subscribe to a portion of a utility-scale Wisconsin-based renewable energy generating facility for up to 125 MWs at WE and 40 MWs at WPS. Under this program, WE and WPS have collectively signed up nine customers, for a total of approximately 51 MWs of generation capacity.
Previous wording
In August 2021, the PSCW approved pilot programs for WE and WPS to install and maintain EV charging equipment for customers at their homes or businesses. The programs provide direct benefits to customers by removing cost barriers associated with installing EV equipment. In October 2021, subject to the receipt of any necessary regulatory approvals, we pledged to expand the EV charging network within the service territories of our electric utilities. In doing so, we joined a coalition of utility companies in a unified effort to make EV charging convenient and widely available throughout the Midwest. The coalition we joined is planning to help build and grow EV charging corridors, enabling the general public to safely and efficiently charge their vehicles.
Current wording
In August 2021, the PSCW approved pilot programs for WE and WPS to install and maintain EV charging equipment for customers at their homes or businesses. We proposed modifications to these pilot programs, which were approved by the PSCW and implemented on January 1, 2025. The programs provide direct benefits to customers by removing cost barriers associated with installing EV equipment. In October 2021, subject to the receipt of any necessary regulatory approvals, we pledged to expand the EV charging network within the service territories of our electric utilities. In doing so, we joined a coalition of utility companies in a unified effort to make EV charging convenient and widely available throughout the Midwest. The coalition we joined is planning to help build and grow EV charging corridors, enabling the general public to safely and efficiently charge their vehicles.
Previous wording
We also continue to reduce methane emissions by improving our natural gas distribution system. We set a target across our natural gas distribution operations to achieve net-zero methane emissions by the end of 2030. We plan to achieve our net-zero goal through an effort that includes continuous operational improvements and equipment upgrades, as well as the use of RNG throughout our natural gas utility systems. In 2022, we received approval from the PSCW for our RNG pilots and in 2023, we began transporting the output of local dairy farms onto our natural gas distribution systems in Wisconsin. The RNG supplied will directly replace higher-emission methane from natural gas that would have entered our pipes. We currently have contracts in place for 1.9 Bcf of RNG. In addition, subject to regulatory approval, we may procure RTCs.
Current wording
We also continue to focus on methane emission reductions by improving our natural gas distribution system. We set a target across our natural gas distribution operations to achieve net-zero methane emissions by the end of 2030. We plan to achieve our net-zero goal through an effort that includes continuous operational improvements and equipment upgrades, as well as the use of RNG throughout our natural gas utility systems. In 2022, we received approval from the PSCW for our RNG pilots and in 2023, we began transporting the output of local dairy farms onto our natural gas distribution systems in Wisconsin. The RNG supplied is expected to directly replace higher-emission methane from natural gas that would have entered our pipes. We currently have contracts in place for 2.1 Bcf of RNG. In addition, subject to regulatory approval and market conditions, we expect to procure RTCs.
Previous wording
In December 2023, we started a pilot program with Electric Power Research Institute and CMBlu Energy, a Germany-based designer and manufacturer of an organic solid flow battery, to test this new form of long-duration energy storage on the U.S. electric grid at our Valley power plant. The program will test battery system performance, including the ability to store and discharge energy for up to twice as long as the typical lithium-ion batteries in use today. We expect the pilot activities to continue into 2025.
Current wording
In December 2023, we started a pilot program with Electric Power Research Institute and CMBlu Energy, a Germany-based designer and manufacturer of an organic solid flow battery, to test this new form of long-duration energy storage on the U.S. electric grid at our VAPP. The program will test battery system performance, including the ability to store and discharge energy for up to twice as long as the typical lithium-ion batteries in use today. We expect the pilot activities to continue throughout 2025.
Previous wording
We have made significant reliability-related investments in recent years, and in accordance with our ESG Progress Plan, expect to continue strengthening and modernizing our generation fleet, as well as our electric and natural gas distribution networks to further improve reliability.
Current wording
We have made significant reliability-related investments in recent years, and in accordance with our capital plan, expect to continue strengthening and modernizing our generation fleet, as well as our electric and natural gas distribution networks to further improve reliability.
Previous wording
•In April 2024, WE filed a request with the PSCW to construct an LNG facility with a storage capacity of two Bcf, which would be located on the OCPP site. In addition, the construction of additional LNG facilities in Wisconsin has been proposed as part of the 2025-2029 capital plan and would provide another approximately four Bcf of natural gas supply. The LNG facilities are expected to reduce the likelihood of constraints on our natural gas distribution system during the highest demand days of winter.
Current wording
•In April 2024, WE filed a request with the PSCW to construct an LNG facility with a storage capacity of two Bcf, which would be located on the OCPP site. In addition, the construction of additional LNG facilities in Wisconsin has been proposed as part of our capital plan and would provide another approximately four Bcf of natural gas supply. The LNG facilities are expected to reduce the likelihood of constraints on our natural gas distribution system during the highest demand days of winter.
Previous wording
•Through the SMP, PGL had been working to replace old iron pipes and facilities in Chicago’s natural gas delivery system with modern polyethylene pipes to reinforce the long-term safety and reliability of the system. In November 2023, the ICC ordered PGL to pause spending on the SMP until the ICC completes a proceeding to determine the optimal method for replacing aging natural gas infrastructure and a prudent investment level. The ICC initiated the proceeding on January 31, 2024, and the proceeding is expected to last 12 months. For more information, see Factors Affecting Results, Liquidity, and Capital Resources – Regulatory, Legislative, and Legal Matters – Future Illinois Proceedings.
Current wording
•PGL had been working to replace old iron pipes and facilities in Chicago’s natural gas delivery system with modern polyethylene pipes to reinforce the long-term safety and reliability of the system. In November 2023, the ICC ordered PGL to pause spending on these projects until the ICC completed a proceeding to determine the optimal method for replacing aging natural gas infrastructure and a prudent investment level. The ICC subsequently granted PGL a limited-scope rehearing related to the completion of the projects that started in 2023 and emergency repairs needed to ensure the safety and reliability of the delivery system. In May 2024, the ICC issued a written order on the rehearing, approving $28.5 million of additional spending for this emergency work.
Previous wording
•Our utilities continue to upgrade their electric and natural gas distribution systems to enhance reliability and system hardening.
Current wording
•Our utilities continue to upgrade their electric and natural gas distribution systems to enhance reliability and storm hardening.
Previous wording
We expect to spend approximately $4.5 billion from 2025 to 2029 on reliability related projects with continued investment over the next decade. For more details, see Liquidity and Capital Resources – Cash Requirements – Significant Capital Projects.
Current wording
We expect to spend approximately $4.5 billion from 2025 to 2029 on reliability related to electric distribution projects with continued investment over the next decade. For more details, see Liquidity and Capital Resources – Cash Requirements – Significant Capital Projects.
Previous wording
We continually look for ways to optimize the operating efficiency of our company and will continue to do so under the ESG Progress Plan. For example, we are making progress on our AMI program, replacing aging meter-reading equipment on both our network and customer property. An integrated system of smart meters, communication networks, and data management programs enables two-way communication between our utilities and our customers. This program reduces the manual effort for disconnects and reconnects and enhances outage management capabilities.
Current wording
We continually look for ways to optimize the operating efficiency of our company and will continue to do so under our capital plan. For example, we are making progress on our AMI program, replacing aging meter-reading equipment on both our network and customer property. An integrated system of smart meters, communication networks, and data management programs enables two-way communication between our utilities and our customers. This program reduces the manual effort for disconnects and reconnects and enhances outage management capabilities.
Previous wording
Our planned investment focus from 2025 to 2029 is in our regulated utilities and our investment in ATC. We expect total capital expenditures for our regulated utility businesses to be approximately $24.4 billion from 2025 to 2029. In addition, we currently forecast that our share of ATC's projected capital expenditures over the next five years will be approximately $3.2 billion. Over the same period, we expect to invest approximately $0.4 billion in our non-utility energy infrastructure business on the acquisition of Hardin III. Specific projects included in the $28.0 billion ESG Progress Plan are discussed in more detail below under Liquidity and Capital Resources – Cash Requirements – Significant Capital Projects. Also, see Note 2, Acquisitions, for information on the acquisition of Hardin III and other recent and pending transactions.
Current wording
Our planned investment focus from 2025 to 2029 is in our regulated utilities and our investment in ATC. We expect total capital expenditures for our regulated utility businesses to be approximately $24.4 billion from 2025 to 2029. In addition, we currently forecast that our share of ATC's projected capital expenditures over the next five years will be approximately $3.2 billion. In February 2025, we invested $406.1 million in our non-utility energy infrastructure business with the acquisition of Hardin III. Specific projects included in the $28.0 billion capital plan are discussed in more detail below under Liquidity and Capital Resources – Cash Requirements – Significant Capital Projects. Also, see Note 2, Acquisitions, for additional information on the acquisition of Hardin III.
Previous wording
The following table compares our consolidated results for the third quarter of 2024 with the third quarter of 2023, including favorable or better, "B", and unfavorable or worse, "W", variances:
Current wording
The following table compares our consolidated results for the first quarter of 2025 with the first quarter of 2024, including favorable or better, "B", and unfavorable or worse, "W", variances:
Previous wording
These decreases in earnings were partially offset by a $30.8 million increase in net income attributed to common shareholders at the non-utility energy infrastructure segment, driven by an increase in PTCs from our non-utility renewable generating facilities in 2024, a positive impact from We Power due to continued capital investment, and higher operating income at WECI.
Current wording
•A $14.5 million increase in net income attributed to common shareholders at the non-utility energy infrastructure segment, driven by an increase in PTCs from our non-utility renewable generating facilities and higher operating income at WECI.
Previous wording
We expect our 2024 annual effective tax rate to be between 12.5% and 13.5%. Our effective tax rate calculations are revised every quarter based on the best available year-end tax assumptions, adjusted in the following year after returns are filed. Tax accrual estimates are trued-up to the actual amounts claimed on the tax returns and further adjusted after examinations by taxing authorities, as needed.
Current wording
We expect our 2025 annual effective tax rate to be between 6.5% and 7.5%. Our effective tax rate calculations are revised every quarter based on the best available year-end tax assumptions, adjusted in the following year after returns are filed. Tax accrual estimates are trued-up to the actual amounts claimed on the tax returns and further adjusted after examinations by taxing authorities, as needed.
Previous wording
The other states segment's contribution to net income attributed to common shareholders was $35.5 million during the nine months ended September 30, 2024, representing a $4.6 million, or 14.9%, increase over the same period in 2023. The increase was driven by higher margins due to MGU's rate increase approved by the MPSC that was effective January 1, 2024 and MERC's final rate increase approved by the MPUC in November 2023. Lower property and revenue taxes also contributed to the increase in earnings. These positive impacts were partially offset by higher depreciation and amortization expense.
Current wording
The Wisconsin segment's contribution to net income attributed to common shareholders was $359.9 million during the first quarter of 2025, representing a $93.5 million, or 35.1%, increase over the same quarter in 2024. The increase in earnings was driven by higher margins from the impact of the Wisconsin rate orders approved by the PSCW, effective January 1, 2025, and higher retail sales volumes. See Note 26, Regulatory Environment, in our 2024 Annual Report on Form 10-K, for more information on the 2025 rate orders. These positive impacts were partially offset by higher operating expenses, primarily due to increases in depreciation and amortization expense and transmission expense.
Previous wording
(1)Represents transmission expense that our electric utilities are authorized to collect in rates. The PSCW has approved escrow accounting for ATC and MISO network transmission expenses for WE and WPS. 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. During the third quarter of 2024 and 2023, $147.5 million and $136.4 million, respectively, of costs were billed to our electric utilities by transmission providers.
Current wording
(1)Represents transmission expense that our electric utilities are authorized to collect in rates. The PSCW has approved escrow accounting for ATC and MISO network transmission expenses for WE and WPS. 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. During the first quarter of 2025 and 2024, $149.0 million and $137.8 million, respectively, of costs were billed to our electric utilities by transmission providers.
Previous wording
(3)Represents costs associated with the We Power generation units, including operating and maintenance costs recognized by WE. During the third quarter of 2024 and 2023, $27.8 million and $26.7 million, respectively, of costs were billed to or incurred by WE related to the We Power generation units, with the difference in costs billed or incurred and expenses recognized, either deferred or deducted from the regulatory asset.
Current wording
(3)Represents costs associated with the We Power generation units, including operating and maintenance costs recognized by WE. During the first quarter of 2025 and 2024, $27.1 million and $29.5 million, respectively, of costs were billed to or incurred by WE related to the We Power generation units, with the difference in costs billed or incurred and expenses recognized, either deferred or deducted from the regulatory asset.
Previous wording
•A $2.2 million increase in margins driven by the impact of the Wisconsin limited rate case re-openers approved by the PSCW, effective January 1, 2024. See Note 26, Regulatory Environment, in our 2023 Annual Report on Form 10-K, for more information on the 2024 limited rate case re-openers.
Current wording
•A $109.4 million increase in margins driven by the impact of the Wisconsin rate orders approved by the PSCW, effective January 1, 2025. See Note 26, Regulatory Environment, in our 2024 Annual Report on Form 10-K, for more information on the 2025 rate orders.
Previous wording
These increases in margins were partially offset by a $7.4 million decrease in margins related to lower sales volumes, driven by the impact of unfavorable weather during the nine months ended September 30, 2024, compared with the same period in 2023. As measured by heating degree days, the nine months ended September 30, 2024 were 7.3% and 11.2% warmer than the same period in 2023 in the Milwaukee area and Green Bay area, respectively. As measured by cooling degree days, the nine months ended September 30, 2024 were 3.8% warmer than the same period in 2023 in the Milwaukee area.
Current wording
•A $64.2 million increase in margins related to higher retail sales volumes, driven by the impact of colder winter weather during the first quarter of 2025, compared with the same quarter in 2024. As measured by heating degree days, the first quarter of 2025 was 21.5% and 16.1% colder than the same quarter in 2024 in the Milwaukee area and Green Bay area, respectively.
Previous wording
•A $4.7 million quarter-over-quarter positive impact from collections of fuel and purchased power costs. Under the Wisconsin fuel rules, the margins of our electric utilities are impacted by under- or over-collections of certain fuel and purchased power costs that are within a 2% price variance from the costs included in rates, and the remaining variance above or below the 2% is generally deferred for either future recovery from or refund to customers.
Current wording
These increases in margins were partially offset by a $9.3 million quarter-over-quarter negative impact from collections of fuel and purchased power costs. Under the Wisconsin fuel rules, the margins of our electric utilities are impacted by under- or over-collections of certain fuel and purchased power costs that are within a 2% price variance from the costs included in rates, and the remaining variance above or below the 2% is generally deferred for either future recovery from or refund to customers.
Previous wording
•A $15.6 million increase in electric and natural gas distribution expenses.
Current wording
•A $6.8 million increase in electric and natural gas distribution expenses.
Previous wording
•A $15.6 million increase in electric and natural gas distribution expenses, primarily driven by storm restoration and higher costs to maintain the distribution systems during the nine months ended September 30, 2024, compared with the same period in 2023.
Current wording
•A $6.8 million increase in electric and natural gas distribution expenses, driven by higher costs to maintain the distribution system during the first quarter of 2025, compared with the same quarter in 2024.
Previous wording
•A $13.2 million increase in benefit costs, primarily driven by higher stock-based compensation and deferred compensation expense.
Current wording
•A $3.7 million increase in benefit costs, primarily driven by higher stock-based compensation and deferred compensation expense.
Previous wording
Other operating expenses at the Wisconsin segment increased $21.9 million during the third quarter of 2024, compared with the same quarter in 2023. The significant factors impacting the increase in other operating expenses were:
Current wording
Gross margin (GAAP) at the Illinois segment increased $21.9 million during the first quarter of 2025, compared with the same quarter in 2024, and utility margin (non-GAAP) increased $28.8 million during the first quarter of 2025, compared with the same quarter in 2024. Both measures were driven by:
Previous wording
•A $16.5 million increase in revenues associated with certain riders that are offset in other operation and maintenance and therefore do not have a significant impact on net income.
Current wording
•A $24.8 million increase in revenues associated with certain riders that are offset in other operation and maintenance and therefore do not have a significant impact on net income.
Previous wording
Other operating expenses at the Illinois segment increased $37.6 million, net of the $12.5 million impact of the riders referenced in the table above, during the third quarter of 2024, compared with the same quarter in 2023. The significant factors impacting the increase in other operating expenses were:
Current wording
Other operating expenses at the Illinois segment increased $18.3 million, net of the $24.8 million impact of the riders referenced in the table above, during the first quarter of 2025, compared with the same quarter in 2024. The significant factors impacting the increase in other operating expenses were:
Previous wording
•A $10.5 million decrease in expenses associated with the favorable settlement of a legal claim during the nine months ended September 30, 2024.
Current wording
•A $12.4 million increase in expense primarily associated with the favorable settlement of a legal claim during the first quarter of 2024.
Previous wording
•A $5.5 million increase in property and revenue taxes, driven by an increase in the invested capital tax. This increase was related to an increase in regulatory amortizations as approved in the PGL and NSG rate orders issued by the ICC, effective December 1, 2023 and February 1, 2024, respectively.
Current wording
•A $2.3 million increase in property and revenue taxes, driven by an increase in the invested capital tax and property taxes.
Previous wording
•A $3.1 million increase in natural gas distribution and maintenance costs, primarily related to maintaining the natural gas infrastructure.
Current wording
•A $2.2 million increase in natural gas distribution and maintenance costs, primarily related to maintaining the natural gas infrastructure.
Previous wording
•A $1.5 million increase related to MERC's final rate increase approved by the MPUC in November 2023.
Current wording
•A $1.5 million increase in benefit costs, driven by higher costs related to stock-based compensation and deferred compensation expense.
Previous wording
•A $3.1 million increase related to higher sales volumes, driven by higher retail sales.
Current wording
•A $7.2 million increase related to higher sales volumes, driven by colder weather during the first quarter of 2025, as compared to the same quarter in 2024. As measured by heating degree days, the first quarter of 2025 was 15.9% and 11.9% colder than the same quarter in 2024 at MERC and MGU, respectively.
Previous wording
These increases were partially offset by a $1.2 million decrease related to MERC CIP revenue, which was offset in operation and maintenance expense. Rebates and programs are available to residential and commercial customers of MERC through the CIP, which is funded by rate payers using the Conservation Cost Recovery Charge and the Conservation Cost Recovery Adjustment funds that are collected on their monthly billing statements.
Current wording
•A $2.6 million increase related to MERC CIP revenue, which was offset in operation and maintenance expense. Rebates and programs are available to residential and commercial customers of MERC through the CIP, which is funded by rate payers using the Conservation Cost Recovery Charge and the Conservation Cost Recovery Adjustment funds that are collected on their monthly billing statements.
Previous wording
•A $1.2 million decrease in operation and maintenance expense related to MERC's CIP program, which has an offsetting decrease in margins.
Current wording
•A $2.6 million increase in operation and maintenance expense related to MERC's CIP program, which has an offsetting increase in margins.
Previous wording
•A $3.0 million increase in customer service expense primarily due to higher metering costs.
Current wording
•A $2.3 million increase in natural gas operations and customer service expense, primarily driven by higher metering costs at MERC and MGU.
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Current report — wording carried from elsewhere
•A $2.2 million increase in natural gas distribution and maintenance costs.
Current report — wording carried from elsewhere
authorities, as well as the securities registered under the 1933 Act, are closely monitored and appropriate filings are made to ensure flexibility in the capital markets.
Current report — wording carried from elsewhere
businesses. In addition, certain buildings and equipment, such as hospitals, commercial kitchens, and back-up generators, would be exempt from the new emission limits.
Current report — wording carried from elsewhere
technologies, like hydrogen and carbon management, as we continue the transition to a clean energy future to the benefit of our customers, the communities we serve, and our company.
Current report — wording carried from elsewhere
In August 2022, the IRA was signed into law and provides for $258 billion in energy-related provisions over a 10-year period. The provisions of the IRA are intended to, among other things, lower gasoline and electricity prices, incentivize domestic clean energy investment, manufacturing, and production, and promote reductions in carbon emissions. We believe that we and our customers can benefit from the IRA’s provisions that extend tax benefits for renewable technologies, increase or restore higher rates for PTCs, add an option to claim PTCs for solar projects, expand qualified ITC facilities to include standalone energy storage, and its provision to allow companies to transfer tax credits generated from renewable projects.
Current report — wording carried from elsewhere
D.C. Circuit Court of Appeals issued the following orders and opinion. The refunds resulting from these orders and opinion are also described below.
Rearranged previous paragraphs (41)
Previous report — wording carried elsewhere
These decreases in earnings were partially offset by a $17.6 million increase in net income attributed to common shareholders at the non-utility energy infrastructure segment, driven by an increase in PTCs from our non-utility renewable generating facilities and a positive impact from We Power due to continued capital investment.
Previous report — wording carried elsewhere
These decreases in gross margin (GAAP) and utility margin (non-GAAP) were partially offset by a $12.5 million increase in revenues associated with certain riders that are offset in other operation and maintenance and therefore do not have a significant impact on net income.
Previous report — wording carried elsewhere
These increases in operating income were partially offset by:
Previous report — wording carried elsewhere
The following table compares our consolidated results for the nine months ended September 30, 2024 with the nine months ended September 30, 2023, including favorable or better, "B", and unfavorable or worse, "W", variances:
Previous report — wording carried elsewhere
The discussions below address the contribution of each of our utility segments to net income attributed to common shareholders. The discussions include financial information prepared in accordance with GAAP, as well as utility margin, which is not a measure of financial performance under GAAP. Utility margin (operating revenues less fuel and purchased power costs and cost of natural gas sold) is a non-GAAP financial measure because it excludes certain operation and maintenance expenses applicable to revenues, as well as depreciation and amortization and property and revenue taxes.
Previous report — wording carried elsewhere
We believe that utility margin provides a useful basis for evaluating utility operations since the majority of prudently incurred fuel and purchased power costs, as well as prudently incurred natural gas costs, are passed through to customers in current rates. As a result, management uses utility margin internally when assessing the operating performance of our utility segments as these measures exclude the majority of revenue fluctuations caused by changes in these expenses. Similarly, the presentation of utility margin herein is intended to provide supplemental information for investors regarding our operating performance.
Previous report — wording carried elsewhere
Our utility margin may not be comparable to similar measures presented by other companies. Furthermore, this measure is not intended to replace gross margin as determined in accordance with GAAP as an indicator of operating performance. Each of our three utility segment discussions below include a table that provides the calculation of both gross margin as determined in accordance with GAAP and utility margin, as well as a reconciliation between the two measures.
Previous report — wording carried elsewhere
Wisconsin Segment Contribution to Net Income Attributed to Common Shareholders
Previous report — wording carried elsewhere
(1)Cost of sales includes fuel and purchased power and cost of natural gas sold.
Previous report — wording carried elsewhere
(1)Represents transmission expense that our electric utilities are authorized to collect in rates. The PSCW has approved escrow accounting for ATC and MISO network transmission expenses for WE and WPS. 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. During the nine months ended September 30, 2024 and 2023, $425.4 million and $391.5 million, respectively, of costs were billed to our electric utilities by transmission providers.
Previous report — wording carried elsewhere
(2)Regulatory amortizations and other pass through expenses are substantially offset in margins and therefore do not have a significant impact on net income.
Previous report — wording carried elsewhere
(3)Represents costs associated with the We Power generation units, including operating and maintenance costs recognized by WE. During the nine months ended September 30, 2024 and 2023, $86.7 million and $89.1 million, respectively, of costs were billed to or incurred by WE related to the We Power generation units, with the difference in costs billed or incurred and expenses recognized, either deferred or deducted from the regulatory asset.
Previous report — wording carried elsewhere
(1)Includes distribution sales for customers who have purchased power from an alternative electric supplier in Michigan.
Previous report — wording carried elsewhere
(1)Normal degree days are based on a 20-year moving average of monthly temperatures from Mitchell International Airport in Milwaukee, Wisconsin.
Previous report — wording carried elsewhere
(2)Normal degree days are based on a 20-year moving average of monthly temperatures from the Green Bay, Wisconsin weather station.
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(3)Normal degree days are based on a 20-year moving average of monthly temperatures from the Iron Mountain, Michigan weather station.
Previous report — wording carried elsewhere
The following table summarizes our Wisconsin segment gross margin (GAAP) and reconciles gross margin (GAAP) to utility margin (non-GAAP). See Non-GAAP Financial Measures above for additional information regarding gross margin (GAAP) and utility margin (non-GAAP).
Previous report — wording carried elsewhere
(1)Operating and maintenance expenses deemed to be directly attributable to our revenue-producing activities include plant operating and maintenance expenses related to our generating units; costs associated with the We Power generating units; and transmission, distribution and customer service expenses. These expenses are included in the above table to calculate gross margin as defined under GAAP.
Previous report — wording carried elsewhere
•A $37.3 million period-over-period positive impact from collections of fuel and purchased power costs. Under the Wisconsin fuel rules, the margins of our electric utilities are impacted by under- or over-collections of certain fuel and purchased power costs that are within a 2% price variance from the costs included in rates, and the remaining variance above or below the 2% is generally deferred for either future recovery from or refund to customers.
Previous report — wording carried elsewhere
Illinois Segment Contribution to Net Income Attributed to Common Shareholders
Previous report — wording carried elsewhere
(1)These riders and regulatory amortizations are substantially offset in margins and therefore do not have a significant impact on net income.
Previous report — wording carried elsewhere
(1)Normal heating degree days are based on a 12-year moving average of monthly temperatures from Chicago's O'Hare Airport.
Previous report — wording carried elsewhere
The following table summarizes our Illinois segment gross margin (GAAP) and reconciles gross margin (GAAP) to utility margin (non-GAAP). See Non-GAAP Financial Measures above for additional information regarding gross margin (GAAP) and utility margin (non-GAAP).
Previous report — wording carried elsewhere
(1)Operating and maintenance expenses deemed to be directly attributable to our revenue-producing activities include distribution and customer service expenses. These expenses are included in the above table to calculate gross margin as defined under GAAP.
Previous report — wording carried elsewhere
Additionally, the smaller increase in gross margin (GAAP) as compared to the increase in utility margin (non-GAAP), was driven by the following items that are further described in Other Operating Expenses below:
Previous report — wording carried elsewhere
•A $10.2 million increase in natural gas distribution and maintenance costs, primarily related to maintaining the natural gas infrastructure.
Previous report — wording carried elsewhere
Other States Segment Contribution to Net Income Attributed to Common Shareholders
Previous report — wording carried elsewhere
Since the majority of MERC and MGU customers use natural gas for heating, net income attributed to common shareholders at the other states segment is sensitive to weather and is generally higher during the winter months.
Previous report — wording carried elsewhere
(1)Regulatory amortizations and other pass through expenses are substantially offset in margins and therefore do not have a significant impact on net income.
Previous report — wording carried elsewhere
(1)Normal heating degree days for MERC and MGU are based on a 20-year moving average and 15-year moving average, respectively, of monthly temperatures from various weather stations throughout their respective service territories.
Previous report — wording carried elsewhere
The following table summarizes our other states segment gross margin (GAAP) and reconciles gross margin (GAAP) to utility margin (non-GAAP). See Non-GAAP Financial Measures above for additional information regarding gross margin (GAAP) and utility margin (non-GAAP).
Previous report — wording carried elsewhere
(1)Operating and maintenance expenses deemed to be directly attributable to our revenue-producing activities include distribution and customer service expenses. These expenses are included in the above table to calculate gross margin as defined under GAAP.
Previous report — wording carried elsewhere
Electric Transmission Segment Contribution to Net Income Attributed to Common Shareholders
Previous report — wording carried elsewhere
Equity in Earnings of Transmission Affiliates
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Non-Utility Energy Infrastructure Segment Contribution to Net Income Attributed to Common Shareholders
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•A $12.9 million increase in PPA revenue resulting from increased generation driven by higher wind speeds and lower energy curtailments.
Previous report — wording carried elsewhere
These increases in operating income were partially offset by:
Previous report — wording carried elsewhere
The income tax benefit at the non-utility energy infrastructure segment increased $15.4 million during the nine months ended September 30, 2024, compared with the same period in 2023. The increase was primarily due to an increase in PTCs that was related to the IRS approved PTC rate increase and higher production volumes, partially offset by higher pre-tax earnings.
Previous report — wording carried elsewhere
Corporate and Other Segment Contribution to Net Income Attributed to Common Shareholders
Previous report — wording carried elsewhere
•A $2.6 million increase in the net gains from the investments held in the Integrys rabbi trust. The gains from the investments held in the rabbi trust partially offset the changes in benefit costs related to deferred compensation, which are primarily included in other operation and maintenance expense in our utility segments.
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