WEC ENERGY GROUP, INC.
For the period ended Mar 31, 2026. Filed May 7, 2026.
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, 2026 · Filed May 7, 2026
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 2025-09-30; filed 2025-10-31.
0000783325-25-000060
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0000783325-26-000052
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 432 previous paragraphs and 273 current paragraphs.
112 unchanged; 96 reworded; 60 added; 185 removed; 39 previous and 5 current paragraphs rearranged.
Tables are not compared: 88 previous and 49 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 (60)
Current report
Supporting Economic Growth Within Our Communities
Current report
Economic growth continues in our Wisconsin service territories. Companies are investing in major projects, including data centers and modern manufacturing facilities. We anticipate electric demand growth in the years ahead from these economic developments. Microsoft has announced plans to invest over $20 billion in data centers in southeastern Wisconsin over the next several years, and we expect up to 2.6 GWs of load growth in the Milwaukee-to-Chicago corridor through 2030. Additionally, Vantage Data Centers plan to develop a large data center campus in Port Washington that is forecasted to add 1.3 GWs of demand through 2030. This site has the potential to add an incremental 2.2 GWs, for a total of up to 3.5 GWs over time. We are working closely with these large customers to provide power to meet this substantial projected demand. On April 24, 2026, we received verbal approval from the PSCW for new VLC and Bespoke Resources tariffs. These tariffs specifically address the unique needs of VLCs while protecting our other customers and shareholders. See Note 23, Regulatory Environment, for more information on the VLC and Bespoke Resources tariffs.
Current report
To meet the forecasted electric demand growth in the years ahead, greater capacity will be required to provide affordable, reliable, and clean energy for our communities. Our capital plan addresses that demand with a range of planned investments in natural gas-fired generation, renewables, and battery storage. We plan on investing approximately $5.4 billion from 2026 to 2030 in a combination of efficient natural gas-fired generation, including:
Current report
Through our multiyear Energy Delivery Program, we are planning to implement capabilities and standard processes for customer service, natural gas and electric operations, work management, and field operations. This includes improvements to outage management, geographic information systems, and work and asset management systems, as well as the implementation of new capabilities through advanced distribution management systems.
Current report
Earnings increased $80.2 million during the first quarter of 2026, compared with the same quarter in 2025. The $80.2 million increase in earnings was driven by:
Current report
•An $11.8 million increase in net income attributed to common shareholders at the non-utility energy infrastructure segment, driven by higher operating income at WECI.
Current report
•A $10.8 million increase in net income attributed to common shareholders at the Illinois segment, driven by lower operating expenses, primarily due to the quarter-over-quarter positive impact from a gain on the sale of certain real estate at PGL and a decrease in natural gas distribution and maintenance costs.
Current report
The Wisconsin segment's contribution to net income attributed to common shareholders was $408.1 million during the first quarter of 2026, representing a $48.2 million, or 13.4%, increase over the same quarter in 2025. The increase in earnings was primarily due to higher margins from the impact of the Wisconsin rate orders approved by the PSCW, effective January 1, 2026. See Note 26, Regulatory Environment, in our 2025 Annual Report on Form 10-K for more information. Higher AFUDC-Equity and increases in certain income tax benefits also contributed to the higher earnings. These positive impacts were partially offset by higher operating expenses, primarily due to an increase in regulatory amortizations and other pass through expenses, higher depreciation and amortization expense, and an increase in transmission expense.
Current report
Gross margin (GAAP) at the Wisconsin segment increased $31.7 million during the first quarter of 2026, compared with the same quarter in 2025, and utility margin (non-GAAP) increased $74.4 million during the first quarter of 2026, compared with the same quarter in 2025. Both measures were driven by:
Current report
•A current return of $4.3 million consisting of carrying costs earned during the construction of certain bespoke resources assigned to our VLCs during the first quarter of 2026.
Current report
These increases in margins were partially offset by a $6.6 million decrease related to lower sales volumes, driven by retail natural gas sales, including the impact of warmer weather during the first quarter of 2026, compared with the same quarter in 2025. As measured by heating degree days, the first quarter of 2026 was 4.0% warmer than the same quarter in 2025 in the Milwaukee area.
Current report
•A $19.1 million increase in depreciation and amortization expense;
Current report
•A $15.3 million increase in transmission expense;
Current report
•A partially offsetting $5.3 million decrease in electric and natural gas distribution expenses.
Current report
Other operating expenses at the Wisconsin segment increased $59.5 million during the first quarter of 2026, compared with the same quarter in 2025. The significant factors impacting the increase in other operating expenses were:
Current report
•A $19.1 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 $5.3 million increase in property and revenue taxes, driven by gross receipt taxes.
Current report
Other Income, Net
Current report
Other income, net at the Wisconsin segment increased $25.5 million during the first quarter of 2026, compared with the same quarter in 2025, driven by a $26.8 million positive impact from higher AFUDC-Equity due to continued capital investment.
Current report
Interest expense at the Wisconsin segment increased $0.5 million during the first quarter of 2026, compared with the same quarter in 2025. The increase was primarily due to the impact of long-term debt issuances in 2025 and 2026. Also contributing to the increase was higher average short-term debt balances. These increases were substantially offset by AFUDC-Debt that was $11.2 million higher quarter-over-quarter due to continued capital investment and the impact of long-term debt maturities in 2025.
Current report
Income tax expense at the Wisconsin segment decreased $8.3 million during the first quarter of 2026, compared with the same quarter in 2025, driven by:
Current report
•A $4.7 million increase in income tax benefits associated with certain regulatory tax deferral items; and
Current report
•A $4.6 million increase in PTCs.
Current report
Partially offsetting these favorable income tax variances was higher pre-tax income.
Current report
The Illinois segment's contribution to net income attributed to common shareholders was $188.9 million during the first quarter of 2026, representing a $10.8 million, or 6.1%, increase over the same quarter in 2025. The increase in earnings was driven by lower operating expenses, primarily due to the quarter-over-quarter positive impact from a gain on the sale of certain real estate at PGL and a decrease in natural gas distribution and maintenance costs.
Current report
Gross margin (GAAP) at the Illinois segment decreased $13.6 million during the first quarter of 2026, compared with the same quarter in 2025, and utility margin (non-GAAP) decreased $25.6 million during the first quarter of 2026, compared with the same quarter in 2025. Both measures were driven by:
Current report
•A $9.4 million decrease in revenues associated with the invested capital tax adjustment rider, which was offset in property and revenue taxes and therefore does not have a significant impact on net income. The invested capital tax adjustment rider is a mechanism that allows us to recover or refund the difference between the cost of invested capital tax incurred and the amount collected through base rates.
Current report
•A $9.4 million decrease in property and revenue taxes; and
Current report
•A $4.5 million decrease in natural gas distribution and maintenance costs.
Current report
•An $11.9 million gain related to the sale of certain real estate owned by PGL. See Note 3, Disposition, for more information.
Current report
•A $9.4 million decrease in property and revenue taxes, driven by the invested capital tax.
Current report
Interest expense at the Illinois segment decreased $0.8 million during the first quarter of 2026, compared with the same quarter in 2025, driven by both lower short-term debt balances and interest rates.
Current report
Income tax expense at the Illinois segment increased $5.0 million during the first quarter of 2026, compared with the same quarter in 2025, driven by an increase in pre-tax income.
Current report
The other states segment's contribution to net income attributed to common shareholders was $37.6 million during the first quarter of 2026, representing a $5.5 million, or 12.8%, decrease over the same quarter in 2025. The lower earnings were driven by a decrease in margins related to lower retail sales volumes, along with higher interest expense and an increase in depreciation and amortization expense.
Current report
Other operating expenses at the other states segment increased $2.2 million during the first quarter of 2026, compared with the same quarter in 2025. The significant factors impacting the increase in operating expenses were:
Current report
Income tax expense at the other states segment decreased $1.7 million during the first quarter of 2026, compared with the same quarter in 2025, driven by lower pre-tax income.
Current report
Interest expense at the electric transmission segment decreased $0.9 million during the first quarter of 2026, compared with the same quarter in 2025, due to the maturity of long-term debt.
Current report
Income tax expense at the electric transmission segment increased $1.8 million during the first quarter of 2026, compared with the same quarter in 2025, driven by higher pre-tax income.
Current report
•A $10.1 million improvement in revenue related to lower congestion related costs.
Current report
•A $2.2 million increase in operating income from a full quarter of operations at Hardin III, which was acquired in February 2025.
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Removed paragraphs (185)
Previous report
Creating a Sustainable Future
Previous report
We also plan on investing in a combination of clean, natural gas-fired generation, including:
Previous report
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 collectively have 16 active contracts, for a total of approximately 47 MWs of generation capacity.
Previous report
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 report
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 into 2026.
Previous report
Earnings increased $31.2 million during the third quarter of 2025, compared with the same quarter in 2024. The $31.2 million increase in earnings was driven by:
Previous report
•An $18.1 million decrease in the net loss attributed to common shareholders at the Illinois segment, driven by the positive quarter-over-quarter impact of the $25.3 million pre-tax charge to income recorded in the third quarter of 2024 related to the ICC's disallowance of certain capital costs in PGL's 2016 rider QIP reconciliation. See Factors Affecting Results, Liquidity, and Capital Resources – Regulatory, Legislative, and Legal Matters – Regulatory Recovery and Note 23, Regulatory Environment, for more information on the ICC disallowance.
Previous report
These increases in earnings were partially offset by a $33.7 million increase in the net loss attributed to common shareholders at the corporate and other segment, driven by 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 and a net loss from our equity
Previous report
method investments in technology and energy-focused investment funds also contributed to the increase in the net loss attributed to common shareholders.
Previous report
The Wisconsin segment's contribution to net income attributed to common shareholders was $281.3 million during the third quarter of 2025, representing a $43.5 million, or 18.3%, 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, higher retail sales volumes, and an increase in certain income tax benefits. 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 an increase in depreciation and amortization expense, higher costs related to our power plants, and an increase in property and revenue taxes.
Previous report
Gross margin (GAAP) at the Wisconsin segment increased $51.2 million during the third quarter of 2025, compared with the same quarter in 2024, and utility margin (non-GAAP) increased $118.7 million during the third quarter of 2025, compared with the same quarter in 2024. Both measures were driven by:
Previous report
•A $4.9 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.
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•A $23.3 million increase in depreciation and amortization expense;
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•A $15.4 million increase in other operating and maintenance related to our power plants;
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•A $10.4 million increase in transmission expense; and
Previous report
•A $6.6 million increase in electric and natural gas distribution expenses.
Previous report
Other operating expenses at the Wisconsin segment increased $75.2 million during the third quarter of 2025, compared with the same quarter in 2024. The significant factors impacting the increase in other operating expenses were:
Previous report
•A $23.3 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 $15.4 million increase in other operating and maintenance related to our power plants, partially driven by renewable generation facilities placed in service during 2025 and the fourth quarter of 2024.
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•An $11.7 million increase in property and revenue taxes during the third quarter of 2025, compared with the same quarter in 2024, driven by a favorable 2024 adjustment related to a sales tax audit.
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•A $6.6 million increase in benefits expenses, driven by higher compensation costs.
Previous report
Other income, net at the Wisconsin segment decreased $10.7 million during the third quarter of 2025, compared with the same quarter in 2024, driven by a $19.7 million negative impact from the non-service components of our net periodic pension and OPEB costs. In accordance with our December 2024 PSCW rate orders, in 2025, we began amortizing our pension and OPEB costs that were previously deferred under escrow accounting. During the third quarter of 2025, we amortized $12.1 million of the previously deferred non-service costs as we are now collecting these costs in rates. See Note 16, Employee Benefits, for more information on our benefit costs. This decrease in other income, net was partially offset by a $9.1 million positive impact from higher AFUDC-Equity due to continued capital investment.
Previous report
Interest expense at the Wisconsin segment decreased $1.4 million during the third quarter of 2025, compared with the same quarter in 2024, due to higher AFUDC-Debt due to continued capital investment, lower average short-term debt balances, and lower average short-term debt interest rates. Partially offsetting these decreases were the impact of WE, WPS, WG, and UMERC issuing long-term debt.
Previous report
Income tax expense at the Wisconsin segment decreased $9.3 million during the third quarter of 2025, compared with the same quarter in 2024, driven by:
Previous report
•A $6.2 million increase in the benefit from the flow through of tax repairs in connection with the Wisconsin rate orders approved by the PSCW, effective January 1, 2025;
Previous report
•A $4.9 million increase in PTCs; and
Previous report
Partially offsetting these decreases in income tax expense was higher pre-tax income.
Previous report
The Illinois segment's net loss attributed to common shareholders was $30.5 million during the third quarter of 2025, representing an $18.1 million, or 37.2%, reduction in net loss over the same quarter in 2024. The lower net loss was driven by the positive quarter-over-quarter impact of the $25.3 million pre-tax charge to income recorded in the third quarter of 2024 related to the ICC's disallowance of certain capital costs in PGL's 2016 rider QIP reconciliation. See Factors Affecting Results, Liquidity, and Capital Resources – Regulatory, Legislative, and Legal Matters – Regulatory Recovery and Note 23, 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 23, Regulatory Environment, for more information on the ICC disallowance.
Previous report
Gross margin (GAAP) at the Illinois segment increased $6.1 million during the third quarter of 2025, compared with the same quarter in 2024, and utility margin (non-GAAP) increased $6.3 million during the third quarter of 2025, compared with the same quarter in 2024.
Previous report
Both measures were impacted by a $12.9 million increase in revenues driven by a disallowance recorded in 2024 related to an ICC order received in August 2024 related to PGL's 2016 Rider QIP reconciliation prudency review, which required 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 23, Regulatory Environment, for more information on the ICC disallowance. This increase in gross margin (GAAP) and utility margin (non-GAAP) was partially offset by a $6.6 million decrease 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
•A $12.1 million impairment recorded in 2024 related to 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 23, Regulatory Environment, for more information on the ICC disallowance.
Previous report
These decreases in other operating expenses were partially offset by a $2.1 million increase in benefits expenses, driven by higher compensation costs.
Previous report
Interest expense at the Illinois segment decreased $0.5 million during the third quarter of 2025, compared with the same quarter in 2024, driven by the impact of a series of PGL's first mortgage bonds maturing in November 2024.
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The income tax benefit at the Illinois segment decreased $7.5 million during the third quarter of 2025, compared with the same quarter in 2024, driven by a decrease in pre-tax loss.
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The other states segment's net loss attributed to common shareholders was $8.9 million during the third quarter of 2025, representing a $5.2 million, or 140.5%, increase in net loss over the same quarter in 2024. The higher net loss was driven by an increase in property and revenue taxes and higher interest expense.
Previous report
Other operating expenses at the other states segment increased $5.5 million during the third quarter of 2025, compared with the same quarter in 2024. The significant factors impacting the increase in operating expenses were:
Previous report
•A $4.0 million increase in property and revenue taxes, driven by the quarter-over-quarter impact from a positive resolution of a use tax audit at MGU during the third quarter of 2024.
Previous report
•A $0.5 million increase in benefits expenses, driven by higher compensation costs.
Previous report
Interest expense at the other states segment increased $0.9 million during the third quarter of 2025, compared with the same quarter in 2024, driven by the impact of MERC issuing long-term debt in April 2025 and MGU issuing long-term debt in October 2024 and April 2025. This increase was partially offset by lower average short-term debt interest rates.
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Reworded paragraphs (96)
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 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
We are working to build and sustain long-term value for our shareholders and customers by supporting economic growth in our region while focusing on the fundamentals of our business: reliability, operating efficiency, financial discipline, environmental stewardship, exceptional customer care, and safety. Our capital plan provides a roadmap for us to achieve this goal. It is a plan premised upon maintaining superior reliability, delivering savings for customers, and growing our investment in the future of energy.
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•180 MWs of RICE natural gas-fueled generation.
Current wording
•180 MWs of reciprocating internal combustion engine natural gas-fueled generation.
Previous wording
In addition to retiring these older, fossil-fueled plants, we expect to invest approximately $11.6 billion from 2026 to 2030 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:
Current wording
We expect to invest approximately $12.6 billion from 2026 to 2030 in regulated renewable energy in Wisconsin. Our plan is to build and own zero-carbon-emitting renewable generation facilities that are anticipated to include the following investments:
Previous wording
•3,700 MWs of utility-scale solar;
Current wording
•3,850 MWs of utility-scale solar;
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•1,780 MWs of battery storage; and
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•2,130 MWs of battery storage; and
Previous wording
In the third quarter of 2025, we made a decision to reconsider our near-term CO 2 emission reduction goals due to a combination of factors, including tightened energy supply requirements in the Midwest power market and the need to serve our customers with safe, reliable, and affordable energy. However, our long-term goal to achieve net carbon neutral electric generation by 2050 remains intact. We expect to achieve this goal by continuing to make operating refinements, retiring less efficient generating units, and executing our capital plan. As part of our path toward this goal, we have started implementing co-firing with natural gas at the ERGS coal-fired units and at Weston Unit 4. We expect to use coal only as a backup fuel by the end of 2030 and to be in a position to eliminate coal as an energy source by the end of 2032.
Current wording
Our capital plan also reflects the planned retirement of our older, fossil-fueled generation, which we expect to replace with the natural gas-fired generation and zero-carbon-emitting renewables discussed above. These retirements are intended to address compliance with EPA regulations established under the CAA, as well as contribute to meeting our goal to reduce CO 2 emissions from our electric generation. Our long-term goal is to achieve net carbon neutral electric generation by the end of 2050. We expect to achieve this goal by continuing to make operating refinements, retiring less efficient generating units, and executing our capital plan. We expect to use coal only as a backup fuel by the end of 2030 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 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 900 MWs of additional coal-fired generation by the end of 2031, which includes the planned retirements of OCPP Units 7 and 8 and Weston Unit 3. In conjunction with our new capital plan, we and the other co-owners of Columbia Units 1 and 2 currently plan to continue coal operations at these units through at least 2029, and continue to evaluate the conversion of both units to natural gas. See Note 6, Property, Plant, and Equipment, for more information related to Columbia Units 1 and 2 and our planned power plant retirements.
Current wording
As part of our path toward this goal, we have started implementing co-firing with natural gas at the ERGS coal-fired units and at Weston Unit 4. We and the other co-owners of Columbia Units 1 and 2 currently plan to continue coal operations at these units through at least 2029, but continue to evaluate the conversion of both units to natural gas. Additionally, we have 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 Generating Station Unit 4 generating unit. We expect to retire approximately 900 MWs of additional coal-fired generation by the end of 2031, which includes the planned retirements of OCPP Units 7 and 8 and Weston Unit 3. See Note 7, Property, Plant, and Equipment, for more information related to the planned retirement of OCPP Units 7 and 8.
Previous 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.
Current wording
When taken together, the retirements and new investments in natural gas generation and renewables should better balance our supply with our demand, while helping to address compliance and maintaining reliable, affordable energy for our customers.
Previous wording
We also continue to focus on methane emission reductions by improving and upgrading our natural gas distribution systems, and using 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 light of our progress, significant uncertainty surrounding the market for RTCs, and our desire to focus on long-term GHG emissions-reduction across the enterprise, in the third quarter of 2025, we made a decision to reassess our previous, standalone goal related to methane emissions from natural gas distribution.
Current wording
We also continue to focus on methane emission reductions by improving and upgrading our natural gas distribution systems and using RNG throughout our natural gas utility systems. In 2023, we began transporting the output of local dairy farms onto our natural gas distribution systems in Wisconsin. The RNG supplied is replacing higher-emission methane from natural gas that would have entered our pipes. We currently have contracts in place for 2.1 Bcf of RNG.
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Below are a few examples of reliability projects that are proposed, currently underway, or recently completed.
Current wording
Below are a few of the more significant projects that are proposed, currently underway, or recently completed.
Previous 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. In February 2025, the ICC issued an order setting expectations for PGL's prospective retirement of its aging natural gas infrastructure. The ICC directed us to focus on retiring all cast and ductile iron pipe that has a diameter of less than 36 inches by January 1, 2035. PGL will retire 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 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. In a limited-scope rehearing of this order, PGL was authorized spending for completion of projects that had started in 2023. In February 2025, the ICC issued an order setting expectations for PGL's prospective retirement of its aging natural gas infrastructure. The ICC directed us to focus on retiring all cast and ductile iron pipe that has a diameter of less than 36 inches by January 1, 2035. PGL is working to retire 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 Proceeding – Replacement of Aging Natural Gas Infrastructure.
Previous wording
•Our capital plan includes $2.2 billion of investments in battery energy storage systems from 2026 to 2030, which are intended to capture excess power and release it during peak demand or when power is limited due to weather or other unexpected disruptions.
Current wording
•Our capital plan includes $2.9 billion of investments in battery energy storage systems from 2026 to 2030, which are intended to capture excess power and release it during peak demand or when power is limited due to weather or other unexpected disruptions.
Previous wording
We expect to spend approximately $4.7 billion from 2026 to 2030 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.
Current wording
We expect to spend approximately $7.1 billion and $4.7 billion on reliability related to natural gas and electric distribution projects, respectively, from 2026 to 2030, 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 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.
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 advanced metering infrastructure 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 customer connections and enhances outage management capabilities.
Previous wording
We continue to focus on integrating the resources of all our businesses and improving our business processes to find the best and most efficient processes possible. We expect these efforts to continue to drive operational efficiency and to put us in a position to effectively support plans for future growth.
Current wording
We continue to focus on integrating the resources of all our businesses and improving our business processes to find the best and most efficient processes possible, including evaluating the use of AI tools. We expect these efforts to continue to drive operational efficiency and to put us in a position to effectively support plans for future growth.
Previous wording
A strong adherence to financial discipline is essential to meeting our earnings projections and maintaining a strong balance sheet, stable cash flows, a growing dividend, and quality credit ratings.
Current wording
A strong adherence to financial discipline is essential to meeting our earnings projections and maintaining a strong balance sheet, stable cash flows, a growing dividend, and quality credit ratings. We work to earn allowed rates of return through a focus on cost control and strategic investment.
Previous wording
Our planned investment focus from 2026 to 2030 is in our regulated utilities and our investment in ATC. We expect total capital expenditures for our regulated utility businesses to be approximately $32.4 billion from 2026 to 2030. In addition, we currently forecast that our share of ATC's projected capital expenditures over the next five years will be approximately $4.1 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 $36.5 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.
Current wording
Our planned investment focus from 2026 to 2030 is in our regulated utilities and our investment in ATC. We expect total capital expenditures for our regulated utility businesses to be approximately $33.4 billion from 2026 to 2030. In addition, we currently forecast that our share of ATC's projected capital expenditures over the next five years will be approximately $4.1 billion. For additional information regarding projects included in the $37.5 billion capital plan, see Liquidity and Capital Resources – Cash Requirements – Significant Capital Projects.
Previous wording
We follow an asset management strategy that focuses on investing in and acquiring assets consistent with our strategic plans, as well as disposing of assets, including property, plants, equipment, and entire business units, that are no longer strategic to operations, are not performing as intended, or have an unacceptable risk profile.
Current wording
We follow an asset management strategy that focuses on investing in and acquiring assets consistent with our strategic plans, as well as disposing of assets, including property, plants, equipment, and entire business units, that are no longer strategic to operations, are not performing as intended, or have an unacceptable risk profile. See Note 2, Acquisitions, and Note 3, Disposition, for additional information on our recent and pending transactions.
Previous wording
Safety is one of our core values and a critical component of our culture. We are committed to keeping our employees and the public safe through a comprehensive corporate safety program that focuses on employee engagement and elimination of at-risk behaviors.
Current wording
Safety is one of our core values and a critical component of our culture. We are committed to keeping our employees and the public safe through a comprehensive corporate safety program that focuses on employee engagement and elimination of at-risk behaviors. To further protect public safety, we monitor the integrity of our distribution systems, have emergency response and business continuity plans in place, and provide key safety information to customers, contractors, and first responders.
Previous wording
The following table compares our consolidated results for the third quarter of 2025 with the third quarter of 2024, 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 2026 with the first quarter of 2025, including favorable or better, "B", and unfavorable or worse, "W", variances:
Previous wording
•A $43.5 million increase in net income attributed to common shareholders at the Wisconsin segment, primarily due to higher margins from the impact of the Wisconsin rate orders approved by the PSCW, effective January 1, 2025, higher retail sales volumes, and an increase in certain income tax benefits. 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 an increase in depreciation and amortization expense, higher costs related to our power plants, and an increase in property and revenue taxes.
Current wording
•A $48.2 million increase in net income attributed to common shareholders at the Wisconsin segment, primarily due to higher margins from the impact of the Wisconsin rate orders approved by the PSCW, effective January 1, 2026. See Note 26, Regulatory Environment, in our 2025 Annual Report on Form 10-K for more information. Higher AFUDC-Equity and increases in certain income tax benefits also contributed to the higher earnings. These positive impacts were partially offset by higher operating expenses, primarily due to an increase in regulatory amortizations and other pass through expenses, higher depreciation and amortization expense, and an increase in transmission expense.
Previous wording
We expect our 2025 annual effective tax rate to be between 7.5% and 8.5%. 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 2026 annual effective tax rate to be between 5.5% and 6.5%. 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
(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 2025 and 2024, $157.9 million and $147.5 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 2026 and 2025, $164.3 million and $149.0 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 2025 and 2024, $29.0 million and $27.8 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 2026 and 2025, $34.9 million and $27.1 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 wording
•A $97.8 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.
Current wording
•A $73.4 million increase in margins driven by the impact of the Wisconsin rate orders approved by the PSCW, effective January 1, 2026. See Note 26, Regulatory Environment, in our 2025 Annual Report on Form 10-K, for more information.
Previous wording
•A $10.0 million increase in property and revenues taxes.
Current wording
•A $5.3 million increase in property and revenues taxes; and
Previous wording
•A $10.3 million increase in regulatory amortizations and other pass through expenses, as discussed in the notes under the other operation and maintenance table above.
Current wording
•A $26.9 million increase in regulatory amortizations and other pass through expenses, as discussed in the notes under the other operation and maintenance table above.
Previous wording
•A $10.4 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 wording
•A $15.3 million increase in transmission expense as approved by the PSCW in our Wisconsin rate orders, effective January 1, 2026. See the notes under the other operation and maintenance table above for more information.
Previous wording
•A $6.6 million increase in electric and natural gas distribution expenses, driven by higher costs to maintain the distribution systems during the third quarter of 2025, compared with the same quarter in 2024.
Current wording
These increases in other operating expenses were partially offset by a $5.3 million decrease in electric and natural gas distribution expenses, driven by lower costs to maintain the distribution systems and for storm damage in the first quarter of 2026 compared with the same quarter of 2025.
Previous wording
•A $3.7 million increase in income tax benefits associated with AFUDC-Equity, driven by continued capital investment.
Current wording
•An $8.0 million increase in income tax benefits associated with AFUDC-Equity, driven by continued capital investment;
Previous wording
•A $24.9 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 $17.3 million decrease 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
Gross margin (GAAP) decreased $5.6 million during the third quarter of 2025, compared with the same quarter in 2024, and utility margin (non-GAAP) decreased $0.6 million during the third quarter of 2025, compared with the same quarter in 2024. The larger decrease in gross margin (GAAP) as compared to the decrease in utility margin (non-GAAP), was driven by a $4.0 million increase in property and revenue taxes that is further described in Other Operating Expenses below.
Current wording
Additionally, the smaller decrease in gross margin (GAAP) as compared with the decrease in utility margin (non-GAAP), was driven by the following items that are further described in Other Operating Expenses below:
Previous wording
Other operating expenses at the Illinois segment decreased $11.6 million, net of the $6.6 million impact of the riders referenced in the table above, during the third quarter of 2025, compared with the same quarter in 2024. The significant factors impacting the decrease in other operating expenses were:
Current wording
Other operating expenses at the Illinois segment decreased $23.3 million, net of the $17.3 million impact of the riders referenced above, during the first quarter of 2026, compared with the same quarter in 2025. The significant factors impacting the decrease in other operating expenses were:
Previous wording
•A $2.0 million decrease in natural gas distribution and maintenance costs, primarily related to maintaining the natural gas infrastructure.
Current wording
•A $4.5 million decrease in natural gas distribution and maintenance costs, primarily related to maintaining the natural gas infrastructure.
Previous wording
•A $12.6 million increase in margins related to higher sales volumes, including the impact of weather during the third quarter of 2025, compared with the same quarter in 2024.
Current wording
Gross margin (GAAP) decreased $5.7 million during the first quarter of 2026, compared with the same quarter in 2025, and utility margin (non-GAAP) decreased $3.9 million during the first quarter of 2026, compared with the same quarter in 2025. Both measures were driven by a $3.6 million decrease in margins related to lower retail sales volumes, including the impact of weather, during the first quarter of 2026, compared with the same quarter in 2025.
Previous wording
•A $2.1 million increase in depreciation and amortization expense related to continued capital investment.
Current wording
•A $0.9 million increase in depreciation and amortization expense related to continued capital investment.
Previous wording
•A $1.5 million increase related to MGU's energy optimization program, which provides rebates, incentives, and energy efficiency
Current wording
•A $0.8 million increase related to MGU's energy optimization program, which provides rebates, incentives, and energy efficiency education to customers.
Previous wording
Interest expense at the other states segment increased $1.9 million during the nine months ended September 30, 2025, compared with the same period in 2024, driven by the impact of MERC issuing long-term debt in April 2025 and MGU issuing long-term debt in October 2024 and April 2025.
Current wording
Interest expense at the other states segment increased $1.0 million during the first quarter of 2026, compared with the same quarter in 2025, driven by the impact of MERC and MGU issuing long-term debt in April 2025.
Previous wording
Equity in earnings of transmission affiliates increased $22.0 million during the nine months ended September 30, 2025, compared with the same period in 2024. This increase was primarily due to continued capital investment by ATC. A $3.6 million gain related to the sale of an investment at ATC Holdco in March 2025 also contributed to the increase.
Current wording
Equity in earnings of transmission affiliates increased $5.9 million during the first quarter of 2026, compared with the same quarter in 2025. This increase in earnings was primarily due to continued capital investment by ATC, partially offset by a $3.6 million gain recognized in March 2025 related to the sale of an investment at ATC Holdco.
Previous wording
Operating income at the non-utility energy infrastructure segment decreased $13.2 million during the nine months ended September 30, 2025, compared with the same period in 2024, driven by these items at WECI:
Current wording
Operating income at the non-utility energy infrastructure segment increased $15.6 million during the first quarter of 2026, compared with the same quarter in 2025, driven by these items at WECI:
Showing the first 40 of 96 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Additionally, the larger decrease in gross margin (GAAP) as compared to the decrease in utility margin (non-GAAP), was driven by a $0.9 million increase in depreciation and amortization expense that is further described in Other Operating Expenses below.
Current report — wording carried from elsewhere
Cash generated from operations is primarily driven by sales of electricity and natural gas to our utility customers, reduced by costs of operations. Our access to the capital markets is critical to our overall strategic plan and allows us to supplement cash flows from operations with external borrowings to manage seasonal variations, working capital needs, commodity price fluctuations, unplanned expenses, and unanticipated events. Subject to market conditions and other factors, we may repurchase our debt securities through open market purchases, privately negotiated transactions and/or other types of transactions.
Current report — wording carried from elsewhere
2024B Junior Notes, collectively) due 2055. The adjusted presentation attributes $675.0 million of the Junior Notes to common shareholders' equity and $675.0 million to long-term debt.
Current report — wording carried from elsewhere
Environment, in our 2025 Annual Report on Form 10-K for more information regarding recent and pending rate proceedings, orders, and investigations involving our utilities.
Current report — wording carried from elsewhere
program will be overseen by a safety monitor hired by the ICC. PGL initiated a general rate case proceeding in January 2026, which we anticipate will provide further regulatory clarity before we significantly increase our spend associated with the PRP.
Rearranged previous paragraphs (39)
Previous report — wording carried elsewhere
•An $11.7 million increase in property and revenues taxes;
Previous report — wording carried elsewhere
The following table compares our consolidated results for the nine months ended September 30, 2025 with the nine months ended September 30, 2024, 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, 2025 and 2024, $466.7 million and $425.4 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, 2025 and 2024, $88.9 million and $86.7 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.
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 temperature readings from the National Oceanic and Atmospheric Administration weather stations within each company's respective service territories.
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 $295.1 million increase in margins driven by the impact of the Wisconsin rate orders approved by the PSCW, effective January 1, 2025.
Previous report — wording carried elsewhere
Additionally, the smaller increase in gross margin (GAAP) as compared with 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 $31.8 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.
Previous report — wording carried elsewhere
•A $6.8 million increase in the income tax benefits associated with AFUDC-Equity, driven by continued capital investment; and
Previous report — wording carried elsewhere
Illinois Segment Contribution to Net Income Attributed to Common Shareholders
Previous report — wording carried elsewhere
Since the majority of PGL and NSG customers use natural gas for heating, net income attributed to common shareholders at the Illinois segment is sensitive to weather and is generally higher during the winter months.
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 temperature readings from National Oceanic and Atmospheric Administration weather stations throughout our Illinois service territories.
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 with 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 $4.1 million increase in natural gas distribution and maintenance costs, primarily related to maintaining the natural gas infrastructure.
Previous report — wording carried elsewhere
These increases in operating expenses were partially offset by:
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 temperature readings from National Oceanic and Atmospheric Administration 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
Previous report — wording carried elsewhere
Non-Utility Energy Infrastructure Segment Contribution to Net Income Attributed to Common Shareholders
Previous report — wording carried elsewhere
Corporate and Other Segment Contribution to Net Income Attributed to Common Shareholders
Previous report — wording carried elsewhere
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 at an estimated cost of $1 billion. The facilities are expected to reduce the likelihood of constraints on our natural gas distribution system during the highest demand days of winter.
Previous report — wording carried elsewhere
Financial Condition and Results of Operations – Factors Affecting Results, Liquidity, and Capital Resources – Market Risks and Other Significant Risks in our 2024 Annual Report on Form 10-K for a discussion of market and other significant risks applicable to us.