Planned Data Centers Drive Up WEC Proposed Capex--Again

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Written by John Egan for IIR News Intelligence (Sugar Land Texas)

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Summary

Midwestern utility holding company WEC Energy Group Incorporated has sharply increased, again, its planned five-year capital expenditures plan to about $37.5 billion, mainly to meet expected electric demand growth coming from planned data centers and other large loads in its service area.

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Data Center Growth Drives Up WEC Energy Capex Plans

In the not-too-distant past, Midwestern utility holding company WEC Energy Group Incorporated (WEC) planned to make about $15 billion of capital expenditures (capex) over the five-year period 2020-2024. For more on that, see May 8, 2020, article - WEC Energy Lays Out $15 Billion, Five-Year Capital Spending Plan.

The next few five-year plans anticipated modest growth. But those plans were prepared in a simpler time, before data centers and artificial intelligence (AI) emerged as powerful drivers of utility electric load growth forecasts and capital spending plans. As those Big Tech plans unfolded, WEC's planned five-year capital outlays grew significantly each year, reaching $28 billion for the 2025-2029 period and $36.5 billion for the 2026-2030 period.

Click on the image at right to see WEC Energy's steadily rising planned capital outlays since 2020.

When WEC announced 2025 earnings February 5, company officials said planned capex over the 2026-2030 period had jumped an additional $1 billion since November 2025, to a new total of approximately $37.5 billion for that five-year period.

Click on the image at right to see WEC's revised five-year capital spending plans for 2026-2030.

WEC is a holding company for electric and gas utilities operating in Wisconsin, Minnesota, Michigan and Illinois. All told, the company provides energy to about 4.7 million customers.

"Strong economic growth in our region is driving our robust capital plan," Scott Lauber, WEC's president and chief executive officer, told investors February 5. "Microsoft is making good progress on its large data center complex, with more than 2,000 acres (of land) purchased today. We have energy flowing to the project, and the first phase of the project is expected to go online this year."

The company projected that its electric sales for its Wisconsin segment will rise by an estimated 45% between 2026 and 2030, or about 3,900 megawatts (MW). Once the planned data centers are built and start operating, WEC officials projected year-over-year electric demand growth will rise approximately 6% to 8% annually for the 2028-2030 period.

Lauber added that Microsoft recently received approval to build an additional 15 data center buildings on that campus. "Based on our updated plan, we are adding 500 MW of customer demand to the forecast, which will result in an additional $1 billion of additional capital (spending) to our (five-year) capital plan."

Microsoft is not the only tech company with big plans for data centers in the Heartland. Lauber told investors that Vantage has signed contracts to develop facilities for Oracle and OpenAI on approximately 1,900 acres of land north of the I-94 corridor that runs from Milwaukee to the northwestern corner of the state.

Industrial Info is tracking about 24 capital and maintenance projects being planned by WEC's electric and gas utilities, totaling about $1.8 billion. Subscribers to IIR's Global Market Intelligence platform can view WEC planned capital and maintenance project spending here.

Electric Generation Spend Keeps Growing

A good bit of WEC's capex growth is tied to building new electric generation. Annual capital outlays to build new electric generation will rise from an estimated $2.8 billion in 2026 to approximately $4.3 billion in 2030, according to the company's updated capex plan in its February 5 earnings presentation. Over the revised five-year period 2026-2030, capital outlays for generation will total about $20.3 billion.

Over that time, WEC plans to invest about $12.6 billion in regulated clean energy projects over the next five years, including :

• $7.9 billion to build 3,850 MW of solar power
• $1.8 billion to construct 555 MW of new wind generation
• $2.9 billion to build about 2,130 MW of energy storage

On the thermal generation side, WEC also has plans to invest heavily over the next five years, including:

• $5.2 billion to build about 3,300 MW of gas-fired combustion turbine generation
• $370 million to convert coal generation to gas and provide fuel oil backups
• $280 million to upgrade the summer generating capacity of its fleet of combined cycle gas turbines
• $240 million to construct about 180 MW of reciprocating internal combustion engine (RICE) generators

Annual spending on electric transmission, including WEC's 60%-owned affiliate American Transmission Company, is forecast to rise from about $667 million this year to roughly $901 million in 2030, officials told investors February 5.

The company also is pursuing a gas pipe replacement program, to which it plans to invest between $1.3 billion to $1.6 billion per year over the five-year horizon.

In addition, WEC plans to invest roughly $1.3 billion to build a liquefied natural gas (LNG) storage facility to ensure it has adequate gas supply for power generation and to meet peak customer demand for heating.

Click on the image at right to see a functional breakout for capital spending by WEC's electric and gas operating utilities.

Company Reiterates Exit from Coal by 2032

Unlike some other electric utilities that have postponed planned retirements of coal-fired generators in the face of strong electric demand growth from large loads, WEC's Lauber reiterated the company's plan to eliminate the use of coal by yearend 2032. Between 2030 and 2032, he added, the company expects to use coal only as a backup fuel.

Since 2018, the company said, it has retired nearly 2,500 MW of fossil fuel generation. This year, it plans to retire about 611 MW of coal-fired capacity at its Oak Creek Generating Station. WEC expects to close Weston Unit 3, which has about 328 MW of capacity, by the end of 2031. The company also is enhancing its gas blending capabilities at two generating stations. In addition, it is considering converting coal-fired Columbia Units 1 and 2 to burn natural gas.

Full-Year Profits Flat on Rising Revenue

WEC earned $317 million on $2.1 billion of revenue in the fourth quarter, a decline from the $453 million in profits it reported on $2.3 billion of sales for the comparable year-earlier quarter. For the full year, earnings were flat at approximately $1.5 billion while revenue rose to $9.8 billion of revenue compared to $8.6 billion in 2024.

Key Takeaways

• Electric and gas utility holding company WEC Energy Group has once again increased its planned five-year capital spending to meet the needs of large-load customers, mainly data centers.
• WEC now plans to invest about $37.5 billion over the 2026-2030 period, more than double what it had planned to invest only five years ago, before data centers and AI emerged as energy-intensive new loads.
• Despite dramatic projected electric demand growth, WEC is not backing off its pledge to exit coal-fired generation by the end of 2032.
• Full-year earnings were flat despite an increase in revenue

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).