WEC Energy Lays Out $15 Billion, Five-Year Capital Spending Plan

---

Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--WEC Energy Group Incorporated (NYSE:WEC) (Milwaukee, Wisconsin) plans to invest approximately $15 billion over the next five years in its electric and gas businesses, the company said last month in a presentation to investors. That's an increase of about $900 million over the company's year-earlier planned capital expenditure (capex) for the 2019-2023 period.

The company serves about 2.9 million gas customers and 1.6 million electric customers across four Upper Midwest states: Wisconsin, Illinois, Michigan and Minnesota.

WEC's largest planned cluster of capital spending over the 2020-2024 period will be in its gas utility business. That business has experienced organic growth of about 12,000 gas customers over the last year, and is engaged in gas-distribution pipe replacement programs in Chicago and southeastern Wisconsin, WEC spokesman Brendan Conway told Industrial Info in an interview.

Click on the image at right to see a pie chart of WEC's five-year capex plan.

After gas-distribution lines, the most significant cluster of spending is expected to be in WEC's electric-distribution business, which is slated to see about $2.8 billion in investments over the 2020-2024 period.

After electric distribution comes WEC's electric-generation business, which is scheduled to receive about $2.2 billion in capital investments between 2020 and 2024. Invenergy LLC (Chicago, Illinois) is building two large solar plants for WEC's electric units in Wisconsin: The Badger Hollow Energy Park and the Badger Hollow II Energy Park, each with a 150-MW capacity.

The first plant is under construction and is scheduled to be operational by March 2021. The second facility is scheduled to begin construction near the end of this year and to be operational by the end of 2021. Each has total investment value (TIV) of about $247 million. WEC units will take 100 MW from each facility, while the remaining 50 MW at each plant will go to another utility, Madison Gas & Electric (MG&E), a subsidiary of MGE Energy (NASDAQ:MGEE) (Madison, Wisconsin).

The third solar power plant in WEC's future, Two Creeks Energy Center, is a 150-MW, $225 million project being built by a unit of NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida). That project began construction last summer and is scheduled to be brought online by the end of this year. A WEC unit will take about 100 MW of that project's generation, while MG&E will take the other 50 MW.

Beyond these three solar projects, WEC told investors last month it is developing two unnamed, "innovative," carbon-free renewable-energy projects totaling 185 MW.

In addition to these three named solar projects and the two unnamed carbon-free projects, Industrial Info is tracking about 21 projects, valued at approximately $470 million, being developed by WEC or one of its subsidiaries, which include Wisconsin Public Service, We Energies and Peoples Gas.

The largest of these other projects is the $170 million Lakeshore Lateral gas pipe replacement program near Milwaukee. Beyond that, a WEC unit accounts for about one-third of an $80 million coal-ash pond cleanup project at the 1,023-MW Columbia Energy Center, a participation plant. Another coal-ash cleanup project is set for the 1,099-MW Weston Power Station, which is 70% owned by WEC subsidiary Wisconsin Public Service Corporation (WPS) (Green Bay, Wisconsin).

Also on the planning board is a $40 million gas compressor project in Michigan--the Mount Clemens Natural Gas Compressor Station, which is slated to begin construction next month. It has a planned operational date of March 2021.

WEC also is investing in transmission projects through its 60% ownership of American Transmission Company LLC (ATC) (Pewaukee, Wisconsin).

WEC reported first-quarter financial results May 4. It earned $452 million on $2.1 billion of revenue for the just-completed quarter, versus earnings of $420 million in net income on $2.4 billion of revenue. In the just-completed quarter, sales of electricity and natural gas trailed the comparable year-earlier period, mostly because of a warmer winter. The COVID-19 pandemic also contributed to lower sales, as "stay at home" orders were in effect for the second half of March.

"We delivered another solid quarter, despite mild winter temperatures and an economic downturn that began in late March, as businesses closed to slow the spread of COVID-19," said Gale Klappa, WEC's executive chairman. "In the months ahead, we will continue to focus on employee safety and on executing the fundamentals of our business--world-class reliability, customer satisfaction and financial discipline." He added, "Our team is experienced and resilient. I'm confident we'll shine through the challenges ahead."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.