WEC Energy Group, Inc. (WEC) | The Buildout — AI Infrastructure
The Verdict
WEC Energy Group is a diversified utility holding company whose regulated subsidiaries deliver electricity, natural gas, and renewable energy, with a majority stake in American Transmission Company. Its role in the AI buildout is not chips or software; it is the local distribution, substation, transmission interconnection, and new generation capacity that large data-center campuses require.
| Market Cap | — |
| Revenue (TTM) | $10.1B |
| Revenue Growth | +8.9% |
| EBITDA Margin (TTM) | 39.1% |
| Net Debt | $22.9B |
| Earnings Beats | 6 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Five-year capital plan of $37.5 billion; 2027 capex of $6,949.5 million and 2028 capex of $6,965.6 million.
- 3.9 GW of data-center load already in the five-year plan; management estimates approved sites could support another 4–5 GW.
- Approved VLC tariff carries an ROE of 10.48%–10.98% and 57% equity ratio, with collateral and full cost allocation.
- By end of 2030, management expects approximately 15% of the asset base dedicated to very large customers.
- Illinois unanimous May 2026 settlement resolved all issues in 12 open dockets.
What We’re Watching
- Q3 2026 capital plan refresh: Point Beach replacement, transmission, and a possible additional customer are currently framed as upside, not committed.
- Oracle credit-support and court challenge could delay the Port Washington build; service agreements are scheduled for June 1, 2027.
- Wisconsin and Illinois rate-case final orders are expected by year-end 2026.
- Political data-center moratorium rhetoric remains a risk in Wisconsin.
Thesis is strengthening on delivered milestones—Microsoft's first facility is operational, the VLC tariff has a written order, and Illinois resolved 12 legacy dockets. The main caveat is concentration: growth sits with two anchor sites while the non-VLC base is roughly flat. The key open question is whether the Q3 capital plan refresh converts Point Beach replacement and a possible third VLC customer from upside into committed capital, and whether Oracle reaches June 1, 2027 service agreements.
Earnings Beat
WEC reported Q2 2026 revenue of $2,062.1 million, reported gross margin of 73.1%, and net income of $299.5 million. Diluted EPS was $0.91, above the company's Q2 guidance range of $0.76–$0.82. Total weather-normal retail electric sales grew 4.2% year over year, driven by very large customers; excluding the iron ore mine and VLC customers, sales grew 1.2%.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.1B | $3.4B | $2.0B | +2.6% |
| Gross margin | 73.1% | 59.5% | 41.9% | +3120bps |
| EBITDA | $818M | $1.4B | $774M | +5.7% |
| EPS | $0.91 | $2.45 | $0.77 | +18.9% |
| Weather-normal retail electric sales growth | 4.2% | n/a | n/a | Total Q2 2026 YoY growth, driven by VLCs |
the data centers are up and running and electricity is flowing and all the substations are moving actually ahead of schedule.— Scott Lauber, CEO, July 29, 2026
Management tone: Management remained execution-focused and confident on construction milestones, while becoming more measured about the pace of new customer announcements. On the Q2 call, management said discussions were with potential customers in the 400–500 MW range and that it did not want expectations of three or four coming in any day.
Management Guidance
Management reaffirmed FY2026 EPS guidance of $5.51–$5.61. Q3 2026 EPS guidance was set at $0.92–$0.98. The long-term EPS growth guide remains 7%–8% CAGR for 2026–2030, accelerating to the upper half starting in 2028. Full-year 2026 weather-normalized electric sales, excluding the iron ore mine and VLC customers, are expected to be relatively even with 2025. The company reiterated about $1.1 billion of common equity issuance in 2026, with incremental capital beyond the plan funded with 50% equity content.
Trajectory
Revenue is seasonal: Q1 2026 revenue was $3,434.2 million and Q2 2026 was $2,062.1 million. The code-computed trajectory is decelerating, with Q2 year-over-year revenue growth of 2.6% after 9.0% in Q1. Reported gross margin expanded sharply—from 59.5% in Q1 to 73.1% in Q2—while EBITDA margin was stable at 39.6% then 39.7%, and trailing free cash flow conversion is negative. The growth driver is VLC load; the base non-VLC electric business is roughly flat.
The Model
The model projects FY+1 revenue of $10,600 million and EBITDA of $4,070 million, a 38.4% EBITDA margin. For FY+2, it projects revenue of $11,500 million and EBITDA of $4,508 million, a 39.2% margin. Near-term output is anchored by the $37.5 billion capital plan and the 3.9 GW of data-center load already in the plan; FY+2 is driven by construction converting from AFUDC to cash returns and more VLC load entering service.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $9.8B | $10.6B | $11.5B |
| YoY Growth | — | +8.2% | +8.5% |
| EBITDA | $3.9B | $4.1B | $4.5B |
| EBITDA Margin | 39.3% | 38.4% | 39.2% |
Projections are the median of 5 independent model runs. The model’s revenue sits 8.1% above analyst consensus.
Management reaffirmed FY2026 EPS guidance of $5.51–$5.61. Q3 2026 EPS guidance was set at $0.92–$0.98. The long-term EPS growth guide remains 7%–8% CAGR for 2026–2030, accelerating to the upper half starting in 2028. Full-year 2026 weather-normalized electric sales, excluding the iron ore mine and VLC customers, are expected to be relatively even with 2025. The company reiterated about $1.1 billion of common equity issuance in 2026, with incremental capital beyond the plan funded with 50% equity content.
What Could Go Right — and Wrong
- Microsoft's I-94 corridor demand steps up beyond the current 2.6 GW forecast, adding load to each capital plan refresh.
- Vantage/Oracle resolves its credit support issue and converts to full VLC service agreements on June 1, 2027, with first facility online late 2027.
- A third VLC customer in the 400–500 MW range is signed, confirming the tariff's repeatability.
- Point Beach replacement generation enters the Q3 plan as a committed gas project at roughly $2 billion–$2.5 billion per gigawatt.
- ATC transmission approvals and additional transmission projects enter the plan, adding regulated capital.
- Oracle's court challenge or credit position causes delay, downsizing, or cancellation of the Port Washington build.
- Data-center moratorium rhetoric becomes state or local policy in Wisconsin.
- Wisconsin or Illinois rate-case outcomes produce weaker ROEs or disallowances.
- Labor, gas-turbine, or solar supply-chain constraints delay the Paris and Oak Creek gas plants, expected online late 2027.
- The capital plan grows faster than cash generation, requiring more equity than the current $1.1 billion 2026 plan.
Looking Ahead
The next twelve months turn on the Q3 2026 capital plan refresh, where management has said it will update the five-year plan and may announce a new very large customer in the 400–500 MW range and finalize Point Beach replacement. Final Wisconsin and Illinois rate-case orders and the ATC transmission decision are expected by year-end 2026. The next major commercial milestone is Oracle's conversion into VLC service agreements on June 1, 2027, followed by Paris and Oak Creek gas plants coming online late 2027.
- Aug 2026Wisconsin rate case testimony — Staff and intervener testimony due mid-August.
- Q3 2026Capital plan refresh — Updated five-year plan; Point Beach replacement may enter committed plan.
- Q3 2026Possible new VLC announcement — Management may announce a new data-center customer in the 400–500 MW range.
- Year-end 2026Wisconsin and Illinois rate orders — Final commission orders expected by year-end.
- Year-end 2026ATC transmission line decision — Commission decision expected for the Vantage site transmission line.
- June 1, 2027Oracle service agreement milestone — Oracle transitions into VLC service agreements.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $8.6B | $9.8B | $10.1B | +14.0% |
| Gross Margin | 43.8% | 51.4% | 62.0% | +758bps |
| EBITDA | $3.5B | $3.9B | $29.7B | +9.9% |
| EBITDA Margin | 40.8% | 39.3% | 39.1% | 146bps |
| Net Income | $1.5B | $1.6B | $1.7B | +2.0% |
| Free Cash Flow | $431M | −$1.0B | $114M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)62.0%
- EBITDA Margin (TTM)39.1%
- Net Margin (TTM)16.7%
- ROIC5.2%
- FCF Conversion-35.4%
- SBC / Revenue0.0%
The Company
WEC Energy Group is a diversified utility holding company whose wholly owned subsidiaries provide regulated natural gas and electricity, regulated and nonregulated renewable energy, and related infrastructure. It owns approximately 60% of American Transmission Company (ATC), a regional electric transmission company operating in Illinois, Michigan, Minnesota, and Wisconsin. Its AI-infrastructure role is the regulated Wisconsin electric utility layer: distribution, substation service, transmission interconnection, and new generation capacity serving hyperscale data-center campuses.
The company operates six reportable segments: Wisconsin, Illinois, Other States, Electric Transmission, Non-Utility Energy Infrastructure, and Corporate and Other. The 10-K plant inventory includes regulated gas, coal, wind, solar, storage, hydro, and biomass generation, plus nonregulated renewables mostly held at about 90% ownership. We Power designed and built about 2,500 MW of generation in Wisconsin, and Bluewater provides natural gas storage and hub services primarily to Wisconsin utilities.
Business Segments
Competitive Landscape
The supplied source material does not name specific Wisconsin/Midwest utility competitors for data-center load or local utility service. WEC's position is framed as hard to replace at the local distribution and transmission level, with an approved VLC tariff requiring full cost allocation and collateral protection.
Supply Chain
WEC sits at the regulated distribution, transmission, and generation layer between data-center developers and the grid. Verified counterparties are documented in filings and calls; other supplier names are inferred only.
More on WEC: Earnings recap