Good afternoon and welcome to WEC Energy Group's conference call for the third quarter 2026 results. This call is being recorded for rebroadcast and all participants are in a listen-only mode at this time. After the presentation, the conference will be open to analysts for questions and answers. In conjunction with this call, A package of detailed financial information is posted at wecenergygroup.com. A replay will be available approximately two hours after the conclusion of this call. Before the conference call begins, please note that all statements in the presentation, other than historical facts, are forward-looking statements that involve risk and uncertainties that are subject to change at any time. Such statements are based on management's expectation at the time they are made. In addition to the assumptions and other factors referred to in connection with the statements, factors described in WEC Energy Group's latest form 10k and subsequent reports filed with the securities and exchange commissions could cause actual results to differ materially from those contemplated. During the discussions, referenced earnings per share will be based on diluted earnings per share unless otherwise noted. And now it's my pleasure to introduce Scott Lauber, Chairman, CEO and President of WEC Energy Group.

Good afternoon, everyone, and thank you for joining us today as we review our results for the third quarter of 2026. Here with me are Xia Liu, our Chief Financial Officer, and Beth Straka, Senior Vice President of Corporate Communications and Investor Relations. As you saw in our news release this morning, we reported third quarter 2026 earnings of $1.18 per share compared to 83 cents per share in the third quarter last year. These results were driven by warmer than normal weather, execution of our capital plan, and operating efficiency. With another solid quarter, we remain on track to deliver strong results for 2026. Our continued focus on the fundamentals of our business is creating value for our customers and stockholders. Today, we're raising and narrowing our earnings guidance for 2026 to a range of $5.60 to $5.64 per share, assuming normal weather for the remainder of the year. This reflects 7.7% growth in earnings per share from our 2025 adjusted guidance midpoint. As a reminder, our previous guidance was in the range of $5.51 to $5.61 per share. I'm also pleased to share our new five-year capital plan. Let's start by talking about the economic growth that's driving it. Overall, we expect our electric demand to grow 4.9 gigawatts between 2026 and 2031, an increase of 1 gigawatt compared to the prior plan. Microsoft continues to make good progress on its large data center complex in Mount Pleasant, Wisconsin, with the first facility operating Construction is underway on additional facilities as Microsoft expands at the site. As a reminder, Microsoft has purchased more than 2,200 acres to date in the I-94 corridor south of Milwaukee. Just last week, Microsoft announced the purchase of an additional 70 acres next to the site. We are preparing to serve forecasted demand of 3.2 gigawatts in the I-94 region through 2031. with opportunity for further expansion. That's up 600 megawatts from the previous plan. You'll notice an additional 400 megawatts in the new capital plan. We're making good progress with another customer and you can expect more details in the future. Stay tuned. And to the north of Milwaukee, you'll recall that Vantage Data Centers is developing facilities for Oracle on approximately 1,900 acres. Construction continues on the initial phase of the data center project, which is being built on 670 acres. Vantage has stated that it expects to invest $15 billion to complete this phase in 2028. We currently have 1.3 gigawatts of demand for this Vantage site in our forecast through 2031. Looking to the future, it has the potential to reach 3.5 gigawatts of demand over time. The project is well on its way, and Oracle has met its financial security obligations, which are consistent with the Wisconsin Commission's very large customer tariff requirements. To serve this project, ATC has refiled a proposal with the Public Service Commission of Wisconsin. In addition to the transmission line, this filing includes proposed investment in an ESTATCOM system to maintain grid reliability. ATC is working through the process now with the Commission. As a reminder, both Microsoft and Oracle have committed to paying their full share for energy costs. We solidified this through our very large customer tariff, which protects other customers. Microsoft, Vantage, and Oracle have made significant investments to support our communities. Just recently, We worked with Oracle to save our customers an estimated $300 million in fuel costs. Oracle agreed to subscribe to a portion of the energy we purchased from Point Beach Nuclear Power Plant. We expect the full details to be submitted to the Wisconsin Commission in the coming months. As we work with these hyperscalers, we are confident our very large customer tariff provides a strong framework for growth while maintaining affordable energy service for all our customers. We continue to see local growth in small, commercial, and large businesses as well. For example, both Generac and Modine are expanding and adding jobs. We have designed our new capital plan to reliably serve our customers while supporting the significant growth we continue to see across our service areas. As you may have seen from our announcement this morning, we expect to invest $47.5 billion in capital projects between 2027 and 2031. This is an increase of $10 billion, more than 26% above our previous five-year plan. The majority of this increase is being driven and therefore paid for by our very large customers. The updated plan is expected to support asset-based growth at a 13.4% compound annual growth rate. This should drive compound annual earnings per share growth of 7 to 9 plus percent from 2027 to 2031. This is based off the midpoint of our original 2026 guidance. The increase in our plan is mostly driven by investments and regulated electric generation and transmission, largely due to very large customer demand. Let me give you a few more details. Over the next five years, we'll continue to take an all of the above approach for generation to support economic growth and reliability by investing in new natural gas, batteries, and renewables. Dispatchable generation is a key component of our reliability strategy. Between 2027 and 2031, we expect to invest an incremental $6.8 billion in modern, efficient natural gas generation versus the prior plan. This includes a combined cycle turbine project that we expect to come online by the end of the five-year forecast period, as well as combustion turbines and upgrades to our existing facilities. We are increasing planned investment in renewable generation and battery storage by $1.1 billion, with the total planned battery storage increased by $3 billion, while planned solar and wind investment decreased by $1.9 billion. Some of this decrease relates to the work already completed in 2026. Continuing our all of the above approach, we also reached an agreement with Nextera that pending regulatory approval, we will support long-term electrical liability and customer savings. We plan to extend our purchase power agreement for approximately 1,000 megawatts of carbon-free base load capacity from the Point Beach nuclear plant. The new PPA would extend the existing agreement by 20 years. Outside of generation, American Transmission Company plans to continue investing in transmission capabilities to serve our region's economic growth, connecting new facilities and strengthening the system. Our plan calls for us to invest approximately $5.3 billion in ATC projects between 2027 and 2031. This represents a $1.2 billion increase from the previous plan. Planning to strengthen reliability and support economic growth, we continue to invest in our electric and natural gas distribution networks. Our plan includes an additional $1 billion to improve distribution infrastructure. This supports the continuing investment in our pipe retirement program in Chicago. Recall, the Illinois Commerce Commission directed us to focus on retiring more than 1,000 miles of older pipe by January 1st, 2035. Now turning to the regulatory front. I have a couple of updates across our service area. In Wisconsin, progress continues on the rate request we filed in April for forward-looking test years 2027 and 2028. The procedural calendar has now been completed. We expect final orders from the commission by the end of the year with new rates effective in January 27 and 2028. We also have rate filings under review in Illinois for test years 2027 at Peoples Gas and North Shore Gas. Recently, the Administrative Law Judge issued a proposed order that is largely consistent with the staff's recommendation. The order recommends a 9.48% ROE and a 50% equity ratio at both utilities. We expect a final decision in December. Of course, we'll keep you updated on future developments. In summary, we're excited about the strong economic development in our region, and we believe our capital plan, along with our very large customer tariff, positions us well to support that growth. Now I'll turn it over to Shaw for more details.

Thank you, Scott. Our third quarter 2026 earnings of $1.18 per share reflects a $0.35 increase compared to the third quarter of 2025. Our earnings packet includes a comparison of third quarter results on page 15. I'll walk through the significant drivers. Starting with our utility operations, earnings were 28 cents higher versus the third quarter of 2025. Let me highlight a couple of factors. Weather favorably impacted quarter over quarter earnings by approximately five cents. Compared to normal conditions, we estimate that weather had an 8-cent positive impact in the third quarter of 26 compared to a 3-cent positive impact in the third quarter of 2025. Rate-based growth contributed 19 cents to earnings. This includes 15 cents of growth from incremental AFUDC equity and cash returns associated with projects under construction. I'll note that 12 cents or 80% of these incremental returns are from project four and supported by the VLCs. In addition, VLCs added two cents of margin quarter over quarter. And favorable day-to-day O&M drove an eight cent variance. This was primarily driven by our stock-based plan, which could be timing. These positive drivers were partially offset by higher depreciation and amortization expense, higher interest expense and tax and other items. Next, let me provide some additional color on our weather normal retail electric delivery. Compared to Q3 last year, total weather normal retail electric sales grew 4.1% driven by growth from the VLCs. Excluding the iron ore mine and VLC customers, we saw sales grow 0.4% during the quarter. For the year, we continue to expect weather normalized electric sales to be relatively flat with 2025. At American Transmission Company, capital investment growth contributed an incremental $0.03 to Q3 earnings compared to 2025. and at our energy infrastructure segment, earnings were two cents higher in the third quarter compared to the same period in 2025. This was driven by additional capital investment at WePower and a better operating income at WECI. Lastly, you'll see that earnings from the corporate and other segments increased four cents, driven primarily by tax timing. In terms of common equity, we locked in about $1.16 billion during the first nine months of the year. This includes $50 million issued under our dividend reinvestment and employee benefit plan. The remaining $1.1 billion are under the ATM program, which includes approximately $350 million from forward contracts that have been settled and $765 million still under forward contracts that will be settled in the future. As Scott noted, we're raising and narrowing our 2026 earnings guidance range to $5.60 to $5.64 per share, assuming normal weather for the rest of the year. Going forward with the updated capital plan that Scott discussed earlier, We expect our long-term EPS growth to increase. Again, based off the midpoint of the original 2026 guidance range, $5.56 per share, our long-term EPS CAGR is expected to be 7 to 9 plus percent through 2031. Now, let me comment on the financing plan that supports this growth and the new capital plan. Slide 22 of the earnings packet outlines the funding sources. Over the next five years, we expect to generate $26 to $27 billion in cash from operations, funding more than half of our cash needs. We expect $19 billion to come from incremental debt, including hybrid instruments, and we plan to fund the remaining cash needs with $5 and more. Although our current capital plan increased $10 billion, we expect common equity needs to remain relatively flat with the prior plan. This is largely due to incremental cash from operations in the new plan. As projects are completed and placed in service in the planning horizon, they begin generating cash revenues. many of which are supported by the VLCs that comes with a 10.48 to 10.98% ROE. The new plan also includes more projects for which the VLCs are expected to provide cash returns during construction rather than AFUDC. The additional cash from operations helps us keep common equity needs at a modest 10% of total cash sources and relatively flat compared with the prior plan. In closing, as Scott discussed previously, strong economic development and low growth in Wisconsin are the foundation of our new capital plan. As illustrated on page 21 of the earnings package, over the next five years, we expect to transform our business while staying true to our fundamentals. Our asset base is expected to more than double over the next five years, with the electric business representing 80% of the asset base by 2031. Furthermore, with almost half of the capital plan, or more than $20 billion allocated to the VLCs, the asset base dedicated to these customers is projected to represent almost 30% of our total assets by 2031. As you know, these assets are supported by the VLC tariff, which is designed to ensure that these large customers pay their full share of the costs and are not subsidized by other customers. In addition, the tariff provides very strong financial security and credit support requirements. We are excited about our company's future and the investment opportunities ahead. With that, I'll turn it back to Scott.

Thank you, Shaw. Finally, a quick reminder about the dividend. As usual, I expect we'll provide our 2027 dividend plan and earnings guidance in December. We expect to grow the dividend at a rate of 6.5% to 7% consistent with our past practice. This results in a projected payout ratio of 60% to 70% due to the forecasted earnings per share growing at a faster pace. Before I open it up for Q&A, I want to summarize some of the key highlights of the call. Economic growth is driving another gigawatt of forecasted demand for a total 4.9 gigawatts of growth in our plan. This growth is adding $10 billion to our five-year capital plan, which is now at $47.5 billion. These developments give us confidence in our EPS compound annual growth rate of 7 to 9 plus percent. We remain committed to 6.5% to 7% dividend growth. We expect the total equity funding to be flat in our five-year plan versus the prior plan at approximately $5.5 billion, maintaining a strong balance sheet. Overall, we're optimistic about our five-year plan and the longer-term outlook. We'll look forward to discussing our plan at the EEI conference. Operator, we're now ready for the question and answer portion of the call.

Now we will take your questions. The question and answer session will be conducted electronically. To ask a question, please press the star key followed by the digit 1 on your phone. If you are using a speakerphone, turn off your mute function to allow your signal to reach our equipment. We will take as many questions as time permits. Once again, please press star and then 1 on your telephone keypad to ask a question. The first question is from the line of Shah Peraza with Wells Fargo. Your line is now open. Please go ahead.

Hey, guys. Hey, Scott. Hey, Shah. Hey, Shah.

How are you doing?

I'm doing all right. Big congrats. I know this print was pretty amazing and made Beth's job a lot easier. Just on the... Just the updated guidance, you know, obviously you now see 7% to 9% plus. Just help us frame, you know, what is assumed in the plus. That's always the question mark you get when you come out with a plus. The $10 billion is included in the range. But just help us frame the plus and honestly, why even keep the 7% to 8% at this point?

Sure, sure. It's a great question. And as we look at it and we look at the The capital projects we have, and you saw our growth of another gigawatt, we felt really confident with that seven to nine range and feel confident not only in this five-year plan that we think it will continue. The second part is when you think about the plus, you really got to look at the pattern of our growth of our capital plan that's illustrated in our handout. There's a lot of projects that need regulatory approval, but if there's an opportunity that we can get the approvals and move faster than we anticipate, there's an opportunity that the growth may be a little faster in a couple years, maybe like in 28 or 29. So it really depends on a lot of stuff, but I think there's an opportunity as we continue to execute on plan for potential upside in some of those years.

Got it. No, that's perfect. That's what I was trying to get into. That's perfect. And then, Scott, switching to Oracle, the ATC line project, to serve the Vantage site in its second application filing. It appears the filing is still under review with the Commission. So I guess what's the timeline there? And do you see a potential delay to the start of the project? Or can the site start taking the megawatts before the line is completed?

Thanks. So, great question. And, you know, they're still working feverishly on the construction. Listening to the Oracle conference call the last quarter, I don't think it's going to delay any of their projects in the timeline. We expect we'll get a completeness here, and it'll get approval, and we'll be right back on schedule. Just to put it in perspective, I mean, remember, this filing is a big filing. In addition, we just added the eStatCom to the filing to make sure we have true transparency. When you think about it, there's over 20,000 pages in the filing. So the commission having 35 questions, I think that's pretty reasonable. So it's really a complete filing and understand, you know, we wanted to ask those questions up front and work it through so we can get a quick result here. So everything's on schedule here. Although we had a little pause with that refiling, I feel good where we're at.

Perfect. Appreciate it, guys. Yeah, really big congrats. And it's quite a report. So see you in a couple weeks.

Sounds good. Thank you.

Your next question is from the line of Nicholas Campanella with Barclays. Your line is now open. Please go ahead.

Oracle could be expanding. Just does this capital plan build into that load or would those expansions result in incremental capital?

Sure, sure. And when you look at it, you know, if there'd be potential expansions, we factored in the 400 megawatts on this to be announced and we're making progress on that customer there. But we do have some long lead time equipment in here anticipating we'll have some spending done, but those megawatts probably won't come in until like that 2032, 33. But true transparency, we think this growth will extend beyond 2031 and opportunities in 2032 and 33. So we have a little bit of long lead time equipment. as you can see in some of the public filings of plants being filed. So more to come on that. So I think as we grow, that we continue to be upside if there's additional data center growth beyond 2031.

OK, thank you. And then just with the plan being out to 2031 now, you talked about the long lead time equipment and you still have some chunky generation you're probably going to be building in 2032. You also have some load ramping by then. How do equity needs look like kind of beyond this plan just Is there something idiosyncratic that's causing you to, you know, basically have flat to declining needs on the CapEx raise or is this type of, you know, CapEx increase to equity needs sustainable on a roll forward, if you understand my point? Thanks.

Yeah, that's a great question. I'll start and then Shaw will back clean up as we're in the brewer fever here. When you think about it, we really worked hard getting more cash up front and getting some cash returns with some of our very large customers. And as we always said, having plants go into service was also going to help with our cash. So this was kind of a step change to get into that, you know, Realign our cash needs and working with our very large customers who have been great partners here. As we go forward, though, Shaw has looked at what additional capital would mean and potential there.

Yeah, so just to build on that, we think that we traditionally guided you that every $1 million of incremental capital, we would require 50 cents with equity content. with the factors that Scott just outlined, we expect that number to come down over time. So I would be comfortable to say it could be around 40%. So every incremental dollar would come with 40% of equity content comfortably. So that would be the going forward guidance for you, Nick.

If I could just squeeze one more in just in response to kind of Char's question before. On the plus, is it really with the capital plan essentially peaking here in 28? Is it 29 and beyond that you'd really be in that plus range if things go correctly? We're just trying to make sure we heard that right. I'm sorry.

Sure, sure. I think it all depends upon when we can get the regulatory approvals right. potentially 28, more likely 29. And as we continue, you can see our capital plan actually falls down a little bit in 2030 and 31. I wouldn't read too much into that because as we look at 2032, et cetera, there'll be more opportunities there. So, you know, I feel the most confident in that 28, 29 timeframe, but, you know, 30 and 31 aren't that far off. So we have some time here to look at those also.

Thank you very much.

Thanks, Nick.

Your next question is from the line of Steve D'Ambrosi with RBC Capital Markets. Your line is now open. Please go ahead.

Hey, Scott and Shaw. Thanks very much for taking my question. Good afternoon. Good afternoon. Just had a quick one, a couple quick ones. Just in terms of Microsoft and the 600 megawatt expansion of the 3.2-ish gigawatts of load, Can you just talk maybe at a high level about, you know, how much of the acreage that relates to or, you know, they keep adding acreage, but it also seems like power density per acre, you know, is moving up with newer generations of racks. So just how we can think about, you know, you've given a good estimate of what Vantage could potentially size to, but just interested about Microsoft on the other side.

Sure, sure. and Microsoft hasn't disclosed anything in particular. This is more us just looking at other comparable sites. I think those sites, and they've talked about, you just saw them buy in another 70 acres right next door. I think the opportunity for these sites to have another, not another, but in total four and a half to five gigawatts. So right now, Southeastern Wisconsin is about 3.2. potentially that could get up to four and a half to five. As you see, they just bought some more land. So I agree with you. I think the technology continues to get more capacity on the same location. So more to come on that. But those are just our kind of rough estimates. But right now we're very comfortable with the 3.2 that's in the plan for southeastern Wisconsin.

And then just obviously more to come, I guess, on the 400 megawatts. But can you talk about whether it's It's within WebCo or WPS, the service territory, or any color on just what that could look like? Understand that we'll get more details soon.

Yeah, we'll get more details too. I know people are looking at locations in both territories. So once again, you've got to make sure you have a community that's excited about it and interested in it. You've got to make sure the transmission lines are available and the capacity. So there's a lot of factors going in. So I don't want to really get much more there. More to come on this, though.

Totally appreciate it. Thanks very much, Scott.

Thank you.

Your next question is from the line of Michael Sullivan with Wolf Research. Your line is now open. Please go ahead.

Hey, good afternoon. Sorry, I got to try one more. Hey, Scott, I got to try one more on the growth rate. So is the takeaway here The plus as it stands now is for one, maybe two years, and then you're back within more of the seven to nine and all the other years.

So I feel, you know, I feel good that we're going to get a couple of years out of here. But once again, you know, we'll have another update in a year here on our capital plan or maybe interim as we get more more customers here. so a little too early to tell but feel really good that it'll be into that nine plus probably the the upper end or a plus sign based on where we're currently at.

Okay and and on the equity piece um can you just maybe unpack a little more about what changed here for the nearer term that you were able to? I mean, because you really have two large customers, and so I guess there was a negotiation with one or both that brought the needs down, and then why that wouldn't sustain if you expand with those same customers out in future years?

Yeah, Michael, I'll take that one. So remember, the tariff allows to recognize AFUDC or current returns. So we have the options there. We've been assuming conservatively before that most of the projects would come with AFUDC. And in this plan, to your point, we've been working with our VLC customers to try to charge more cash returns. So as a result, you're basically reducing the AFUDC originally assumed in the prior plan and increasing cash returns in this plan. So it's kind of like a, like Scott mentioned, it's a step change. So that's why it's a relative equity, even though we have added $10 billion. Going forward, you wouldn't be doing this unwinding AFDC and adding cash return thing, but we will continue to to encourage the customers to pay cash returns. So, incrementally, you would need a little more equity as a result. I don't know if that makes sense.

It does. Thank you.

And the last thing, just for me, the 400 megawatts, is that all with one customer, and then just any detail on the gating items there?

Sure. And right now, it's anticipated to be all with one customer. More to come on this. They're still working with the different communities on this. So it's anticipated to be with one customer, but more to come. Okay, thank you. Thank you.

Your next question is from the line of Andrew Weasel with Scotiabank. Your line is now open. Please go ahead.

Hey, good afternoon, everyone. Congrats to the Brewers. Not a lot of love there, but quite a World Series. Congrats to the Brewers, and congrats to you guys. They're not the only ones winning in Milwaukee.

Great updates. Thank you. Thank you. The Brewers have been exciting and fun to watch and glad to bring a World Series home. That's great.

So my first question is on the sales growth. You added a gigawatt to the outlook there, and yet the forecast still shows 6% to 8%. Why wouldn't that be increasing the 6% to 8%? I understand there's a roll forward, but why didn't that number come up? And can you talk a little bit about why the pace of gas growth came down a little bit from the prior forecast? This is all in Wisconsin, I believe, not Illinois. So could you please talk to those two numbers? Sure. Sure.

Happy to. So on the first one, remember, we continue to add sales along the way between now and 2029. So when you look at 29 to 31, the base is very high. So when you grow from a very high base, you continue to have a 6% to 8%. So it's really just a timing of the growth rate. On the gas sales side, nothing to read too much into it. We forecasted a pretty flat gas sales this year, and we, through the and many more. Thank you. Thank you.

The very large customers are really, remember the way our tariff is set up, the very large customers, you've got to really look at the returns on the assets versus the volumetric. The volumetric does make a difference, but a lot of that volumetric is completely passed through as it relates to energy prices, et cetera. It's really the return on those assets is where the earnings come from.

Great. That makes a lot of sense on the electric side. Sorry, Shaf, for gas, I was talking about the 29 to 31 outlook. You're now saying half a percent to 0.8%. You previously said 0.7% to 0.1%. Is it the same story about the 28% to 21%?

0.7% to 1%?

Yeah.

Yeah, it's still in that neighborhood. As I said, from last year to this year, we're expecting that to be even. So growing from that, we feel good about the 0.5% to 0.8%. It could be better than that.

I think we're just making sure we factor in conservation where the price of gas may go, you know, factoring in what could happen. Usually use per customer continues to go down a little bit. This is largely driven by customer growth. So I'm not too concerned about it. And remember, on those gas sales, we'll factor all that into future rate cases as we look at it.

Right. Good point. That's a full rate case cycle away. Okay. Then one more on equity, if I may. How should we think about the timing of this? Your commentary on the magnitude and the customers was pretty clear. But given all that, how should we think about the timing of when the equity would be drawn down and common equity versus JSNs within this cycle? Should it be ratable or would it be more back-end loaded within the five-year plan?

We always say that equity goes with capital. So it could be a little bit front end loaded because we are still in the construction phase, in the front end of the planning horizon. So again, as we continue to place the projects in service, you have more cash coming in in the latter part of the plan. So overall, it's a little bit front end loaded on equity.

OK. Thank you very much. That's helpful. Thank you.

Your next question is from the line of Anthony Crowdell with Mizzou. Your line is now open. Please go ahead.

Hey, good afternoon. I reiterate Andrew's comments. Congrats on the World Series. Must be nice. I think I wanted to follow up one of Stevie D's questions earlier on Microsoft and Oracle. I think Steve was kind of talking on the Microsoft angle. I guess my question is... Between Microsoft and Oracle Advantage, which customer has the greatest potential to exceed the load currently in your plan right now and what would trigger that?

Sure. And, you know, that's hard. I mean, they're both building extremely fast. They're both going – they both have their construction sites under construction extremely fast here. I think when you look at it, probably Microsoft has a lot more individual construction sites going. Oracle's really concentrated on that first 670 acres, really concentrated on that first 1.3 gigawatts. As you notice, we didn't increase anything in the plan here. They want to get that up and running, get that transmission line. So I would say right now, potential Microsoft has a little more opportunity, especially as they continue to buy more land, if you think of our current five-year plan.

Great. And just one follow-up, I guess it's on, and I hope I have these numbers right, like customer concentration. I think by like 20, 31, you know, nearly like 30% of your assets could be supporting very large customers. I mean, is there a point maybe you become concerned with maybe customer concentration, whether it's from a regulatory perspective or a credit perspective?

That's a great question. And we do get that question, but part of our Our comfort level going up to that 29-30% is the very large customer tariff we have with the strong financial requirements and the credits needed in those financial requirements. In addition to the length of how people have to sign up for the length of those assets so we don't have any stranded assets for are other customers or investors. So having renewables, wind and solar sign up for 20 years, and the natural gas and batteries, the depreciable life, matched with that credit support, I'm very comfortable having a concentration of the very large customers. And having two of them also helps having a little diversity with that group.

Great. That's all I had. See you guys in EEI. Thanks again.

Thank you.

Your next question is from Brian Russo with Jefferies. Your line is now open. Please go ahead.

Good afternoon. Just to follow up on the cadence of the EPS growth, is it kind of following the same pattern as the prior 7% to 8% and kind of follows the capital plan on slide 22? As the VLC generation investments ramp up, that requires, in theory, less equity because you're getting some upfront cash recovery from those customers. Is that how to think about it?

I would really go with the pattern of the capital plan, I think. And if we can do something and some more capital can come in a little earlier, I think there's opportunities to be in that plus section. So I would look at the capital plan because that's a return on those assets. and then the equity is, as we've talked about, it's really a step change here to get more of that cash flow from our very large customers to stick to that balanced approach here. And then I think as you go forward, as we get more in service, the equity needs will continue to go lower.

Okay, understood. And then could you be more specific on the actual construction time needed for that ATC line? You know, I could see on the cap, It looks like the majority might be in 27 and 28. Just with the incomplete CCN filing and refiling, just want to make sure that there's adequate time, which is an already condensed timeline for construction.

Yeah, and I don't have the exact timeline in my mind here. I imagine it's going to take 12 to 15 months. I have not flushed that out completely, but I know American Transmission Company is ready. They have people working on other projects. So we maintaining the workforce so that when this project does get approved and we have to go ahead, we're ready to go with it. We have the equipment is ready to go with the construction. So as soon as we get approval, there will be no delay in starting. We'll be able to keep moving. So it's probably about 12 to 15 months.

OK, great. And then lastly, any insights into this DNR? environmental review following the Port Washington settlement. It seems like it's not an obstacle for this new 400 megawatt customer. Just wondering what you're hearing or seeing on the ground related to that.

Yeah. So this environmental review, I don't see it as an obstacle at all. And actually, we kind of welcome having a reasonable environmental review to get the facts out. So having a study, getting all the clarity on the facts on the environmental impact, I think is positive. And hopefully there's even clarity of what rules have to be filed for future environmental reviews so there's less interpretation. So we see this as net positive. It shouldn't affect any of the current sites. I think everyone thinks it's going to be very manageable. We expect their environmental review to be on a reasonable basis. It sounds like it's going to be done very quickly by beginning of 28. So I think all of that and having the facts out there and having the true on an environmental review is all net positive.

Got it. Thank you very much.

Thank you.

Your next question is from the line of Jeremy Tonette with JP Morgan. Your line is now open. Please go ahead.

Hi there. Good afternoon. This is Diana Niles on the call for Jeremy. Thank you for taking our questions today.

Absolutely.

If you could elaborate more on the relatively unchanged equity in this plan and maybe more broadly on the financing plan, puts and takes when considering the allocation of debt and equity under a higher rate environment, would it be possible to speak to that and potentially speak to rate exposure?

Sure, sure. kind of look at how it's all laid out and some concepts here. But in reality, we kind of look at it every day. We're going to do some financing. What's the most efficient? So, Shaw, why don't you kind of lay out some of our base concepts?

Oh, absolutely. On the debt front, we are keenly aware of the increase in the interest rate. And as a matter of fact, as we've been working with the and PSCW, we filed the incremental information related to the increase in interest rates. So we're hoping that the Commission will take up that information and reflect the higher interest rate environment in the RIT case outcome for test year 27-28. Putting that aside, in the five-year plan, We assumed some very conservative interest rates, in some cases in the upper 6% range, just to make sure we could capture the current interest rate environment. So we have taken into consideration all of that related to the cost of debt. On the equity front, I don't know if you have a specific question you wanted me to address.

I think that generally covers it. It was more, I guess, the decision to increase the percentage of the debt in the financing plan while decreasing the percentage of equity. But I understand there are puts and takes there.

Yeah, it's all driven by the cash flow forecast. So as we pick up more cash from operations, and that could be in the form of current returns that we talked about, or incremental revenue in cash, or selling the ITCs and PTCs. Whatever we do in the plan that increases the cash flows, that gives us the capacity to increase a little bit of the debt and still maintain really strong financial metrics, credit metrics. So it's really a function of the cash flows.

OK, got it. Thank you. If I may ask one.

Sure.

Thanks. Thank you. Are there any particularities to consider when it comes to cash inflows from VOC customers, either in terms of upfront payments or cash recovery when it comes to how the rating agencies look at your cash flow statements?

In the plan, we're not assuming any of the upfront payments from the VLCs. We are assuming that they would pay cash returns on CWIP. So it would be really just like earning a return on the rate base, but nothing like an upfront payment from the VLC.

But we think those cash returns on the CWIP will receive positively from the rating agencies. I think they'll consider that very positive.

Understood. Yeah, thank you. Thank you for the time today.

Thank you.

Your next question is from the line of Steve Fleischman with Wolf Research. Your line is now open. Please go ahead.

Thank you. Sorry for the double teaming question here. And congrats on the brewers, by the way. Thank you. Just to kind of tie up may be some of the questions on the growth rate in CAGR. Instead of looking year by year, looking more at the five-year CAGR, is the plus on the table with the plan as it is for the five-year growth rate, or is the plus more representative of 28 to 29, so to speak?

So right now, I would say the plus is more representative of the 28 to 29. but feel comfortable over that five-year growth rate, assuming we don't have any wildcards here, would be at that upper end of the 9%. Got it.

And then, of course, as you update plans, you probably fill in more in the latter parts as well.

Exactly. Exactly. Exactly. As we update plans and get more clarity on a very large customer. Thank you.

That was helpful.

Thank you. Appreciate it.

Your next question is from the line of Carly Davenport with Goldman Sachs. Your line is now open. Please go ahead.

Hey, good afternoon. Thanks so much for taking the questions and for all the updates. Just one quick one. For me, just on the capital plan, I think you quantified the amount of distribution and generation capex tied to the VLCs. Do you have a comparable number that you're sharing for the transmission piece of the plan?

I think in our plan right now for the transmission, specifically related to economic development, is about $1.4 billion in our plan right now. So I think as you look across the state of Wisconsin, I think there's Your next question is from the line of Richard Sunderland with Trust Truist Securities. Your line is now open. Please go ahead.

Hey, good afternoon. Thanks for the time today. Just one cleanup question on the VLC side of disclosures there, that 29% asset-based component in 2031, does that include the 400 megawatts kind of unidentified customer and that longer lead time equipment? I think you call it out for like a 2032, 2033 basis. Is that all in that 29%?

Yes, it is. Yes, it is. It's all part that we think is going to be paid for by those very large customers, and that's all part of the 29%. Okay.

Understood. That's helpful. And then I guess I'd be remiss if I didn't ask on kind of the Illinois pipework and just year-to-date progress there, you know, both on a restaffing perspective and how that's informing kind of rate case discussions as well. Could you speak a little bit to the workflows there?

Sure, sure. And so the Illinois, and you've seen a couple updates in our Illinois filing that the capital amount has gone down a little bit this year just because we're ramping up and it's been hard to get resources for some of the occupations since the economy is strong and there's a lot of construction progress going on across the country, largely in Wisconsin and other places also. So it's been hard to ramp that up. We've updated the forecast, tried to have that true transparency to the commission down there of the timeline of that. But we're making really good progress. It's going to continue to ramp up. And the plans in here ramp up to about $500 million a year spending starting in that 28 timeframe as we continue to ramp. So making progress, it's been a little slower than what we'd like, but we got to make sure we have the quality and the right resources to do it. And we've put in programs to help get new resources in by working with trade associations and other colleges and training to get more beginning workers up to speed to be able to help us on the program.

Great. Appreciate all that. Thank you.

Thank you.

The final question will be from the line of Paul Patterson with Glenrock Associations. Your line is now open. Please go ahead.

Hey, good afternoon. Hey, Paul. Can you hear me? Hey, how are you doing? So just to sort of follow up, and I apologize, but just trying to connect all the dots. The one gigawatt of demand and the $10 billion of CapEx, incremental CapEx, The $10 billion, it sounds, if I heard you guys correctly, the one gigawatt is not directly, there's more than just the one gigawatt of demand because you're getting more demand that's not in the forecast period in 2032 and what have you. Am I thinking about that correctly?

So there's a combination. You have to, you know, we've got the one gigawatt of demand. That one gigawatt demand, we need to We need to get about 1.4, 1.5 gigawatts to make sure we make the MISO requirements. So it's a little bit more to make sure we have the MISO requirements for that capacity need. We also have the transmission in there to serve this. That's up. Plus there's a little bit of long lead time equipment in addition to that. Plus we have some distribution. So significantly related to generation, but a lot of it's in or some of it's in transmission also and a little bit in this long lead time equipment. So kind of all of the above.

Okay, but most of that $10 billion is associated with VLCC customers. That is correct. And could you guys just – I saw the rate base pie charts and everything, but just in general when we think about this incremental number, how much should we think about as roughly speaking associated with the VLCC guys?

I think as you look about the 10 million increase, probably about eight plus is related to the VLCs.

Okay, fair enough. Think about the entire 47.5% of the capital, about 45% is VLC. That's another way to look at it.

Of the total capital, not the incremental?

Correct.

Okay. and then when we, and I think this question was answered, but you mentioned that really the OPEX differentials really have to do simply with QIP versus AFU DC and there's no deposits or collateral or anything like that in that large capex, excuse me, that large OPEX increase other than obviously some growth. But is that the way, am I, I understood that correctly?

So there is no like customer deposit or prepayment for that. It's all related to current return on AFUDC. However, as you think of the credit requirements, we do, you know, if there's a credit requirement need, we do have, you know, letter of credits or whatever is required under the commission order to make sure we have the credit requirements met. So you've got to think of two different ones. One's the credit requirement and one's the cash flow to support it.

And that credit requirement is just on the side for security. That's not part of our financials anywhere in the financials that we represent to you.

Awesome. Thanks so much. And then I just noticed on the footnote on page 20, electric distribution includes 200 million substations dedicated to VLCCs, a portion of which, whatever. Is there any Kayak or anything in any of these things that we should be thinking about or is this pretty much minus any SEAC or contribution to construction or anything like that?

Yeah, that's really just there's no contributions in that. That is just a miscellaneous distribution capital. We need it to serve some of the very large customers that's dedicated to them. We just want to make sure as you tie stuff out, you recognize that.

Okay, just wanted to make sure. Thanks so much. I really appreciate it.

All right, thank you. Well, thank you everyone. That concludes our conference call today. Thank you for participating. If you have more questions, please feel free to contact Beth Straka at 414-221-4639. Thank you.

This concludes today's call. Thank you for attending. You may now disconnect.