WEC Energy Group Tweaking Estimates Higher on VLC Tariff

Goldman Sachs maintains a Sell rating on WEC Energy Group with a $108 price target, noting that while the Wisconsin VLC tariff approval is positive, the company's growth remains undifferentiated for its premium valuation.

Key Takeaways

• 1.Wisconsin commission verbally approved the Very Large Customer (VLC) tariff, providing regulatory clarity and de-risking demand from hyperscale customers like Microsoft.
• 2.Management identified a $2-$2.5 billion incremental capital investment opportunity for the Point Beach PPA replacement, additional to the current $37.5 billion plan.
• 3.Regulatory overhang remains in Illinois due to active rate case proceedings, though a proposed settlement has been filed for outstanding rider issues.

Table of Contents

• Key earnings takeaways
• Point Beach PPA replacement could translate into $2-$2.5 bn incremental capex opportunity
• Regulatory overhang persists in Illinois with rate case, but potential settlement for the recently filed Wisconsin rate case
• Model Updates
• Valuation and Key Risks
• Disclosure Appendix

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