WEC Energy(US:WEC)2023-02-23 12:42Revenue and Customer Growth - In 2022, retail revenues accounted for 90.4% of total electric operating revenues, while wholesale revenues contributed 3.1% and resale revenues 5.2%[41] - The total number of electric customers at the end of 2022 was 1,650.8 thousand, an increase from 1,638.6 thousand in 2021[49] - The total number of customers at the end of 2022 was 1,501.8 thousand, an increase from 1,488.5 thousand in 2021[80] - The Illinois segment serves 1,048.4 thousand customers as of December 31, 2022, an increase from 1,044.3 thousand in 2021[95] - The other states segment serves 431.5 thousand customers as of December 31, 2022, up from 429.2 thousand in 2021[108] Electric Generation and Capacity - The electric generation capacity owned by the company is 7,736 MW, which includes coal-fired, natural gas-fired, and renewable generation facilities[53] - The estimated electric supply mix for 2023 includes 30.4% from coal, 27.0% from combined cycle natural gas, and 5.8% from renewables[52] - The company has received approval to acquire the Red Barn wind project, which will add 82 MW of wind generation capacity[59] - The Koshkonong Solar-Battery Park project, if approved, will provide 270 MW of solar generation and 149 MW of battery storage, with construction expected to be completed in 2025[61] - In December 2022, the company acquired Whitewater, a 236.5 MW dual-fueled combined cycle generation facility, which became operational in January 2023[68] Environmental Goals and Compliance - The company aims to reduce carbon emissions from its electric generation fleet by 60% by the end of 2025 and by 80% by the end of 2030, both from a 2005 baseline[54] - The company has retired over 1,800 MW of coal-fired generation since 2018 and plans to retire an additional 1,600 MW of fossil-fueled generation by the end of 2026[55] - The company aims for a 60% reduction in carbon emissions from its electric generation fleet by the end of 2025 and 80% by the end of 2030, with a long-term goal of net-zero CO2 emissions by 2050[198] - The company aims to achieve net-zero methane emissions by the end of 2030, with plans to utilize renewable natural gas (RNG) from local dairy farms[122] - Significant capital and operating resources are incurred to comply with environmental laws, which may increase operating costs and reduce generating capacity[190] Financial Performance and Projections - The total electric operating revenue for 2022 was $4,971.8 million, a 9.5% increase from $4,538.6 million in 2021[146] - The total natural gas operating revenue for 2022 was $4,498.1 million, a 21.9% increase from $3,690.2 million in 2021[146] - The company has a 12.7% return on equity (ROE) for the ERGS units and 55% equity ratio assumed for these units[130] - The authorized ROE for WE, WPS, and WG is 9.80% effective January 1, 2023, with an average common equity component of 53.0%[150] Natural Gas Operations and Infrastructure - The company has contracted for 8.7 million tons of coal for 2023 under fixed-price contracts, ensuring price stability amid market volatility[71] - The company plans to construct additional LNG facilities to provide approximately 1 Bcf of natural gas supply to meet anticipated peak demand, with operations targeted for late 2023 and 2024[86] - The company has received approval to invest in 364.5 MW of natural gas-fired generation in Wisconsin, enhancing its capacity for sustainable energy[63] - The company manages a 38.8 Bcf storage field and contracts with other providers to enhance storage capabilities, which helps mitigate supply cost volatility[98] Regulatory Environment and Challenges - The company operates under regulatory frameworks that require periodic requests for changes in retail rates based on forward-looking test years reflecting infrastructure additions and cost changes[153] - Rate regulation impacts the company's financial condition, results of operations, and liquidity, with future rate adjustments dependent on regulatory actions[186] - The PSCW has approved leases for all four generating units constructed under Wisconsin's Leased Generation Law, providing regulatory certainty[129] - The company has received market-based rate authority from FERC, allowing wholesale electric sales in the MISO market based on negotiated market values[154] Risks and Uncertainties - The company faces uncertainties regarding the recovery of environmental compliance costs from customers, which could adversely affect financial results[194] - Future greenhouse gas regulations may lead to increased compliance costs and impact the economic viability of certain generating units[196] - The company’s operations are subject to risks from climate change, which could lead to extreme weather events and increased operational costs[216][217] - Cybersecurity threats pose risks to operations, with potential disruptions from successful intrusions affecting revenue and increasing operational costs[226][227] Workforce and Diversity - The company has a total workforce of 7,022 employees, with 4,174 represented under union agreements as of December 31, 2022[176] - Women and racial minorities represented approximately 25% and 26% of the workforce, respectively, as of December 31, 2022[179] Capital Projects and Investments - The company is actively involved in significant capital projects, including investments in renewable energy facilities, which are subject to risks such as supply chain disruptions and rising material costs[223] - Supply chain disruptions and inflation are impacting the availability and costs of materials and equipment, potentially affecting financial condition and results of operations[221][222]