What changed in this filing

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Item 1. Business

2024-02-22 compared with 2023-02-23 · 209 added, 207 removed, 503 unchanged (45% of the section changed)

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Electric Utility Operations

For the periods presented in this Annual Report on Form 10-K, our electric utility operations included operations of WE, WPS, and UMERC.

Our electric utility operations include the operations of WE, WPS, and UMERC.

• WE generates and distributes electric energy to customers located in southeastern Wisconsin (including the metropolitan Milwaukee area), east central Wisconsin, and northern Wisconsin.

In 2022, WE's consolidated revenues also include securitization revenues collected from customers as servicer of environmental control property owned by its subsidiary WEPCo Environmental Trust.

For more information on WEPCo Environmental Trust, see Note 23, Variable Interest Entities.

• WPS generates and distributes electric energy to customers located in northeastern and central Wisconsin.

2023 Form 10-K 4

WEC Energy Group, Inc.

• WPS generates and distributes electric energy to customers located in northeastern and central Wisconsin.

• UMERC generates and distributes electric energy to customers, including one iron ore mine owned by Tilden, located in the Upper Peninsula of Michigan.

UMERC began generating electricity when its new natural gas-fired generation achieved commercial operation on March 31, 2019.

Operating Revenues

For information about our operating revenues disaggregated by customer class for the years ended December 31, 2022, 2021, and 2020, see Note 4, Operating Revenues.

For information about our operating revenues disaggregated by customer class for the years ended December 31, 2023, 2022, and 2021, see Note 1(d), Operating Revenues, and Note 4, Operating Revenues.

Electric Sales

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Our electric utilities are authorized to provide retail electric service in designated territories in the state of Wisconsin, as established by indeterminate permits and boundary agreements with other utilities, and in certain territories in the state of Michigan pursuant to franchises granted by municipalities.

Our electric utilities buy and sell wholesale electric power by participating in the MISO Energy Markets.

The cost of our individual generation offered into the MISO Energy Markets compared to our competitors affects how often our generating units are dispatched and whether we buy or sell power, based on our customers' needs.

We provide wholesale electric service to various customers, including electric cooperatives, municipal joint action agencies, other investor-owned utilities, municipal utilities, and energy marketers.

For more information, see E.

The majority of our sales for resale are sold into an energy market operated by MISO at market rates based on the availability of our generation and market demand.

Retail fuel costs are reduced by the amount that revenue exceeds the costs of sales derived from these opportunity sales.

Retail fuel costs are reduced by the amount that revenue exceeds the cost of sales derived from these opportunity sales.

Our electric utilities buy and sell electric power by participating in the MISO Energy Markets.

The cost of our individual generation offered into the MISO Energy Markets compared to our competitors affects how often our generating units are dispatched and whether we buy or sell power.

For more information on the MISO Energy Markets, see E.

WE has a steam utility that generates, distributes, and sells steam supplied by the VAPP to customers in metropolitan Milwaukee, Wisconsin.

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Electric Sales Forecast

Our service territory experienced slightly higher weather-normalized retail electric sales in 2022, compared with 2021, due to the growth in small commercial and industrial sales.

We currently forecast retail electric sales volumes, excluding the Tilden mine located in the Upper Peninsula of Michigan, to grow at an annual rate between 0.7% and 1.0% for the period 2025 through 2027, assuming normal weather.

Electric peak demand is expected to be flat over the same period.

2022 Form 10-K 5

WEC Energy Group, Inc.

Our service territory experienced slightly lower weather-normalized retail electric sales in 2023, compared with 2022, due to lower sales to large commercial and industrial customers.

We currently forecast retail electric sales volumes, excluding the Tilden mine located in the Upper Peninsula of Michigan, to remain relatively flat for 2024, assuming normal weather.

Year Ended December 31

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Steam customers – end of year 0.4 0.4 0.4

2023 Form 10-K 5

WEC Energy Group, Inc.

Electric Commercial and Industrial Retail Customers

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Electric Generation and Supply Mix

Our electric supply strategy is to provide our customers with energy from plants using a diverse fuel mix that is expected to balance a stable, reliable, and affordable supply of electricity with environmental stewardship.

Through our participation in the MISO Energy Markets, we supply a significant amount of electricity to our customers from power plants that we own.

Our electric supply strategy is to provide our customers with energy from a diverse generation portfolio that is expected to balance a stable, reliable, and affordable supply of electricity with environmental stewardship.

Through our participation in the MISO Energy Markets, we supply a significant amount of electricity to our customers from generation that we own.

We supplement our internally generated power supply with long-term PPAs, including the Point Beach PPA discussed under the heading "Power Purchase Commitments," and through spot purchases in the MISO Energy Markets.

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2024 2023 2022 2021

Company-owned generation units:

Company-owned generation:

Coal 27.7 % 29.0 % 29.4 % 35.5 %

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7.0 % 5.5 % 5.8 % 4.8 %

Total company-owned generation units 68.2 % 67.1 % 68.8 % 67.6 %

Total company-owned generation 73.0 % 69.6 % 67.1 % 68.8 %

Power purchase contracts:

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(2) Includes hydroelectric, biomass, solar, and wind generation.

2022 Form 10-K 6

WEC Energy Group, Inc.

Electric Generation Facilities

Our generation portfolio is a mix of energy resources having different operating characteristics and fuel sources designed to balance providing energy that is stable, reliable, and affordable with environmental stewardship.

We own 7,736 MW of generation capacity, including wholly owned and jointly owned facilities.

We own 8,337 MWs of generation capacity, including wholly owned and jointly owned facilities.

We Power's generating units are also included in the generation capacity.

Our facilities include coal-fired plants, natural gas-fired plants, and renewable generation.

Our facilities include natural gas-fired plants, coal-fired plants, and renewable generation.

Certain of our natural gas-fired generation units have the ability to burn oil if natural gas is not available due to delivery constraints.

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Environmental Goals

We have set goals to achieve reductions in carbon emissions from our electric generation fleet by 60% by the end of 2025 and by 80% by the end of 2030, both from a 2005 baseline.

We expect to achieve these goals by making operating refinements, retiring less efficient generating units, and executing our capital plan.

Over the longer term, the target for our generation fleet is net-zero CO 2 emissions by 2050.

As part of our path toward these goals, we are exploring co-firing with natural gas at our ERGS coal-fired units.

We have announced goals to achieve reductions in carbon emissions from our electric generation fleet by 60% by the end of 2025 and by 80% by the end of 2030, both from a 2005 baseline.

As of the end of 2023, our electric generation fleet has achieved a 54% reduction in carbon emissions from the 2005 baseline.

We expect to achieve these goals by continuing to make operating

2023 Form 10-K 6

WEC Energy Group, Inc.

refinements, retiring less efficient generating units, and executing our capital plan.

Over the longer term, the target for our generation fleet is to be net carbon neutral by 2050.

As part of our path toward these goals, we have started implementing co-firing with natural gas at the ERGS coal-fired units.

By the end of 2030, we expect to use coal as a backup fuel only, and we believe we will be in a position to eliminate coal as an energy source by the end of 2032.

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When taken together, the retirements and new investments in renewables and clean generation discussed in more detail below, should better balance our supply with our demand, while maintaining reliable, affordable energy for our customers.

We already have retired more than 1,800 MW of coal-fired generation since the beginning of 2018, which included the 2019 retirement of the PIPP as well as the 2018 retirements of the Pleasant Prairie power plant, the Pulliam power plant, and the jointly-owned Edgewater Unit 4 generating units.

We already have retired more than 1,900 MWs of coal-fired generation since the beginning of 2018, which included the 2019 retirement of the PIPP as well as the 2018 retirements of the Pleasant Prairie power plant, the Pulliam power plant, and the jointly-owned Edgewater Unit 4 generating units.

See Note 6, Regulatory Assets and Liabilities, for more information related to these power plant retirements.

Through our ESG Progress Plan, we expect to retire approximately 1,600 MW of additional fossil-fueled generation by the end of 2026, which includes the planned retirement in 2024-2025 of OCPP Units 5-8 and the planned retirement by June 2026 of jointly-owned Columbia Units 1-2.

We expect to retire approximately 1,800 MWs of additional fossil-fueled generation by the end of 2031, which includes the planned retirement in 2024-2025 of OCPP Units 5-8, the planned retirement by June 2026 of jointly-owned Columbia Units 1 and 2, and the planned retirement in 2031 of Weston Unit 3.

See Note 7, Property, Plant, and Equipment, for more information.

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Our electric utilities meet a portion of their electric generation supply with various renewable energy resources, including wind, solar, hydroelectric, and biomass.

This helps our electric utilities maintain compliance with renewable energy legislation.

This helps our electric utilities work towards our goals of reducing carbon emissions while also maintaining compliance with renewable energy legislation.

These renewable energy resources also help us maintain diversity in our generation portfolio, which effectively serves as a price hedge against future fuel costs, and will help mitigate the risk of potential unknown costs associated with any future carbon restrictions for electric generators.

In December 2018, WE received approval from the PSCW for the DRER pilot program, a program for large commercial and industrial customers who wish to access renewable resources that WE would operate, adding up to 150 MW of renewables to WE's portfolio.

The DRER helps these larger customers meet their sustainability and renewable energy goals.

In December 2018, WE received approval from the PSCW for the DRER pilot program, a program designed to allow large commercial and industrial customers to access renewable resources that WE would operate.

The DRER pilot is intended to help these larger customers meet their sustainability and renewable energy goals and could add up to 35 MWs of renewables to WE's portfolio.

In addition, in July 2023, the PSCW approved the Renewable Pathway Pilot, which allows WE and WPS commercial and industrial customers to subscribe to a portion of a utility-scale, Wisconsin-based renewable energy generating facility for up to 125 MWs at WE and 40 MWs at WPS.

In April 2023, WPS, along with an unaffiliated utility, completed the acquisition of Red Barn, a commercially operational utility-scale wind-powered electric generating facility.

The project is located in Grant County, Wisconsin, and WPS owns 82 MWs of this project.

Solar and Battery Storage

In December 2023, the construction of Badger Hollow II located in Iowa County, Wisconsin was completed, and the facility became commercially operational.

Badger Hollow II is owned by WE and an unaffiliated utility, with WE owning 100 MWs of the facility.

2023 Form 10-K 7

WEC Energy Group, Inc.

In January 2022, WPS, along with an unaffiliated utility, received approval from the PSCW to acquire Red Barn, a utility-scale wind-powered electric generating facility.

The project will be located in Grant County, Wisconsin and once constructed, WPS will own 82 MW of this project.

Construction of the project is expected to be completed during the first half of 2023.

In December 2022, WE and WPS completed capital investments to repower major components of Blue Sky Green Field Wind Park and Crane Creek Wind Park, which qualify for PTCs.

Solar and Battery Storage

As part of our commitment to invest in zero-carbon generation within our Wisconsin segment, in April 2021, WE and WPS, along with an unaffiliated utility, filed an application with the PSCW for approval to acquire the Koshkonong Solar-Battery Park.

Koshkonong Solar-Battery Park is a utility-scale solar-powered electric generating facility with a battery energy storage system.

The project will be located in Dane County, Wisconsin and once fully constructed, WE and WPS will collectively own 270 MW of solar generation and 149 MW of battery storage of this project.

If approved, construction of the solar portion is expected to be completed in 2025.

We have also received approvals from the PSCW to invest in 707 MW of utility-scale solar and battery storage projects within our Wisconsin segment, including the following:

• In December 2022, WE and WPS, along with an unaffiliated utility, received approval from the PSCW to acquire and construct Darien, a utility-scale solar-powered electric generating facility with a battery energy storage system.

The project will be located in Rock and Walworth counties, Wisconsin and once fully constructed, WE and WPS will collectively own 225 MW of solar generation and 68 MW of battery storage of this project.

The construction of the solar portion is expected to be completed in 2024.

As part of our commitment to invest in additional zero-carbon generation within our Wisconsin segment, we have filed requests to acquire and construct 370 MWs of additional projects, including the following:

• In February 2024, WE and WPS, along with an unaffiliated utility, filed a request with the PSCW to acquire and construct High Noon, a utility-scale solar-powered electric generating facility.

The project will be located in Columbia County, Wisconsin and once fully constructed, WE and WPS will collectively own 270 MWs of solar generation of this project.

The construction is expected to be completed by the end of 2026.

• In December 2023, UMERC filed a request with the MPSC to acquire and construct Renegade, a utility-scale solar-powered electric generating facility.

The project will be located in Delta County, Michigan and once fully constructed UMERC will own 100 MWs of solar generation.

The construction is expected to be completed by the end of 2026.

We have also received approvals from the PSCW to invest in 809 MWs of additional projects currently in construction, including the following:

• In April 2023, WE and WPS, along with an unaffiliated utility, received PSCW approval to acquire Koshkonong, a utility-scale solar-powered electric generating facility.

The project will be located in Dane County, Wisconsin and once fully constructed, WE and WPS will collectively own 270 MWs of solar generation.

The construction is expected to be completed in 2026.

• In December 2022, WE and WPS, along with an unaffiliated utility, received PSCW approval to acquire and construct Darien, a utility-scale solar-powered electric generating facility.

The project will be located in Rock and Walworth counties, Wisconsin and once fully constructed, WE and WPS will collectively own 225 MWs of solar generation.

The construction is expected to be completed in 2024.

• In January 2022, WE and WPS, along with an unaffiliated utility, received PSCW approval to acquire and construct Paris, a utility-scale solar-powered electric generating facility with a battery energy storage system.

The project will be located in Kenosha County, Wisconsin and once fully constructed, WE and WPS will collectively own 180 MW of solar generation and 99 MW of battery storage of this project.

The construction of the solar portion is expected to be completed in 2023.

• In August 2019, WE partnered with an unaffiliated utility to construct a solar project, Badger Hollow II, that will be located in Iowa County, Wisconsin.

Once constructed, WE will own 100 MW of this project.

Commercial operation of Badger Hollow II is targeted for 2023.

• In December 2018, WE received approval from the PSCW for the Solar Now pilot program, which is expected to add a total of 35 MW of solar generation to WE's portfolio, allowing non-profit and government entities, as well as commercial and industrial customers, to site utility owned solar arrays on their property.

Under this program, WE has energized 24 Solar Now projects and currently has another five under construction, together totaling more than 30 MW.

The project will be located in Kenosha County, Wisconsin and once fully constructed, WE and WPS will collectively own 180 MWs of solar generation and 99 MWs of battery storage of this project.

The construction of the solar portion and battery storage is expected to be completed in 2024 and 2025, respectively.

• In December 2018, WE received approval from the PSCW for the Solar Now pilot program, which is expected to add a total of 35 MWs of solar generation to WE's portfolio, allowing non-profit and government entities, as well as commercial and industrial customers, to site utility owned solar arrays on their property.

Under this program, WE has energized 28 Solar Now projects and currently has another one under construction, together totaling more than 30 MWs.

WE and WPS actively review and pursue distribution system interconnected solar projects.

WE and WPS partner with proven developers to identify and purchase cost effective solar projects for our customers.

These projects are typically ground-mounted modules in the range of 5-10 MWs and are connected to the WE or WPS distribution systems, as applicable.

Currently, WE has 30 MWs of distribution connected projects under contract, which are estimated to go in-service in 2024.

Natural Gas-Fired Generation

We have filed applications with the PSCW for approval to invest in natural gas-fired generation within our Wisconsin segment.

In January 2022, WPS, along with an unaffiliated utility, filed an application with the PSCW for approval to acquire a portion of West Riverside's nameplate capacity.

WPS is also requesting approval to assign the option to purchase part of West Riverside to WE.

If approved, WPS or WE would acquire 100 MW of capacity, in the first of two potential option exercises.

West Riverside is a combined cycle natural gas plant recently completed by an unaffiliated utility in Rock County, Wisconsin.

If approved, the transaction is expected to close in the second quarter 2023.

In addition, WPS could exercise a second option to acquire an additional 100 MW of capacity, with the transaction expected to close in 2024.

In July 2023, WE and WPS completed construction of seven natural gas-fired generation RICE units with a rated capacity of 130 MWs at WPS's Weston power plant site.

In June 2023, WE completed the acquisition of 100 MWs of West Riverside's nameplate capacity, in the first of two potential option exercises.

West Riverside is a commercially operational dual fueled combined cycle generation facility in Beloit, Wisconsin, and is operated by an unaffiliated utility.

In addition, WPS filed a request with the PSCW in September 2023 to exercise a second option to acquire an additional 100 MWs of West Riverside's nameplate capacity.

As it did with the first option, in October 2023, WPS filed for approval to assign its ownership interest pursuant to this second option to WE , with the transaction expected to close in 2024.

In January 2023, WE and WPS completed the acquisition of Whitewater, a commercially operational dual fueled combined cycle generation facility in Whitewater, Wisconsin with a rated capacity of 242.8 MWs.

2023 Form 10-K 8

WEC Energy Group, Inc.

We have received approval from the PSCW to invest in 364.5 MW of natural gas-fired generation within our Wisconsin segment, including the following:

• In December 2022, WE and WPS received approval from the PSCW to acquire Whitewater, a commercially operational 236.5 MW dual fueled (natural gas and low sulfur fuel oil) combined cycle electrical generation facility in Whitewater, Wisconsin.

We added Whitewater to our generation portfolio when this transaction closed in January 2023.

• In March 2022, WE and WPS received approval from the PSCW to construct 128 MWs of natural gas-fired generation at WPS's existing Weston power plant site in northern Wisconsin.

The new facility will consist of seven RICE units.

Construction is expected to be completed in 2023.

As part of our effort to look for new opportunities in sustainable energy, during 2022 we completed testing the effects of blending hydrogen, a clean generating fuel, with natural gas at one of our RICE generating units in the Upper Peninsula of Michigan.

We partnered with the Electric Power Research Institute in this research that could help create another viable option for decarbonizing the economy.

The results of this testing continue to be analyzed and will be shared more broadly when complete.

Other Sustainability Programs

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For short-term planning (planning year one), the PSCW requires Wisconsin utilities to follow the planning reserve margin established by MISO.

MISO has a 17.9% installed capacity reserve margin requirement for the planning year from June 1, 2022, through May 31, 2023.

MISO is implementing seasonal requirements effective June 1, 2023.

MISO implemented seasonal requirements effective June 1, 2023.

The installed capacity reserve margins for the planning year June 1, 2024 through May 31, 2025 are as follows:

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MISO's short-term reserve margin requirements experience year-to-year and season-to-season fluctuations, primarily due to changes in the generation resource mix and average forced outage rate of generation within the MISO footprint.

Michigan legislation requires all electric providers to demonstrate to the MPSC that they have adequate resources to serve the anticipated needs of their customers for a minimum of four consecutive planning years beginning in the upcoming planning year June 1, 2023, through May 31, 2024.

Michigan legislation requires all electric providers to annually demonstrate to the MPSC that they have adequate resources to serve the anticipated needs of their customers for a minimum of four consecutive planning years beginning in the upcoming planning year June 1, 2024, through May 31, 2025.

The MPSC has established future planning reserve margin requirements based on the same study conducted by MISO that determines the short-term reserve margin requirements.

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For more information about the fuel rules, see E.

2022 Form 10-K 9

WEC Energy Group, Inc.

Our average fuel and purchased power costs per MWh by fuel type, including delivery costs, were as follows for the years ended December 31:

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Coal and associated transportation services are exposed to volatility in pricing due to changing domestic and world-wide demand for coal and diesel fuel.

To moderate this volatility risk, WE and WPS have PSCW approval for a hedging program.

This program allows them to hedge up to 75% of their potential risks related to rail transportation fuel surcharge exposure.

To mitigate against this volatility risk, WE and WPS have PSCW approval for a hedging program.

This program allows them to hedge, over a 60-month period, up to 75% of their potential risks related to rail transportation fuel surcharge exposure.

The results of this hedging program, when used, are reflected in the average costs of fuel and purchased power.

2023 Form 10-K 9

WEC Energy Group, Inc.

We purchase natural gas for our plants on the spot market from natural gas marketers, utilities, and producers, and we arrange for transportation of the natural gas to our plants.

We have firm and interruptible transportation, as well as balancing and storage agreements, intended to support our plants' variable usage.

WE and WPS also have PSCW approval for a hedging program to moderate volatility related to natural gas price risk.

This program allows them to hedge up to 75% of their estimated natural gas use for electric generation.

WE and WPS also have PSCW approval for a hedging program to mitigate against volatility related to natural gas price risk.

This program allows them to hedge, over a 60-month period, up to 75% of their estimated natural gas use for electric generation.

The results of this hedging program are reflected in the average costs of natural gas.

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(in thousands) Annual Tonnage

2024 9,275 (1)

(1) Coal contracts exceed the total projected requirement due to prior year delivery constraints and forecasted lower operating hours.

Coal Deliveries

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We enter into short- and long-term power purchase commitments to meet a portion of our anticipated electric energy supply needs.

Our power purchase commitments with unaffiliated parties consist of 1,133 MW per year for 2023 through 2027, which exclude planning capacity purchases.

Each of these amounts include 1,033 MW per year related to a long-term PPA for electricity generated by Point Beach.

Through our ESG Progress Plan, we retired some of our older, less efficient coal-fired generation in 2018 and 2019.

To procure additional planning capacity, we purchased capacity from the MISO annual auction to ensure that we maintain our compliance with planning reserve requirements as established by the PSCW, MPSC, and MISO.

2022 Form 10-K 10

WEC Energy Group, Inc.

Excluding planning capacity purchases, our power purchase commitments with unaffiliated parties consist of 1,133 MWs per year for 2024 through 2028.

This amount includes 1,033 MWs per year related to a long-term PPA for electricity generated by Point Beach.

To procure additional planning capacity, we purchase capacity from the MISO annual auction to ensure that we maintain our compliance with planning reserve requirements as established by the PSCW, MPSC, and MISO.

Natural Gas Utility Operations

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In addition, our Wisconsin segment offers natural gas transportation services to our customers that elect to purchase natural gas directly from a third-party supplier.

Major industries served include real estate, restaurants, governmental, food products, and metal manufacturing.

Major industries served include real estate, food products, governmental, restaurants, and paper.

Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Wisconsin Segment Contribution to Net Income Attributed to Common Shareholders for information on natural gas sales volumes by customer class in Wisconsin and the Upper Peninsula of Michigan.

2023 Form 10-K 10

WEC Energy Group, Inc.

Operating Revenues

For information about our operating revenues disaggregated by customer class for the years ended December 31, 2022, 2021, and 2020, see Note 4, Operating Revenues.

For information about our operating revenues disaggregated by customer class for the years ended December 31, 2023, 2022, and 2021, see Note 1(d), Operating Revenues, and Note 4, Operating Revenues.

Natural Gas Sales Forecast

Our combined Wisconsin service territories experienced higher weather-normalized retail natural gas deliveries (excluding natural gas deliveries for electric generation) in 2022 as compared to 2021 largely due to continued recovery from the impact of the COVID-19 pandemic.

We currently forecast retail natural gas delivery volumes to grow at an annual rate between 0.7% and 1.0% for the period 2025 through 2027, assuming normal weather.

Our combined Wisconsin service territories experienced lower weather-normalized retail natural gas deliveries (excluding natural gas deliveries for electric generation) in 2023 as compared to 2022.

We currently forecast retail natural gas delivery volumes to grow 0.8% in 2024, assuming normal weather.

Year Ended December 31

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We generally inject natural gas into storage during the spring and summer months and withdraw it in the winter months.

2022 Form 10-K 11

WEC Energy Group, Inc.

We hold daily transportation and storage capacity entitlements with interstate pipeline companies as well as other service providers under varied-length long-term contracts.

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These facilities are typically utilized during extreme demand conditions to ensure reliable supply to our customers.

In addition to their existing facilities, WE and WG each plan to construct an additional LNG facility.

Each facility would provide approximately one Bcf of natural gas supply to meet anticipated peak demand without requiring the construction of additional interstate pipeline capacity.

Commercial operation of the WE and WG LNG facilities are targeted for the end of 2023 and 2024, respectively.

WE recently finished construction of an LNG facility that was placed into service in November 2023, which provides approximately one Bcf of natural gas supply.

In addition to its existing facilities, WG is constructing an additional LNG facility, which will provide approximately one Bcf of natural gas supply.

Commercial operation of the WG LNG facility is targeted for 2024.

The use of LNG allows us to meet anticipated peak demand without requiring the construction of additional interstate pipeline capacity.

2023 Form 10-K 11

WEC Energy Group, Inc.

Combined with our storage capability, management believes that the volume of natural gas under contract is sufficient to meet our forecasted firm peak-day and seasonal demand.

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Our Wisconsin segment natural gas utilities' peak daily send-out during 2023 was 22.9 million therms on January 31, 2023.

On December 23, 2022, the Guardian pipeline, which provides natural gas to our distribution network, experienced a significant equipment failure, resulting in a significant reduction in the delivery of natural gas it had committed to provide.

In addition, extreme cold weather in our service territories put additional strain on our ability to receive natural gas from other pipeline suppliers.

Our Wisconsin natural gas utilities took numerous steps to meet their customers' demand for natural gas, including drawing from LNG storage facilities, and reducing natural gas deliveries to interruptible business customers.

WE and WG also requested that all other customers reduce their natural gas usage.

The following day, WE and WG lifted their conservation request of customers as the amount of natural gas stabilized to levels that could meet all customers' needs.

As a result of the measures taken, we were able to avoid any significant natural gas outages.

Natural Gas Supply

We have contracts with suppliers for natural gas acquired in the Chicago, Illinois market hub and in some of the producing areas discussed above.

The pricing of the term contracts is based upon first of the month indices.

We expect to continue to make natural gas purchases in the spot market as price and other circumstances dictate.

We have supply relationships with a number of sellers from whom we purchase natural gas in the spot market.

Our natural gas supply requirements are met through a combination of fixed-price purchases, index-priced purchases, storage, peak-shaving facilities, and natural gas supply call options.

We contract for fixed-term firm natural gas supply each year to meet the demand of firm system sales customers.

To supplement natural gas supply and manage risk, we purchase additional natural gas supply on the monthly and daily spot markets.

Hedging Natural Gas Supply Prices

WE, WPS, and WG have PSCW approval to hedge up to 60% of planned winter demand and up to 15% of planned summer demand using a mix of NYMEX-based natural gas options and futures contracts.

As part of their hedging programs, our Wisconsin utilities further reduce their supply cost volatility through the use of a mix of financial instruments, such as NYMEX-based natural gas options and futures contracts.

WE, WPS, and WG have PSCW approval to hedge up to 60% of planned winter demand and up to 15% of planned summer demand.

These approvals allow these companies to pass 100% of the hedging costs (premiums, brokerage fees, and losses) and proceeds (gains) to customers through their respective GCRMs.

To the extent that opportunities develop and physical supply operating plans are supportive, WE, WPS, and WG also have PSCW approval to utilize NYMEX-based natural gas derivatives to capture favorable forward-market price differentials.

These approvals provide for 100% of the related proceeds to accrue to these companies' respective GCRMs.

Illinois Segment

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In addition, PGL and NSG offer natural gas transportation services to our customers that elect to purchase natural gas directly from a third-party supplier.

Major industries served include real estate, non-profits, education, wholesale distributors, and restaurants.

Major industries served include real estate, education, non-profits, wholesale distributors, and food manufacturing.

Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Illinois Segment Contribution to Net Income Attributed to Common Shareholders for information on natural gas sales volumes by customer class.

2022 Form 10-K 12

WEC Energy Group, Inc.

Illinois Utilities Operating Statistics

Operating Revenues

For information about our operating revenues disaggregated by customer class for the years ended December 31, 2022, 2021, and 2020, see Note 4, Operating Revenues.

For information about our operating revenues disaggregated by customer class for the years ended December 31, 2023, 2022, and 2021, see Note 1(d), Operating Revenues, and Note 4, Operating Revenues.

Year Ended December 31

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For more information on our natural gas utility supply and transportation contracts, see Note 24, Commitments and Contingencies.

2023 Form 10-K 12

WEC Energy Group, Inc.

Pipeline Capacity and Storage

We contract with local distribution companies and interstate pipelines to purchase firm transportation services.

We believe that having multiple pipelines that serve our natural gas service territory benefits our customers by improving reliability, providing access to a diverse supply of natural gas, and fostering competition among these service providers.

These benefits can lead to favorable conditions for our Illinois utilities when negotiating new agreements for transportation and storage services.

The interstate pipelines serving Illinois access supply from natural gas producing areas in the Southern and Eastern United States, along with western Canada.

We have contracted for long-term firm capacity from a number of these sources.

This strategy reflects management's belief that overall supply security is enhanced by geographic diversification of the supply portfolio.

We own a 38.8 Bcf storage field (Manlove Field in central Illinois) and contract with various other underground storage service providers for additional storage services.

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Our Illinois utilities' forecasted design peak-day throughput is 25.4 million therms for the 2023 through 2024 heating season.

Our Illinois utilities' peak daily send-out during 2022 was 19.9 million therms on December 23, 2022.

Our Illinois utilities' peak daily send-out during 2023 was 15.9 million therms on January 31, 2023.

Natural Gas Supply

Our natural gas supply requirements are met through a combination of fixed-price purchases, index-priced purchases, contracted and owned storage, peak-shaving facilities, and natural gas supply call options.

We contract for fixed-term firm natural gas supply

2022 Form 10-K 13

WEC Energy Group, Inc.

each year to meet the demand of firm system sales customers.

Our natural gas supply requirements are met through a combination of fixed-price purchases, index-priced purchases, storage, peak-shaving facilities, and natural gas supply call options.

We contract for fixed-term firm natural gas supply each year to meet the demand of firm system sales customers.

To supplement natural gas supply and manage risk, we purchase additional natural gas supply on the monthly and daily spot markets.

Hedging Natural Gas Supply Prices

Our Illinois utilities further reduce their supply cost volatility through the use of financial instruments, such as commodity futures, swaps, and options as part of their hedging programs.

As part of their hedging programs, our Illinois utilities further reduce their supply cost volatility through the use of a mix of financial instruments, such as NYMEX-based natural gas options and futures contracts.

Their hedging programs are reviewed by the ICC as part of the annual purchased gas adjustment reconciliation.

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Natural Gas System Modernization Program

PGL is continuing work on the SMP, a project to replace approximately 2,000 miles of Chicago's aging natural gas pipeline infrastructure that began in 2011.

PGL currently recovers these costs through a surcharge on customer bills pursuant to an ICC approved QIP rider, which is in effect through 2023.

For information on regulatory proceedings related to the SMP and future recovery of SMP costs, see Note 26, Regulatory Environment.

During 2023, PGL continued work on the SMP, a project to replace approximately 2,000 miles of Chicago's aging natural gas pipeline infrastructure that began in 2011.

Prior to December 1, 2023, PGL recovered these costs through a surcharge on customer bills pursuant to an ICC approved QIP rider.

Beginning December 1, 2023, recovery of SMP costs are included in PGL's base rates.

As part of the ICC's November 16, 2023 rate order issued in PGL's rate case, the ICC ordered PGL to pause spending on its SMP until the ICC has a proceeding to determine the optimal method of pipeline replacement and a prudent investment level.

The ICC initiated the proceeding on January 31, 2024, and the proceeding is expected to last twelve months.

PGL and NSG subsequently filed an application for rehearing with the ICC requesting reconsideration of various issues in the ICC's November 16, 2023 written orders.

On January 3, 2024, the ICC granted PGL and NSG a limited-scope rehearing, which includes the authorized spending for the completion of SMP projects that started in 2023 and the authorized spending for emergency repairs needed to ensure the safety and reliability of our delivery system.

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For information on regulatory proceedings related to the SMP and future recovery of SMP costs, see Note 26, Regulatory Environment, and Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations – Factors Affecting Results, Liquidity, and Capital Resources – Regulatory, Legislative, and Legal Matters – Future Illinois Proceedings.

Other States Segment

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In addition, MERC and MGU offer natural gas transportation services to our customers that elect to purchase natural gas directly from a third-party supplier.

Major industries served include education, wholesale distributors, non-profits, metals manufacturing, and real estate.

Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Other States Segment Contribution to Net Income Attributed to Common Shareholders for information on natural gas sales volumes by customer class for this segment.

Other States Utilities Operating Statistics

Major industries served include education, wholesale distributors, real estate, non-profits, and restaurants.

Operating Revenues

For information about our operating revenues disaggregated by customer class for the years ended December 31, 2022, 2021, and 2020, see Note 4, Operating Revenues.

For information about our operating revenues disaggregated by customer class for the years ended December 31, 2023, 2022, and 2021, see Note 1(d), Operating Revenues, and Note 4, Operating Revenues.

Year Ended December 31

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We believe that having diverse capacity and storage benefits our customers.

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Natural gas pipeline capacity and storage and natural gas supplies under contract can be resold in secondary markets.

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Forecasted design peak-day throughput for our other states utilities is 9.7 million therms for the 2023 through 2024 heating season.

Our other states utilities' peak daily send-out during 2022 was 7.5 million therms on January 6, 2022.

Our other states utilities' peak daily send-out during 2023 was 6.8 million therms on February 3, 2023.

Natural Gas Supply

Our natural gas supply requirements are met through a combination of fixed-price purchases, index-priced purchases, contracted and owned storage, and natural gas supply call options.

We contract for fixed-term firm natural gas supply each year to meet the demand of firm system sales customers.

We contract for fixed-term firm natural gas supply each year to meet the

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WEC Energy Group, Inc.

demand of firm system sales customers.

To supplement natural gas supply and manage risk, we purchase additional natural gas supply on the monthly and daily spot markets.

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In 2023, our generating plants performed as expected during the warmest periods of the summer, and all power purchase commitments under firm contract were received.

During this period, our electric utilities did not require public appeals for conservation, and they did not interrupt or curtail service to non-firm customers who participate in load management programs.

WPS did have economic interruption events;

During this period, our electric utilities did not make any public appeals for conservation, and they did not interrupt or curtail service to non-firm customers who participate in load management programs.

Our electric utilities did have economic interruption events;

however, service to customers was not curtailed.

Economic interruptions are declared during times in which the price of electricity in the regional market exceeds the cost of operating the company's peaking generation.

During this time, interruptible customers can choose to continue using electricity at a price based on wholesale market prices or to reduce their load.

In December 2022, MISO declared a "Maximum Generation Emergency Event" due to extreme weather.

As a result of this, UMERC did have to curtail service to an industrial customer in the Upper Peninsula of Michigan for three hours.

During this time, customers taking service under these interruptible programs can choose to continue using electricity at a price based on wholesale market prices or to reduce their load.

Natural Gas Utility Operations – Wisconsin, Illinois, and Other States Segments

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Short-term debt is typically reduced over the January through June period.

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Electric Utility Operations – Wisconsin Segment

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Electrification initiatives or mandates are being considered or proposed by local and state governments.

In addition, the majority of our natural gas customers have the opportunity to choose a natural gas supplier other than us.

In addition, the majority of

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our natural gas customers have the opportunity to choose a natural gas supplier other than us.

Our natural gas utilities offer transportation services for customers that elect to purchase natural gas directly from a third-party supplier.

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Natural Gas Utility Operations – Wisconsin, Illinois, and Other States Segments

We also continue to reduce methane emissions by improving our natural gas distribution systems.

We continue to reduce methane emissions by improving our natural gas distribution system.

We set a target across our natural gas distribution operations to achieve net-zero methane emissions by the end of 2030.

We plan to achieve our net-zero goal through an effort that includes both continuous operational improvements and equipment upgrades, as well as the use of RNG throughout our utility systems.

We plan to achieve our net-zero goal through an effort that includes both continuous operational improvements and equipment upgrades, as well as the use of RNG throughout our natural gas utility systems.

In 2022, we received approval from the PSCW for our RNG pilots.

We have since signed our first five contracts for RNG for our natural gas distribution business, which will be transporting the output of local dairy farms onto our gas distribution system.

We have since signed contracts for RNG for our natural gas distribution business in Wisconsin, which will be transporting the output of local dairy farms onto our gas distribution systems.

The RNG supplied will directly replace higher-emission methane from natural gas that would have entered our pipes.

We expect to have RNG flowing to our distribution system later in 2023, supporting our goal to reduce methane emissions.

These contracts bring us to 1.8 Bcf of RNG planned to enter our systems.

RNG began flowing in 2023.

ELECTRIC TRANSMISSION SEGMENT

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ATC is expected to provide comparable service to all customers, including WE, WPS, and UMERC, and to support effective competition in energy markets without favoring any market participant.

ATC is regulated by the FERC for all rate terms and conditions of service and is a transmission-owning member of MISO.

ATC is regulated by the FERC for all rate terms and conditions of service and certain state regulatory commissions for routing and siting of transmission projects.

ATC is also a transmission-owning member of MISO.

MISO maintains operational control of ATC's transmission system, and WE, WPS, and UMERC are non-transmission owning members and customers of MISO.

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NON-UTILITY OPERATIONS

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Bluewater, which owns underground natural gas storage facilities in Michigan;

and WECI, which holds ownership interests in several wind generating facilities.

and WECI, which holds ownership interests in several renewable generating facilities.

Properties, for more information on our non-utility energy infrastructure facilities.

We Power, through wholly owned subsidiaries, designed and built approximately 2,500 MW of generation in Wisconsin.

We Power, through wholly owned subsidiaries, designed and built approximately 2,500 MWs of generation in Wisconsin.

This generation is made up of capacity from the two coal-fired ERGS units, ER 1 and ER 2, which were placed in service in February 2010 and January 2011, respectively, and the two natural gas-fired PWGS units, PWGS 1 and PWGS 2, which were placed in service in July 2005 and May 2008, respectively.

Two unaffiliated entities collectively own approximately 17%, or approximately 211 MW, of ER 1 and ER 2.

Two unaffiliated entities collectively own approximately 17%, or approximately 211 MWs, of ER 1 and ER 2.

We Power's share of the ERGS units and both PWGS units are being leased to WE under long-term leases (the ERGS units have 30-year leases that began on the in-service dates of the generating units and the PWGS units have 25-year leases that began on the in-service dates of the generating units).

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Because of the significant investment necessary to construct these generating units, we constructed the plants under Wisconsin's Leased Generation Law, which allows a non-utility affiliate to construct an electric generating facility and lease it to the public utility.

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Bluewater Natural Gas Holding, LLC

Bluewater, located in Michigan, provides natural gas storage and hub services for our Wisconsin natural gas utilities, and also provides service to several unaffiliated customers.

Bluewater, located in Michigan, primarily provides natural gas storage and hub services to our Wisconsin natural gas utilities.

WE, WPS, and WG have entered into long-term service agreements for approximately one-third of their combined natural gas storage needs with a wholly owned subsidiary of Bluewater.

WEC Infrastructure LLC

At December 31, 2022, our non-utility energy infrastructure segment included WECI's ownership interests in the wind generating facilities reflected in the table below.

At December 31, 2023, our non-utility energy infrastructure segment included WECI's ownership interests in the renewable generating facilities reflected in the table below.

Name Ownership Interest Commercial Operation

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Thunderhead 90.0% November 2022

Bishop Hill III, Coyote Ridge, Blooming Grove, Tatanka Ridge, Jayhawk, and Thunderhead have offtake agreements with creditworthy counterparties for the sale of all of the energy they produce over periods ranging from 10 to 22 years following commercial operation.

In addition, Upstream's revenue is substantially fixed over a 10-year period following commercial operation through an

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agreement with a creditworthy counterparty.

80.0% May 2022

Sapphire Sky 90.0% February 2023

(1) Although Samson I was commercially operational in May 2022, WECI didn't complete the purchase of its initial 80% ownership interest in this solar facility until February 2023.

WECI completed the acquisition of an additional 10% of Samson I in January 2024, bringing its ownership interest in Samson I to 90.0%.

See Note 2, Acquisitions, for more information.

Bishop Hill III, Coyote Ridge, Blooming Grove, Tatanka Ridge, Jayhawk, Thunderhead, Samson I, and Sapphire Sky have offtake agreements with creditworthy counterparties for the sale of all of the energy they produce over periods ranging from 10 to 22 years following commercial operation.

In addition, Upstream's revenue is substantially fixed over the 10-year period following commercial operation through an agreement with a creditworthy counterparty.

Under the Tax Legislation, all of these investments qualify for PTCs.

WECI is entitled to the tax benefits of Bishop Hill III, Upstream, Blooming Grove, and Thunderhead in proportion to its ownership interest.

WECI is entitled to the tax benefits of Bishop Hill III, Upstream, Blooming Grove, Thunderhead, Samson I, and Sapphire Sky in proportion to its ownership interest.

WECI is entitled to 99% of the tax benefits of Coyote Ridge and Tatanka Ridge for the first 11 years following commercial operation, and is entitled to 99% of the tax benefits of Jayhawk for the first 10 years following commercial operation, after which WECI will be entitled to any tax benefits equal to its ownership interests.

WECI recognizes PTCs as power is generated over a period of 10 years following commercial operation.

In February 2023, WECI completed the acquisition of a 90% ownership interest in Sapphire Sky, a 250 MW wind generating facility in McLean County, Illinois.

The project has an offtake agreement for all of the energy to be produced by the facility for a period of 12 years following commercial operation, which was achieved in February 2023.

WECI's investment in Sapphire Sky qualifies for PTCs.

In January 2023, WECI signed an agreement to acquire an 80% ownership interest in Samson I, a 250 MW solar generating facility in Lamar County, Texas.

The project has an offtake agreement for all of the energy to be produced by the facility for a period of 15 years following commercial operation, which was achieved in May 2022.

WECI's investment in Samson I is expected to qualify for PTCs.

Under the new IRA transferability option, WEC Energy Group entered into a sales agreement in September 2023 to sell substantially all of the PTCs generated by the WECI generating facilities in 2023 to a third party.

See Note 1(q), Income Taxes, for more information about the impact of these sales.

In October 2022, WECI signed an agreement to acquire an 80% ownership interest in Maple Flats, a 250 MW solar generating facility under construction in Clay County, Illinois.

The project has an offtake agreement for all of the energy to be produced by the facility for a period of 15 years following commercial operation.

The project has an offtake agreement for all of the energy to be produced by the facility

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for a period of 15 years following commencement of commercial operation.

WECI's investment in Maple Flats is expected to qualify for PTCs.

See Note 2, Acquisitions, for more information on these generating facilities.

See Note 2, Acquisitions, for more information on certain of these renewable generating facilities.

The electricity produced and revenues generated by our wind generating facilities depend heavily on wind conditions, which are variable.

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Historically, wind production has been greater in the first and fourth quarters.

The electricity produced and revenues generated by our Samson I solar generating facility is also variable and depends heavily on seasonality and weather conditions.

Spring and summer are usually the peak solar production seasons due to increased direct sunlight and longer days.

With regards to weather, solar panels will still work on cloudy and rainy days, but solar system output will be lower than on clear, sunny days.

Also, major storms can damage solar panels and other equipment and lead to lower power generation until equipment can be repaired or replaced and brought back online.

See Note 7, Property, Plant, and Equipment, for more information on the wind storms that damaged equipment at Samson I in 2023.

Corporate and Other Segment

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the Michigan Department of Natural Resources;

the United States Army Corps of Engineers;

the Army Corps;

the Minnesota Department of Natural Resources;

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Regulated Retail Rates Regulatory Commission Authorized ROE Average Common Equity Component

WE – electric, natural gas, and steam (1)

PSCW 10.0% 52.5%

WPS – electric and natural gas (1)

PSCW 10.0% 52.5%

WG – natural gas (1)

PSCW 10.2% 52.5%

WE – Electric, natural gas, and steam PSCW 9.80% 53.0%

WPS – Electric and natural gas PSCW 9.80% 53.0%

WG – Natural gas PSCW 9.80% 53.0%

UMERC – Electric (former WE customers) MPSC 10.1% 55.3%

UMERC – Electric (former WPS customers) MPSC 10.2% 52.94%

PGL – natural gas ICC 9.05% 50.33%

NSG – natural gas ICC 9.67% 51.58%

MERC – natural gas MPUC 9.7% 50.9%

MGU – natural gas MPSC 9.85% 51.5%

(1) In accordance with their most recent rate orders, effective January 1, 2023, each of WE's, WPS's, and WG's base rates reflect a 9.80% authorized ROE and an average common equity component of 53.0%.

PGL – Natural gas (1)

ICC 9.05% / 9.38% 50.33% / 50.79%

NSG – Natural gas (2)

ICC 9.67% 51.58%

MERC – Natural gas (3)

MPUC 9.7% 50.9%

MGU – Natural gas (4)

MPSC 9.85% 51.5%

(1) In accordance with its most recent rate order, effective December 1, 2023, PGL's base rates reflect a 9.38% authorized ROE and an average common equity component of 50.79%.

See Note 26, Regulatory Environment, for more information.

In addition to amounts collected from customers through approved base rates, our utilities have certain recovery mechanisms in place that allow them to recover or refund prudently incurred costs that differ from those approved in base rates.

(2) In accordance with its most recent rate order, effective February 1, 2024, NSG's new base rates reflect a 9.38% authorized ROE and an average common equity component of 52.58%.

See Note 26, Regulatory Environment, for more information.

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(3) In accordance with its most recent rate order, effective March 1, 2024, MERC's base rates will reflect a 9.65% authorized ROE and an average common equity component of 53.0%.

See Note 26, Regulatory Environment, for more information.

(4) In accordance with its most recent rate order, effective January 1, 2024, MGU's base rates reflect a 9.80% authorized ROE and an average common equity component of 51.0%.

See Note 26, Regulatory Environment, for more information.

Embedded within our electric utilities' rates is an amount to recover fuel and purchased power costs.

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Electric Transmission, Capacity, and Energy Markets

In connection with its status as a FERC-approved RTO, MISO operates bid-based energy markets.

In connection with its status as a FERC-approved RTO, MISO operates an energy and ancillary services market and manages the flow of high-voltage electricity across the transmission system in its region.

MISO is responsible for monitoring and ensuring equal access to the electric transmission system in its footprint.

In MISO, base transmission costs are currently being paid by load-serving entities located in the service territories of each MISO transmission owner.

The FERC has previously confirmed the use of the current transmission cost allocation methodology.

Certain additional costs for new transmission projects are allocated throughout the MISO footprint.

As part of MISO, a market-based platform is used for valuing transmission congestion premised upon an LMP system.

In MISO, transmission costs are allocated in accordance with the MISO tariff, which is reviewed and approved by the FERC.

Base transmission costs are paid by load-serving entities located in the service territories of each MISO transmission owner.

Costs for new regional transmission projects are allocated to load-serving entities throughout the MISO footprint, while the costs for new generation interconnections are allocated to the interconnection customer.

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Within MISO, transmission congestion is monetized and included within an LMP that is established through the energy market.

The LMP system includes the ability to hedge transmission congestion costs through ARRs and FTRs.

ARRs are allocated to market participants by MISO, and FTRs are purchased through auctions.

A new allocation and auction were completed for the period of June 1, 2022, through May 31, 2023.

A new allocation and auction was completed for the period of June 1, 2023, through May 31, 2024.

The resulting ARR allocation and the secured FTRs are expected to mitigate our transmission congestion risk for that period.

MISO has an annual zonal resource adequacy requirement to ensure there is sufficient generation capacity to serve the MISO footprint.

To meet this requirement, capacity resources can be acquired through MISO's annual capacity auction, bilateral contracts for capacity, or provided from generating or demand response resources.

While the zone in which our electric utilities’ load resides had sufficient generation capacity resources for the period between June 1, 2022 and May 31, 2023, the MISO North region as a

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whole did not have enough capacity to meet the planning reserve margin for the same time period.

Due to the capacity shortage in the MISO North region, all of its zones cleared at the cost of new entry in the annual auction, which is the maximum clearing price.

To date, there have been sufficient resources in real time operations to meet the demand obligations in the MISO North region.

MISO is implementing a seasonal resource adequacy requirement effective June 1, 2023.

As part of this, the capacity accreditation methodology has changed for thermal resources.

Currently, it is difficult to predict the MISO North region's capacity position for the upcoming planning year.

It is possible that the capacity shortage in the MISO North region will continue as additional resources retire and new resources are delayed.

Our strategy has always been to minimize the amount of capacity we procure from the auction to reduce our exposure to capacity shortages.

This includes managing our generation portfolio, both retirements and new resources, to ensure we do not get in a significant short position.

MISO has seasonal zonal resource adequacy requirements to ensure there is sufficient generation capacity to serve load within each zone and the MISO footprint.

To meet this requirement, load-serving entities can own generation and demand response resources, acquire generation capacity through MISO's annual capacity auction, or acquire generation capacity through bilateral contracts.

The zone in which our electric utilities’ load resides, along with the MISO North region as a whole, had sufficient generation capacity resources to meet their respective planning reserve margins for the period between June 1, 2023 and May 31, 2024.

We manage our electric generation portfolios to minimize their exposure within MISO’s annual capacity auction.

This includes managing the retirement of existing generation resources and the addition of new generation resources to maintain a diversified portfolio to ensure we do not have a significant short position.

Other Electric Regulations

Our electric utilities are subject to the Federal Power Act and the corresponding regulations developed by certain federal agencies.

The Energy Policy Act amended the Federal Power Act in 2005 to, among other things, make electric utility industry consolidation more feasible, authorize the FERC to review proposed mergers and the acquisition of generation facilities, change the FERC regulatory scheme applicable to qualifying cogeneration facilities, and modify certain other aspects of energy regulations and federal tax policies applicable to us.

Additionally, the Energy Policy Act created an Electric Reliability Organization to be overseen by the FERC, which established mandatory electric reliability standards and has the authority to levy monetary sanctions for failure to comply with these standards.

Among other things, the Federal Power Act makes electric utility industry consolidation more feasible and authorizes the FERC to review proposed mergers and the acquisition of generation facilities.

The FERC also oversees the Electric Reliability Organization, which establishes mandatory electric reliability standards and has the authority to levy monetary sanctions for failure to comply with these standards.

WE and WPS are subject to Act 141 in Wisconsin, and UMERC is subject to Public Acts 295 and 342 in Michigan, which contain certain minimum requirements for renewable energy generation.

All of our hydroelectric facilities follow FERC guidelines and/or regulations.

Other Natural Gas Regulations

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The pipelines' transportation and storage services, including PGL's natural gas hub, are regulated by the FERC under the Natural Gas Act and the Natural Gas Policy Act of 1978.

In addition, the Pipeline and Hazardous Materials Safety Administration and the state commissions are responsible for monitoring and enforcing requirements governing our natural gas utilities' safety compliance programs for our pipelines under the United States Department of Transportation regulations.

In addition, the PHMSA and the state commissions are responsible for monitoring and enforcing requirements governing our natural gas utilities' safety compliance programs for our pipelines under the United States Department of Transportation regulations.

These regulations include 49 CFR Part 191 (Transportation of Natural and Other Gas by Pipeline;

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Minimum Federal Safety Standards), and 49 CFR Part 195 (Transportation of Hazardous Liquids by Pipeline).

We also continue to monitor the progress of the PHMSA’s proposed rulemaking titled "Gas Pipeline Leak Detection and Repair," which could have a significant impact on our natural gas utilities.

A final rule is expected to be released in 2024.

We are required to provide natural gas service and grant credit (with applicable deposit requirements) to customers within our service territories.

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These regulations include 49 CFR Parts 191, 192, and 195.

Given that Bluewater is required to route some of its natural gas through Canada, applicable reporting and licensing with the United States Department of Energy and the Canadian National Energy Board are also required, along with routine reporting related to imports and exports.

Given that Bluewater is required to route some of its natural gas through Canada, applicable

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All of our operational wind generating facilities in our non-utility energy infrastructure segment are also subject to the FERC’s regulation of wholesale energy under the Federal Power Act.

reporting and licensing with the United States Department of Energy and the Canadian National Energy Board are also required, along with routine reporting related to imports and exports.

All of our operational renewable generating facilities in our non-utility energy infrastructure segment are also subject to the FERC’s regulation of wholesale energy under the Federal Power Act.

Compliance Costs

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The Compensation Committee reviews recruiting and development programs and priorities, receives updates on key talent, and assesses workforce diversity across the organization.

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As of December 31, 2023, we had the following number of employees, including those represented under union agreements:

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Total employees 7,000 4,128

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We have a local union presence that spans Wisconsin, Illinois, Minnesota, and Michigan.

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Our corporate safety program provides a forum for addressing employee concerns, training employees and contractors on current safety standards, and recognizing those who demonstrate a safety focus.

We monitor and set goals for Occupational Safety and Health Administration lost-time incidents and days away, restricted or transferred metrics, as well as leading indicators, which together raise awareness about employee safety and guide injury-prevention activities.

We monitor and set goals for days away, restricted or transferred metrics, and measurable leading indicators, which together raise awareness about employee safety and guide injury-prevention activities.

We also provide employees various benefits and resources designed to promote healthy living, both at work and at home.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business