What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-02-21 compared with 2024-02-22 · 146 added, 126 removed, 375 unchanged (42% of the section changed)

12 unchanged sentences

wholesale power service practices;

electric reliability requirements and accounting;

electric reliability requirements;

participation in the interstate natural gas pipeline capacity market;

18 unchanged sentences

These decisions, which may come from any level of government, may cause us to cancel or delay current or planned projects, to reduce or delay other planned capital expenditures, or to pay for investments or otherwise incur costs that our utilities may not be able to recover through rates or otherwise.

In November 2023, the ICC issued final rate orders for PGL and NSG, with PGL rates effective December 1, 2023.

In the rate order, the ICC disallowed certain previously incurred capital costs in Illinois, which resulted in PGL and NSG recording an impairment loss in the fourth quarter of 2023.

In addition, the ICC paused spending on PGL's SMP for at least one year, causing uncertainty of recovery of costs for existing and future projects.

Due to the expiration of the QIP rider in December 2023, PGL had included the costs of necessary infrastructure improvements related to the SMP in its rate case.

In January 2024, the ICC granted a rehearing to PGL and NSG with a limited scope.

Disallowance of PGL's and NSG's capital costs will not be part of the rehearing.

Subsequent to the rehearing, we anticipate appealing the ICC's disallowance of these capital costs to the Illinois Circuit Court, which may result in extended uncertainty related to the recovery of existing and future investments in capital expenditures and our natural gas infrastructure in Illinois, and may impact future capital plans.

Prior to its expiration, the QIP rider provided PGL with recovery of, and a return on, qualifying natural gas infrastructure investments that are placed in service between regulatory rate reviews.

In its November 2023 final rate orders for PGL and NSG, the ICC disallowed certain previously incurred capital costs, which resulted in PGL and NSG recording impairment losses in the fourth quarter of 2023, and caused PGL to pause spending on its SMP.

After a limited rehearing, the ICC issued a written order in May 2024 approving additional spending for emergency work related to SMP projects.

PGL and NSG have appealed the orders to the Illinois Appellate Court.

On February 20, 2025, the ICC issued an order setting expectations for PGL's prospective operations under its SMP.

The ICC directed us to focus on replacing all cast and ductile iron pipe that has a diameter under 36 inches by January 1, 2035.

The ICC also indicated that failure to comply with this directive could subject us to civil penalties under Illinois statute.

As a result of these proceedings and order, the recovery of existing and future investments in capital expenditures and our natural gas infrastructure in Illinois is uncertain and future capital plans may be impacted.

Prior to its expiration in December 2023, the QIP rider provided PGL with recovery of, and a return on, qualifying natural gas infrastructure investments that were placed in service between regulatory rate reviews.

Due to the expiration of the QIP rider, PGL included the costs of necessary infrastructure improvements related to the SMP in its rate case, thereby subjecting the recovery of these costs to regulatory lag.

In its August 2024 final order on PGL's 2016 annual reconciliation, the ICC disallowed certain capital costs, which resulted in PGL recording a pre-tax charge to income during the third quarter of 2024 related to the disallowance and the previously recognized return on these investments.

This rider continues to be subject to an annual reconciliation whereby costs are reviewed for accuracy and prudency.

There can be no assurance that all costs incurred under the QIP rider during the open reconciliation years, which include 2017 through 2023, will be deemed recoverable by the ICC.

Regulatory lag, as well as the risk of costs being deemed unrecoverable during the review of the outstanding reconciliations, could have a material adverse impact on PGL’s, and correspondingly our, results of operations, financial position, and liquidity.

The risk of costs being deemed

2024 Form 10-K 25

WEC Energy Group, Inc.

unrecoverable during the review of the outstanding reconciliations, could have a material adverse impact on PGL’s, and correspondingly our, results of operations, financial position, and liquidity.

We believe we have obtained the necessary permits, approvals, authorizations, certificates, and licenses for our existing operations, have complied in all material respects with all of their associated terms, and that our businesses are conducted in accordance with applicable laws.

8 unchanged sentences

CO 2 , methane, mercury, SO 2 , and NOx), protection of natural resources, water quality, wastewater discharges, and management of hazardous and toxic substances and solid wastes and soils.

The EPA has recently adopted and implemented (or is in the process of implementing) new environmental regulations, with more in the proposal process.

These include regulations that govern the emission of NOx, ozone, fine particulates, and other air pollutants under the CAA through the NAAQS, climate change, NSPS for GHG emissions from new, modified, and reconstructed fossil-fueled power plants, other air quality regulations, and water quality regulations.

For example, the EPA finalized regulations under the CWA that govern cooling water intake structures at our power plants, revised again the effluent guidelines for steam electric generating plants, and along with the Army Corps, released a final rule revising the definition of WOTUS that may impact projects requiring federal permits.

Several of these rules were challenged or reviewed by agencies under the Biden Administration's Executive Order 13990, which creates additional uncertainty.

As a result of these challenges and reviews, existing environmental laws and regulations may be revised or new laws or regulations may be adopted at the federal, state, or local level.

The EPA has recently adopted and implemented new environmental regulations, which include regulations that govern the emission of NOx, ozone, fine particulates, and other air pollutants under the CAA through the NAAQS, climate change, other air quality regulations, and water quality regulations.

For example, in 2024, the EPA revised the effluent guidelines for steam electric generating plants, published a final rule lowering the PM limit under the MATS, lowered the primary (health-based) annual PM 2.5 NAAQS, published the Greenhouse Gas Power Plant Rule for fossil-fired steam generating units, issued a final Mandatory Greenhouse Gas Reporting Rule, and finalized a rule for CCR that applies to landfills, historic fill sites, and projects where CCR was placed at a power plant site.

Some of these rules could be challenged or reviewed by agencies under the new presidential administration, which creates additional uncertainty.

As a result of these potential challenges and reviews, existing environmental laws and regulations may be revised or new laws or regulations may be adopted at the federal, state, or local level.

Certain of our service territories in Wisconsin are located in areas determined to be in "serious" nonattainment status under the EPA's ozone standard.

This nonattainment status could affect future permitting activities for our facilities, including additional costs associated with more strenuous emission control requirements or the need to purchase emission reduction credits.

In addition, economic growth in these areas may be constrained by the inability to obtain the required permits, limiting investment and expansion over the coming years, including our ability to execute on our capital plan.

We incur significant capital and operating resources to comply with environmental laws, regulations, and requirements, including costs associated with the installation of pollution control equipment;

6 unchanged sentences

As a result of these compliance costs and other factors, certain of our coal-fired electric generating facilities have become uneconomical to maintain and operate, which has resulted in these units being retired or converted to an alternative type of fuel.

As part of our commitment to a cleaner energy future, we have already retired more than 1,900 MWs of coal-fired generation since the beginning of 2018.

We expect to retire approximately 1,800 MWs of additional fossil-fueled generation by the end of 2031, and plan to replace a portion of the retired capacity by building and owning zero-carbon-emitting renewable generation facilities.

We continue to evaluate the conversion of certain coal units to natural gas.

As part of our commitment to a cleaner energy future, we have already retired nearly 2,500 MWs of fossil-fueled generation since the beginning of 2018.

We expect to retire approximately 1,200 MWs of additional coal-fired generation by the end of 2031, and plan to replace a portion of the retired capacity by building and owning zero-carbon-emitting renewable and reliable, efficient natural gas generation facilities.

We have also started implementing co-firing with natural gas at certain of our coal-fired units and are evaluating the conversion to natural gas.

Our electric and natural gas utilities are also subject to significant liabilities related to the investigation and remediation of environmental impacts at certain of our current and former facilities and at third-party owned sites.

We accrue liabilities and defer costs (recorded as regulatory assets) incurred in connection with our former manufactured gas plant sites.

These costs include all costs incurred to date that we expect to recover, management's best estimates of future costs for investigation and remediation and related legal expenses, and are net of amounts recovered (or that may be recovered) from insurance or other third parties.

Due to the potential for the imposition of stricter standards and greater regulation in the future, the possibility that other potentially responsible parties may not be willing or financially able to contribute to cleanup costs, a change in conditions or the discovery of additional contamination, our remediation costs could increase, and the timing of our capital and/or operating expenditures in the future may accelerate or could vary from the amounts currently accrued.

We accrue liabilities and defer

2024 Form 10-K 26

WEC Energy Group, Inc.

costs (recorded as regulatory assets) incurred in connection with our former manufactured gas plant sites.

Litigation over environmental issues and claims of various types, including property damage, personal injury, common law nuisance, and citizen enforcement of environmental laws and regulations, occurs frequently throughout the United States.

6 unchanged sentences

Our operations, capital expenditures, and financial results may be affected by the impact of greenhouse gas legislation, regulation, and emission reduction goals.

There is significant attention to issues concerning climate change.

Management expects this attention to continue since climate change is one of President Biden's primary initiatives, with significant actions being taken by his administration.

As a result, we expect the EPA and states to finalize and implement additional regulations to restrict emissions of GHGs.

There has been significant attention to issues concerning climate change as well as activism from certain stakeholders, including institutional investors and other sources of financing, to accelerate the transition to lower and limit GHG emissions.

The EPA and some states have adopted and are implementing regulations to restrict emissions of GHGs.

There have also been increasing efforts to introduce and adopt electrification initiatives and/or mandates and other efforts to reduce or eliminate reliance on natural gas as an energy source.

In addition, there is increasing activism from other stakeholders, including institutional investors and other sources of financing, to accelerate the transition to lower GHG emissions.

Costs associated with such legislation, regulation, and emission reduction goals could be significant within our electric and natural gas operations.

GHG regulations that may be finalized in the future, at either the federal or state level, may cause our environmental compliance spending to differ materially from the amounts currently estimated.

New or additional GHG regulations, at either the federal or state level, may cause our environmental compliance spending to differ materially from the amounts currently estimated.

There is no guarantee that we will be allowed to fully recover costs incurred to comply with these and other federal and state regulations or that cost recovery will not be delayed or otherwise conditioned.

These regulations, as well as changes in the fuel markets and advances in technology, could make additional electric generating units uneconomic to maintain or operate, may impact how we operate our existing fossil-fueled power plants and biomass facility, and could cause us to retire and replace units earlier than planned under the ESG Progress Plan, which could lead to a possible loss on abandonment and reduced revenues.

In addition, our natural gas delivery systems and natural gas storage fields may generate fugitive gas as a result of normal operations and as a result of excavation, construction, and repair.

Fugitive gas typically vents to the atmosphere and consists primarily of methane.

CO 2 is also a byproduct of natural gas consumption.

These regulations, as well as changes in the fuel markets and advances in technology, could make additional electric generating units uneconomic to maintain or operate, may impact how we operate our existing fossil-fueled power plants and biomass facility, and could cause us to retire and replace units earlier than planned under our capital plan, which could lead to a possible loss on abandonment and reduced revenues.

In a movement toward electrification, certain states and municipalities near or in our service territories have passed legislation or are considering ordinances banning natural gas used in new construction in order to limit GHG emissions.

For example, the city of Chicago is considering an ordinance that would ban the use of natural gas in most new buildings, and the ICC is exploring the role of natural gas in the future and issues related to decarbonization of the natural gas distribution system in Illinois.

For example, the ICC is exploring the role of natural gas in the future and issues related to decarbonization of the natural gas distribution system in Illinois.

There have also been efforts to restrict residential natural gas-fired appliances.

6 unchanged sentences

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

We also believe we will be in a position to eliminate coal as an energy source by the end of 2032.

We continue to monitor the financial and operational feasibility of taking more aggressive action to further reduce GHG emissions in order to limit future global temperature increases.

We continue to reduce methane emissions by improving our natural gas

We have a goal to eliminate coal as an energy source by the end of 2032.

2024 Form 10-K 27

WEC Energy Group, Inc.

distribution systems.

We continue to monitor the financial and operational feasibility of taking more aggressive action to further reduce GHG emissions in order to limit future global temperature increases.

We continue to focus on methane emission reductions by improving our natural gas distribution systems.

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

The ability to achieve these reductions in CO 2 and methane emissions depends on many external factors, including the ability to make operating refinements, the retirement of less efficient generating units, the development of relevant energy technologies, the use of RNG throughout our natural gas utility systems, and the ability to execute our capital plan.

These efforts could impact how we operate our electric generating units and natural gas facilities and lead to increased competition and regulation, all of which could have a material adverse effect on our operations and financial condition.

There can be no guarantee that we will achieve our targets.

Changes in tax legislation, IRS audits, or our inability to use certain tax benefits and carryforwards, may adversely affect our financial condition, results of operations, and cash flows, as well as our credit ratings.

10 unchanged sentences

Under the IRA, a transferability option also allows us to sell these tax credits to third parties.

This is a new market that may require additional regulations and guidance from taxing authorities.

This is a relatively new market that may require additional regulations and guidance from taxing authorities.

The amount of tax credits we earn depends on available government incentives and policies, the amount of electricity produced, the applicable tax credit rate, or the amount of the investment in qualifying property.

Any reductions or eliminations of tax credits or other governmental incentives that promote renewable energy generating facilities, including the repeal or amendment of portions of the IRA and the executive order issued by the new presidential administration, could make it less conducive for the development and operation of renewable energy facilities.

In addition, a variety of operating and economic factors, including transmission constraints, adverse weather conditions, and breakdown or failure of equipment, could significantly reduce the PTCs generated by the renewable projects we have invested in, resulting in a material adverse impact on our financial condition and results of operations.

The imposition of additional taxes, tariffs, or other assessments related to renewable energy projects or the equipment necessary to generate or deliver it, as well as any reductions or eliminations of tax credits or other governmental incentives that promote renewable energy generating facilities, may limit our ability to make further investments in renewable energy generating facilities or reduce the returns on our existing investments.

The imposition of additional taxes, tariffs, or other assessments related to renewable energy projects or the equipment necessary to generate or deliver it, as well as any reductions or eliminations of tax credits or other governmental incentives that promote renewable energy generating facilities, may also limit our ability to make further investments in renewable energy generating facilities or reduce the returns on our existing investments.

We are also uncertain as to how credit rating agencies, capital markets, the FERC, or state public utility commissions will treat any future changes to federal or state tax legislation.

4 unchanged sentences

The critical infrastructure protection standards focus on controlling access to critical physical and cybersecurity assets.

Compliance with the mandatory reliability standards could subject our electric utilities to higher operating costs.

If our electric utilities are found to be in noncompliance with the mandatory reliability standards, they could be subject to sanctions, including substantial monetary penalties, or damage to our reputation.

Compliance with the mandatory reliability standards could subject our

2024 Form 10-K 28

WEC Energy Group, Inc.

electric utilities to higher operating costs.

Provisions of the Wisconsin Utility Holding Company Act limit our ability to invest in non-utility businesses and could deter takeover attempts by a potential purchaser of our common stock that would be willing to pay a premium for our common stock.

10 unchanged sentences

and access to the capital markets at unreasonable terms or rates.

Public health crises, including epidemics and pandemics, and any related government responses could also impair our ability to develop, construct, and operate facilities.

Public health crises and any related government responses could also impair our ability to develop, construct, and operate facilities.

Risks include extended disruptions to supply chains and inflation, resulting in increased costs for labor, materials, and services, which could adversely impact our ability to implement our corporate strategy.

We may also be adversely impacted by labor disruptions and productivity as a result of infections, employee attrition, and a reduced ability to replace departing employees as a result of employees who leave or forego employment to avoid any required precautionary measures.

Despite our efforts to manage the impacts of public health crises, including epidemics and pandemics, that may occur in the future, the extent to which they may affect us depends on factors beyond our knowledge or control.

As a result, we are unable to determine the potential impact any such public health crises, including epidemics and pandemics, may have on our business plans and operations, liquidity, financial condition, and results of operations.

Despite our efforts to manage the impacts of public health crises which may occur in the future, the extent to which they may affect us depends on factors beyond our knowledge or control.

As a result, we are unable to determine the potential impact any such public health crises may have on our business plans and operations, liquidity, financial condition, and results of operations.

Our operations are subject to risks arising from the reliability of our electric generation, transmission, and distribution facilities, natural gas infrastructure facilities, natural gas storage fields, renewable energy facilities, and other facilities, as well as the reliability of third-party transmission providers.

Our financial performance depends on the successful operation of our electric generation, natural gas and electric distribution facilities, natural gas storage fields, and renewable energy facilities.

Our financial performance depends on the successful operation of our electric generation and transmission, natural gas and electric distribution facilities, natural gas storage fields, and renewable energy facilities.

The operation of these facilities involves many risks, including operator error and the breakdown or failure of equipment or processes.

1 unchanged sentence

catastrophic events (i.e., fires, earthquakes, and explosions);

public health crises, including epidemics and pandemics;

public health crises;

significant changes in water levels in waterways;

37 unchanged sentences

As part of our planning process, we estimate the impacts of changes in customer growth and general economic conditions, weather, and customer energy conservation efforts, but risks still remain.

The growth of data centers and development of associated technology may make it more difficult to accurately forecast customer demand or to recover additional costs.

Any of these matters, as well as any regulatory delay in adjusting rates as a result of reduced sales from effective conservation measures or the adoption of new technologies, could adversely impact our results of operations and financial condition.

In addition, elimination or reduced financial support of programs that provide energy assistance to our customers, including the Low Income Home Energy Assistance Program, could impact the demand for energy and/or adversely impact our liquidity.

Our operations are subject to the effects of global climate change.

1 unchanged sentence

If climate changes occur that result in extreme temperatures in our service territories, our financial results could be adversely impacted by lower electric and natural gas usage and higher natural gas costs.

An extreme weather event could result in downed wires and poles or damage to other operating equipment, which could result in us incurring significant restoration costs and foregoing sales of energy and lost revenues.

An extreme weather event could result in downed wires and poles, as well as damage to wind and solar generation facilities, or other operating equipment.

This could result in us incurring significant restoration costs at our utilities and/or at WECI, and foregoing sales of energy and lost revenues.

Extreme weather in summer could cause electric load to be interrupted or certain customers to be curtailed who participate in load management programs.

Additionally, an extreme weather event could also cause the cost of natural gas purchased for our natural gas utility customers and for the use of fuel at our generation facilities to be temporarily driven significantly higher than our normal winter weather expectations.

Although our utilities have regulatory mechanisms in place for recovering all prudently incurred natural gas costs, our regulators could disallow recovery or order the refund of any costs determined to be imprudent.

2024 Form 10-K 30

WEC Energy Group, Inc.

In addition, our operations could be adversely affected and our facilities placed at greater risk of damage should changes in global climate produce, among other possible conditions, unusual variations in temperature and weather patterns, which could result in more intense, frequent and extreme weather events, such as wind storms including derecho events, floods, tornadoes, snow and ice storms, or abnormal levels of precipitation.

winter weather expectations.

In addition, our operations could be adversely affected and our facilities placed at greater risk of damage should changes in global climate produce, among other possible conditions, unusual variations in temperature and weather patterns, which could result in more intense, frequent and extreme weather events, such as storms, including derecho events, with high winds, lightning, and hail, floods, drought, wild fires, tornadoes, snow and ice storms, or abnormal levels of precipitation.

Extreme weather may result in unexpected increases in customer load, requiring us to procure additional power at wholesale prices for our retail operations, unpredictable curtailment of customer load by MISO to maintain grid reliability, or other grid reliability issues.

3 unchanged sentences

In addition, changes in policy to combat climate change, including mitigation and adaptation efforts, and technology advancement, each of which can also accelerate the implications of a transition to lower emissions, may materially adversely impact our results of operations and cash flows through significant capital expenditures and investments in renewable generation.

Our operations and future results may be impacted by changing expectations and demands of our customers, regulators, investors, and other stakeholders, including heightened emphasis on environmental, social, and governance concerns.

Our operations and future results may be impacted by changing expectations and demands of our customers, regulators, investors, and other stakeholders.

Our ability to execute our strategy and achieve anticipated financial outcomes are influenced by the expectations of our customers, regulators, investors, and other stakeholders.

1 unchanged sentence

Additionally, the risks of global climate change continues to shape our customers’ sustainability goals and energy needs, as well as the investment and financing criteria of investors.

Failure to meet these increasing expectations or to adequately address the risks and external pressures from regulators, customers, investors, and other stakeholders may impact our reputation and affect our ability to achieve favorable outcomes in future rate cases or our results of operations.

Failure to meet these expectations or to adequately address the risks and external pressures may impact our reputation and affect our ability to achieve favorable outcomes in future rate cases or our results of operations.

The new presidential administration's efforts to roll back certain climate and diversity, equity, and inclusion policies and programs may conflict with the expectations of our customers, regulators, and investors, creating additional uncertainty as we look to balance our stakeholders' competing priorities, and could lead to litigation and government investigations.

Furthermore, the increasing use of social media may accelerate and increase the potential scope of negative publicity we might receive and could increase the negative impact on our reputation, business, results of operations, and financial condition.

1 unchanged sentence

Conversely, jurisdictions utilizing more carbon-intensive generation such as coal may experience difficulty attracting certain investors and obtaining the most economical financing terms available.

Furthermore, with this heightened emphasis on environmental, social, and governance concerns, and climate change in particular, there is an increased risk of litigation.

Our operations and corporate strategy may be adversely affected by supply chain disruptions and inflation.

Our business is dependent on the global supply chain to ensure that equipment, materials, and other resources are available to both expand and maintain services in a safe and reliable manner.

Protracted, expanding or escalating regional conflicts, including the conflicts in Ukraine, Israel, and parts of the Middle East, as well as strained relationships between the United States and other countries related to such conflicts, could further contribute to current domestic and global supply chain disruptions that are delaying the delivery, and in some cases resulting in shortages of, materials, equipment, and other resources that are critical to our business operations.

Protracted, expanding or escalating regional or international conflicts, including the conflicts involving Ukraine, Israel, and parts of the Middle East, as well as strained relationships between the United States and other countries related to such conflicts, could result in domestic and global supply chain disruptions that delay the delivery, or result in shortages of, materials, equipment, and other resources that are critical to our business operations.

Failure to eliminate or manage the constraints in the supply chain may eventually impact the availability of items that are necessary to support normal operations as well as materials that are required to implement our corporate strategy for continued utility and infrastructure growth, including our renewable energy projects.

Moreover, prices of equipment, materials, and other resources have increased as a result of these supply chain disruptions and may continue to increase in the future, as a result of inflation.

Moreover, prices of equipment, materials, and other resources have increased as a result of supply chain disruptions and may continue to increase in the future, as a result of inflation.

Increases in inflation raise our costs for labor, materials, and services, and failure to secure these resources on economically acceptable terms, as well as any regulatory delay in adjusting rates to account for increased costs, may adversely impact our financial condition and results of operations.

We are actively involved with multiple significant capital projects, which are subject to a number of risks and uncertainties that could adversely affect project costs and completion of construction projects.

Our business requires substantial capital expenditures for investments in, among other things, capital improvements to our electric generating facilities, electric and natural gas distribution infrastructure, natural gas and LNG storage, and other projects, including projects for environmental compliance.

We also expect to continue constructing and investing in renewable energy generating

In addition, the imposition of new tariffs, or other changes in United States trade policy, could trigger retaliatory actions by affected countries.

A “trade war” of this nature or other governmental action related to tariffs or international trade agreements or policies has the potential to result in or exacerbate global supply chain disruptions and/or inflation, which could result in an adverse impact on our business operations, financial condition, and/or capital plan.

2024 Form 10-K 31

WEC Energy Group, Inc.

facilities as part of the ESG Progress Plan and our goal to be net carbon neutral by 2050, including projects in our non-utility energy infrastructure segment.

In addition, WBS continues to invest in technology and the development of software applications to support our businesses.

We also expect to continue constructing and investing in renewable energy and natural gas generating facilities as part of our capital plan and our goal to be net carbon neutral by 2050.

In addition, we continue to invest in technology and the development of software applications to support our businesses.

Achieving the intended benefits of any large construction project is subject to many uncertainties, some of which we will have limited or no control over, that could adversely affect project costs and completion time.

Supply chain disruptions, including solar panel shortages and delays, increasing material costs, government tariffs, and other factors, could impact the timing of completion of our renewable projects.

For example, the UFLPA's prohibition on imports of solar panels manufactured with certain silica-based products originating in Xinjiang, China, has delayed the release of solar panels to us for our renewables projects.

For example, the UFLPA's prohibition on imports of solar panels manufactured with certain silica-based products originating in Xinjiang, China, has and could delay the release of solar panels to us for our renewables projects.

Additional risks include, but are not limited to, the ability to adhere to established budgets and time frames;

5 unchanged sentences

rising interest rates;

the impact of public health crises, including epidemics and pandemics;

the impact of public health crises;

other governmental actions;

3 unchanged sentences

If construction of commission-approved projects should materially and adversely deviate from the schedules, estimates, and/or projections on which the approval was based, our regulators may deem the additional capital costs as imprudent and disallow recovery of them through rates, and otherwise available PTCs and ITCs for renewable energy projects could be lost or lose value.

In addition, regulators, in a future rate proceeding, may alter the timing or amount of certain costs for which recovery is allowed, such as the case in the ICC's November 2023 rate orders for PGL and NSG.

Our subsidiaries sometimes enter into equipment purchase orders and construction contracts and incur engineering and design service costs in advance of receiving necessary regulatory approvals and/or siting or environmental permits.

Efforts to pause approvals related to wind development could threaten our ability to execute our capital plan.

Other renewable energy sources, including solar developments, could also be at risk.

In addition, regulators, in a future rate proceeding, may alter the timing or amount of certain costs for which recovery is allowed, such as was the case in the ICC's November 2023 rate orders for PGL and NSG.

Our subsidiaries sometimes incur significant engineering, design, and equipment costs in advance of receiving necessary regulatory approvals and/or siting or environmental permits.

If any of these projects are canceled for any reason, including failure to receive necessary regulatory approvals and/or siting or environmental permits, significant cancellation penalties under the equipment purchase orders and construction contracts could occur.

In addition, if any construction work or investments have been recorded as an asset, an impairment may need to be recorded in the event the project is canceled.

We may not be allowed to recover these penalties and other costs incurred in customer rates, which could have a material adverse effect on our results of operations.

In addition, if any construction work or investments have already been recorded as an asset, an impairment may need to be recorded.

Despite mitigation efforts we have undertaken, we may still experience significant losses or delayed recovery of these costs.

To the extent that delays occur, costs become unrecoverable, tax credits are lost or lose value, or we or third parties with whom we invest and/or partner otherwise become unable to effectively manage and complete capital projects, our results of operations, cash flows, and financial condition may be adversely affected.

2 unchanged sentences

however, these prior attacks have not had a material impact on our system or business operations.

Despite the implementation of security measures, all assets and systems are potentially vulnerable to disability, failures, or unauthorized access due to physical or cybersecurity intrusions caused by human error, vendor bugs, terrorist or other physical attacks (including potential attacks on our substations and other electric distribution equipment), acts of war, or other malicious acts.

These threats could result in a full or partial disruption of our ability to generate, transmit, purchase, or distribute electricity or natural gas or cause environmental repercussions.

All of our assets and systems are potentially vulnerable to disability, failures, or unauthorized access due to physical or cybersecurity intrusions caused by human error, vendor bugs, terrorist or other physical attacks (including potential attacks on our substations and other electric distribution equipment), acts of war, or other malicious acts.

Cybersecurity threats could result in a full or partial disruption of our ability to generate, transmit, purchase, or distribute electricity or natural gas or cause environmental repercussions.

If our assets or systems were to fail, be physically damaged, or be breached, and were not recovered in a timely manner, we may be unable to perform critical business functions, and data, including sensitive information, could be compromised.

2 unchanged sentences

A successful physical or cybersecurity intrusion may occur despite our security measures or those we require of our vendors, including compliance with reliability and critical infrastructure protection standards.

Successful cybersecurity intrusions, including those targeting the electronic control systems used at our generating facilities and electric and natural gas transmission, distribution, and storage systems, could disrupt our operations and result in loss of service to customers.

Successful cybersecurity intrusions, including those

2024 Form 10-K 32

WEC Energy Group, Inc.

targeting the electronic control systems used at our generating facilities and electric and natural gas transmission, distribution, and storage systems, could disrupt our operations and result in loss of service to customers.

Attacks may come through ransomware, software updates or patches, or firmware that hackers can manipulate.

1 unchanged sentence

The risk of such intrusions may also increase our capital and operating costs as a result of having to implement increased security measures for protection of our information technology and infrastructure.

2023 Form 10-K 31

WEC Energy Group, Inc.

Our continued efforts to integrate, consolidate, and streamline our operations have also resulted in increased reliance on current and recently completed projects for technology systems.

The failure to enhance existing information technology systems and implement new technology, could adversely affect our operations.

We implement procedures to protect our systems, but we cannot guarantee that the procedures we have implemented to protect against unauthorized access to secured data and systems are adequate to safeguard against all security breaches.

The failure of any of these or other similarly important technologies, or our inability to support, update, expand, and/or integrate these technologies across our subsidiaries could materially and adversely impact our operations, diminish customer confidence and our reputation, materially increase the costs we incur to protect against these risks, and subject us to possible financial liability or increased regulation or litigation.

The failure to enhance existing information technology systems and adopt or successfully implement new technology could adversely affect our operations.

Cybersecurity threats, including those leveraging AI, continue to increase, and the security measures and preventative actions we take to reduce the risk of cybersecurity incidents and protect our systems against unauthorized access to secured data and systems may be insufficient to safeguard against all security breaches.

The failure of any of these important technologies, or our inability to support, update, expand, and/or integrate these technologies across our subsidiaries, could materially and adversely impact our operations, diminish customer confidence and our reputation, materially increase the costs we incur to protect against these risks, and subject us to possible financial liability or increased regulation or litigation.

Our business requires the collection and retention of personally identifiable information of our customers, shareholders, and employees, who expect that we will adequately protect such information.

8 unchanged sentences

The costs of repairing damage to our facilities, operational disruptions, protecting personally identifiable information, and notifying impacted persons, as well as related legal claims, may also not be recoverable in rates, may exceed the insurance limits on our insurance policies, or, in some cases, may not be covered by insurance.

Adoption of AI technologies could adversely affect our business, reputation, or financial results.

We are using AI primarily through services provided by our third party vendors.

In addition, we are exploring the use of AI, including generative AI, and its ability to enhance the services we offer.

There are significant risks involved in developing and deploying AI, and there can be no assurance that the use of AI will enhance our services or be beneficial to our business, including with respect to the efficiency and resiliency of our systems.

Our AI-related efforts may give rise to risks related to accuracy, bias, discrimination, intellectual property infringement or misappropriation, data privacy, and cybersecurity, among others.

In addition, the adoption of AI may subject us to new or enhanced governmental or regulatory scrutiny, laws, rules, directives, or regulations governing the use of AI, as well as litigation, ethical concerns, negative customer perceptions as to automation and AI, legal liability or other complications that could adversely affect our business, reputation, or financial results.

We may not be able to recover our investments in AI technology through our regulatory proceedings.

Similarly, as AI continues to evolve, we may not be able to adopt and implement AI as quickly as our customers or communities desire or regulators may require.

AI is a relatively new and rapidly evolving technology, and we are unable to predict all of the risks that may result from our and our vendors' adoption of AI initiatives.

Advances in technology, and legislation or regulations supporting such technology, could make our electric generating facilities less competitive and may impact the demand for natural gas.

1 unchanged sentence

We generate power at central station power plants and utility-scale renewable generation facilities to achieve economies of scale and produce power at a competitive cost.

Distributed generation technologies that produce power, including fuel cells, microturbines, wind turbines, solar cells, and related energy storage devices, have technologically improved and have become more cost competitive than they were in the past.

Recently enacted legislation, including the IRA and the Infrastructure Investment and Jobs Act, promotes the construction and cost-effectiveness of renewable energy generation, including distributed generation technologies for self-supply of electricity by our customers and third parties.

Distributed generation technologies that produce power, including fuel cells, microturbines, wind turbines, solar

2024 Form 10-K 33

WEC Energy Group, Inc.

cells, and related energy storage devices, have technologically improved and have become more cost competitive than they were in the past.

Recent legislation, including the IRA and the Infrastructure Investment and Jobs Act, has promoted the construction and cost-effectiveness of renewable energy generation, including distributed generation technologies for self-supply of electricity by our customers and third parties.

Increased use of technologies such as private solar and battery storage in our service territories could reduce our recovery of fixed costs, could result in customers leaving the electric distribution system, and could cause an increase in customer net energy metering, which allows customers with private solar to receive bill credits for surplus power at the full retail amount.

Over time, customer adoption of these technologies could result in our electric utilities not being able to fully recover the costs and investment in generation.

In December 2022, the PSCW issued a declaratory ruling finding that a third-party financed DER is not a “public utility” under Wisconsin law.

Although the finding was limited to the specific facts and circumstances of the lease presented in that petition and is being appealed, similar findings or a broader policy position could have a material adverse impact on our business operations.

Federal and state regulations and other efforts designed to promote and expand the use of distributed generation technologies also incentivize modernization of the electric distribution grid to, among other things, accommodate two-way flows of electricity and increase the grid's capacity to interconnect to these distributed generation technologies.

1 unchanged sentence

There is also a risk that advances in technology will continue to reduce the costs of these alternative methods of producing power to a level that is competitive with that of central station and utility-scale renewable power production.

2023 Form 10-K 32

WEC Energy Group, Inc.

In addition, we cannot predict the effect that development of alternative energy sources or new technology may have on our natural gas operations, including whether subsidies of alternative energy sources by local, state, and federal governments might be expanded, or what impact this might have on the supply of or the demand for natural gas.

In addition, regulatory support of co-locating generation near data centers could impact our generation planning and its related cost recovery and could cause our generation to be less cost effective.

We also cannot predict the effect that development of alternative energy sources or new technology may have on our natural gas operations, including whether subsidies of alternative energy sources by local, state, and federal governments might be expanded, or what impact this might have on the supply of or the demand for natural gas.

If these technologies become cost competitive and achieve economies of scale, our market share could be eroded, and the value of our generating facilities and natural gas distribution systems could be reduced.

Advances in technology, or changes in legislation or regulations, could also change the channels through which our customers purchase or use power and natural gas, which could reduce our sales and revenues or increase our expenses.

We transport, distribute, and store natural gas, which involves numerous risks that may result in accidents and other operating risks and costs.

Inherent in natural gas distribution and storage activities are a variety of hazards and operational risks, such as leaks, accidental explosions, and mechanical problems, which could materially and adversely affect our results of operations, financial condition, and cash flows.

We generate and distribute electricity and transport, distribute, and store natural gas, which involves numerous risks that may result in accidents and other operating risks and costs.

Inherent in electric generation and distribution and natural gas transportation, distribution, and storage activities are a variety of hazards and operational risks, such as leaks, accidental explosions, mechanical problems, fires, discharges or releases of toxic or hazardous substances or gases, and other environmental risks, which could materially and adversely affect our results of operations, financial condition, and cash flows.

In addition, these risks could result in serious injury to employees and non-employees, loss of human life, significant damage to property, environmental pollution, impairment of operations, and substantial losses to us.

The location of natural gas pipelines and storage facilities near populated areas, including residential areas, commercial business centers, and industrial sites, could increase the level of damages resulting from these risks.

The location of natural gas pipelines and storage facilities near populated areas could increase the level of damages resulting from these risks.

These activities may subject us to litigation and/or administrative proceedings from time to time, which could result in substantial monetary judgments, fines, or penalties against us, or be resolved on unfavorable terms.

Further, delays in the replacement of aging infrastructure as a result of the ICC's orders in the PGL and NSG rate cases may lead to increased costs and disruptions in operations that could also negatively impact our financial results.

Further, delays in the replacement of aging infrastructure as a result of the ICC's orders in the 2023 PGL and NSG rate cases, as well as the ICC's decision in PGL's 2016 QIP rider reconciliation proceeding, may lead to increased costs and disruptions in operations that could also negatively impact our financial results.

We face risks related to our non-utility renewable energy facilities that could impact our return on investment or have a negative impact on our financial condition or results of operations.

1 unchanged sentence

Wind conditions or solar irradiance that is unfavorable or below our estimates can cause electricity production, and therefore revenues and PTCs earned from non-utility renewable energy facilities, to be substantially below our expectations.

We base our decisions about which sites to acquire and operate in part on the findings of studies of long-term meteorological data in the proposed area, which includes wind speed and prevailing direction or solar irradiance and seasonal variations of each.

We based our decisions about which sites to acquire and operate in part on the findings of studies of long-term meteorological data in the proposed area.

Actual conditions at these sites, however, may not conform to the results of these studies.

An increase in frequency and severity of weather conditions could cause disruptions to our sites to become more frequent and severe.

Wind and solar equipment can be damaged by natural events such as lightning strikes that damage blades or in-ground electrical systems used to collect electricity from turbines or panels.

Sites also may experience production shutdowns or delayed restoration of production during extreme weather conditions resulting in, among other things, damage to solar panels, icing on wind turbine blades, or restricted access to sites.

Our renewable sites may experience performance issues and production shutdowns as a result of the quality of the wind turbine and solar panel components used in construction, as well as due to the availability of replacement parts.

In addition, an increase in frequency and severity of weather conditions could cause disruptions to our sites to become more frequent and severe.

Wind and solar equipment can be damaged by natural events such as lightning strikes that damage blades or in-ground systems used to collect electricity from turbines or panels.

Sites also may experience production shutdowns or delayed restoration of production during

2024 Form 10-K 34

WEC Energy Group, Inc.

extreme weather conditions resulting in, among other things, damage to solar panels, icing on wind turbine blades, or restricted access to sites.

The costs of repairing damage to these facilities may exceed the insurance limits on our insurance policies or may be outside the coverage afforded by our insurance policies.

2 unchanged sentences

Customers may raise objections to force majeure declarations for these or similar operating issues.

The failure to satisfy minimum operational or availability requirements under the PPAs, including PPAs related to projects under construction, could result in payment of damages or termination of the PPAs.

The failure to satisfy minimum operational or availability requirements under the PPAs could result in payment of damages or termination of the PPAs.

Lower wholesale market prices for electricity may adversely affect the financial results for certain of our renewable projects, depending on the structure of the related PPA.

2 unchanged sentences

Reduced government incentives for wind and solar energy, increases in operating and maintenance costs, new regulations, or incentives that favor other forms of energy could reduce the demand for renewable energy and may adversely affect our results of operations.

We do not own all the property and other sites on which our projects are located, and our rights may be subordinate to the rights of lienholders and leaseholders, which could have an adverse effect on our business and financial condition.

Existing and future projects may be located on property on other sites occupied under long-term easements, leases, and rights of way.

The ownership interests on these properties may be subject to mortgages securing loans or other liens and other easements, lease rights and rights

2023 Form 10-K 33

WEC Energy Group, Inc.

of way of third parties that were created previously.

As a result, some of our real property rights may be subordinate to the rights of these third parties, and the rights of our operating subsidiaries to use the property could be lost or curtailed.

We do not own all the property and other sites on which our projects are located.

Projects may be located on property or other sites occupied under long-term easements, leases, and rights of way.

The ownership interests on these properties may be subject to mortgages securing loans or other liens and other easements, lease rights, and rights of way of third parties that were created previously.

As a result, some of our real property rights may be subordinate to the rights of third parties, and the rights of our operating subsidiaries to use the property could be lost or curtailed, which could have an adverse effect on our business and financial conditions.

We have entered into long-term PPAs for the majority of our non-utility renewable energy operations with a small number of customers where their payment is based on the energy produced, and in some cases the REC value created, by our facilities.

Although initial agreements are often ten years or more, in the future we may not be able to replace expiring PPAs related to our non-utility renewable energy facilities with contracts on acceptable terms, including at prices that support operation of the facility on a profitable basis.

Decreases in the retail prices of electricity supplied by traditional utilities or the pricing of other clean energy sources in the regions where our non-utility renewable energy facilities are located could harm our ability to offer competitive pricing and to sign PPAs with customers.

10 unchanged sentences

If a transmission network to which one or more of our facilities is connected experiences down time for system emergencies, force majeure, safety, reliability, maintenance or other operational reasons, we may lose revenues and PTCs and be exposed to non-performance penalties and claims from our customers.

This risk of curtailment of our non-utility renewable energy facilities may result in a reduced return on our investments, and we may not be compensated for lost energy and ancillary services.

Curtailment of our non-utility renewable energy facilities may result in a reduced return on our investments, and we may not be compensated for lost energy and ancillary services.

As members of these RTOs, we are also subject to certain additional risks, including the allocation of losses among existing members caused by unreimbursed defaults of other participants in these markets and resolution of complaint cases seeking refunds of revenues previously earned by members of these markets.

1 unchanged sentence

In addition, these RTOs may assess costs resulting from improved transmission reliability, reduced transmission congestion, and firm transmission rights.

2024 Form 10-K 35

WEC Energy Group, Inc.

We are a holding company and rely on the earnings of our subsidiaries to meet our financial obligations.

8 unchanged sentences

Events such as an aging workforce without appropriate replacements, the mismatch of skill sets to future needs, or the unavailability of contract resources may lead to operating challenges or increased costs.

These operating challenges include lack of resources, loss of knowledge, and a

2023 Form 10-K 34

WEC Energy Group, Inc.

lengthy time period associated with skill development.

These operating challenges include lack of resources, loss of knowledge, and a lengthy time period associated with skill development.

Failure to hire and obtain replacement employees, including the ability to transfer significant internal historical knowledge and expertise to the new employees, may adversely affect our ability to manage and operate our business.

10 unchanged sentences

Risks Related to Economic and Market Volatility

Our business is dependent on our ability to successfully access capital markets on competitive terms and rates.

Our business is dependent on our ability to successfully access credit and capital markets on competitive terms and rates.

We rely on access to credit and capital markets to support our capital requirements, including expenditures for our utility infrastructure and to comply with future regulatory requirements, to the extent not satisfied by the cash flow generated by our operations.

4 unchanged sentences

Successful implementation of our long-term business strategies, including capital investment, is dependent upon our ability to access the capital markets, including the banking and commercial paper markets, on competitive terms and rates.

Continued elevation of, or further increases in, interest rates may adversely affect our results of operations and the ability of our regulated subsidiaries to earn their approved rates of return.

Continued elevation of, or further increases in, interest rates may adversely affect our results of operations and the ability of our regulated subsidiaries to

2024 Form 10-K 36

WEC Energy Group, Inc.

earn their approved rates of return.

High interest rates may also impair our ability to cost-effectively finance capital expenditures and to refinance maturing debt.

10 unchanged sentences

• The overall health and view of the utility and financial institution industries.

2023 Form 10-K 35

WEC Energy Group, Inc.

If any of these risks or uncertainties limit our access to the credit and capital markets or significantly increase our cost of capital, it could limit our ability to implement, or increase the costs of implementing, our business plan, which, in turn, could materially and adversely affect our results of operations, cash flows, and financial condition, and could limit our ability to sustain our current common stock dividend level.

3 unchanged sentences

Changes in rating methodologies by the rating agencies could also have a negative impact on credit ratings.

Any downgrade by the rating agencies could:

• Increase borrowing costs under certain existing credit facilities;

• Require the payment of higher interest rates in future financings and possibly reduce the pool of creditors;

• Decrease funding sources by limiting our access to the commercial paper market;

• Limit the availability of adequate credit support for our operations;

• Trigger collateral requirements in various contracts.

Fluctuating commodity prices could negatively impact our operations.

Any downgrade by the rating agencies could increase borrowing costs under certain existing credit facilities or future financings, decrease funding sources, limit the availability of adequate credit support for our operations, and trigger collateral requirements in various contracts.

The fluctuation in demand for certain commodities and their respective prices could negatively impact our operations.

Our operating and liquidity requirements are impacted by changes in the forward and current market prices of natural gas, coal, electricity, renewable energy credits, and ancillary services.

2 unchanged sentences

The cost of natural gas may increase because of disruptions in the supply of natural gas due to a curtailment in production or distribution, international market conditions, the demand for natural gas, and the availability of shale gas and potential regulations and/or other government action affecting its accessibility.

Our electric utilities also burn coal at certain of their electric generation facilities.

We may be obligated to pay for coal deliveries under our contracts even if our coal-fired generating facilities do not operate enough to fully utilize the amounts of coal covered by the contracts.

For Wisconsin retail electric customers, our utilities bear the risk for the recovery of fuel and purchased power costs within a symmetrical 2% fuel tolerance band compared to the forecast of fuel and purchased power costs established in their respective rate structures.

1 unchanged sentence

Our natural gas utilities receive dollar-for-dollar recovery of prudently incurred natural gas costs from their natural gas customers.

Changes in commodity prices could result in:

Changes in the demand for commodities and their respective prices could result in:

• Higher working capital requirements, particularly related to natural gas inventory, accounts receivable, and cash collateral postings;

• Reduced profitability to the extent that lower revenues, increased bad debt, and higher interest expense are not recovered through rates;

2024 Form 10-K 37

WEC Energy Group, Inc.

• Reduced profitability to the extent that lower revenues, higher fuel costs, increased bad debt, and higher interest expense are not recovered through rates;

• Higher rates charged to our customers, which could impact our competitive position;

6 unchanged sentences

While we have coal supply and transportation contracts in place, we cannot assure that the counterparties to these agreements will be able to fulfill their obligations to supply coal to us or that we will be able to take delivery of all the coal volume contracted for.

Coal deliveries may occasionally be restricted because of rail congestion and maintenance, derailments, weather,

2023 Form 10-K 36

WEC Energy Group, Inc.

public health crises, including epidemics and pandemics, and supplier financial hardship.

Supplier financial hardship is a result of decreased demand for coal due to increased natural gas and renewable energy generation, the impact of environmental regulations, and environmental concerns related to coal-fired generation.

Coal deliveries may occasionally be restricted because of rail congestion and maintenance, derailments, weather, public health crises, and supplier financial hardship as a result of decreased demand for coal.

If we are unable to obtain our coal requirements under our coal supply and transportation contracts, we may be required to purchase coal at higher prices or we may be forced to reduce generation at our coal-fired units, which could lead to increased fuel costs.

25 unchanged sentences

We are required to follow MISO's instructions when dispatching generating units to support MISO's responsibility for maintaining the stability of the transmission system.

MISO also implemented an ancillary services market for operating reserves that schedules energy and ancillary services at the same time as part of the energy market, allowing for more efficient use of generation assets in the MISO Energy Markets.

MISO also implemented an ancillary services

2024 Form 10-K 38

WEC Energy Group, Inc.

market for operating reserves that schedules energy and ancillary services at the same time as part of the energy market, allowing for more efficient use of generation assets in the MISO Energy Markets.

These market designs continue to have the potential to increase the costs of transmission, the costs associated with inefficient generation dispatching, the costs of participation in the MISO Energy Markets, and the costs associated with estimated payment settlements.

2 unchanged sentences

Technology changes in the power and fuel industries also have significant impacts on wholesale transactions and related costs.

2023 Form 10-K 37

WEC Energy Group, Inc.

cannot predict the impact of these and other developments or the effect of changes in levels of wholesale supply and demand, which are driven by factors beyond our control.

We currently cannot predict the impact of these and other developments or the effect of changes in levels of wholesale supply and demand, which are driven by factors beyond our control.

Volatility in the securities markets, interest rates, changes in assumptions, market conditions, and other factors may impact the performance of our benefit plan holdings and other investment funds.

6 unchanged sentences

Our funding requirements could be impacted by a decline in the market value of plan assets, changes in interest rates, changes in demographics (including the number of retirements), or changes in life expectancy assumptions.

In addition, we maintain rabbi trusts to fund our deferred compensation plans and other investments funds, which from time to time, hold equity and debt investments that are subject to market fluctuations.

In addition, we maintain rabbi trusts to fund our deferred compensation plans and other investments funds, including our clean energy funds, which from time to time, hold equity and debt investments that are subject to market fluctuations.

Decreases in investment performance of these assets could materially adversely affect our results of operations, cash flows, and financial condition.

General Risks

We have recorded goodwill and other long-lived assets, including intangible assets, that could become impaired.

We have recorded goodwill and other long-lived assets, including intangible assets, which could become impaired.

We assess goodwill for impairment on an annual basis or whenever events or circumstances occur that would more than likely indicate that the carrying amount of our reporting unit's net assets exceeds the reporting unit's fair value.

2 unchanged sentences

If goodwill or other long-lived assets are deemed to be impaired, we may be required to incur a non-cash charge to earnings that could materially adversely affect our results of operations.

See the risk factor titled "Our business is significantly impacted by governmental regulation and oversight" for more information about long-lived assets that were impaired as a result of the ICC's November 2023 rate orders for PGL and NSG.

We may be unable to obtain insurance on acceptable terms or at all, and the insurance coverage we do obtain may not provide protection against all significant losses.

5 unchanged sentences

Any losses for which we are not fully insured or that are not covered by insurance at all could materially adversely affect our results of operations, cash flows, and financial position.

2024 Form 10-K 39

WEC Energy Group, Inc.

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 1A. Risk Factors