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Item 1A. Risk Factors

2026-02-20 compared with 2025-02-21 · 160 added, 162 removed, 359 unchanged (47% of the section changed)

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Risks Related to Legislation and Regulation

Our business is significantly impacted by governmental regulation and oversight.

We are subject to significant state, local, and federal governmental regulations, including regulations by the various utility commissions in the states where we serve customers.

These regulations significantly influence our operating environment, may affect our ability to recover costs from utility customers, affect our ability to implement our corporate strategy, and cause us to incur substantial compliance and other costs.

Changes in regulations, interpretations of regulations, or the imposition of new regulations could also significantly impact us, including requiring us to change our business operations.

Many aspects of our operations are regulated and impacted by government regulation, including, but not limited to:

Our business is significantly impacted by governmental legislation, regulation, and oversight.

We are subject to significant state, local, and federal governmental legislation and regulations, including regulations by the various utility commissions in the states where we serve customers.

Legislation and regulation significantly influence our operating environment, may affect our ability to recover costs from utility customers, affect our ability to implement our corporate strategy, and cause us to incur substantial compliance and other costs.

Changes in legislation or regulations, their interpretation, or the imposition of new legislation or regulations could also significantly impact our business operations.

Many aspects of our operations are impacted by government legislation and regulations, including, but not limited to:

the rates we charge our retail electric, natural gas, and steam customers;

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Future recovery of regulatory assets is not assured and is subject to review and approval by our regulators.

If recovery of regulatory assets is not approved or is no longer deemed probable, these costs would be recognized in current period expense and could have a material adverse impact on our results of operations, cash flows, and financial condition.

Changes in the local and national political, regulatory, and economic environment have had, and may in the future have, an adverse effect on regulatory decisions, which could impair the ability of our utility subsidiaries to recover costs historically collected from customers.

If recovery is not approved or is no longer deemed probable, these costs would be recognized in current period expense and could have a material adverse impact on our results of operations, cash flows, and financial condition.

Changes in the local and national political, regulatory, and economic environment, including significant attention on energy affordability concerns, have had, and may in the future have, an adverse effect on regulatory decisions, which could impair the ability of our utility subsidiaries to recover costs historically collected from customers.

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 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.

For example, the ICC's 2023 final rate order 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 PRP.

PGL will include the costs of necessary infrastructure improvements related to the PRP in future rate cases, thereby subjecting the recovery of these costs to regulatory lag.

In addition, in February 2025, the ICC issued an order setting expectations for PGL's prospective operations under its PRP.

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.

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

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.

The risk of costs being deemed

In February 2026, PGL agreed on the terms of a proposed settlement that would, among other things, resolve all proceedings of the open reconciliation years related to the QIP rider.

As a result, we recorded a charge to income during the fourth quarter of 2025 through an impairment to net property, plant, and equipment and a reduction to revenues.

The proposed settlement is subject to ICC approval.

Otherwise, there can be no assurance that all costs incurred under the QIP rider during the open reconciliation years, including 2017 through 2023, will be deemed recoverable by the ICC, which could have a material adverse impact on PGL’s, and correspondingly our, results of operations, financial condition, and liquidity.

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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.

These permits, approvals, authorizations, certificates, and licenses may be revoked or modified by the agencies that granted them if facts develop that differ significantly from the facts assumed when they were issued.

In addition, permits and other approvals and licenses are often granted for a term that is less than the expected life of the associated facility.

Licenses and permits may require periodic renewal, which may result in additional requirements being imposed by the granting agency.

In addition, permits and other approvals and licenses are often granted for a term that is less than the expected life of the associated facility and may require periodic renewal, which may result in additional requirements being imposed by the granting agency.

In addition, existing regulations may be revised or reinterpreted by federal, state, and local agencies, or these agencies may adopt new laws and regulations that apply to us.

We cannot predict the impact on our business and operating results of any such actions by these agencies.

If we are unable to recover costs of complying with regulations or other associated costs in customer rates in a timely manner, or if we are unable to obtain, renew, or comply with these governmental permits, approvals, authorizations, certificates, or licenses, our results of operations and financial condition could be materially and adversely affected.

If we are unable to recover regulatory compliance costs or other associated costs in customer rates in a timely manner, or if we are unable to obtain, renew, or comply with governmental permits, approvals, authorizations, certificates, or licenses, our results of operations and financial condition could be materially and adversely affected.

We face significant costs to comply with existing and future environmental laws and regulations.

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 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;

Our operations are subject to extensive and evolving federal, state, and local environmental laws, regulations, and permit requirements related to, among other things, air emissions (including, but not limited to CO 2 , methane, mercury, SO 2 , NOx, ozone and other pollutants), protection of natural resources, water quality, wastewater discharges, management of hazardous and toxic substances and solid wastes and soils, and climate change.

Many of these rules are now the subject of a large deregulatory effort by the EPA and have resulted, and are expected to continue to result in, the adoption of new federal, state, and/or local level laws and regulations.

Any EPA actions will require formal rulemaking proceedings and are likely to be subject to legal challenges.

In addition, at the end of 2025, the President issued executive orders directing the DOE to issue orders keeping certain coal plants running for grid reliability despite utilities' plans to retire them.

Future orders impacting our planned retirements of coal plants could impact our ability to execute on our capital plan and to meet our environmental goal.

We continue to monitor the evolving regulatory landscape and standards for impacts on our business operations and financial condition.

Certain of our service territories in Wisconsin are located in areas that, in December 2024, were determined to be in "serious" nonattainment status under the EPA's ozone standard.

In February 2025, the State of Wisconsin filed a petition for review of this classification in the U.S.

Court of Appeals for the Seventh Circuit.

Wisconsin subsequently moved for a stay of the reclassification, which was granted in September 2025, pending the Court’s review.

As a result, southeast Wisconsin has returned to "moderate" status while the underlying lawsuit proceeds.

A nonattainment status of "serious" 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, impacting our ability to execute on our capital plan.

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

operating restrictions on our facilities;

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Failure to comply with these laws, regulations, and requirements, even if caused by factors beyond our control, may result in the assessment of civil or criminal penalties and fines.

We continue to assess the potential cost of complying, and to explore different alternatives in order to comply, with these and other environmental regulations.

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 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.

We continue to assess the cost of compliance and to explore different compliance alternatives with these and other environmental regulations.

The cost of compliance with these regulations, and other factors, has resulted in certain of our coal-fired electric generating units being retired or converted to an alternative type of fuel, and may impact the future operations of our existing fossil-fueled generation.

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

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

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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.

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Further, increased costs recovered through rates could contribute to reduced demand for electricity and natural gas, which could adversely affect our results of operations, cash flows, and financial condition.

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

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.

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

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 our capital plan, which could lead to a possible loss on abandonment and reduced revenues.

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

Although the EPA is pursuing a large deregulatory effort of GHG laws and regulations, significant laws and regulations restricting emissions of GHGs continue to impact our current and planned operations.

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

New or additional restrictive GHG legislation or regulations 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 compliance costs of these and other federal and state regulations, or that cost recovery will not be delayed or otherwise conditioned.

GHG legislation, regulation, or the emission reduction goal, as well as changes in the fuel markets and advances in technology could make electric generating units uneconomic to maintain, 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.

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

Future local, statewide, or nationwide actions like these to regulate GHG emissions could increase the price of natural gas, reduce the demand for natural gas, cause us to accelerate the replacement and/or updating of our natural gas delivery systems, and adversely affect our ability to operate our natural gas facilities.

A significant increase in the price of natural gas may increase rates for our natural gas customers, which could also reduce natural gas demand and revenues.

Future actions like these to regulate GHG emissions in our service territories could increase the price of natural gas resulting in reduced demand for, and revenues from, natural gas, cause us to accelerate the replacement and/or updating of our natural gas delivery systems, and adversely affect our ability to operate our natural gas facilities.

The adoption of electrification initiatives and/or mandates could also result in an increase in electrical demand and increased investment costs for existing or new electrical systems.

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In addition, financial investments in older carbon-intensive technologies may not be fully realized.

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.

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

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

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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, the ability to procure RTCs, legislative and regulatory support for renewable generation, the ability to maintain reliability with demand growth, 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.

We have set a goal for our generation fleet to be net carbon neutral by the end of 2050.

We expect to be in a position to eliminate coal as an energy source by the end of 2032.

In addition, 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.

The ability to achieve this goal 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, the ability to procure renewable thermal credits, legislative and regulatory support for renewable generation, the ability to maintain reliability with demand growth, and the ability to execute our capital plan.

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.

Tax legislation and regulations can adversely affect, among other things, our financial condition, results of operations, cash flows, liquidity, and credit ratings.

Future changes to corporate tax rates or policies, including under Treasury Regulations and guidance issued in connection with the IRA, could require us to take material charges against earnings.

Such changes include, among other things, increasing the federal corporate income tax rate, disallowing or limiting the use of certain tax benefits and carryforwards, limiting interest deductions, and altering the expensing of capital expenditures.

In July 2025, the OBBBA was signed into law, enacting significant modifications to clean-energy tax credits previously provided under the IRA.

The OBBBA provides companies the ability to earn solar and wind tax credits at current credit rates under new beginning of construction rules.

Solar and wind tax incentives can be denied for energy projects that use

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equipment beyond statutory guidelines from prohibited foreign entities or for taxpayers that exceed certain thresholds of equity or debt held by prohibited foreign entities.

Future changes to corporate tax rates or policies, including under Treasury Regulations and guidance issued in connection with the IRA and OBBBA, could require us to take material charges against earnings.

Such changes include, among other things, increasing the federal corporate income tax rate, disallowing or limiting the use of solar and wind tax incentives and other tax benefits and carryforwards, limiting interest deductions, and altering the expensing of capital expenditures.

Our inability to manage these changes, an adverse determination by one of the applicable taxing jurisdictions, or additional interpretations, implementing regulations, amendments, or technical corrections by the Treasury Department, the IRS, or state income tax authorities, could significantly impact our financial results and cash flows.

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

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 also limit our ability to make further investments in renewable energy generating facilities or reduce the returns on our existing investments.

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

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, any of which could result in a material adverse impact on our financial condition and results of operations.

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.

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

Compliance with the mandatory reliability standards could subject our

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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 electric utilities to higher operating costs.

Noncompliance with the mandatory reliability standards could result in sanctions, including substantial monetary penalties, or damage to our reputation.

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.

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As a result, shareholders may be deprived of opportunities to sell some or all of their shares of our common stock at prices that represent a premium over market prices.

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Risks Related to the Operation of Our Business

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

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

These 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 which may occur in the future, the extent to which they may affect us depends on factors beyond our knowledge or control.

We may also be adversely impacted by labor disruptions and productivity as a result of infections, employee attrition, or the inability to replace or maintain appropriate staffing.

The extent to which future public health crises 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 operations are subject to risks arising from the reliability and safety 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 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.

Inherent in electric generation and distribution and natural gas transportation, distribution, and storage activities are a variety of hazards and operational risks, including accidents, operator error, and the breakdown or failure of equipment or processes including leaks, accidental explosions, mechanical problems, fires, discharges or releases of toxic or hazardous substances or gases, and other environmental risks.

Potential breakdown or failure may occur due to severe weather (i.e., storms, tornadoes, floods, droughts, etc.);

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or cybersecurity intrusions.

Any of these events could lead to substantial financial losses, including increased maintenance costs, unanticipated capital expenditures, and a reduction of revenues related to our non-utility renewable energy facilities.

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

Unplanned outages at our power plants may cause us to incur significant costs if we are required to operate our higher cost electric generators or purchase replacement power to satisfy our obligations.

Because our electric generation and renewable energy facilities are interconnected with third-party transmission facilities, the operation of our facilities could also be adversely affected by events impacting their systems.

Unplanned outages at our power plants may reduce our revenues, cause us to incur significant costs if we are required to operate our higher cost electric generators or purchase replacement power to satisfy our obligations, and could result in additional maintenance expenses.

Insurance, warranties, performance guarantees, or recovery through the regulatory process may not cover any or all of these lost revenues or increased expenses, which could adversely affect our results of operations and cash flows.

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These hazards and operational risks could result in serious injury to employees and non-employees, loss of human life, significant damage to property, environmental pollution, and impairment of operations.

They may also 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.

Any of these events could lead to substantial financial losses, including increased maintenance costs, unanticipated capital expenditures, and a reduction of revenues, which could materially and adversely affect our results of operations, financial condition, and cash flows.

The operations of our natural gas utilities depend upon the availability of adequate interstate pipeline transportation capacity and natural gas.

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Interstate pipeline companies transport the natural gas to our natural gas utilities’ systems under firm service agreements that are designed to meet the requirements of their core markets.

Certain of our natural gas facilities have experienced significant disruptions to operations as a result of problems with interstate pipelines.

A significant disruption to interstate pipelines capacity or reduction in natural gas supply due to events including, but not limited to, operational failures or disruptions, hurricanes, tornadoes, floods, freeze-off of natural gas wells, terrorist or physical attacks, cyberattacks, other acts of war, or legislative or regulatory actions or requirements, including remediation related to integrity inspections or regulations and laws enacted to address climate change or other environmental matters, could reduce the normal interstate supply of natural gas and thereby significantly disrupt our operations and/or reduce earnings.

Our operations are subject to various conditions that can result in fluctuations in energy sales to customers, including customer growth and general economic conditions in our service areas, varying weather conditions, and energy conservation efforts.

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Our operations are subject to various conditions that can result in fluctuations in energy sales to customers, including fluctuations in customer growth and general economic conditions in our service areas, varying weather conditions, and energy conservation efforts.

Our results of operations and cash flows are affected by the demand for electricity and natural gas, which can vary greatly based upon:

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Demand for electricity is greater in the summer and winter months when cooling and heating is necessary.

In addition, demand for natural gas peaks in the winter heating season.

As a result, our overall results may fluctuate substantially on a seasonal basis.

In addition, milder temperatures during the summer cooling season and during the winter heating season may result in lower revenues and net income.

Demand for natural gas peaks in the winter heating season.

As a result, our overall results may fluctuate on a seasonal basis and could be negatively impacted by milder temperatures during the summer cooling season and winter heating season.

• Our customers' continued focus on energy conservation .

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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.

Any of these matters, as well as any regulatory delay in adjusting rates as a result of fluctuations in energy demand 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.

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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, as well as damage to wind and solar generation facilities, or other operating equipment.

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.

An extreme weather event could result in damage to distribution and transmission infrastructure, 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

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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.

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.

Extreme weather may also 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.

Any of these events could lead to substantial financial losses including increased maintenance costs, unanticipated capital expenditures, or a reduction of revenues related to our non-utility renewable energy facilities.

The cost of storm restoration efforts may also not be fully recoverable through the regulatory process.

Our corporate strategy may be impacted by policy and legal, technology, market, and reputational risks and opportunities that are associated with the transition to lower GHG emissions.

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.

2025 Form 10-K 29

WEC Energy Group, Inc.

Changes in our corporate strategy to combat climate change, including mitigation and adaptation efforts and technology advancement, may materially adversely impact our results of operations and cash flows.

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.

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

Those expectations are based in part on the core fundamentals of affordability and reliability but are also increasingly focused on our ability to meet rapidly changing demands for new and varied products, services, and offerings.

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.

Efforts to roll back certain environmental rules and social policies and programs may conflict with the expectations of our customers, regulators, or investors, creating additional uncertainty as we look to balance our stakeholders' competing priorities, and could lead to litigation and government investigations.

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.

As it relates to electric generation, a diversified fleet with increasingly clean generation resources may facilitate more efficient financing and lower costs.

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

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

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

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 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.

Increased tensions between the United States and other countries, as well as new, protracted, or escalating regional or international 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 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.

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.

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

Further governmental actions related to trade policy could exacerbate global supply chain disruptions and/or inflation.

Increased costs for labor, materials, and services, as a result of supply chain disruptions, inflation, or tariffs, 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 business operations, financial condition, and/or capital plan.

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 and natural gas generating facilities as part of our capital plan and our goal to be net carbon neutral by 2050.

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 the end of 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 and could delay the release of solar panels to us for our renewables projects.

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

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

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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.

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.

2025 Form 10-K 30

WEC Energy Group, Inc.

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.

We face risks related to providing service to our large-scale customers, including potential customers under our proposed VLC and Bespoke Resources Tariffs, which could impact our business, results of operations, and financial condition.

We are engaged in discussions with a small number of customers to provide power to large-scale data centers being constructed to support AI and other technology capabilities.

Because of the significant demand and energy needs associated with these facilities, extending service to these facilities requires investment in incremental electric infrastructure.

Subject to pending regulatory approvals from the PSCW, WE has made and will continue to make significant infrastructure investments in new solar and battery projects, natural gas power plants, and other generation and distribution assets to power and serve these large-scale data centers and other projects.

Our transmission affiliate, ATC, also has made and will continue to make significant investments in additional transmission infrastructure to serve the increased customer load.

In March 2025, WE filed an application with the PSCW requesting approval to implement a VLC Tariff and a Bespoke Resources Tariff.

Under these proposed inter-connected tariffs, VLCs directly pay for the electricity they consume, along with the power plants and distribution facilities built to serve them and transmission costs allocated to their usage.

The proposed tariffs are designed so that the costs associated with these VLCs are not subsidized by or shifted to residential or other business customers.

WE is incurring significant engineering, design, and equipment costs in advance of receiving approval of the tariffs as well as necessary regulatory and other approvals for the needed generation, distribution, and transmission projects.

If any of these projects are canceled for any reason, including due to lower than forecasted demand or for 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 already been recorded as an asset, an impairment loss may need to be recorded.

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

WE requires VLCs to enter into payment and cancellation agreements which obligate the VLC to reimburse WE for all costs associated with projects requested by the customer until service agreements are executed under the approved tariffs.

Reimbursement is also required if, among other things, the VLC terminates the payment and cancellation agreement or reduces its anticipated load, or regulatory approval is not received for the construction of a project.

Despite these risk mitigating efforts, we may still experience significant losses or delayed recovery of these costs.

In addition, the ability to obtain regulatory approval of one or more projects and/or the VLC and Bespoke Resources Tariffs may affect our ability to recover costs with acceptable conditions for these large-scale customers.

The ability to complete large capital projects is dependent upon a number of factors, including the ability to obtain financing of such projects on satisfactory terms and conditions.

Along with the significant capital spend, a portion of the expected earnings growth from these projects will result in an increase in AFUDC as part of CWIP, with recovery of these costs delayed until the capital project is placed in service.

As a result of this delay in receiving cash proceeds, we may be required to issue additional debt and/or equity to support these projects, which could negatively impact our earnings, balance sheet, and/or credit metrics.

Other dependent factors include the ability to secure regulatory permits, secure sufficient land for the siting of power generation facilities, obtain necessary interconnection or transmission service in MISO, garner public support for these projects, and the ability of suppliers and contractors to fulfill their obligations under contracts.

Successful completion of these projects may be further influenced by changes in law or regulation, such as new legislation or regulation impacting large data center cost allocation or environmental compliance requirements, trade and tariff issues, including those associated with imported solar panels, as well as supply chain delays or disruptions, workforce challenges, and other events beyond our control.

If these projects are significantly delayed or become subject to cost overruns or cancellation due to these or other factors, we could incur additional costs and termination payments or face increased risk of potential write-offs of our investments in these projects.

The occurrence of any of these events may materially affect the schedule, cost, and performance of these projects.

This concentration of business with a small number of customers in an industry based on emerging technologies, including AI and machine learning, presents several risks.

We cannot predict the rate at which or the extent to which these emerging technologies will be broadly adopted and successful as business models.

Changes in industry practice or advances in these technologies could reduce the demand for electricity to power data centers.

Significant capital spend to build out required infrastructure or a downturn in business could cause the loss of these customers or may weaken their financial condition, liquidity and/or creditworthiness, including their ability to satisfy their reimbursement obligations to us.

Similarly, customers may reduce their investment in these new technologies or abandon them entirely.

2025 Form 10-K 31

WEC Energy Group, Inc.

Any of these situations may result in the early termination or non-renewal of these customers’ electric service agreements or renewal on terms less favorable to us.

Electric service agreements with these customers include provisions for early termination payments, but they may not fully protect against all risks.

While the assets constructed to serve these customers may otherwise be useful in our utility operations, there is a risk that we may not be able to fully recover our investment in or a return on those assets.

Our business, results of operations, and financial condition could be materially adversely affected as a result of any or all of these factors.

Our operations are subject to risks beyond our control, including but not limited to, cybersecurity intrusions, terrorist or other physical attacks, acts of war, or unauthorized access to personally identifiable information.

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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

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.

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.

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

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Threats to our systems and operations continue to emerge as new ways to compromise components into our systems or networks are developed.

Any operational disruption or environmental repercussions caused by on-going or future threats to our assets and technology systems could result in a significant decrease in our revenues or significant reconstruction or remediation costs, which could materially and adversely affect our results of operations, financial condition, and cash flows.

2025 Form 10-K 32

WEC Energy Group, Inc.

could materially and adversely affect our results of operations, financial condition, and cash flows.

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.

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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

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.

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.

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.

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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 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 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 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.

2025 Form 10-K 33

WEC Energy Group, Inc.

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.

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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.

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.

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.

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Basis risk cannot be entirely eliminated and can adversely affect our financial condition and results of operations.

2025 Form 10-K 34

WEC Energy Group, Inc.

Our non-utility renewable energy facilities are exposed to risks through participation in various regional power markets.

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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.

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To the extent these costs are not allowed to be reallocated by our regulators or there is any regulatory delay in adjusting rates, a counterparty default under these agreements could have a negative impact on our results of operations and cash flows.

2025 Form 10-K 35

WEC Energy Group, Inc.

Risks Related to Economic and Market Volatility

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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

2024 Form 10-K 36

WEC Energy Group, Inc.

earn their approved rates of return.

An increase in interest rates may adversely affect our results of operations and the ability of our regulated subsidiaries to 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.

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• Changes in tax policy;

• Changes in investment criteria of institutional investors or banks, including any policies that would limit or restrict funding for companies with fossil fuel-related investments;

• Changes in investment criteria of institutional investors or banks;

• War or the threat of war;

• Growth in AFUDC during periods of significant construction;

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

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.

A downgrade in our credit ratings could negatively affect our ability to access capital at reasonable costs and/or require the posting of collateral.

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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.

We may be obligated to pay for coal

2025 Form 10-K 36

WEC Energy Group, Inc.

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.

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

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;

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Deregulation or other changes in law in the states where we serve our customers could allow third-party suppliers to contract directly with customers for their natural gas and electric supply requirements.

In addition, legislation or regulation that supports distributed energy technologies or that allows third party sales from such technologies could result in further competition.

This increased competition in the retail and wholesale markets could have a material adverse financial impact on us.

Increased competition in these markets could have a material adverse financial impact on us.

Certain jurisdictions in which we operate, including Michigan and Illinois, have adopted retail choice.

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The iron ore mine located in the Upper Peninsula of Michigan is excluded from this cap.

When a customer switches to an alternative electric supplier, we continue to provide distribution and customer service functions for the customer.

When a customer switches to an alternative electric supplier, we continue to provide distribution and customer service functions for the

2025 Form 10-K 37

WEC Energy Group, Inc.

Although Illinois has adopted retail choice, there is currently little or no impact on the net income of our Illinois utilities as they still earn a distribution charge for transporting the natural gas for these customers.

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In connection with its status as a FERC-approved RTO, MISO implemented bid-based energy markets that are part of the MISO Energy Markets.

All market participants, including us, must submit day-ahead and/or real time bids and offers for energy at locations across the MISO region.

MISO then calculates the most efficient solution for all of the bids and offers made into the market that day and establishes an LMP that reflects the market price for energy.

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

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.

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.

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

The FERC rules related to transmission are designed to facilitate competition in the wholesale electricity markets among regulated utilities, non-utility generators, wholesale power marketers, and brokers by providing greater flexibility and more choices to wholesale customers, including initiatives designed to encourage the integration of renewable sources of supply.

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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.

At December 31, 2024, our goodwill was $3,052.8 million.

Other long-lived assets, including intangible assets, are evaluated for impairment on an annual basis or whenever events or circumstances occur that indicate that an asset's carrying value may not be recoverable.

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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 1A. Risk Factors