WEC Energy Group (NYSE:WEC) reported first-quarter financial results on Tuesday. The transcript from the company's first-quarter earnings call has been provided below.
Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more.
The full earnings call is available at https://events.q4inc.com/attendee/951468178
Summary
WEC Energy Group reported first quarter 2026 earnings of $2.45 per share, marking a solid start to the year with a focus on execution, financial discipline, and operating efficiency.
The company is on track to meet its 2026 earnings guidance of $5.51 to $5.61 per share, assuming normal weather conditions, and expects long-term earnings per share growth of 7-8% annually from 2026 to 2030.
Strategic initiatives include significant investments in data centers in Wisconsin, with Microsoft and Vantage Data Centers as key partners, and plans to invest $37.5 billion over five years to meet growing demand.
Recent regulatory updates include the approval of a VLC tariff structure by the Wisconsin Public Service Commission, which is expected to support economic development and protect financial health.
Operational highlights feature the extension of Oak Creek units' operating lives to ensure reliability and affordability, alongside ongoing construction of solar, battery storage, and natural gas facilities.
Full Transcript
OPERATOR
It. Good afternoon and welcome to WEC Energy Group's conference call for first quarter 2026 results. This call is being recorded for rebroadcast and all participants are in a listen only mode at this time. After the presentation, the conference will be open to analysts for questions and answers. In conjunction with this call, a package of detailed financial information is [email protected] A replay will be available approximately two hours after the conclusion of this call. Before the conference call begins. Please note that all statements in the presentation other than historical facts are forward looking statements that involve risks and uncertainties that are subject to change at any time. Such statements are based on management's expectations at the time that they are made, in addition to the assumptions and other factors referred to in connection with the statements. Factors described in WEC Energy Group's latest Form 10K and subsequent reports filed with the securities and Exchange Commission could cause actual results to differ materially from those contemplated during the discussions. WEC Energy Group's earnings per share will be based on diluted earnings per share unless otherwise noted. And now it's my pleasure to introduce Scott Lauber, President and Chief Executive Officer of WEC Energy Group.
Scott Lauber (President and Chief Executive Officer)
Good afternoon everyone and thank you for joining us today as we discuss our results for the first quarter of 2026. Here with me are Shaw Liu, our Chief Financial Officer, and Beth Stracha, Senior Vice President of Corporate Communications and Investor Relations. As you saw from our news release this morning, we reported first quarter 2026 earnings of $2.45 a share. We're off to a solid start to the year. Our results reflect our continued focus on execution, financial discipline and operating efficiency. Just a couple of weeks ago, we received an oral decision from the Wisconsin Commission on the Tariff we proposed for Very large customers, or VLCs. We believe this decision solidifies our future growth and protects all customers and shareholders by making sure data centers pay their full share. I'll provide more information on that shortly. We're on track to deliver results in line with our 2026 earnings guidance of $5.51 to $5.61 a share. This of course, assumes normal weather for the remainder of the year. In a few minutes, Shaw will walk through our financial results and outlook in more detail. But first let me highlight the strong economic growth in our region that's the foundation of our robust capital plan. We continue to see significant economic development in Wisconsin. Just last month, Microsoft brought its first data center online in Mount Pleasant ahead of schedule and construction continues at the site. As a reminder, Microsoft has purchased more than 2,200 acres to date in the I94 corridor south of Milwaukee. We are preparing to serve forecasted demand of 2.36 gigawatts in this region through 2030 with opportunity for further expansion. And to the north of Milwaukee, you'll recall that Vantage Data Centers has signed on to develop facilities for Oracle on approximately 1900 acres. Vantage continues to work on the initial phase of its data center project which is planned for 670 acres. Vantage has stated that that is expected to invest $15 billion to complete this phase in 2028. Construction continues and the first facility could come online late in 2027. We currently have 1.3 gigawatts of demand for this Vantage site in our forecast over the next five years. Looking to the future, this site has the potential to reach 3.5 gigawatts of demand over time and there's other other notable growth in the state. As a recent example, Milwaukee Tool has announced plans to further expand its campus in our territory, including a new research and development facility. Waukesha Engine also announced plans to expand upon its local operation and employee base. In addition, we're starting to see good housing development. In fact, realtor.com recognized Racine county, home of the Microsoft site, as one of the nation's hottest housing markets. We're committed to meeting the growing demand across our service areas as we invest in our system for increased capacity and reliability. Our five year capital plan includes $37.5 billion of projected investments. It's based on projects that are low risk and highly executable with a good portion dedicated to the very large customers. In total, by the end of 2030, we expect approximately 15% of our asset base to be attributable to these very large customers. As you recall, we project long term earnings per share growth of 7 to 8% a year on a compound annual basis between 2026 and 2030. This is based on the midpoint of our 2025 adjusted guidance. We expect that growth rate to accelerate to the upper half of the range starting in 2028. Now let me give you an update on our capital projects. This March we had a solar facility go into service with total capital of about $225 million. The Wisconsin Commission has approved the purchase of three additional solar projects and a battery storage project. In total, we plan to invest approximately $730 million in these newly approved projects. Construction continues on the new natural gas facilities in Paris and Oak Creek, Wisconsin. We have our labor force and supply chain lined up to bring these projects online according to schedule. We expect the Paris Rice units in the Oak Creek combustion turbines to start coming online in late 2027. Also at our Oak Creek site, we recently announced plans to extend the operating lives of units 7 and 8. We expect to have units available to meet high energy demand periods through 2027 rather than retiring them at the end of this year. The decision is based on two critical factors, reliability and affordability for our customers. Overall, we have a highly a high level of confidence in our ability to execute on our capital plan and continue our growth trajectory. Now turning to the regulatory front, first let's update you on Wisconsin and our VLC tariff. After completing its review, the Public Service Commission verbally approved the tariff structure on April 24th. We expect the written order in the few weeks. As a reminder, this tariff provides a balance approach reliable electric service for our very large customers with a predictable cost profile, protection of other customers from bearing any cost to serve these very large customers, protection of the company's financial health and support for economic development and growth in the region. The Commission approved the return on equity in the range of 10.48 to 10.98% and the equity ratio of 57% for our non VLC customers. On April 1, we filed rate requests with the Wisconsin Commission for forward looking test years 2027 and 2028. Our proposed plans would help us continue to strengthen key infrastructure and deliver the energy our customers depend on while remaining focused on affordability for our customers. We expect final orders by the end of the year with new rates effective in January 2027 and 2028. And in Illinois, just last week we filed a proposed settlement with the Illinois Commerce Commission. If approved, these agreements will resolve all open proceedings related to the customer's uncollectible and QIP riders. As you recall, we filed a rate request for our Illinois utilities in January for test year 2027. A key driver of this request is support the Pipe Retirement Program in Chicago. The Illinois Commerce Commission continues to review our filing. We expect the decision by the end of the year. In summary, we remain focused on executing our capital investment plan. Now I'll turn things over to Shah.
Shah Liu
Thank you Scott. Our first quarter 2026 earnings of $2.45 per share reflects an 18 cent increase compared to the first quarter of 2025. Our earnings package includes a comparison of first quarter results. On page 12, I'll walk through the significant drivers. Starting with our utility operations. Earnings were $0.17 higher versus the first quarter of 2025. Let me highlight a couple of key drivers. Weather negatively impacted quarter over quarter earnings by approximately $0.02 compared to normal conditions. We estimate that weather had a $0.01 negative impact in the first quarter of 2026 versus a $0.01 positive impact for the same period in 2025. Rate base growth contributed $0.17 to earnings, including $0.09 of incremental AFUDC equity from projects under construction. Day to day O&M was $0.05 favorable in the first quarter. This includes a $0.02 gain from a planned asset sale in Illinois during first quarter this year. The rest of the favorability was largely due to the timing of certain maintenance and benefit costs, which we expect to reverse throughout the rest of the year. For 2026, we continue to expect day to day O&M to increase 3 to 5% when compared to 2025 actuals. Next, let me give you some color on our weather. Normal retail electric deliveries excluding the iron ore mine compared to Q1 last year. We saw 1.3% growth this quarter, led by the large commercial and industrial price which grew 3%. This is in line with our forecast for the year. We still expect electric sales to grow around 1.5%. At American Transmission Company earnings increased a penny compared to the first quarter of 2025 as a result of continued capital investment. Turning to our energy infrastructure segment, earnings were $0.04 higher in 1Q26 compared to the same period in 2025, driven largely by higher operating income from WEC infrastructure. WEC Energy Group also benefited from a full quarter of operations from the Hearten 3 solar project acquired in February 2025. Next, you'll see that earnings from the corporate and other segment increased $0.03 driven by favorable tax timing. In terms of common equity, we locked in about $455 million in Q1 this year. This includes $25 million issued under our Employee Benefit Plan and $430 million via the ATM program under Forward contracts that we will settle in the future. Remember, we expect to issue up to $1.1 billion of common equity this year, so through the first quarter we have accounted for almost half of our expected equity need for 2026 going forward. As a reminder, any incremental capital beyond the current plan is expected to be funded with 50% equity content. Now let me comment on guidance. As Scott mentioned earlier, we are reaffirming our 2026 earnings guidance of $5.51 to $5.61 per share, assuming normal weather for the rest of the year. For the second quarter we're expecting a range of 76 to 82 cents per share. This accounts for April weather and assumes normal weather for the rest of the quarter. With that, I'll turn it back to Scott.
Scott Lauber (President and Chief Executive Officer)
Thank you, Shah. Now, as you may recall, our board, that's January meeting, increased the dividend by 6.7%. This marks the 23rd consecutive year that our shareholders will be rewarded with higher dividends. The increase is consistent with our plan to grow the dividend rate at the 6.5 to 7%. We're optimistic about continued growth in the region and our company's future. Operator. We are now ready for the question and answer portion of the call.
OPERATOR
Now we will take your questions. The question and answer session will be conducted electronically. To ask a question, please press the star key followed by the digit 1 on your phone. If you're using a speakerphone, turn off your mute function to allow your signal to reach our equipment. We will take as many questions as time permits. Once again, press star and then one on your phone to ask a question. Your first question comes from the line Afshar Pereza with Wells Fargo, Please go ahead.
Alex
Hey, good afternoon, everyone. It's actually Alex on for Char. Thanks for taking our questions. Sounds good, Alex. So just obviously you're seeing a lot of growth on the data center front. You know, you have Microsoft and Vantage projects and you've kind of highlighted some upsides there. But can you maybe talk a little bit more to the extent that you can, , are you seeing additional interest from other hyperscaler customers in the state? And just to add on, there's been, , obviously a lot of local opposition in some parts of the state. So can you just talk about, , your strategy and overall confidence level around attracting new customers despite some of the headlines we've seen.
Scott Lauber (President and Chief Executive Officer)
Sure, sure. Let me kind of phrase this and look at it in total. When you think about, you know, we've got Microsoft and the southeastern Wisconsin region and then north and Vantage site, when you look at that, we have about 3.9 gigawatts in our five year plan. And if you just look at the acreage and do some back of the envelope math, you could see how these sites, which are already been approved and have the ability to put data centers on, could add another 4 to 5 gigawatts of capacity on those sites alone. So we see tremendous growth on already the available sites that we have in the works and construction is starting on a good portion of them. And then you think of the other data centers, you know, we are in discussions with a few others, I think, you know, very optimistic now that we have the final VLC tariff and we'll see that final order come out in the next few weeks. A little more clarity, you know, I expect to have more information on our third quarter call and anticipate we hopefully have another announcement debate on that third quarter call.
Alex
Got it. That's very helpful. I guess just switching gears here. Just want to touch on Point Beach. You know, you've obviously mentioned you're in discussions there. Just if you were to, you know, go ahead with building sort of incremental generation, can you maybe provide some sort of sensitivity around the capex opportunity there and just maybe any sense on possible timing?
Scott Lauber (President and Chief Executive Officer)
Thanks. Sure. And we're going through the planning process right now. We always go through the summer and go through our generation planning process and with our very large customers to factor in additional growth along with what we need on the generation side to serve our native load. And as we talked about in the last call, that Point beach ppa, the prices are pretty high. We're going to look at affordability for our customers at this time. We're planning that, , we're going to have to replace that and we'll put that in our five year plan this fall. Most likely replace it with some gas, perhaps a combined cycle. Remember that PPA ends the first unit ends in like 2030 and the second unit ends in 2033. So we have some time but it'll start working into our planning cycle. As just a rule of thumb, about a gigawatt, , is about two to two and a half billion dollars. And this is, , over those two units it's about 500 for each. So that's about a gigawatt. But when we look at our planning assumptions, it's about 2 to 2.5 billion for every gigawatt we add. And you think about that as we also think about the very large customers. Hope that helps.
Alex
Great. I'll leave it there. Definitely. Thank you. I'll leave it there.
Scott Lauber (President and Chief Executive Officer)
Thank you.
OPERATOR
Your next question comes from the line of Richard Sunderland with Truist Securities. Please go ahead.
Richard Sunderland (Equity Analyst)
Hey, good afternoon. Thanks for the time today. Absolutely. Richard, picking up some of the commentary on the VLC tariff,. I think the revisions from the commission saw the threshold move down to a lower level, maybe 100 megawatts if I'm recalling correctly. Curious if that captures more load than you were expecting to run through the VLC tariff, in any ramifications on your plan as a result of that. And then it sounds like sort of customer interest overall now that you've gotten to the other side of a VLC outcome is sort of firming up. But again, just curious more broadly in the context of that load side revision, how you're thinking about the tariff impacting economic development going forward?
Scott Lauber (President and Chief Executive Officer)
Sure. And a great question. And when you think about it, we proposed 500 megawatts, which is, , it's smaller than the two data centers that we have going right now. The load going down to the hundred megawatts. We don't have any current customers that fall into that range. So it doesn't affect any of our current customers. And we'll see as we talk to a future load. You know, if there's something in that 200 megawatt, how does that affect and how does it look at the economics with our tariff? And we'll address that if, if we see something at the time. But right now, moving it to 100 does not affect our economic development in either direction. Maybe a little positive that it actually opened up the door for some smaller data centers and we can show that they're paying their full share. So not concerned at all about going to the 100 megawatts.
Richard Sunderland (Equity Analyst)
Perfect. Thanks for framing that. And then turning to Illinois, it sounds like again, more progress that you've been able to put up in the state, although still more to come on the rate case as well. Could you speak a little bit more to the data points that are sort of emerging along the way here, how you see conversations trending overall in the state and kind of what you have an eye to over the balance of the year to get those rate orders?
Scott Lauber (President and Chief Executive Officer)
Sure, sure. So a couple things, you know, we just filed the settlement which I think has taken off 12 cases related to uncollectibles in the previous QIP rider. So an extremely long period. We filed that just the other day that had the support of the AG, the Illinois Commerce Commission staff and the Citizens Utility Board, was involved in that signing. So it's great to see that sign and that in front of the commission. Now we, we have our rate case in front of the commission. Of course, one of the, the key elements of the, there is going to be the pipe retirement plan. And as, as we're ramping that up that we expect to see the first testimony from our, the Illinois Commerce Commission staff and other interveners. I think by the end of the day today we'll see where that comes out. And then we're just executing on our, on our plan, starting to ramp up the pipe replacement program that we've talked about. We're ramping it up this year It'll get about 200, I think for about 200 million this year. And it'll ramp up in 2027 and 2028. And we're just going to execute on the program. We're following along all the direction that we received in the order from the Pipe Retirement program on having workshops and working through those workshops and really have a lot of transparency on our program. So we're hitting the ground running, feel really good about the progress we're having in our communication with our customers and keeping the ICC informed along with the safety monitor. So those are kind of three key elements and they will evolve during the summer here as we start seeing the testimony and more results of the settlement with Illinois. Great. Thank you. Thank you.
OPERATOR
Your next question comes from the line of Nick Campanello with Barclays. Please go ahead.
Nick Campanello (Equity Analyst)
Hey, good afternoon. Hope everyone's doing well. Can you hear me? Yep, we can hear you fine. Nick. Hey, great. Thank you. Thank you. So, hey, I just wanted to ask Scott on the, you talked about the acreage that you have that is kind of fully permitted and ready to go and I think you said like, you know, up to 4 gigawatt potential number and you know, maybe just acknowledging the fact that the Hyperscaler capex is continuing to kind of increase here and if customers want to kind of maximize that, can you just kind of talk about your ability to execute on that from a supply chain and equipment standpoint and then just how do we kind of think about how much could actually fall into the plan in the third quarter just based on the conversations you're having and you know, now that the VLC is finalized and seems that, you know, everyone is happy with that, maybe you could just expand on that a little bit more. Thanks.
Scott Lauber (President and Chief Executive Officer)
Sure. Sure. So as we analyze that question and we've been working with these very large customers, as you know, behind the scenes for years and working with, you know, our developer and our generation and planning team and we feel very confident we can deliver all that's needed to supply the load growth as we ramp this up. It's a little early before I, you know, talk about what's going to be on that third quarter call, but feel for sure there'll be increment increment added in our third quarter. It's just we're still working with them on this individual amounts and we'll more to come on third quarter, but feel good about the update we'll have then.
Nick Campanello (Equity Analyst)
Great. And then just, you know, maybe just one, one more thing and Just keeping with the megawatts here on Point Beach. Is it the base idea that you're going to bring in the full replacement or could you just be kind of targeting half of that to start and then, you know, on the next plan, look at the next, you know, part of the PPA that rolls off, I think in the, in the mid-2030 time frame.
Scott Lauber (President and Chief Executive Officer)
Yeah, that's a great question. And when you think about that first one is in 2030. So for sure that first one will be in this plan and then probably some dollars as it relates to long lead time equipment for that 2033. So you may start to see a little bit tweak in on that last 500 in this plant.
Nick Campanello (Equity Analyst)
Great. Great. And then maybe if I could just one more, the GRC just given all that's kind of in front of you and you had a, you know, successful VLC with this commission. We're still very early innings of this, this case. But is this something that you expect to go fully litigated or do you think there could be an opportunity to settle? Depending on where the starting points of testimony are?
Scott Lauber (President and Chief Executive Officer)
Sure. As you look at it and remember, we filed the case at the beginning of April. I think we have a real, a modest increase out there on our base rates in the electric side of 4, 7 and 4.5% in each of the, in 27 and 28. You know, we'll, you know, we don't even have a procedural schedule out, but I think we'll get through the staff audit sometime this summer. And when we see that audit in probably the first round of testimony, that'll be an opportunity for us to take a step and see if there's an opportunity to settle. You know, you notice last year this commission did settle cases with a couple other utilities in the state. So optimistic that, you know, we're going to have a reasonable audit and then, you know, we can make progress later in the year, but a little early before we can make any decisions on that. Absolutely. Absolutely. Well, thank you so much. Appreciate it. Thank you.
OPERATOR
Your next question comes from the line of Julian demouin Smith with Jefferies. Please go ahead.
Julian demouin Smith
Hey, good afternoon, team. Thank you guys very much. Appreciate the time. Nicely done. Again, I got to hand it to you on the ICC backdrop here with the QIP resolution. Excellent. Thanks, Julian. Absolutely. Hey, just a couple things. If I can come back to it, the VLC tariff, with that approved here, at least verbally, are you having other discussions with other Jason developers? I know this was asked a little bit earlier in a Different. But how is this enabling or catalyzing developments? And can you speak to the expansion opportunity a little bit more specifically? Again, just if I can link this to another subject. How do you think about Point beach enabling data centers as well? I just want to ask that explicitly here if I can.
Scott Lauber (President and Chief Executive Officer)
Sure, sure. Well, the VLC and when we see the final order, I think that's just going to be a lot more transparency for everyone. And we wanted to make sure we filed the VLC as a tariff to make sure it's transparent not only for other VLC customers but also for the public and the community to see that they're paying their full share. So, you know, very happy about that. You know, it's good. I think all the people we've been talking to are well aware of what the VLC filing was and what the tariff and the discussion from the commission. So a lot of people are watching that decision to see what was going on on that. As you think about, you know, Point beach, you know there's, that's in 2030, 2033, we'll see what opportunities are there. But potentially right now we're looking at it. How do we serve our native load and actually provide capital investment and probably some bill headroom as you think about affordability in that 2030 and 33 timeframe.
Julian demouin Smith
Yep, absolutely, I hear you here. And then just to ask it explicitly, I know it was brought up a little bit earlier, but given this rate case, I mean it seems fairly benign in many respects. My words. How do you think about settlement and any specific items that might stand out here in the filing? Right. I mean mid single digit increase, it seems fairly down the fairway.
Scott Lauber (President and Chief Executive Officer)
You know, it's too early. We want to see what the final audit is. But when you think about our rate case filing, it's really balanced. You know, there's a little bit of new generation, there's a little bit of transmission, there's a little bit of, of reliability that we put in on the distribution system. Some general inflation, some truing up for sales. So it's, it's sprinkled throughout. So it's not like we are having any one big initiative here. And remember when we filed our case now we laid out that those very large customers are paying a significant amount of our capital additions that we're putting into our plan. So you're not seeing it come through to these individual non VLC customers. It's all being paid for by the large customers, but too early. Excellent guys. Thank you.
Julian demouin Smith
I totally get it. Cheers. Cheers.
OPERATOR
Your Next question comes from the line of Andrew Wiesel with Scotiabank. Please go ahead. Andrew, Your line is open. Your next question comes from the line of Sophie Karp with KeyBank. Please go ahead.
Sophie Karp (Equity Analyst)
Hi, good morning, good afternoon. Rather, thank you for taking my question. I wanted to ask you guys. Yeah. Not to beat this whole course to death, but I wanted to ask about Point beach. And it sounds like since you're thinking about replacing that power, that you're contemplating a scenario where it won't be available to serve your retail customers. And I just. Can you, can you give us some reminder of what other options the owners of this asset would even have under Wisconsin law, which I don't think they're able to serve retail directly themselves. So what kind of an outcome is actually contemplated here with respect to Point Beach?
Scott Lauber (President and Chief Executive Officer)
Yeah, you know, I can't speak with Next for Nextera, so you'd have to ask them that question. You know, you could all. They could always enter into a financial transaction or something like that, but you'll have to run that by Nextera and see what their thoughts are.
Sophie Karp (Equity Analyst)
And then I guess on the vlc, what kind of a feedback, if any, have you heard so far from the existing hyperscale customers and potential others, just given the modifications that were made at the commission?
Scott Lauber (President and Chief Executive Officer)
Yeah. And we've been talking and you could kind of see it through the testimony where those potential adjustments were being made. So the initial indication is, you know, there's nothing major right now, but of course, we all want to see the written order to see what's really in that final written order, but nothing surprising at this time. All right, thank you. Thank you.
OPERATOR
Your next question comes from the line of Andrew Wiesel, Wiscosia Bank. Please go ahead.
Andrew Wiesel (Equity Analyst)
Hi. Let's try it again. Can you hear me now? Yep, we can hear you. Okay, terrific. I don't know what happened there, but thanks for giving it a second try. Okay, so I first want to ask another try at the Port Washington situation. My question is to what degree do you see the referendum on data centers? They're either challenging the current 1.3 gigawatt build out. Do you see that at all being at risk, or do you think it might make it harder for the customers to expand to the full 3.5 gigawatts or, you know, could this potentially defer other customers from looking into opportunities in or around that area or across Wisconsin more broadly?
Scott Lauber (President and Chief Executive Officer)
Well, I think you're referring to the referendum related to the TIF district. And I, you know, when you look at that it, it should not affect any of our, any of that site up to the 3 1/2 gigawatts. Based on all of our understanding, it potentially could affect not just data centers but any other just economic development in an area that would need a TIF district for that for that particular county. So more of a challenge just in general for economic development, but it should not affect any of the data center growth we had outlined in our script.
Andrew Wiesel (Equity Analyst)
Okay, so not only the 1.3 but the full 3.5 you think would be safe. Okay, great. Then do you think it's isolated to that specific area? Do you think other from your conversation with customers, do you think it's isolated or do you think it's more of a broad issue in your conversations?
Scott Lauber (President and Chief Executive Officer)
You know, we haven't seen any other issues out that as it relates to like a referendum. We have seen a couple areas across the state just put like a one year moratorium on reviewing data centers just because I think everyone wants to understand a little bit more of the facts in the data centers to get the facts out. But I have not seen any other type of referendum like that.
Andrew Wiesel (Equity Analyst)
Great, thank you. Very helpful. And just a minor one maybe for Shah. The weather adjusted natural gas deliveries were down over 2 point or down 2.1% year on year. I know the weather was extremely mild. That always messes with the normalization models. But volumes were also down half a percent for the full year in 2025. What are you seeing in terms of trends or patterns? Anything worth calling out? Or was the one Q maybe just a blip with the models?
Shah Liu
Yeah, Andrew, we looked at that. I think we expected some usage decline in the forecast. So what played out was a little worse than what we expected, but by not much. But we filed in the test year 27:28 the expected decline in the filing. So hopefully we catch it up for the future. And there's some details about in which metropolitan area you see a little more decline. So as people continue to come back to the office or reduce their residential usage, so you may see that naturally happen in the metropolitan area. So nothing surprising in the first quarter.
OPERATOR
Very good, thank you. Your next question comes from the line of Michael Sullivan with Wolf Research. Please go ahead.
Michael Sullivan (Equity Analyst)
Hey, good afternoon. Good afternoon, Michael. Yeah, hey Scott. Maybe I'll just try in Illinois. And this, this might be unfair because we're about to get the testimony, but is there any scenario where you think you can settle in that jurisdict maybe just longer term, like how you think about the future of rate case cadence in that state.
Scott Lauber (President and Chief Executive Officer)
Sure, sure. And you're right, we haven't even seen the testimony yet, so pretty hard to handicap anything there. Historically, Illinois has been a hard place to actually settle when you look across for other jurisdictions. So, you know, I don't know about all the opportunities there, but we got to see the testimony. But very happy, as you could see, we actually got a settlement on those old historical riders. So that's a step in the right direction. And your second question was, oh, just like the future of Ray case cadence in this, like, is this going to be like every year, every other year? How do you think about that? Yeah, I anticipate, especially as we ramp up this, this rider and we start Getting increases in 27, 28 and then an ongoing. I expect that it'll be more of an annual rate case kind of cadence. As you think of Illinois specifically, as it relates to putting in this pipe retirement program. Okay, very helpful. And then we saw, I think you mentioned pushing out the retirement dates on some of your coal units, just as you think about your remaining coal fleet holistically, what are kind of some of the options that like in terms of conversions, further push outs, how you're thinking about some of those remaining units holistically. Sure, sure. And we're going to look at, you know, conversion of those, the natural gas for the most part. As you think about the EPA rules, we need to be in compliance with the current EPA rules. We'll see where those EPA rules go at this time. The reason we pushed out 7 and 8, we just wanted to make sure we get other dispatchable generation online and those parasites and the new CTS will start to come online at the end of 27. So we want to make sure we had, you know, as we retire, old dispatchable capacity. We had new capacity online. We also reviewed this to make sure there was no significant capital investments we had to make to keep these units running another year. And basically they're only running on days that we really need it. So we're really running it on a limited basis, but we just want to make sure we have that capacity around to make sure we have that reliability. But as you look at the other units, we're still looking at converting to natural gas and we'll follow the EPA rules as they evolve. Great. Very helpful. Thank you. Thank you.
Carly Davenport (Equity Analyst)
Our next question comes from the line of Carly Davenport with Goldman Sachs. Please go ahead. Hey, good afternoon. Thanks for taking the questions. Just, just one for me. Just wanted to check in kind of on. I know you've talked about the Construction activity at the Vantage site has sort of started. Just any color you could provide on how execution is kind of tracking their relative to the timeline. I think end of 27 that the company has laid out and perhaps just if you do see any slippage there maybe can, can you refresh us kind of on the protections in place on if timing slips there related to the investments that WECC is making?
Scott Lauber (President and Chief Executive Officer)
Sure. And we don't see any slippage and we're in contact with the site. We have like a meeting every other week with them on the site. We don't see any slippage there. And the other significant item is approval of a transmission line to serve that site which there is data request and information going around at the commission right now. We expect to get approval for that in the fall of this year. So we don't think there's any issues in the slippage of that in service at this time. So things are going well. There's you think about in service, you know, some of the fixes and fine tuning that happened in the VLC tariff as it relates to transmission will be more on a nominated basis which will make sure that everyone pays their fair share and full cost as we build this cost and put that in. So it's not getting subsidized by anyone else and it should not be a slippage also for any of our generation plans. So we feel good about the tariff and the protections plus but more importantly we feel really good about the execution of that site and getting it online. That's great. I'll leave it there. Thank you for the color. Thank you.
Paul Fremont Gladenberg
Your final question comes from the line of Paul Fremont Gladenberg. Please go ahead.
Scott Lauber (President and Chief Executive Officer)
Thanks. Thanks for taking my question. When I look at the two to two and a half billion for one gigawatt in terms of replacement capacity, should I assume that what you're looking at is a, is a combination of renewables and gas for Point Beach?
Paul Fremont Gladenberg
Yeah, I think, I think you got to kind of think about all of the above as we think and we'll look at our entire generation plan. It may be a combination of renewables and cts, but we also may be looking at a combined cycle as we look at our plan to continue to get more energy since it also provides a lot of energy. So. So we're going through that process. We look at it every year not just as it relates to like the Point beach, but also adding additional load on for our very large customers and other economic development in the region. So we're going through that process right now. On what makes sense and cost effective value for our customers.
Scott Lauber (President and Chief Executive Officer)
Great. And then in terms of the non regulated renewables, I imagine you're getting to a point where you're reaching sort of the end of the PTCs on some of the units. For those units, what type of uplift, if any, are you seeing in recontracting those assets and does that sort of should we assume that that offsets the PTC or how should we think about that?
Paul Fremont Gladenberg
Great question. So two things. One is we're going through the process right now and in fact last year we had safe harbored a lot of the materials to make sure those early PTCs that fall off, we have safe harbored materials so we could actually repower them to get to another 10 years of PTCs. So we're evaluating that right now and we'll talk about that on our third quarter conference call. But an opportunity to get another 10 years of PTCs and then as those contracts come up, the value of renewable resources today and a capacity across the country, it's more valuable than when we initially contracted those. So I also see some upside as those contracts come due now they just to remind you they don't all come due at the same time as the ptc. So there's a different timing there. But I think there's value in both sides of it.
Scott Lauber (President and Chief Executive Officer)
And then I guess last question that I have is it was my, the Microsoft Council plant, was that to be located near where the Oak Creek plant is located or was that in a different vicinity?
Paul Fremont Gladenberg
Well, there was, there was a potential option to purchase some land by the Oak Creek plant for a potential Microsoft expansion that is no longer moving forward. But I mean in total they still have about 2200 acres and that was by the Oak Creek site. So I guess my question, has there been any reconsideration by that community of potential benefits for having a data center located in their community?
Scott Lauber (President and Chief Executive Officer)
I haven't talked specifically with them, but I think every community is looking at, you know, potential for data centers or the discussion of data centers because there's a lot of discussion in the region and I think a lot of these communities are looking at like Fort Washington and Mount Pleasant, looking at the value of property taxes and the other value these hyperscalers bring to the community, especially when you talk about affordability and people talking about property taxes. So I think there's opportunities there. We haven't had direct discussions with them, but there's potential there. I think it's a great site, requires very little transmission and it's right by our power plant. So it's a great power supply with very little transmission. An ideal spot for something like that.
OPERATOR
Great. That's it for me. Thank you so much. All right. That concludes our conference call for today. Thank you for participating. If you have any more questions, please feel free to contact Beth Stracha at 414-221-4639. Thanks, everyone.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
Login to comment