About WEC Energy Group

WEC Energy Group, Inc., through its wholly owned subsidiaries, provides or invests in regulated natural gas and electricity, and renewable energy, as well as nonregulated renewable energy. The company has an approximately 60% equity interest in ATC (an electric transmission company operating in Illinois, Michigan, Minnesota and Wisconsin). Segments As of December 31, 2023, the company had six reportable segments: Wisconsin, Illinois, Other States, Electric Transmission, Non-Utility Energy Infrastructure, and Corporate and Other. Utility Energy Operations Wisconsin segment The Wisconsin segment includes the electric and natural gas utility operations of WE (Wisconsin Electric Power Company), WPS (Wisconsin Public Service Corporation), WG (Wisconsin Gas LLC), and UMERC (Upper Michigan Energy Resources Corporation). Electric Utility Operations The company’s electric utility operations include the operations of WE, WPS and UMERC. WE generates and distributes electric energy to customers located in southeastern Wisconsin (including the metropolitan Milwaukee area), east central Wisconsin, and northern Wisconsin. WPS generates and distributes electric energy to customers located in northeastern and central Wisconsin. UMERC generates and distributes electric energy to customers, including one iron ore mine owned by Tilden, located in the Upper Peninsula of Michigan. Operating Revenues Electric Sales The company’s electric energy deliveries included supply and distribution sales to retail, wholesale, and resale customers, and distribution sales to those customers who switched to an alternative electric supplier in the Upper Peninsula of Michigan. The company’s electric utilities are authorized to provide retail electric service in designated territories in the state of Wisconsin, as established by indeterminate permits and boundary agreements with other utilities, and in certain territories in the state of Michigan pursuant to franchises granted by municipalities. The company provides wholesale electric service to various customers, including electric cooperatives, municipal joint action agencies, other investor-owned utilities, municipal utilities, and energy marketers. The majority of the company’s sales for resale are sold into an energy market operated by MISO (Midcontinent Independent System Operator, Inc.) at market rates based on the availability of the company’s generation and market demand. The company’s electric utilities buy and sell electric power by participating in the MISO Energy Markets (MISO Energy and Operating Reserves Market). Steam Sales WE has a steam utility that generates, distributes, and sells steam supplied by the VAPP (Valley Power Plant) to customers in metropolitan Milwaukee, Wisconsin. Steam is used by customers for processing, space heating, domestic hot water, and humidification. Electric Sales Forecast The company’s service territory experienced slightly lower weather-normalized retail electric sales in 2023 due to lower sales to large commercial and industrial customers. The company forecasts retail electric sales volumes, excluding the Tilden mine located in the Upper Peninsula of Michigan, to remain relatively flat for 2024, assuming normal weather. Customers Electric Commercial and Industrial Retail Customers The company provides electric utility service to a diversified base of customers in industries, such as metals and other manufacturing, paper, governmental, food products, and health services. Electric Generation and Supply Mix The company’s electric supply strategy is to provide its customers with energy from a diverse generation portfolio that is expected to balance a stable, reliable, and affordable supply of electricity with environmental stewardship. Through the company’s participation in the MISO Energy Markets, the company supplies a significant amount of electricity to the company’s customers from generation that the company own. The company supplements its internally generated power supply with long-term PPAs, including the Point Beach PPA discussed under the heading ‘Power Purchase Commitments,’ and through spot purchases in the MISO Energy Markets. The company also sells excess power supply into the MISO Energy Markets when it is economical, which reduces net fuel costs by offsetting costs of purchased power. All options, including owned generation resources and purchased power opportunities, are continually evaluated on a real time basis to select and dispatch the lowest-cost resources available to meet system load requirements. Electric Generation Facilities The company’s generation portfolio is a mix of energy resources having different operating characteristics and fuel sources designed to balance providing energy that is stable, reliable, and affordable with environmental stewardship. The company owns 8,337 MWs of generation capacity, including wholly owned and jointly owned facilities. We Power's generating units are also included in the generation capacity. The company’s facilities include natural gas-fired plants, coal-fired plants, and renewable generation. Certain of the company’s natural gas-fired generation units have the ability to burn oil if natural gas is not available due to delivery constraints. Renewable Generation The company’s electric utilities meet a portion of their electric generation supply with various renewable energy resources, including wind, solar, hydroelectric, and biomass. This helps the company’s electric utilities work towards the company’s goals of reducing carbon emissions while also maintaining compliance with renewable energy legislation. In December 2018, WE received approval from the PSCW for the DRER pilot program, a program designed to allow large commercial and industrial customers to access renewable resources that WE would operate. The DRER pilot is intended to help these larger customers meet their sustainability and renewable energy goals and could add up to 35 MWs of renewables to WE's portfolio. In addition, in July 2023, the PSCW approved the Renewable Pathway Pilot, which allows WE and WPS commercial and industrial customers to subscribe to a portion of a utility-scale, Wisconsin-based renewable energy generating facility for up to 125 MWs at WE and 40 MWs at WPS. Wind In April 2023, WPS, along with an unaffiliated utility, completed the acquisition of Red Barn (Red Barn Wind Park), a commercially operational utility-scale wind-powered electric generating facility. The project is located in Grant County, Wisconsin, and WPS owns 82 MWs of this project. Solar and Battery Storage In December 2023, the construction of Badger Hollow II located in Iowa County, Wisconsin was completed, and the facility became commercially operational. Badger Hollow II is owned by WE and an unaffiliated utility, with WE owning 100 MWs of the facility. As part of the company’s commitment to invest in additional zero-carbon generation within the company’s Wisconsin segment, the company has filed requests to acquire and construct 370 MWs of additional projects, including the following: In February 2024, WE and WPS, along with an unaffiliated utility, filed a request with the PSCW (Public Service Commission of Wisconsin) to acquire and construct High Noon (High Noon Solar Energy Center), a utility-scale solar-powered electric generating facility. The project will be located in Columbia County, Wisconsin and once fully constructed, WE and WPS will collectively own 270 MWs of solar generation of this project. The construction is expected to be completed by the end of 2026. In December 2023, UMERC filed a request with the MPSC (Michigan Public Service Commission) to acquire and construct Renegade (Renegade Solar Energy Center), a utility-scale solar-powered electric generating facility. The project will be located in Delta County, Michigan and once fully constructed UMERC will own 100 MWs of solar generation. The construction is expected to be completed by the end of 2026. The company has also received approvals from the PSCW to invest in 809 MWs of additional projects in construction, including the following: In April 2023, WE and WPS, along with an unaffiliated utility, received PSCW approval to acquire Koshkonong (Koshkonong Solar Park), a utility-scale solar-powered electric generating facility. The project will be located in Dane County, Wisconsin and once fully constructed, WE and WPS will collectively own 270 MWs of solar generation. The construction is expected to be completed in 2026. In December 2022, WE and WPS, along with an unaffiliated utility, received PSCW approval to acquire and construct Darien (Darien Solar Park), a utility-scale solar-powered electric generating facility. The project will be located in Rock and Walworth counties, Wisconsin and once fully constructed, WE and WPS will collectively own 225 MWs of solar generation. The construction is expected to be completed in 2024. In January 2022, WE and WPS, along with an unaffiliated utility, received PSCW approval to acquire and construct Paris (Paris Solar-Battery Park), a utility-scale solar-powered electric generating facility with a battery energy storage system. The project will be located in Kenosha County, Wisconsin and once fully constructed, WE and WPS will collectively own 180 MWs of solar generation and 99 MWs of battery storage of this project. The construction of the solar portion and battery storage is expected to be completed in 2024 and 2025, respectively. In December 2018, WE received approval from the PSCW for the Solar Now pilot program, which is expected to add a total of 35 MWs of solar generation to WE's portfolio, allowing non-profit and government entities, as well as commercial and industrial customers, to site utility owned solar arrays on their property. Under this program, WE has energized 28 Solar Now projects and has another one under construction, together totaling more than 30 MWs. WE and WPS actively review and pursue distribution system interconnected solar projects. WE and WPS partner with proven developers to identify and purchase solar projects for the company’s customers. These projects are typically ground-mounted modules in the range of 5-10 MWs and are connected to the WE or WPS distribution systems, as applicable. WE has 30 MWs of distribution connected projects under contract, which are estimated to go in-service in 2024. Natural Gas-Fired Generation In July 2023, WE and WPS completed construction of seven natural gas-fired generation RICE (Reciprocating Internal Combustion Engine) units with a rated capacity of 130 MWs at WPS's Weston power plant site. In June 2023, WE completed the acquisition of 100 MWs of West Riverside's nameplate capacity, in the first of two potential option exercises. West Riverside (West Riverside Energy Center) is a commercially operational dual fueled combined cycle generation facility in Beloit, Wisconsin, and is operated by an unaffiliated utility. In addition, WPS filed a request with the PSCW in September 2023 to exercise a second option to acquire an additional 100 MWs of West Riverside's nameplate capacity. As it did with the first option, in October 2023, WPS filed for approval to assign its ownership interest pursuant to this second option to WE, with the transaction expected to close in 2024. In January 2023, WE and WPS completed the acquisition of Whitewater (Whitewater Cogeneration Facility), a commercially operational dual fueled combined cycle generation facility in Whitewater, Wisconsin with a rated capacity of 242.8 MWs. Coal Supply The company diversifies the coal supply for its electric generating facilities and jointly-owned plants by purchasing coal from several mines in Wyoming and Pennsylvania, as well as from various other states. For 2024, 100% of the company’s total projected coal requirements of 7.1 million tons are contracted under fixed-price contracts. Coal Deliveries All of the company’s coal requirements are expected to be shipped by unit trains that the company owns or leases under existing transportation agreements. The unit trains transport the coal for electric generating facilities from mines in Wyoming and Pennsylvania. Power Purchase Commitments The company enters into short- and long-term power purchase commitments to meet a portion of the company’s anticipated electric energy supply needs. Excluding planning capacity purchases, the company’s power purchase commitments with unaffiliated parties consist of 1,133 MWs per year for 2024 through 2028. This amount includes 1,033 MWs per year related to a long-term PPA for electricity generated by Point Beach. To procure additional planning capacity, the company purchases capacity from the MISO annual auction to ensure that the company maintains its compliance with planning reserve requirements as established by the PSCW, MPSC, and MISO. Natural Gas Utility Operations WE, WPS, and WG (Wisconsin Gas LLC) are authorized to provide retail natural gas distribution service in designated territories in the state of Wisconsin, as established by indeterminate permits and boundary agreements with other utilities. The company’s Wisconsin natural gas utilities operate throughout the state of Wisconsin, including the City of Milwaukee and surrounding areas, northeastern Wisconsin, and in large areas of both central and western Wisconsin. In addition, UMERC is authorized to provide retail natural gas distribution service in designated territories in the Upper Peninsula of Michigan. The company’s Wisconsin segment natural gas utilities provide service to residential and commercial and industrial customers. In addition, the company’s Wisconsin segment offers natural gas transportation services to the company’s customers that elect to purchase natural gas directly from a third-party supplier. Major industries served include real estate, food products, governmental, restaurants, and paper. Natural Gas Sales Forecast The company’s combined Wisconsin service territories experienced lower weather-normalized retail natural gas deliveries (excluding natural gas deliveries for electric generation) in 2023. The company forecasts retail natural gas delivery volumes to grow 0.8% in 2024, assuming normal weather. Natural Gas Supply, Pipeline Capacity and Storage The company manages portfolios of natural gas supply contracts, storage services, and pipeline transportation services designed to meet varying customer use patterns. Pipeline Capacity and Storage The interstate pipelines serving Wisconsin access supply from natural gas producing areas in the Southern and Eastern United States, along with western Canada. The company has contracted for long-term firm capacity from a number of these sources. Due to variations in natural gas usage in Wisconsin, the company’s Wisconsin natural gas utilities have also contracted for substantial underground storage capacity, primarily in Michigan. WE, WPS, and WG have entered into long-term service agreements for approximately 99% of a wholly owned subsidiary of Bluewater's natural gas storage. Bluewater Natural Gas Holding, LLC (Bluewater) owns natural gas storage facilities in Michigan and provides approximately one-third of the current storage needs for the company’s Wisconsin natural gas utilities. The company targets storage inventory levels at approximately 40% of forecasted demand for November through March. The company generally injects natural gas into storage during the spring and summer months and withdraw it in the winter months. The company holds daily transportation and storage capacity entitlements with interstate pipeline companies, as well as other service providers under varied-length long-term contracts. Natural gas pipeline capacity and storage and natural gas supplies under contract can be resold in secondary markets. Peak or near-peak demand generally occurs only a few times each year. The secondary markets facilitate utilization of capacity and supply during times when the contracted capacity and supply are in excess of utility demand. The proceeds from these transactions are passed through to customers, subject to the company’s approved GCRMs. To ensure a reliable supply of natural gas during peak winter conditions, the company has LNG and propane facilities located within its distribution system. These facilities are typically utilized during extreme demand conditions to ensure reliable supply to the company’s customers. WE recently finished construction of an LNG facility that was placed into service in November 2023, which provides approximately one Bcf of natural gas supply. In addition to its existing facilities, WG is constructing an additional LNG facility, which will provide approximately one Bcf of natural gas supply. Commercial operation of the WG LNG facility is targeted for 2024. The use of LNG allows the company to meet anticipated peak demand without requiring the construction of additional interstate pipeline capacity. Combined with the company’s storage capability, the volume of natural gas under contract is sufficient to meet the company’s forecasted firm peak-day and seasonal demand. The company’s Wisconsin segment natural gas utilities' forecasted design peak-day throughput is 36.7 million therms for the 2023 through 2024 heating season. The company’s Wisconsin segment natural gas utilities' peak daily send-out during 2023 was 22.9 million therms on January 31, 2023. Natural Gas Supply The company’s natural gas supply requirements are met through a combination of fixed-price purchases, index-priced purchases, storage, peak-shaving facilities, and natural gas supply call options. The company contracts for fixed-term firm natural gas supply each year to meet the demand of firm system sales customers. To supplement natural gas supply and manage risk, the company purchases additional natural gas supply on the monthly and daily spot markets. Hedging Natural Gas Supply Prices As part of their hedging programs, the company’s Wisconsin utilities further reduce their supply cost volatility through the use of a mix of financial instruments, such as NYMEX-based natural gas options and futures contracts. WE, WPS, and WG have PSCW approval to hedge up to 60% of planned winter demand and up to 15% of planned summer demand. These approvals allow these companies to pass 100% of the hedging costs (premiums, brokerage fees, and losses) and proceeds (gains) to customers through their respective GCRMs (Gas Cost Recovery Mechanisms). Illinois Segment The company’s Illinois segment includes the natural gas utility operations of PGL (The Peoples Gas Light and Coke Company) and NSG (North Shore Gas Company). The company’s customers are located in Chicago and the northern suburbs of Chicago. PGL and NSG provide service to residential and commercial and industrial customers. In addition, PGL and NSG offer natural gas transportation services to the company’s customers that elect to purchase natural gas directly from a third-party supplier. Major industries served include real estate, education, non-profits, wholesale distributors, and food manufacturing. Natural Gas Supply, Pipeline Capacity, and Storage The company manages portfolios of natural gas supply contracts, storage services, and pipeline transportation services designed to meet varying customer use patterns. Pipeline Capacity and Storage The interstate pipelines serving Illinois access supply from natural gas producing areas in the Southern and Eastern United States, along with western Canada. The company has contracted for long-term firm capacity from a number of these sources. The company owns a 38.8 Bcf storage field (Manlove Field in central Illinois) and contract with various other underground storage service providers for additional storage services. Storage allows the company to manage significant changes in daily natural gas demand and to purchase steady levels of natural gas on a year-round basis, which provides a hedge against supply cost volatility. The company also owns a natural gas pipeline system that connects Manlove Field to Chicago and nine major interstate pipelines. These assets are directed primarily to serving rate-regulated retail customers and are included in the company’s regulatory rate base. The company also uses a portion of these company-owned storage and pipeline assets as a natural gas hub, which consists of providing transportation and storage services in interstate commerce to the company’s wholesale customers. Customers deliver natural gas to the company for storage through an injection into the storage reservoir, and the company returns the natural gas to the customers under an agreed schedule through a withdrawal from the storage reservoir. Title to the natural gas does not transfer to the company. The company recognizes service fees associated with the natural gas hub services provided to wholesale customers. Natural gas pipeline capacity and storage and natural gas supplies under contract can be resold in secondary markets. Peak or near-peak demand generally occurs only a few times each year. The secondary markets facilitate utilization of capacity and supply during times when the contracted capacity and supply are in excess of utility demand. The proceeds from these transactions are passed through to customers, subject to the company’s approved GCRMs. Combined with the company’s storage capability, the volume of natural gas under contract is sufficient to meet the company’s forecasted firm peak-day and seasonal demand. The company’s Illinois utilities' forecasted design peak-day throughput is 25.4 million therms for the 2023 through 2024 heating season. The company’s Illinois utilities' peak daily send-out during 2023 was 15.9 million therms on January 31, 2023. Natural Gas Supply The company’s natural gas supply requirements are met through a combination of fixed-price purchases, index-priced purchases, storage, peak-shaving facilities, and natural gas supply call options. The company contracts for fixed-term firm natural gas supply each year to meet the demand of firm system sales customers. To supplement natural gas supply and manage risk, the company purchases additional natural gas supply on the monthly and daily spot markets. Hedging Natural Gas Supply Prices As part of their hedging programs, the company’s Illinois utilities further reduce their supply cost volatility through the use of a mix of financial instruments, such as NYMEX-based natural gas options and futures contracts. Their hedging programs are reviewed by the ICC (Illinois Commerce Commission) as part of the annual purchased gas adjustment reconciliation. Natural Gas System Modernization Program During 2023, PGL continued work on the Safety Modernization Program (SMP), a project to replace approximately 2,000 miles of Chicago's aging natural gas pipeline infrastructure that began in 2011. On January 3, 2024, the ICC granted PGL and NSG a limited-scope rehearing, which includes the authorized spending for the completion of SMP projects that started in 2023 and the authorized spending for emergency repairs needed to ensure the safety and reliability of the company’s delivery system. Other States Segment The company’s Other States segment includes the natural gas utility operations of MERC (Minnesota Energy Resources Corporation) and MGU (Michigan Gas Utilities Corporation) and the non-utility operations of MERC related to servicing appliances for customers. MERC serves customers in various cities and communities throughout Minnesota, and MGU serves customers in southern and western Michigan. MERC and MGU provide service to residential and commercial and industrial customers. In addition, MERC and MGU offer natural gas transportation services to the company’s customers that elect to purchase natural gas directly from a third-party supplier. Major industries served include education, wholesale distributors, real estate, non-profits, and restaurants. Natural Gas Supply, Pipeline Capacity and Storage The company manages portfolios of natural gas supply contracts, storage services, and pipeline transportation services designed to meet varying customer use patterns. Pipeline Capacity and Storage MGU owns a 2.9 Bcf storage field (Partello in Michigan) and contracts with various other underground storage service providers for additional storage services. The company contracts with local distribution companies and interstate pipelines to purchase firm transportation services. Natural gas pipeline capacity and storage and natural gas supplies under contract can be resold in secondary markets. Peak or near-peak demand generally occurs only a few times each year. The secondary markets facilitate utilization of capacity and supply during times when the contracted capacity and supply are in excess of utility demand. The proceeds from these transactions are passed through to customers, subject to the company’s approved GCRMs. Combined with the company’s storage capability, the volume of gas under contract is sufficient to meet the company’s forecasted firm peak-day and seasonal demand. Forecasted design peak-day throughput for the company’s other states utilities is 9.7 million therms for the 2023 through 2024 heating season. The company’s other states utilities' peak daily send-out during 2023 was 6.8 million therms on February 3, 2023. Natural Gas Supply The company’s natural gas supply requirements are met through a combination of fixed-price purchases, index-priced purchases, contracted and owned storage, and natural gas supply call options. The company contracts for fixed-term firm natural gas supply each year to meet the demand of firm system sales customers. To supplement natural gas supply and manage risk, the company purchases additional natural gas supply on the monthly and daily spot markets. Hedging Natural Gas Supply Prices The company’s other states utilities further reduce their supply cost volatility through the use of financial instruments, such as commodity futures, swaps, and options as part of their hedging programs. MERC has MPUC approval to hedge up to 30% of planned winter demand using NYMEX financial instruments. MGU has MPSC approval to hedge up to 20% of its planned annual purchases using NYMEX financial instruments. Seasonality Electric Utility Operations – Wisconsin Segment The company’s electric utility sales are impacted by seasonal factors and varying weather conditions. The company sells more electricity during the summer months because of the residential cooling load. The company continues to upgrade its electric distribution system, including substations, transformers, and lines, to meet the demand of the company’s customers. In 2023, the company’s generating plants performed as expected during the warmest periods of the summer, and all power purchase commitments under firm contract were received. During this period, the company’s electric utilities did not make any public appeals for conservation, and they did not interrupt or curtail service to non-firm customers who participate in load management programs. The company’s electric utilities did have economic interruption events; however, service to customers was not curtailed. Economic interruptions are declared during times in which the price of electricity in the regional market exceeds the cost of operating the company's peaking generation. During this time, customers taking service under these interruptible programs can choose to continue using electricity at a price based on wholesale market prices or to reduce their load. Natural Gas Utility Operations – Wisconsin, Illinois, and Other States Segments Since the majority of the company’s customers use natural gas for heating, customer use is sensitive to weather and is generally higher during the winter months. Accordingly, the company is subject to some variations in earnings and working capital throughout the year as a result of changes in weather. The effect on earnings from these changes in weather are reduced by decoupling mechanisms included in the rates of PGL, NSG, and MERC. These mechanisms differ by state and allow the utilities to recover or refund the differences between actual and authorized margins for certain customer classes. The company’s natural gas utilities' working capital needs are met by cash generated from operations and debt (both long-term and short-term). The seasonality of natural gas revenues causes the timing of cash collections to be concentrated from January through June. A portion of the winter natural gas supply needs is typically purchased and stored from April through November. Also, planned capital spending on the company’s natural gas distribution facilities is concentrated in April through November. Because of these timing differences, the cash flow from customers is typically supplemented with temporary increases in short-term borrowings (from external sources) during the late summer and fall. Short-term debt is typically reduced over the January through June period. Electric Transmission Segment ATC (American Transmission Company LLC) is a regional transmission company that owns, maintains, monitors, and operates electric transmission systems in Wisconsin, Michigan, Illinois, and Minnesota. ATC is expected to provide comparable service to all customers, including WE, WPS, and UMERC, and to support effective competition in energy markets without favoring any market participant. ATC is regulated by the FERC for all rate terms and conditions of service and certain state regulatory commissions for routing and siting of transmission projects. ATC is also a transmission-owning member of MISO. MISO maintains operational control of ATC's transmission system, and WE, WPS, and UMERC are non-transmission owning members and customers of MISO. As of December 31, 2023, the company’s ownership interest in ATC was approximately 60%. In addition, as of December 31, 2023, the company owned approximately 75% of ATC Holdco (ATC Holdco LLC), a separate entity formed in December 2016 to invest in transmission-related projects outside of ATC's traditional footprint. See Note 21, Investment in Transmission Affiliates, for more information. The FERC and D.C. Circuit Court of Appeals have issued orders and an opinion, respectively, related to the authorized base ROE for all MISO transmission owners, including ATC. Non-Utility Operations Non-Utility Energy Infrastructure Segment The non-utility energy infrastructure segment includes We Power (W.E. Power, LLC), which owns and leases generating facilities to WE; Bluewater, which owns underground natural gas storage facilities in Michigan; and WECI (WEC Infrastructure LLC), which holds ownership interests in several renewable generating facilities. W.E. Power, LLC We Power, through wholly owned subsidiaries, designed and built approximately 2,500 MWs of generation in Wisconsin. This generation is made up of capacity from the two coal-fired ERGS units, ER 1 and ER 2, which were placed in service in February 2010 and January 2011, respectively, and the two natural gas-fired PWGS units, PWGS 1 and PWGS 2, which were placed in service in July 2005 and May 2008, respectively. Two unaffiliated entities collectively own approximately 17%, or approximately 211 MWs, of ER 1 and ER 2. We Power's share of the ERGS units and both PWGS units are being leased to WE under long-term leases (the ERGS units have 30-year leases that began on the in-service dates of the generating units and the PWGS units have 25-year leases that began on the in-service dates of the generating units). Bluewater Natural Gas Holding, LLC Bluewater, located in Michigan, primarily provides natural gas storage and hub services to the company’s Wisconsin natural gas utilities. WE, WPS, and WG have entered into long-term service agreements for approximately one-third of their combined natural gas storage needs with a wholly owned subsidiary of Bluewater. WEC Infrastructure LLC As of December 31, 2023, the company’s Non-Utility Energy Infrastructure segment included WECI's ownership interests in the renewable generating facilities. Bishop Hill III, Coyote Ridge, Blooming Grove, Tatanka Ridge, Jayhawk, Thunderhead, Samson I, and Sapphire Sky have offtake agreements with creditworthy counterparties for the sale of all of the energy they produce over periods ranging from 10 to 22 years following commercial operation. In addition, Upstream's revenue is substantially fixed over the 10-year period following commercial operation through an agreement with a creditworthy counterparty. Under the Tax Legislation, all of these investments qualify for PTCs. WECI is entitled to the tax benefits of Bishop Hill III, Upstream, Blooming Grove, Thunderhead, Samson I, and Sapphire Sky in proportion to its ownership interest. WECI is entitled to 99% of the tax benefits of Coyote Ridge and Tatanka Ridge for the first 11 years following commercial operation, and is entitled to 99% of the tax benefits of Jayhawk for the first 10 years following commercial operation, after which WECI will be entitled to any tax benefits equal to its ownership interests. WECI recognizes PTCs as power is generated over a period of 10 years following commercial operation. Under the new IRA transferability option, WEC Energy Group entered into a sales agreement in September 2023 to sell substantially all of the PTCs generated by the WECI generating facilities in 2023 to a third party. See Note 1(q), Income Taxes, for more information about the impact of these sales. In October 2022, WECI signed an agreement to acquire an 80% ownership interest in Maple Flats, a 250 MW solar generating facility under construction in Clay County, Illinois. The project has an offtake agreement for all of the energy to be produced by the facility for a period of 15 years following commencement of commercial operation. WECI's investment in Maple Flats is expected to qualify for PTCs. Seasonality The electricity produced and revenues generated by the company’s wind generating facilities depend heavily on wind conditions, which are variable. Operating results for wind generating facilities vary significantly from period to period depending on the wind conditions during the periods in question. Historically, wind production has been greater in the first and fourth quarters. The electricity produced and revenues generated by the company’s Samson I solar generating facility is also variable and depends heavily on seasonality and weather conditions. Spring and summer are usually the peak solar production seasons due to increased direct sunlight and longer days. Corporate and Other Segment The Corporate and Other segment includes the operations of the company, the Integrys (Integrys Holding, Inc.) holding company, and the PELLC (Peoples Energy, LLC) holding company, as well as the operations of Wispark (Wispark LLC) and WBS (WEC Business Services LLC). Wispark develops and invests in real estate, primarily in southeastern Wisconsin. WBS is a wholly owned centralized service company that provides administrative and general support services to the company’s regulated entities. WBS also provides certain administrative and support services to the company’s nonregulated entities. This segment also includes Wisvest (Wisvest LLC), WECC (Wisconsin Energy Capital Corporation), and PDL (WPS Power Development, LLC), which no longer have significant operations. Regulation The company is a holding company and is subject to the requirements of the Public Utility Holding Company Act of 2005. The company also has various subsidiaries that meet the definition of a holding company under the Public Utility Holding Company Act of 2005 and are also subject to its requirements. Regulated Utility Operations In addition to the specific regulations noted above and below, the company’s utilities are subject to various other regulations, which primarily consist of regulations, where applicable, of the EPA; the WDNR; the Illinois Department of Natural Resources; the Illinois Environmental Protection Agency; the Michigan Department of Environment, Great Lakes, and Energy; the Michigan Department of Natural Resources; the Army Corps; the Minnesota Department of Natural Resources; and the Minnesota Pollution Control Agency. Wholesale Rates The FERC regulates the company’s wholesale sales of electric energy, capacity, and ancillary services. The company’s electric utilities have received market-based rate authority from the FERC. Other Electric Regulations The company’s electric utilities are subject to the Federal Power Act and the corresponding regulations developed by certain federal agencies. Among other things, the Federal Power Act makes electric utility industry consolidation more feasible and authorizes the FERC to review proposed mergers and the acquisition of generation facilities. The FERC also oversees the Electric Reliability Organization, which establishes mandatory electric reliability standards and has the authority to levy monetary sanctions for failure to comply with these standards. WE and WPS are subject to Act 141 in Wisconsin, and UMERC is subject to Public Acts 295 and 342 in Michigan, which contain certain minimum requirements for renewable energy generation. Other Natural Gas Regulations Almost all of the natural gas the company distributes is transported to its distribution systems by interstate pipelines. The pipelines' transportation and storage services, including PGL's natural gas hub, are regulated by the FERC under the Natural Gas Act and the Natural Gas Policy Act of 1978. In addition, the PHMSA and the state commissions are responsible for monitoring and enforcing requirements governing the company’s natural gas utilities' safety compliance programs for its pipelines under the United States Department of Transportation regulations. These regulations include 49 CFR Part 191 (Transportation of Natural and Other Gas by Pipeline; Annual Reports, Incident Reports, and Safety-Related Condition Reports), 49 CFR Part 192 (Transportation of Natural and Other Gas by Pipeline: Minimum Federal Safety Standards), and 49 CFR Part 195 (Transportation of Hazardous Liquids by Pipeline). The company also continues to monitor the progress of the PHMSA’s proposed rulemaking titled ‘Gas Pipeline Leak Detection and Repair,’ which could have a significant impact on the company’s natural gas utilities. A final rule is expected to be released in 2024. Non-Utility Energy Infrastructure Operations The generation facilities constructed by wholly owned subsidiaries of We Power are being leased on a long-term basis to WE. Environmental permits necessary for operating the facilities are the responsibility of the operating entity, WE. We Power received determinations from the FERC that upon the transfer of the facilities by lease to WE, We Power's subsidiaries would not be deemed public utilities under the Federal Power Act and thus would not be subject to the FERC's jurisdiction. Bluewater is regulated by the FERC under the Natural Gas Act and the Natural Gas Policy Act of 1978. In addition, the Pipeline and Hazardous Materials Safety Administration is responsible for monitoring and enforcing requirements governing Bluewater's safety compliance programs for its pipelines under the United States Department of Transportation regulations. These regulations include 49 CFR Parts 191, 192, and 195. Given that Bluewater is required to route some of its natural gas through Canada, applicable reporting and licensing with the United States Department of Energy and the Canadian National Energy Board are also required, along with routine reporting related to imports and exports. All of the company’s operational renewable generating facilities in the company’s non-utility energy infrastructure segment are also subject to the FERC’s regulation of wholesale energy under the Federal Power Act. History The company was founded in 1896. It was incorporated in the state of Wisconsin in 1981. It was formerly known as Wisconsin Energy Corporation and changed its name to WEC Energy Group, Inc. in 2015.