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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission
File Number
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Registrant; State of Incorporation;
Address; and Telephone Number
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IRS Employer
Identification No.
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001-09057
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WEC ENERGY GROUP, INC.
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39-1391525
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Common Stock, $.01 Par Value
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WEC
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New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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2019 Form 10-K
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i
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WEC Energy Group, Inc.
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2019 Form 10-K
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ii
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WEC Energy Group, Inc.
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Subsidiaries and Affiliates
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ATC
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American Transmission Company LLC
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ATC Holdco
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ATC Holdco LLC
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ATC Holding
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ATC Holding LLC
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Bishop Hill III
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Bishop Hill Energy III LLC
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Blooming Grove
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Blooming Grove Wind Energy Center LLC
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Bluewater
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Bluewater Natural Gas Holding, LLC
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Bluewater Gas Storage
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Bluewater Gas Storage, LLC
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Bostco
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Bostco LLC
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Coyote Ridge
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Coyote Ridge Wind, LLC
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Integrys
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Integrys Holding, Inc.
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MERC
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Minnesota Energy Resources Corporation
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MGU
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Michigan Gas Utilities Corporation
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NSG
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North Shore Gas Company
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PDL
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WPS Power Development, LLC
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PELLC
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Peoples Energy, LLC
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PGL
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The Peoples Gas Light and Coke Company
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Thunderhead
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Thunderhead Wind Energy LLC
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UMERC
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Upper Michigan Energy Resources Corporation
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Upstream
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Upstream Wind Energy LLC
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WBS
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WEC Business Services LLC
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WE
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Wisconsin Electric Power Company
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We Power
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W.E. Power, LLC
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WEC Energy Group
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WEC Energy Group, Inc.
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WECC
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Wisconsin Energy Capital Corporation
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WECI
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WEC Infrastructure LLC
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WG
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Wisconsin Gas LLC
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Wispark
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Wispark LLC
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Wisvest
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Wisvest LLC
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WPS
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Wisconsin Public Service Corporation
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WRPC
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Wisconsin River Power Company
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Federal and State Regulatory Agencies
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EPA
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United States Environmental Protection Agency
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FERC
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Federal Energy Regulatory Commission
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ICC
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Illinois Commerce Commission
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IDNR
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Illinois Department of Natural Resources
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IEPA
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Illinois Environmental Protection Agency
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IRS
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United States Internal Revenue Service
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MPSC
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Michigan Public Service Commission
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MPUC
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Minnesota Public Utilities Commission
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PSCW
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Public Service Commission of Wisconsin
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SEC
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Securities and Exchange Commission
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WDNR
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Wisconsin Department of Natural Resources
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Accounting Terms
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AFUDC
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Allowance for Funds Used During Construction
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ARO
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Asset Retirement Obligation
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ASC
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Accounting Standards Codification
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2019 Form 10-K
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iii
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WEC Energy Group, Inc.
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ASU
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Accounting Standards Update
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CWIP
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Construction Work in Progress
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FASB
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Financial Accounting Standards Board
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GAAP
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Generally Accepted Accounting Principles
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LIFO
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Last-In, First-Out
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OPEB
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Other Postretirement Employee Benefits
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SAB
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Staff Accounting Bulletin
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Environmental Terms
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ACE
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Affordable Clean Energy
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Act 141
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2005 Wisconsin Act 141
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BATW
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Bottom Ash Transport Water
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BSER
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Best System of Emission Reduction
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BTA
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Best Technology Available
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CAA
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Clean Air Act
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CO2
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Carbon Dioxide
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ELG
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Steam Electric Effluent Limitation Guidelines
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FGD
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Flue Gas Desulfurization
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GHG
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Greenhouse Gas
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NAAQS
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National Ambient Air Quality Standards
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GMZ
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Groundwater Management Zone
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MATS
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Mercury and Air Toxics Standards
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NOV
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Notice of Violation
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NOx
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Nitrogen Oxide
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PCB
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Polychlorinated Biphenyl
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RTR
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Risk and Technology Review
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SO2
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Sulfur Dioxide
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VN
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Violation Notice
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Measurements
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Dth
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Dekatherm
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MDth
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One thousand Dekatherms
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MW
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Megawatt
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MWh
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Megawatt-hour
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Other Terms and Abbreviations
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2007 Junior Notes
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WEC Energy Group, Inc.'s 2007 Junior Subordinated Notes Due 2067
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AG
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Attorney General
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AMI
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Advanced Metering Infrastructure
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ARR
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Auction Revenue Right
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Badger Hollow I
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Badger Hollow Solar Farm I
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Badger Hollow II
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Badger Hollow Solar Farm II
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CFR
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Code of Federal Regulations
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Compensation Committee
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Compensation Committee of the Board of Directors
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D.C. Circuit Court of Appeals
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United States Court of Appeals for the District of Columbia Circuit
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ERGS
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Elm Road Generating Station
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ER 1
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Elm Road Generating Station Unit 1
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ER 2
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Elm Road Generating Station Unit 2
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ERP
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Enterprise Resource Planning
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Exchange Act
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Securities Exchange Act of 1934, as amended
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FTR
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Financial Transmission Right
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GCRM
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Gas Cost Recovery Mechanism
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2019 Form 10-K
|
iv
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WEC Energy Group, Inc.
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GUIC
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Gas Utility Infrastructure Costs
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Holding Company Act
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Wisconsin Utility Holding Company Act
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LIBOR
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London Interbank Offered Rate
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LMP
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Locational Marginal Price
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LNG
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Liquefied Natural Gas
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MISO
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Midcontinent Independent System Operator, Inc.
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MISO Energy Markets
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MISO Energy and Operating Reserves Market
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NYMEX
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New York Mercantile Exchange
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OCPP
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Oak Creek Power Plant
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OC 5
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Oak Creek Power Plant Unit 5
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OC 6
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Oak Creek Power Plant Unit 6
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OC 7
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Oak Creek Power Plant Unit 7
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OC 8
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Oak Creek Power Plant Unit 8
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Omnibus Stock Incentive Plan
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WEC Energy Group 1993 Omnibus Stock Incentive Plan, Amended and Restated Effective as of January 1, 2016
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PIPP
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Presque Isle Power Plant
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Point Beach
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Point Beach Nuclear Power Plant
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PUHCA 2005
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Public Utility Holding Company Act of 2005
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PWGS
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Port Washington Generating Station
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PWGS 1
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Port Washington Generating Station Unit 1
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PWGS 2
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Port Washington Generating Station Unit 2
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QIP
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Qualifying Infrastructure Plant
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RCC
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Replacement Capital Covenant (dated May 11, 2007)
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ROE
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Return on Equity
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RTO
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Regional Transmission Organization
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SMP
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Natural Gas System Modernization Program
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SOX
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Section 404 of the Sarbanes-Oxley Act
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SREC
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Solar Renewable Energy Certificate
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SSR
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System Support Resource
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Tax Legislation
|
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Tax Cuts and Jobs Act of 2017
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Tilden
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Tilden Mining Company
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Two Creeks
|
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Two Creeks Solar Project
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VAPP
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Valley Power Plant
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VITA
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Variable Income Tax Adjustment Rider
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2019 Form 10-K
|
v
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WEC Energy Group, Inc.
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•
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Factors affecting utility operations such as catastrophic weather-related damage, environmental incidents, unplanned facility outages and repairs and maintenance, and electric transmission or natural gas pipeline system constraints;
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•
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Factors affecting the demand for electricity and natural gas, including political developments, unusual weather, changes in economic conditions, customer growth and declines, commodity prices, energy conservation efforts, and continued adoption of distributed generation by customers;
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•
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The timing, resolution, and impact of rate cases and negotiations, including recovery of deferred and current costs and the ability to earn a reasonable return on investment, and other regulatory decisions impacting our regulated operations;
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•
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The impact of recent and future federal, state, and local legislative and/or regulatory changes, including changes in rate-setting policies or procedures, deregulation and restructuring of the electric and/or natural gas utility industries, transmission or distribution system operation, the approval process for new construction, reliability standards, pipeline integrity and safety standards, allocation of energy assistance, energy efficiency mandates, and tax laws, including the Tax Legislation as well as those that affect our ability to use production tax credits and investment tax credits;
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•
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Federal and state legislative and regulatory changes relating to the environment, including climate change and other environmental regulations impacting generation facilities and renewable energy standards, the enforcement of these laws and regulations, changes in the interpretation of regulations or permit conditions by regulatory agencies, and the recovery of associated remediation and compliance costs;
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•
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The ability to obtain and retain customers, including wholesale customers, due to increased competition in our electric and natural gas markets from retail choice and alternative electric suppliers, and continued industry consolidation;
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•
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The timely completion of capital projects within budgets and the ability to recover the related costs through rates;
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•
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Factors affecting the implementation of our generation reshaping plan, including related regulatory decisions, the cost of materials, supplies, and labor, and the feasibility of competing projects;
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•
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The financial and operational feasibility of taking more aggressive action to further reduce GHG emissions in order to limit future global temperature increases;
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•
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The risks associated with changing commodity prices, particularly natural gas and electricity, and the availability of sources of fossil fuel, natural gas, purchased power, materials needed to operate environmental controls at our electric generating facilities, or water supply due to high demand, shortages, transportation problems, nonperformance by electric energy or natural gas suppliers under existing power purchase or natural gas supply contracts, or other developments;
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2019 Form 10-K
|
1
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WEC Energy Group, Inc.
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•
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Changes in credit ratings, interest rates, and our ability to access the capital markets, caused by volatility in the global credit markets, our capitalization structure, and market perceptions of the utility industry, us, or any of our subsidiaries;
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•
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Changes in the method of determining LIBOR or the replacement of LIBOR with an alternative reference rate;
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•
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Costs and effects of litigation, administrative proceedings, investigations, settlements, claims, and inquiries;
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•
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The direct or indirect effect on our business resulting from terrorist attacks and cyber security intrusions, as well as the threat of such incidents, including the failure to maintain the security of personally identifiable information, the associated costs to protect our utility assets, technology systems, and personal information, and the costs to notify affected persons to mitigate their information security concerns and to comply with state notification laws;
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•
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Restrictions imposed by various financing arrangements and regulatory requirements on the ability of our subsidiaries to transfer funds to us in the form of cash dividends, loans or advances, that could prevent us from paying our common stock dividends, taxes, and other expenses, and meeting our debt obligations;
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•
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The risk of financial loss, including increases in bad debt expense, associated with the inability of our customers, counterparties, and affiliates to meet their obligations;
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•
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Changes in the creditworthiness of the counterparties with whom we have contractual arrangements, including participants in the energy trading markets and fuel suppliers and transporters;
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•
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The financial performance of ATC and its corresponding contribution to our earnings;
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•
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The investment performance of our employee benefit plan assets, as well as unanticipated changes in related actuarial assumptions, which could impact future funding requirements;
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•
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Factors affecting the employee workforce, including loss of key personnel, internal restructuring, work stoppages, and collective bargaining agreements and negotiations with union employees;
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•
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Advances in technology, and related legislation or regulation supporting the use of that technology, that result in competitive disadvantages and create the potential for impairment of existing assets;
|
•
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The risk associated with the values of goodwill and other intangible assets and their possible impairment;
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•
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Potential business strategies to acquire and dispose of assets or businesses, which cannot be assured to be completed timely or within budgets, and legislative or regulatory restrictions or caps on non-utility acquisitions, investments or projects, including the State of Wisconsin's public utility holding company law;
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•
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The timing and outcome of any audits, disputes, and other proceedings related to taxes;
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•
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The ability to maintain effective internal controls in accordance with SOX, while both integrating and continuing to consolidate our enterprise systems;
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•
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The effect of accounting pronouncements issued periodically by standard-setting bodies; and
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•
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Other considerations disclosed elsewhere herein and in other reports we file with the SEC or in other publicly disseminated written documents.
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2019 Form 10-K
|
2
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WEC Energy Group, Inc.
|
•
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WE generates and distributes electric energy to customers located in southeastern Wisconsin (including the metropolitan Milwaukee area), east central Wisconsin, and northern Wisconsin. WE also served an iron ore mine customer, Tilden, in the Upper Peninsula of Michigan, through March 31, 2019 when Tilden became a customer of UMERC.
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•
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WPS generates and distributes electric energy to customers located in northeastern and central Wisconsin.
|
•
|
UMERC generates and distributes electric energy to customers located in the Upper Peninsula of Michigan. UMERC began generating electricity when its new natural gas-fired generation achieved commercial operation on March 31, 2019.
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2019 Form 10-K
|
3
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WEC Energy Group, Inc.
|
(in millions)
|
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2017
|
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Operating revenues
|
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|
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Residential
|
|
$
|
1,581.5
|
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Small commercial and industrial (1)
|
|
1,400.9
|
|
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Large commercial and industrial (1)
|
|
913.7
|
|
|
Other
|
|
30.5
|
|
|
Retail (1)
|
|
3,926.6
|
|
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Wholesale
|
|
233.4
|
|
|
Resale
|
|
270.6
|
|
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Steam
|
|
23.3
|
|
|
Other operating revenues (2)
|
|
105.1
|
|
|
Total operating revenues (1)
|
|
$
|
4,559.0
|
|
(1)
|
Includes distribution sales for customers who have purchased power from an alternative electric supplier in Michigan.
|
(2)
|
Includes SSR revenues, amounts collected from (refunded to) customers for certain fuel and purchased power costs that exceed a 2% price variance from costs included in rates, and other revenues, partially offset by revenues from Tilden that were addressed in WE's December 2019 Wisconsin rate order.
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2019 Form 10-K
|
4
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WEC Energy Group, Inc.
|
|
|
Year Ended December 31
|
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(in thousands)
|
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2019
|
|
2018
|
|
2017
|
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Electric customers – end of year
|
|
|
|
|
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|
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Residential
|
|
1,449.7
|
|
|
1,441.3
|
|
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1,431.4
|
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Small commercial and industrial
|
|
174.6
|
|
|
173.2
|
|
|
172.2
|
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Large commercial and industrial
|
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0.9
|
|
|
0.9
|
|
|
0.9
|
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Wholesale and other
|
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2.7
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|
|
2.7
|
|
|
2.6
|
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Total electric customers – end of year
|
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1,627.9
|
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|
1,618.1
|
|
|
1,607.1
|
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|
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Steam customers – end of year
|
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0.4
|
|
|
0.4
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|
|
0.4
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2019 Form 10-K
|
5
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WEC Energy Group, Inc.
|
|
|
Estimate (1)
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Actual
|
||||||||
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2020
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2019
|
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2018
|
|
2017
|
||||
Company-owned generation units:
|
|
|
|
|
|
|
|
|
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Coal
|
|
32.5
|
%
|
|
36.3
|
%
|
|
44.7
|
%
|
|
48.5
|
%
|
Natural gas:
|
|
|
|
|
|
|
|
|
||||
Combined cycle
|
|
24.3
|
%
|
|
26.8
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%
|
|
19.7
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%
|
|
16.5
|
%
|
Steam turbine
|
|
0.9
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%
|
|
0.8
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%
|
|
0.6
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%
|
|
0.8
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%
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Natural gas/oil peaking units
|
|
4.4
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%
|
|
0.9
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%
|
|
1.7
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%
|
|
1.1
|
%
|
Renewables (2)
|
|
4.2
|
%
|
|
4.4
|
%
|
|
4.1
|
%
|
|
4.1
|
%
|
Total company-owned generation units
|
|
66.3
|
%
|
|
69.2
|
%
|
|
70.8
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%
|
|
71.0
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%
|
Power purchase contracts:
|
|
|
|
|
|
|
|
|
||||
Nuclear
|
|
19.0
|
%
|
|
19.8
|
%
|
|
18.6
|
%
|
|
17.7
|
%
|
Natural gas
|
|
2.7
|
%
|
|
1.8
|
%
|
|
1.5
|
%
|
|
1.3
|
%
|
Renewables (2)
|
|
2.5
|
%
|
|
2.0
|
%
|
|
2.4
|
%
|
|
2.9
|
%
|
Other
|
|
1.8
|
%
|
|
1.8
|
%
|
|
1.7
|
%
|
|
1.6
|
%
|
Total power purchase contracts
|
|
26.0
|
%
|
|
25.4
|
%
|
|
24.2
|
%
|
|
23.5
|
%
|
Purchased power from MISO
|
|
7.7
|
%
|
|
5.4
|
%
|
|
5.0
|
%
|
|
5.5
|
%
|
Total purchased power
|
|
33.7
|
%
|
|
30.8
|
%
|
|
29.2
|
%
|
|
29.0
|
%
|
Total electric utility supply
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
(1)
|
The values included in the estimate assume a natural gas price based on the February 2020 NYMEX.
|
(2)
|
Includes hydroelectric, biomass, and wind generation.
|
2019 Form 10-K
|
6
|
WEC Energy Group, Inc.
|
•
|
In April 2019, WPS, along with an unaffiliated utility, received approval from the PSCW to acquire ownership interests in two utility-scale solar projects in Wisconsin. Badger Hollow I is located in Iowa County, Wisconsin, and Two Creeks is located in Manitowoc County, Wisconsin. Once constructed, WPS will own 100 MW of the output of each project for a total of 200 MW. Construction began at Two Creeks and Badger Hollow I in August 2019 and October 2019, respectively. Commercial operation of both projects is targeted for the end of 2020.
|
•
|
In August 2019, WE, along with an unaffiliated utility, filed an application with the PSCW for approval to acquire an ownership interest in a proposed solar project, Badger Hollow II, that will be located in Iowa County, Wisconsin. At its meeting on February 20, 2020, the PSCW approved the acquisition of this project. The approval is still subject to WE's receipt and review of a final written order from the PSCW. Once constructed, WE will own 100 MW of the output of this project. Commercial operation of Badger Hollow II is targeted for the end of 2021.
|
2019 Form 10-K
|
7
|
WEC Energy Group, Inc.
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Coal
|
|
$
|
22.77
|
|
|
$
|
23.54
|
|
|
$
|
23.05
|
|
Natural gas combined cycle
|
|
19.55
|
|
|
21.69
|
|
|
22.65
|
|
|||
Natural gas/oil peaking units
|
|
51.80
|
|
|
49.06
|
|
|
53.91
|
|
|||
Biomass
|
|
102.99
|
|
|
97.33
|
|
|
118.76
|
|
|||
Purchased power
|
|
42.53
|
|
|
42.85
|
|
|
42.12
|
|
(in thousands)
|
|
Annual Tonnage
|
|
2020
|
|
10,020
|
|
2021
|
|
4,640
|
|
2022
|
|
2,100
|
|
2019 Form 10-K
|
8
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2017
|
||
Operating revenues
|
|
|
||
Residential
|
|
$
|
809.3
|
|
Commercial and industrial
|
|
395.5
|
|
|
Total retail revenues
|
|
1,204.8
|
|
|
Transport
|
|
72.6
|
|
|
Other operating revenues *
|
|
(7.2
|
)
|
|
Total operating revenues
|
|
$
|
1,270.2
|
|
*
|
Includes amounts refunded to customers for purchased gas adjustment costs.
|
|
|
Year Ended December 31
|
|||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
|||
Customers – end of year
|
|
|
|
|
|
|
|||
Residential
|
|
1,339.6
|
|
|
1,329.6
|
|
|
1,318.3
|
|
Commercial and industrial
|
|
131.5
|
|
|
130.6
|
|
|
129.7
|
|
Transport
|
|
3.2
|
|
|
3.0
|
|
|
2.8
|
|
Total customers
|
|
1,474.3
|
|
|
1,463.2
|
|
|
1,450.8
|
|
2019 Form 10-K
|
9
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
10
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2017
|
||
Operating revenues
|
|
|
||
Residential
|
|
$
|
934.8
|
|
Commercial and industrial
|
|
156.7
|
|
|
Total retail revenues
|
|
1,091.5
|
|
|
Transport
|
|
246.9
|
|
|
Other operating revenues
|
|
17.1
|
|
|
Total operating revenues
|
|
$
|
1,355.5
|
|
|
|
Year Ended December 31
|
|||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
|||
Customers – end of year
|
|
|
|
|
|
|
|||
Residential
|
|
870.6
|
|
|
863.2
|
|
|
849.8
|
|
Commercial and industrial
|
|
71.8
|
|
|
72.1
|
|
|
72.9
|
|
Transport
|
|
88.7
|
|
|
97.5
|
|
|
107.5
|
|
Total customers
|
|
1,031.1
|
|
|
1,032.8
|
|
|
1,030.2
|
|
2019 Form 10-K
|
11
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2017
|
||
Operating revenues
|
|
|
||
Residential
|
|
$
|
220.2
|
|
Commercial and industrial
|
|
123.9
|
|
|
Total retail revenues
|
|
344.1
|
|
|
Transport
|
|
31.4
|
|
|
Other operating revenues
|
|
35.7
|
|
|
Total operating revenues
|
|
$
|
411.2
|
|
2019 Form 10-K
|
12
|
WEC Energy Group, Inc.
|
|
|
Year Ended December 31
|
|||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
|||
Customers – end of year
|
|
|
|
|
|
|
|||
Residential
|
|
360.8
|
|
|
356.5
|
|
|
353.0
|
|
Commercial and industrial
|
|
35.0
|
|
|
34.9
|
|
|
34.5
|
|
Transport
|
|
24.7
|
|
|
24.7
|
|
|
24.2
|
|
Total customers
|
|
420.5
|
|
|
416.1
|
|
|
411.7
|
|
2019 Form 10-K
|
13
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
14
|
WEC Energy Group, Inc.
|
Name
|
|
Ownership Interest
|
|
Upstream (1)
|
|
80.0
|
%
|
Bishop Hill III
|
|
90.0
|
%
|
Coyote Ridge (2)
|
|
80.0
|
%
|
(1)
|
In February 2020, WECI signed an agreement to acquire an additional 10% ownership interest in Upstream.
|
(2)
|
Coyote Ridge achieved commercial operation on December 20, 2019.
|
2019 Form 10-K
|
15
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
16
|
WEC Energy Group, Inc.
|
Regulated Rates
|
|
Regulatory Commission
|
WE
|
|
|
Retail electric, natural gas, and steam
|
|
PSCW
|
Retail electric *
|
|
MPSC
|
Wholesale power
|
|
FERC
|
WPS
|
|
|
Retail electric and natural gas
|
|
PSCW
|
Wholesale power
|
|
FERC
|
WG
|
|
|
Retail natural gas
|
|
PSCW
|
UMERC
|
|
|
Retail electric and natural gas
|
|
MPSC
|
Wholesale power
|
|
FERC
|
PGL
|
|
|
Retail natural gas
|
|
ICC
|
NSG
|
|
|
Retail natural gas
|
|
ICC
|
MERC
|
|
|
Retail natural gas
|
|
MPUC
|
MGU
|
|
|
Retail natural gas
|
|
MPSC
|
*
|
Tilden, an iron-ore mine in the Upper Peninsula of Michigan, was a customer of WE through March 31, 2019. Tilden became a customer of UMERC when UMERC's new natural gas-fired generation in the Upper Peninsula began commercial operation. As a result, WE no longer has any retail customers in Michigan and its retail electric rates were not regulated by the MPSC after March 31, 2019. See Note 25, Regulatory Environment, for more information on the formation of UMERC.
|
2019 Form 10-K
|
17
|
WEC Energy Group, Inc.
|
Regulatory Commission
|
|
Website
|
PSCW
|
|
https://psc.wi.gov/
|
ICC
|
|
https://www.icc.illinois.gov/
|
MPSC
|
|
http://www.michigan.gov/mpsc/
|
MPUC
|
|
http://mn.gov/puc/
|
FERC
|
|
http://www.ferc.gov/
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
(in millions)
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|||||||||
Electric
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Wisconsin
|
|
$
|
3,807.4
|
|
|
88.2
|
%
|
|
$
|
3,890.4
|
|
|
87.7
|
%
|
|
$
|
3,909.1
|
|
|
85.7
|
%
|
Michigan
|
|
142.6
|
|
|
3.3
|
%
|
|
152.4
|
|
|
3.4
|
%
|
|
145.9
|
|
|
3.2
|
%
|
|||
FERC – Wholesale
|
|
367.6
|
|
|
8.5
|
%
|
|
396.1
|
|
|
8.9
|
%
|
|
504.0
|
|
|
11.1
|
%
|
|||
Total
|
|
4,317.6
|
|
|
100.0
|
%
|
|
4,438.9
|
|
|
100.0
|
%
|
|
4,559.0
|
|
|
100.0
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Natural Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Wisconsin
|
|
1,325.3
|
|
|
42.6
|
%
|
|
1,351.8
|
|
|
42.3
|
%
|
|
1,266.4
|
|
|
41.7
|
%
|
|||
Illinois
|
|
1,357.1
|
|
|
43.6
|
%
|
|
1,400.0
|
|
|
43.8
|
%
|
|
1,355.5
|
|
|
44.6
|
%
|
|||
Minnesota
|
|
281.5
|
|
|
9.0
|
%
|
|
289.8
|
|
|
9.1
|
%
|
|
272.6
|
|
|
9.0
|
%
|
|||
Michigan
|
|
148.7
|
|
|
4.8
|
%
|
|
152.4
|
|
|
4.8
|
%
|
|
142.4
|
|
|
4.7
|
%
|
|||
Total
|
|
3,112.6
|
|
|
100.0
|
%
|
|
3,194.0
|
|
|
100.0
|
%
|
|
3,036.9
|
|
|
100.0
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total utility operating revenues
|
|
$
|
7,430.2
|
|
|
|
|
|
$
|
7,632.9
|
|
|
|
|
|
$
|
7,595.9
|
|
|
|
|
2019 Form 10-K
|
18
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
19
|
WEC Energy Group, Inc.
|
|
|
Total Employees
|
|
WE
|
|
2,562
|
|
WPS
|
|
1,190
|
|
WG
|
|
392
|
|
PGL
|
|
1,497
|
|
NSG
|
|
150
|
|
MERC
|
|
217
|
|
MGU
|
|
146
|
|
WBS
|
|
1,355
|
|
Total employees
|
|
7,509
|
|
|
|
Number of Employees
|
|
Expiration Date of Current Labor Agreement
|
|
WE
|
|
|
|
|
|
Local 2150 of International Brotherhood of Electrical Workers
|
|
1,547
|
|
|
August 15, 2020
|
Local 420 of International Union of Operating Engineers
|
|
351
|
|
|
September 30, 2021
|
Local 2006 Unit 1 of United Steel Workers of America
|
|
103
|
|
|
October 31, 2021
|
Local 510 of International Brotherhood of Electrical Workers
|
|
4
|
|
|
October 31, 2020
|
Total WE
|
|
2,005
|
|
|
|
|
|
|
|
|
|
WPS
|
|
|
|
|
|
Local 420 of International Union of Operating Engineers
|
|
858
|
|
|
April 16, 2021
|
|
|
|
|
|
|
WG
|
|
|
|
|
|
Local 2150 of International Brotherhood of Electrical Workers
|
|
87
|
|
|
August 15, 2020
|
Local 2006 Unit 1 of United Steel Workers of America
|
|
184
|
|
|
October 31, 2021
|
Total WG
|
|
271
|
|
|
|
|
|
|
|
|
|
PGL
|
|
|
|
|
|
Local 18007 of Utility Workers Union of America
|
|
945
|
|
|
April 30, 2023
|
Local 18007(C) of Utility Workers Union of America
|
|
59
|
|
|
July 31, 2021
|
Total PGL
|
|
1,004
|
|
|
|
|
|
|
|
|
|
NSG
|
|
|
|
|
|
Local 2285 of International Brotherhood of Electrical Workers
|
|
103
|
|
|
June 30, 2024
|
|
|
|
|
|
|
MERC
|
|
|
|
|
|
Local 31 of International Brotherhood of Electrical Workers
|
|
44
|
|
|
May 31, 2020
|
Local 49 of International Union of Operating Engineers
|
|
3
|
|
|
January 1, 2022
|
Total MERC
|
|
47
|
|
|
|
|
|
|
|
|
|
MGU
|
|
|
|
|
|
Local 12295 of United Steelworkers of America *
|
|
68
|
|
|
January 15, 2023
|
Local 417 of Utility Workers Union of America
|
|
24
|
|
|
February 15, 2022
|
Total MGU
|
|
92
|
|
|
|
|
|
|
|
|
|
Total represented employees
|
|
4,380
|
|
|
|
*
|
A three year contract was ratified between MGU and the Union Steelworkers of America, Local 12295, on January 11, 2020.
|
2019 Form 10-K
|
20
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
21
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
22
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
23
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
24
|
WEC Energy Group, Inc.
|
•
|
Fluctuations in customer growth and general economic conditions in our service areas. Customer growth and energy use can be negatively impacted by population declines as well as economic factors in our service territories, including workforce reductions, stagnant wage growth, changing levels of support from state and local government for economic development, business closings, and reductions in the level of business investment. Our electric and natural gas utilities are impacted by economic cycles and the competitiveness of the commercial and industrial customers we serve. Any economic downturn, disruption of financial markets, or reduced incentives by state government for economic development could adversely affect the financial condition of our customers and demand for their products or services. These risks could directly influence the demand for electricity and natural gas as well as the need for additional power generation and generating facilities. We could also be exposed to greater risks of accounts receivable write-offs if customers are unable to pay their bills.
|
•
|
Weather conditions. 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.
|
•
|
Our customers' continued focus on energy conservation. Our customers' use of electricity and natural gas has decreased as a result of continued individual conservation efforts, including the use of more energy efficient technologies. Customers could also voluntarily reduce their consumption of energy in response to decreases in their disposable income and increases in energy prices. Conservation of energy can be influenced by certain federal and state programs that are intended to influence how consumers use energy. For example, several states, including Wisconsin and Michigan, have adopted energy efficiency targets to reduce energy consumption by certain dates.
|
2019 Form 10-K
|
25
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
26
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
27
|
WEC Energy Group, Inc.
|
•
|
A rating downgrade;
|
•
|
An economic downturn or uncertainty;
|
•
|
Prevailing market conditions and rules;
|
•
|
Concerns over foreign economic conditions;
|
•
|
Changes in tax policy;
|
•
|
Changes in investment criteria of institutional investors;
|
•
|
War or the threat of war;
|
•
|
The overall health and view of the utility and financial institution industries; and
|
•
|
Changes in the method of determining LIBOR or the replacement of LIBOR with an alternative reference rate.
|
2019 Form 10-K
|
28
|
WEC Energy Group, Inc.
|
•
|
Increase borrowing costs under certain existing credit facilities;
|
•
|
Require the payment of higher interest rates in future financings and possibly reduce the pool of creditors;
|
•
|
Decrease funding sources by limiting our or our subsidiaries' access to the commercial paper market;
|
•
|
Limit the availability of adequate credit support for our subsidiaries' operations; and
|
•
|
Trigger collateral requirements in various contracts.
|
•
|
Higher working capital requirements, particularly related to natural gas inventory, accounts receivable, and cash collateral postings;
|
•
|
Reduced profitability to the extent that lower revenues, increased bad debt, and interest expense are not recovered through rates;
|
•
|
Higher rates charged to our customers, which could impact our competitive position;
|
•
|
Reduced demand for energy, which could impact revenues and operating expenses; and
|
•
|
Shutting down of generation facilities if the cost of generation exceeds the market price for electricity.
|
2019 Form 10-K
|
29
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
30
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
31
|
WEC Energy Group, Inc.
|
Name
|
|
Location
|
|
Fuel
|
|
Number of Generating Units
|
|
Rated Capacity In MW (1)
|
|
||
Coal-fired plants
|
|
|
|
|
|
|
|
|
|
||
Columbia
|
|
Portage, WI
|
|
Coal
|
|
2
|
|
|
314
|
|
(2)
|
ERGS
|
|
Oak Creek, WI
|
|
Coal
|
|
2
|
|
|
1,054
|
|
(3) (4)
|
OCPP
|
|
Oak Creek, WI
|
|
Coal
|
|
4
|
|
|
1,075
|
|
|
Weston
|
|
Rothschild, WI
|
|
Coal
|
|
2
|
|
|
715
|
|
(2)
|
Total coal-fired plants
|
|
|
|
|
|
10
|
|
|
3,158
|
|
|
Natural gas-fired plants
|
|
|
|
|
|
|
|
|
|
||
Concord Combustion Turbines
|
|
Watertown, WI
|
|
Natural Gas/Oil
|
|
4
|
|
|
361
|
|
|
De Pere Energy Center
|
|
De Pere, WI
|
|
Natural Gas/Oil
|
|
1
|
|
|
167
|
|
|
Fox Energy Center
|
|
Wrightstown, WI
|
|
Natural Gas
|
|
3
|
|
|
567
|
|
|
Germantown Combustion Turbines
|
|
Germantown, WI
|
|
Natural Gas/Oil
|
|
5
|
|
|
273
|
|
|
F. D. Kuester
|
|
Negaunee, MI
|
|
Natural Gas
|
|
7
|
|
|
131
|
|
|
A. J. Mihm
|
|
Baraga, MI
|
|
Natural Gas
|
|
3
|
|
|
56
|
|
|
Paris Combustion Turbines
|
|
Union Grove, WI
|
|
Natural Gas/Oil
|
|
4
|
|
|
358
|
|
|
PWGS
|
|
Port Washington, WI
|
|
Natural Gas
|
|
2
|
|
|
1,228
|
|
(4)
|
Pulliam
|
|
Green Bay, WI
|
|
Natural Gas/Oil
|
|
1
|
|
|
79
|
|
|
VAPP
|
|
Milwaukee, WI
|
|
Natural Gas
|
|
2
|
|
|
265
|
|
|
West Marinette
|
|
Marinette, WI
|
|
Natural Gas/Oil
|
|
3
|
|
|
154
|
|
|
Weston
|
|
Rothschild, WI
|
|
Natural Gas/Oil
|
|
3
|
|
|
114
|
|
|
Total natural gas-fired plants
|
|
|
|
|
|
38
|
|
|
3,753
|
|
|
Renewables
|
|
|
|
|
|
|
|
|
|
||
Hydro Plants (30 in number)
|
|
WI and MI
|
|
Hydro
|
|
81
|
|
|
94
|
|
(5) (6)
|
Rothschild Biomass Plant
|
|
Rothschild, WI
|
|
Biomass
|
|
1
|
|
|
46
|
|
(7)
|
Wind Sites (5 in number)
|
|
WI and IA
|
|
Wind
|
|
350
|
|
|
67
|
|
(8)
|
Total renewables
|
|
|
|
|
|
432
|
|
|
207
|
|
|
Total system
|
|
|
|
|
|
480
|
|
|
7,118
|
|
|
(1)
|
Capacity for our electric generation facilities is based on rated capacity, which is the net power output under average operating conditions with equipment in an average state of repair as of a given month in a given year. Values are primarily based on the net dependable expected capacity ratings for summer 2020 established by tests and may change slightly from year to year. The summer period is the most relevant for capacity planning purposes. This is a result of continually reaching demand peaks in the summer months, primarily due to air conditioning demand.
|
(2)
|
These facilities are jointly owned by WPS and various other utilities. The capacity indicated for each of these units is equal to WPS's portion of total plant capacity based on its percent of ownership.
|
•
|
Wisconsin Power and Light Company, an unaffiliated utility, operates the Columbia units. WPS holds a 27.6% ownership interest in Columbia. See Note 7, Jointly Owned Utility Facilities, for more information on the anticipated decrease in WPS's ownership interest in the Columbia unit.
|
•
|
WPS operates the Weston 4 facility and holds a 70.0% ownership interest in this facility. Dairyland Power Cooperative, an unaffiliated energy cooperative, holds the remaining 30.0% interest.
|
2019 Form 10-K
|
32
|
WEC Energy Group, Inc.
|
(3)
|
This facility is jointly owned by We Power and two other unaffiliated entities. Our share of capacity is equal to We Power's ownership interest of 83.34%.
|
(4)
|
These facilities are part of the Company's non-utility energy infrastructure segment. See B. Non-Utility Energy Infrastructure Segment below.
|
(5)
|
All of our hydroelectric facilities follow FERC guidelines and/or regulations.
|
(6)
|
WRPC owns and operates the Castle Rock and Petenwell units. WPS holds a 50.0% ownership interest in WRPC and is entitled to 50.0% of the total capacity at Castle Rock and Petenwell. WPS's share of capacity for Castle Rock and Petenwell is 6.8 MW and 10.2 MW, respectively.
|
(7)
|
WE has a biomass power plant that uses wood waste and wood shavings to produce electric power as well as steam to support the paper mill's operations. Fuel for the power plant is supplied by both the paper mill and through contracts with biomass suppliers. The plant also has the ability to burn natural gas if wood waste and wood shavings are not available.
|
(8)
|
WPS, along with two other unaffiliated utilities, owns Forward Wind Energy Center, which consists of 86 wind turbines located in Wisconsin with a total capacity of 138 MW. WPS is entitled to its share of generating capability and output of the facility equal to its ownership interest of 44.6%. See Note 2, Acquisitions, for more information on the Forward Wind Energy Center acquisition.
|
•
|
Approximately 49,500 miles of natural gas distribution mains,
|
•
|
Approximately 1,200 miles of natural gas transmission mains,
|
•
|
Approximately 2.3 million natural gas lateral services,
|
•
|
Approximately 510 natural gas distribution and transmission gate stations,
|
•
|
Approximately 68.2 billion cubic feet of working gas capacities in underground natural gas storage fields:
|
◦
|
Bluewater, 26.5 billion cubic feet of fields located in southeastern Michigan,
|
◦
|
Manlove, a 38.8 billion-cubic-foot field located in central Illinois,
|
◦
|
Partello, a 2.9 billion-cubic-foot field located in southern Michigan,
|
•
|
A 2.0 billion-cubic-foot LNG plant located in central Illinois,
|
•
|
A peak-shaving facility that can store the equivalent of approximately 80 MDth in liquefied petroleum gas located in Illinois,
|
•
|
Peak propane air systems providing approximately 2,960 Dth per day, and
|
•
|
LNG storage plants with a total send-out capability of 73,600 Dth per day.
|
2019 Form 10-K
|
33
|
WEC Energy Group, Inc.
|
Name
|
|
Location
|
|
Number of Generating Units
|
|
Nameplate Capacity In MW (1)
|
|
||
Wind generating facilities
|
|
|
|
|
|
|
|
||
Upstream
|
|
Antelope County, Nebraska
|
|
81
|
|
|
202.5
|
|
(2)
|
Bishop Hill III
|
|
Henry County, Illinois
|
|
53
|
|
|
132.1
|
|
(3)
|
Coyote Ridge
|
|
Brookings County, South Dakota
|
|
39
|
|
|
96.7
|
|
(4)
|
Total wind generating facilities
|
|
|
|
173
|
|
|
431.3
|
|
|
(1)
|
Nameplate capacity is the amount of energy a turbine should produce at optimal wind speeds.
|
(2)
|
In January 2019, WECI completed the acquisition of an 80% ownership interest in Upstream. In February 2020, WECI agreed to acquire an additional 10% ownership interest in Upstream. See Note 2, Acquisitions, for more information.
|
(3)
|
In August 2018, WECI completed the acquisition of an 80% ownership interest in Bishop Hill III. In December 2018, WECI acquired an additional 10% ownership interest in this wind farm. See Note 2, Acquisitions, for more information.
|
(4)
|
In December 2018, WECI completed the acquisition of an 80% ownership interest in Coyote Ridge, which achieved commercial operation in December 2019. See Note 2, Acquisitions, for more information.
|
2019 Form 10-K
|
34
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
35
|
WEC Energy Group, Inc.
|
•
|
WEC Energy Group — Executive Chairman since February 2019. Chairman of the Board and Chief Executive Officer from October 2017 to February 2019, and from May 2004 to May 2016. Non-Executive Chairman of the Board from May 2016 to October 2017. Director since December 2003. President from April 2003 to August 2013.
|
•
|
WE — Director since January 2018, and from December 2003 to May 2016. Chairman of the Board from January 2018 to February 2019, and from May 2004 to May 2016. Chief Executive Officer from January 2018 to February 2019, and from August 2003 to May 2016. President from August 2003 to June 2015.
|
•
|
WEC Energy Group — Director and Chief Executive Officer since February 2019. President since October 2018.
|
•
|
WE — Chairman of the Board and Chief Executive Officer since February 2019. Director since June 2015. President from May 2016 to November 2018. Executive Vice President - Customer Service and Operations from June 2015 to April 2016. Senior Vice President - Customer Operations from October 2011 to June 2015.
|
•
|
WEC Energy Group — Executive Vice President - External Affairs since June 2015. Senior Vice President - External Affairs from April 2011 to June 2015.
|
•
|
WE — Executive Vice President - External Affairs since June 2015. Senior Vice President - External Affairs from April 2011 to June 2015.
|
•
|
WEC Energy Group — Controller since October 2015. Vice President since June 2015.
|
•
|
WE — Vice President and Controller since October 2015.
|
•
|
Integrys Energy Group — Vice President and Treasurer from December 2010 to June 2015.
|
•
|
WEC Energy Group — Executive Vice President, Corporate Secretary and General Counsel since January 2018. Executive Vice President from September 2017 to January 2018.
|
•
|
WE — Executive Vice President, Corporate Secretary and General Counsel since January 2018. Director since January 2018.
|
•
|
Modine Manufacturing Company – General Counsel, Corporate Secretary, and Vice President - Legal from April 2008 to August 2017. Vice President - Corporate Communications from April 2014 to August 2017.
|
•
|
WEC Energy Group — Executive Vice President - WEC Infrastructure since November 2018.
|
•
|
WE — Senior Vice President - Wholesale Energy and Fuels from June 2015 to January 2019. Vice President from May 2014 to June 2015.
|
•
|
WEC Energy Group — Senior Executive Vice President since March 2018. Executive Vice President from May 2004 to January 2013.
|
•
|
WE — Executive Vice President from May 2004 to January 2013.
|
•
|
WEC Energy Group — Senior Executive Vice President and Chief Financial Officer since October 2019. Senior Executive Vice President, Chief Financial Officer and Treasurer from February 2019 to October 2019. Executive Vice President, Chief Financial Officer and Treasurer from October 2018 to February 2019. Executive Vice President and Chief Financial Officer from April 2016 to October 2018. Vice President and Treasurer from February 2013 to March 2016.
|
•
|
WE — Executive Vice President and Chief Financial Officer since October 2019, and from April 2016 to October 2018. Director since April 2016. Executive Vice President, Chief Financial Officer and Treasurer from October 2018 to October 2019. Vice President and Treasurer from February 2013 to March 2016.
|
2019 Form 10-K
|
36
|
WEC Energy Group, Inc.
|
•
|
PELLC — President since June 2015.
|
•
|
PGL — Director, President, and Chief Executive Officer since June 2015.
|
•
|
NSG — Director, President, and Chief Executive Officer since June 2015.
|
•
|
WE — Senior Vice President - Wholesale Energy and Fuels from January 2012 to June 2015.
|
•
|
WE — President since November 2018. Director since January 2018. Executive Vice President - Generation from April 2016 to November 2018. Senior Vice President - Power Generation from January 2014 to March 2016.
|
•
|
WEC Energy Group — Vice President and Treasurer since October 2019.
|
•
|
WE — Vice President and Treasurer since October 2019.
|
•
|
Controller - Illinois from September 2015 to September 2019. Manager - Financial Planning and Analysis from May 2011 to September 2015.
|
•
|
WEC Energy Group — Senior Vice President - Corporate Communications and Investor Relations since June 2015.
|
•
|
WE — Senior Vice President - Corporate Communications and Investor Relations from June 1 to June 28, 2015.
|
•
|
Barclays — Vice President of Equity Research Power and Utilities Group from September 2008 to May 2015.
|
*
|
On January 31, 2020, Mr. Kuester informed the Company of his intent to retire in 2020.
|
2019 Form 10-K
|
37
|
WEC Energy Group, Inc.
|
As of or for Year Ended December 31
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions, except per share information)
|
|
2019
|
|
2018
|
|
2017 (1)
|
|
2016
|
|
2015 (2)
|
||||||||||
Operating revenues
|
|
$
|
7,523.1
|
|
|
$
|
7,679.5
|
|
|
$
|
7,648.5
|
|
|
$
|
7,472.3
|
|
|
$
|
5,926.1
|
|
Net income attributed to common shareholders
|
|
1,134.0
|
|
|
1,059.3
|
|
|
1,203.7
|
|
|
939.0
|
|
|
638.5
|
|
|||||
Total assets
|
|
34,951.8
|
|
|
33,475.8
|
|
|
31,590.5
|
|
|
30,123.2
|
|
|
29,355.2
|
|
|||||
Preferred stock of subsidiary
|
|
30.4
|
|
|
30.4
|
|
|
30.4
|
|
|
30.4
|
|
|
30.4
|
|
|||||
Long-term debt (excluding current portion)
|
|
11,211.0
|
|
|
9,994.0
|
|
|
8,746.6
|
|
|
9,158.2
|
|
|
9,124.1
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
315.4
|
|
|
315.5
|
|
|
315.6
|
|
|
315.6
|
|
|
271.1
|
|
|||||
Diluted
|
|
316.7
|
|
|
316.9
|
|
|
317.2
|
|
|
316.9
|
|
|
272.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
3.60
|
|
|
$
|
3.36
|
|
|
$
|
3.81
|
|
|
$
|
2.98
|
|
|
$
|
2.36
|
|
Diluted
|
|
$
|
3.58
|
|
|
$
|
3.34
|
|
|
$
|
3.79
|
|
|
$
|
2.96
|
|
|
$
|
2.34
|
|
Dividends per share of common stock
|
|
$
|
2.36
|
|
|
$
|
2.21
|
|
|
$
|
2.08
|
|
|
$
|
1.98
|
|
|
$
|
1.74
|
|
(1)
|
Includes a $206.7 million increase in net income attributed to common shareholders related to a re-measurement of our deferred taxes as a result of the Tax Legislation. See Note 15, Income Taxes, for more information.
|
(2)
|
Includes the impact of the Integrys acquisition for the last two quarters of 2015.
|
2019 Form 10-K
|
38
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
39
|
WEC Energy Group, Inc.
|
•
|
WE and Wisconsin Gas LLC (WG) each plan to construct their own LNG facility. Subject to PSCW approval, each facility would provide approximately one billion cubic feet of natural gas supply to meet anticipated peak demand without requiring the construction of additional interstate pipeline capacity. These facilities are expected to reduce the likelihood of constraints on WE's and WG's natural gas systems during the highest demand days of winter. Commercial operation of the LNG facilities is targeted for the end of 2023.
|
•
|
The Peoples Gas Light and Coke Company continues to work on its Natural Gas System Modernization Program, which primarily involves replacing old cast and ductile iron pipes and facilities in Chicago’s natural gas delivery system with modern polyethylene pipes to reinforce the long-term safety and reliability of the system.
|
•
|
WPS continues work on its System Modernization and Reliability Project, which involves modernizing parts of its electric distribution system, including burying or upgrading lines. The project focuses on constructing facilities to improve the reliability of electric service WPS provides to its customers. WE, WPS, and WG also continue to upgrade their electric and natural gas distribution systems to enhance reliability.
|
•
|
See Note 2, Acquisitions, for information about our acquisitions of portions of wind energy generation facilities in Wisconsin, Illinois, Nebraska, and South Dakota.
|
2019 Form 10-K
|
40
|
WEC Energy Group, Inc.
|
•
|
See Note 3, Dispositions, for information on recent dispositions. In the first quarter of 2017, we sold substantially all of the remaining assets of Bostco LLC, and, in October 2018, Bostco was dissolved. In 2019, we sold certain WPS Power Development, LLC solar power generation facilities.
|
2019 Form 10-K
|
41
|
WEC Energy Group, Inc.
|
|
|
Year Ended December 31
|
||||||||||||||||||||||
(in millions, except per share data)
|
|
2019
|
|
2018
|
|
B (W)
|
|
Change Related to Flow Through of Tax Repairs
|
|
Change Related to Adoption of New Lease Guidance (Topic 842)
|
|
Remaining Change
B (W) |
||||||||||||
Wisconsin
|
|
$
|
1,189.6
|
|
|
$
|
800.2
|
|
|
$
|
389.4
|
|
|
$
|
(3.1
|
)
|
|
$
|
350.9
|
|
|
$
|
41.6
|
|
Illinois
|
|
291.9
|
|
|
255.8
|
|
|
36.1
|
|
|
—
|
|
|
—
|
|
|
36.1
|
|
||||||
Other states
|
|
65.3
|
|
|
68.8
|
|
|
(3.5
|
)
|
|
—
|
|
|
—
|
|
|
(3.5
|
)
|
||||||
Non-utility energy infrastructure
|
|
366.6
|
|
|
365.8
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||||
Corporate and other
|
|
(34.4
|
)
|
|
(22.2
|
)
|
|
(12.2
|
)
|
|
—
|
|
|
—
|
|
|
(12.2
|
)
|
||||||
Reconciling eliminations *
|
|
(347.6
|
)
|
|
—
|
|
|
(347.6
|
)
|
|
—
|
|
|
(347.6
|
)
|
|
—
|
|
||||||
Total operating income
|
|
1,531.4
|
|
|
1,468.4
|
|
|
63.0
|
|
|
(3.1
|
)
|
|
3.3
|
|
|
62.8
|
|
||||||
Equity in earnings of transmission affiliates
|
|
127.6
|
|
|
136.7
|
|
|
(9.1
|
)
|
|
—
|
|
|
—
|
|
|
(9.1
|
)
|
||||||
Other income, net
|
|
102.2
|
|
|
70.3
|
|
|
31.9
|
|
|
—
|
|
|
—
|
|
|
31.9
|
|
||||||
Interest expense
|
|
501.5
|
|
|
445.1
|
|
|
(56.4
|
)
|
|
—
|
|
|
(3.3
|
)
|
|
(53.1
|
)
|
||||||
Income before income taxes
|
|
1,259.7
|
|
|
1,230.3
|
|
|
29.4
|
|
|
(3.1
|
)
|
|
—
|
|
|
32.5
|
|
||||||
Income tax expense
|
|
125.0
|
|
|
169.8
|
|
|
44.8
|
|
|
3.1
|
|
|
—
|
|
|
41.7
|
|
||||||
Preferred stock dividends of subsidiary
|
|
1.2
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net loss attributed to noncontrolling interests
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
||||||
Net income attributed to common shareholders
|
|
$
|
1,134.0
|
|
|
$
|
1,059.3
|
|
|
$
|
74.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
74.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings per share
|
|
$
|
3.58
|
|
|
$
|
3.34
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
*
|
We adopted ASU 2016-02, Leases (Topic 842), effective January 1, 2019, which revised the previous guidance regarding the accounting for leases. As a result of this adoption, during 2019, $347.6 million of minimum lease payments that were billed from We Power to WE were no longer classified within operation and maintenance, but were instead recorded as interest expense in accordance with Topic 842. The We Power leases do not impact our financial statements as all amounts associated with the leases are eliminated at the consolidated level.
|
•
|
A $41.7 million remaining decrease in income tax expense, primarily due to an increase in wind production tax credits related to acquisitions of ownership interests in wind generation facilities in our non-utility energy infrastructure segment and the impact of the 2018 PSCW order regarding the benefits associated with the Tax Legislation. The impacts from the 2018 PSCW order related to the Tax Legislation were offset in operating income at the Wisconsin segment. See Note 2, Acquisitions, for more information on the acquisitions in our non-utility energy infrastructure segment.
|
•
|
A $41.6 million remaining increase in operating income at the Wisconsin segment. The increase was driven by lower operation and maintenance expense related to our power plants, which primarily resulted from lower maintenance and labor costs associated with our 2019 and 2018 plant retirements, and increases to certain plant-related regulatory assets resulting from decisions included in the December 2019 Wisconsin rate orders. The positive impact from lower operation and maintenance expense was partially offset by a decrease in electric margins related to lower retail sales volumes, primarily driven by cooler summer weather during 2019 compared with 2018; higher depreciation and amortization expense, driven by assets being placed into service as we continue to execute on our capital plan; and the impact from the PSCW's 2018 order addressing the Tax Legislation, which was offset in income tax expense.
|
•
|
A $36.1 million increase in operating income at the Illinois segment. The increase was driven by higher natural gas margins at PGL due to continued capital investment in the SMP project under its QIP rider.
|
2019 Form 10-K
|
42
|
WEC Energy Group, Inc.
|
•
|
A $31.9 million increase in other income, net, driven by net gains from investments held in the Integrys rabbi trust during 2019, compared with net losses during 2018. These investment gains partially offset benefits costs related to deferred compensation, which are included in other operation and maintenance expense. See Note 16, Fair Value Measurements, for more information on our investments held in the Integrys rabbi trust. Also contributing to the increase was higher net credits from the non-service components of our net periodic pension and OPEB costs. See Note 19, Employee Benefits, for more information on our benefit costs.
|
•
|
A $53.1 million remaining increase in interest expense, driven by higher long-term debt balances, primarily used to fund capital investments.
|
•
|
A $12.2 million increase in operating loss at the corporate and other segment, primarily driven by the transfer of assets from WBS, our centralized services company, to our regulated utilities in 2018. As a result of these transfers, the return on these assets is now recognized within our regulated utility operations. Also contributing to the increase in operating loss was a gain recorded in the third quarter of 2018 that related to the sale of a legacy business.
|
•
|
A $9.1 million decrease in earnings from our ownership interests in transmission affiliates, driven by the impact of a FERC order issued in November 2019 that addressed complaints related to ATC's allowed ROE. Increased earnings from continued capital investment partially offset the negative impact from the FERC order.
|
2019 Form 10-K
|
43
|
WEC Energy Group, Inc.
|
|
|
Year Ended December 31
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
B (W)
|
||||||
Electric revenues
|
|
$
|
4,317.6
|
|
|
$
|
4,438.9
|
|
|
$
|
(121.3
|
)
|
Fuel and purchased power
|
|
1,341.9
|
|
|
1,418.1
|
|
|
76.2
|
|
|||
Total electric margins
|
|
2,975.7
|
|
|
3,020.8
|
|
|
(45.1
|
)
|
|||
|
|
|
|
|
|
|
||||||
Natural gas revenues
|
|
1,329.5
|
|
|
1,355.8
|
|
|
(26.3
|
)
|
|||
Cost of natural gas sold
|
|
748.0
|
|
|
792.1
|
|
|
44.1
|
|
|||
Total natural gas margins
|
|
581.5
|
|
|
563.7
|
|
|
17.8
|
|
|||
|
|
|
|
|
|
|
||||||
Total electric and natural gas margins
|
|
3,557.2
|
|
|
3,584.5
|
|
|
(27.3
|
)
|
|||
|
|
|
|
|
|
|
||||||
Other operation and maintenance
|
|
1,591.3
|
|
|
2,076.1
|
|
|
484.8
|
|
|||
Depreciation and amortization
|
|
617.0
|
|
|
546.6
|
|
|
(70.4
|
)
|
|||
Property and revenue taxes
|
|
159.3
|
|
|
161.6
|
|
|
2.3
|
|
|||
Operating income
|
|
$
|
1,189.6
|
|
|
$
|
800.2
|
|
|
$
|
389.4
|
|
|
|
Year Ended December 31
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
B (W)
|
||||||
Operation and maintenance not included in line items below
|
|
$
|
670.7
|
|
|
$
|
769.5
|
|
|
$
|
98.8
|
|
We Power (1)
|
|
140.9
|
|
|
506.9
|
|
|
366.0
|
|
|||
Transmission (2)
|
|
418.1
|
|
|
420.7
|
|
|
2.6
|
|
|||
Transmission expense related to the flow through of tax repairs (3)
|
|
67.2
|
|
|
77.8
|
|
|
10.6
|
|
|||
Transmission expense related to Tax Legislation (4)
|
|
65.3
|
|
|
67.7
|
|
|
2.4
|
|
|||
Regulatory amortizations and other pass through expenses (5)
|
|
160.6
|
|
|
159.1
|
|
|
(1.5
|
)
|
|||
Earnings sharing mechanisms (6)
|
|
61.5
|
|
|
67.5
|
|
|
6.0
|
|
|||
Other
|
|
7.0
|
|
|
6.9
|
|
|
(0.1
|
)
|
|||
Total other operation and maintenance
|
|
$
|
1,591.3
|
|
|
$
|
2,076.1
|
|
|
$
|
484.8
|
|
(1)
|
Represents costs associated with the We Power generation units, including operating and maintenance costs incurred by WE. During 2018, the amount also included the lease payments that were billed from We Power to WE and then recovered in WE's rates. We adopted ASU 2016-02, Leases (Topic 842), effective January 1, 2019, which revised the previous guidance regarding the accounting for leases. As a result of this adoption, during 2019, $363.3 million of lease expense related to the We Power leases with WE was no longer classified within other operation and maintenance, but was instead recorded as $15.8 million and $347.5 million of depreciation and amortization and interest expense, respectively, in accordance with Topic 842. The We Power leases do not impact our financial statements as all amounts associated with the leases are eliminated at the consolidated level.
|
(2)
|
Represents transmission expense that we are authorized to collect in rates, in accordance with the PSCW's approval of escrow accounting for ATC and MISO network transmission expenses for our Wisconsin electric utilities. As a result, WE and WPS defer as a regulatory asset or liability the differences between actual transmission costs and those included in rates until recovery or refund is authorized in a future rate proceeding. During 2019 and 2018, $486.7 million and $438.2 million, respectively, of costs were billed to our electric utilities by transmission providers.
|
(3)
|
Represents additional transmission expense associated with WE's flow through of tax benefits of its repair-related deferred tax liabilities starting in 2018, in accordance with a settlement agreement with the PSCW, to maintain certain regulatory asset balances at their December 31, 2017 levels. See Note 25, Regulatory Environment, for more information. The decrease in transmission expense associated with the flow through of tax benefits is offset in income taxes.
|
(4)
|
Represents additional transmission expense associated with the May 2018 PSCW order requiring WE to use 80% of its current 2018 tax benefit, including the amortization associated with the revaluation of deferred taxes, to reduce its transmission regulatory asset balance. See Note 25, Regulatory Environment, for more information.
|
2019 Form 10-K
|
44
|
WEC Energy Group, Inc.
|
(5)
|
Regulatory amortizations and other pass through expenses are substantially offset in margins and therefore do not have a significant impact on operating income.
|
(6)
|
See Note 25, Regulatory Environment, for more information about our earnings sharing mechanisms.
|
|
|
Year Ended December 31
|
|||||||
|
|
MWh (in thousands)
|
|||||||
Electric Sales Volumes
|
|
2019
|
|
2018
|
|
B (W)
|
|||
Customer class
|
|
|
|
|
|
|
|||
Residential
|
|
10,918.6
|
|
|
11,195.0
|
|
|
(276.4
|
)
|
Small commercial and industrial *
|
|
12,861.0
|
|
|
13,186.7
|
|
|
(325.7
|
)
|
Large commercial and industrial *
|
|
12,601.6
|
|
|
12,946.5
|
|
|
(344.9
|
)
|
Other
|
|
164.8
|
|
|
169.0
|
|
|
(4.2
|
)
|
Total retail *
|
|
36,546.0
|
|
|
37,497.2
|
|
|
(951.2
|
)
|
Wholesale
|
|
3,314.3
|
|
|
3,612.7
|
|
|
(298.4
|
)
|
Resale
|
|
6,006.0
|
|
|
6,019.3
|
|
|
(13.3
|
)
|
Total sales in MWh *
|
|
45,866.3
|
|
|
47,129.2
|
|
|
(1,262.9
|
)
|
*
|
Includes distribution sales for customers who have purchased power from an alternative electric supplier in Michigan.
|
|
|
Year Ended December 31
|
|||||||
|
|
Therms (in millions)
|
|||||||
Natural Gas Sales Volumes
|
|
2019
|
|
2018
|
|
B (W)
|
|||
Customer class
|
|
|
|
|
|
|
|||
Residential
|
|
1,195.6
|
|
|
1,131.1
|
|
|
64.5
|
|
Commercial and industrial
|
|
740.9
|
|
|
733.1
|
|
|
7.8
|
|
Total retail
|
|
1,936.5
|
|
|
1,864.2
|
|
|
72.3
|
|
Transport
|
|
1,426.1
|
|
|
1,411.5
|
|
|
14.6
|
|
Total sales in therms
|
|
3,362.6
|
|
|
3,275.7
|
|
|
86.9
|
|
|
|
Year Ended December 31
|
|||||||
|
|
Degree Days
|
|||||||
Weather
|
|
2019
|
|
2018
|
|
B (W)
|
|||
WE and WG (1)
|
|
|
|
|
|
|
|||
Heating (6,556 normal)
|
|
6,835
|
|
|
6,685
|
|
|
2.2
|
%
|
Cooling (739 normal)
|
|
727
|
|
|
929
|
|
|
(21.7
|
)%
|
|
|
|
|
|
|
|
|||
WPS (2)
|
|
|
|
|
|
|
|||
Heating (7,381 normal)
|
|
7,723
|
|
|
7,554
|
|
|
2.2
|
%
|
Cooling (514 normal)
|
|
504
|
|
|
678
|
|
|
(25.7
|
)%
|
|
|
|
|
|
|
|
|||
UMERC (3)
|
|
|
|
|
|
|
|||
Heating (8,382 normal)
|
|
8,971
|
|
|
8,611
|
|
|
4.2
|
%
|
Cooling (333 normal)
|
|
284
|
|
|
478
|
|
|
(40.6
|
)%
|
(1)
|
Normal degree days are based on a 20-year moving average of monthly temperatures from Mitchell International Airport in Milwaukee, Wisconsin.
|
(2)
|
Normal degree days are based on a 20-year moving average of monthly temperatures from the Green Bay, Wisconsin weather station.
|
(3)
|
Normal degree days are based on a 20-year moving average of monthly temperatures from the Iron Mountain, Michigan weather station.
|
2019 Form 10-K
|
45
|
WEC Energy Group, Inc.
|
•
|
A $54.1 million decrease related to lower sales volumes, primarily driven by cooler summer weather during 2019 compared with 2018. As measured by cooling degree days, 2019 was 21.7% and 25.7% cooler than 2018 in the Milwaukee and Green Bay areas, respectively.
|
•
|
A $13.7 million decrease in margins associated with WE's flow through of tax benefits of its repair-related deferred tax liabilities starting in 2018 in accordance with a settlement agreement with the PSCW to maintain certain regulatory assets at their December 31, 2017 levels. This decrease in margins was offset in income taxes. See Note 25, Regulatory Environment, for more information.
|
•
|
A $6.8 million decrease in margins related to savings from the Tax Legislation that we are required to return to customers through bill credits or reductions in other regulatory assets. This decrease in margins did not impact net income as it was offset by the net impact of a $22.0 million decrease in income taxes and a $15.2 million increase in depreciation and amortization expense. We received the PSCW order in May 2018, which required WPS to use 40% of its 2018 and 2019 tax benefits associated with the Tax Legislation to reduce certain regulatory assets. See Note 15, Income Taxes, and Note 25, Regulatory Environment, for more information.
|
•
|
A $16.3 million increase in margins related to the iron ore mine located in the Upper Peninsula of Michigan. Prior to the transfer of the mine as a full requirements customer of WE to UMERC as of April 1, 2019, the margin from the mine was being deferred for the benefit of Wisconsin retail electric customers, as ordered by the PSCW. On March 31, 2019 when the new generation solution in the Upper Peninsula began commercial operation, a new 20 year agreement with Tilden became effective under which Tilden began purchasing electric power from UMERC. Half of the cost of the generation solution is being recovered from Tilden under this new agreement.
|
•
|
A $5.3 million increase in margins related to a net decrease in fuel and purchased power costs driven by the commercial operation of UMERC's new generation solution in the Upper Peninsula of Michigan on March 31, 2019. UMERC previously met its market obligations through power purchase agreements.
|
•
|
A $363.3 million decrease in other operation and maintenance expense resulting from the adoption of the new lease guidance. As discussed in the other operation and maintenance table above, the adoption of Topic 842, effective January 1, 2019, required WE to change the income statement classification of its lease payments related to the We Power leases. During 2019, the minimum lease payments that were billed from We Power to WE were no longer classified within other operation and
|
2019 Form 10-K
|
46
|
WEC Energy Group, Inc.
|
•
|
A $107.6 million decrease in other operation and maintenance expense related to our power plants, driven by lower maintenance and labor costs associated with our 2019 and 2018 plant retirements, and increases to certain plant-related regulatory assets resulting from decisions included in the December 2019 Wisconsin rate orders. Plant retirements included the March 2019 retirement of the PIPP as well as the 2018 retirements of the Pleasant Prairie power plant, Edgewater Unit 4, and Pulliam Units 7 and 8. See Note 6, Property, Plant, and Equipment, for more information on the plant retirements. See Note 25, Regulatory Environment, for more information on the Wisconsin rate orders.
|
•
|
A $10.6 million decrease in transmission expense in 2019 related to the flow through of tax repairs, as discussed in the other operation and maintenance table above. This decrease in transmission expense was offset in income taxes.
|
•
|
A $6.0 million decrease in expense related to the earnings sharing mechanisms in place at our Wisconsin utilities. See Note 25, Regulatory Environment, for more information.
|
•
|
A $70.4 million increase in depreciation and amortization, driven by assets being placed into service as we continue to execute on our capital plan, an increase related to the reduction of certain regulatory assets as a result of the PSCW's May 2018 order addressing the Tax legislation and offset in electric margins above, and additional expense recognized related to the adoption of Topic 842, as discussed in the notes under the other operation and maintenance table above.
|
•
|
A $16.4 million increase in storm restoration expense during 2019.
|
•
|
A $16.3 million net increase in benefit costs, primarily related to higher deferred compensation costs during 2019.
|
|
|
Year Ended December 31
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
B (W)
|
||||||
Natural gas revenues
|
|
$
|
1,357.1
|
|
|
$
|
1,400.0
|
|
|
$
|
(42.9
|
)
|
Cost of natural gas sold
|
|
401.4
|
|
|
480.5
|
|
|
79.1
|
|
|||
Total natural gas margins
|
|
955.7
|
|
|
919.5
|
|
|
36.2
|
|
|||
|
|
|
|
|
|
|
|
|||||
Other operation and maintenance
|
|
461.1
|
|
|
472.3
|
|
|
11.2
|
|
|||
Depreciation and amortization
|
|
181.3
|
|
|
170.3
|
|
|
(11.0
|
)
|
|||
Property and revenue taxes
|
|
21.4
|
|
|
21.1
|
|
|
(0.3
|
)
|
|||
Operating income
|
|
$
|
291.9
|
|
|
$
|
255.8
|
|
|
$
|
36.1
|
|
|
|
Year Ended December 31
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
B (W)
|
||||||
Operation and maintenance not included in the line items below
|
|
$
|
362.2
|
|
|
$
|
372.9
|
|
|
$
|
10.7
|
|
Riders *
|
|
97.5
|
|
|
95.3
|
|
|
(2.2
|
)
|
|||
Regulatory amortizations *
|
|
(1.5
|
)
|
|
(1.4
|
)
|
|
0.1
|
|
|||
Other
|
|
2.9
|
|
|
5.5
|
|
|
2.6
|
|
|||
Total other operation and maintenance
|
|
$
|
461.1
|
|
|
$
|
472.3
|
|
|
$
|
11.2
|
|
*
|
These riders and regulatory amortizations are substantially offset in margins and therefore do not have a significant impact on operating income.
|
2019 Form 10-K
|
47
|
WEC Energy Group, Inc.
|
|
|
Therms (in millions)
|
|||||||
Natural Gas Sales Volumes
|
|
2019
|
|
2018
|
|
B (W)
|
|||
Customer Class
|
|
|
|
|
|
|
|||
Residential
|
|
904.8
|
|
|
896.2
|
|
|
8.6
|
|
Commercial and industrial
|
|
368.6
|
|
|
358.3
|
|
|
10.3
|
|
Total retail
|
|
1,273.4
|
|
|
1,254.5
|
|
|
18.9
|
|
Transport
|
|
896.6
|
|
|
905.1
|
|
|
(8.5
|
)
|
Total sales in therms
|
|
2,170.0
|
|
|
2,159.6
|
|
|
10.4
|
|
|
|
Degree Days
|
|||||||
Weather *
|
|
2019
|
|
2018
|
|
B (W)
|
|||
Heating (6,122 normal)
|
|
6,479
|
|
|
6,327
|
|
|
2.4
|
%
|
*
|
Normal heating degree days are based on a 12-year moving average of monthly temperatures from Chicago's O'Hare Airport.
|
•
|
An $11.0 million increase in depreciation and amortization, primarily driven by PGL's continued capital investment in the SMP project.
|
•
|
An $8.4 million increase in benefit costs, primarily related to higher deferred compensation costs in 2019.
|
2019 Form 10-K
|
48
|
WEC Energy Group, Inc.
|
|
|
Year Ended December 31
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
B (W)
|
||||||
Natural gas revenues
|
|
$
|
426.0
|
|
|
$
|
438.2
|
|
|
$
|
(12.2
|
)
|
Cost of natural gas sold
|
|
217.5
|
|
|
232.8
|
|
|
15.3
|
|
|||
Total natural gas margins
|
|
208.5
|
|
|
205.4
|
|
|
3.1
|
|
|||
|
|
|
|
|
|
|
|
|||||
Other operation and maintenance
|
|
98.5
|
|
|
101.0
|
|
|
2.5
|
|
|||
Depreciation and amortization
|
|
27.5
|
|
|
24.1
|
|
|
(3.4
|
)
|
|||
Property and revenue taxes
|
|
17.2
|
|
|
11.5
|
|
|
(5.7
|
)
|
|||
Operating income
|
|
$
|
65.3
|
|
|
$
|
68.8
|
|
|
$
|
(3.5
|
)
|
|
|
Year Ended December 31
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
B (W)
|
||||||
Operation and maintenance not included in line items below
|
|
$
|
76.4
|
|
|
$
|
76.1
|
|
|
$
|
(0.3
|
)
|
Regulatory amortizations and other pass through expenses *
|
|
22.0
|
|
|
24.8
|
|
|
2.8
|
|
|||
Other
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|||
Total other operation and maintenance
|
|
$
|
98.5
|
|
|
$
|
101.0
|
|
|
$
|
2.5
|
|
*
|
Regulatory amortizations and other pass through expenses are substantially offset in margins and therefore do not have a significant impact on operating income.
|
|
|
Therms (in millions)
|
|||||||
Natural Gas Sales Volumes
|
|
2019
|
|
2018
|
|
B (W)
|
|||
Customer Class
|
|
|
|
|
|
|
|||
Residential
|
|
345.2
|
|
|
336.1
|
|
|
9.1
|
|
Commercial and industrial
|
|
238.2
|
|
|
218.5
|
|
|
19.7
|
|
Total retail
|
|
583.4
|
|
|
554.6
|
|
|
28.8
|
|
Transport
|
|
777.1
|
|
|
738.7
|
|
|
38.4
|
|
Total sales in therms
|
|
1,360.5
|
|
|
1,293.3
|
|
|
67.2
|
|
|
|
Degree Days
|
|||||||
Weather *
|
|
2019
|
|
2018
|
|
B (W)
|
|||
MERC
|
|
|
|
|
|
|
|||
Heating (7,934 normal)
|
|
8,728
|
|
|
8,490
|
|
|
2.8
|
%
|
|
|
|
|
|
|
|
|||
MGU
|
|
|
|
|
|
|
|||
Heating (6,245 normal)
|
|
6,347
|
|
|
6,368
|
|
|
(0.3
|
)%
|
*
|
Normal heating degree days for MERC and MGU are based on a 20-year moving average and 15-year moving average, respectively, of monthly temperatures from various weather stations throughout their respective territories.
|
2019 Form 10-K
|
49
|
WEC Energy Group, Inc.
|
|
|
Year Ended December 31
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
B (W)
|
||||||
Operating income
|
|
$
|
366.6
|
|
|
$
|
365.8
|
|
|
$
|
0.8
|
|
|
|
Year Ended December 31
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
B (W)
|
||||||
Operating loss
|
|
$
|
(34.4
|
)
|
|
$
|
(22.2
|
)
|
|
$
|
(12.2
|
)
|
|
|
Year Ended December 31
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
B (W)
|
||||||
Equity in earnings of transmission affiliates
|
|
$
|
127.6
|
|
|
$
|
136.7
|
|
|
$
|
(9.1
|
)
|
2019 Form 10-K
|
50
|
WEC Energy Group, Inc.
|
|
|
Year Ended December 31
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
B (W)
|
||||||
AFUDC – Equity
|
|
$
|
14.4
|
|
|
$
|
15.2
|
|
|
$
|
(0.8
|
)
|
Non-service components of net periodic benefit costs
|
|
36.2
|
|
|
26.0
|
|
|
10.2
|
|
|||
Gains (losses) from investments held in rabbi trust
|
|
21.2
|
|
|
(1.8
|
)
|
|
23.0
|
|
|||
Other, net
|
|
30.4
|
|
|
30.9
|
|
|
(0.5
|
)
|
|||
Other income, net
|
|
$
|
102.2
|
|
|
$
|
70.3
|
|
|
$
|
31.9
|
|
|
|
Year Ended December 31
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
B(W)
|
||||||
Interest expense
|
|
$
|
501.5
|
|
|
$
|
445.1
|
|
|
$
|
(56.4
|
)
|
|
|
Year Ended December 31
|
|||||||
|
|
2019
|
|
2018
|
|
B (W)
|
|||
Effective tax rate
|
|
9.9
|
%
|
|
13.8
|
%
|
|
3.9
|
%
|
2019 Form 10-K
|
51
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
|
Change in 2019 Over 2018
|
||||||
Cash provided by (used in):
|
|
|
|
|
|
|
||||||
Operating activities
|
|
$
|
2,345.5
|
|
|
$
|
2,445.5
|
|
|
$
|
(100.0
|
)
|
Investing activities
|
|
(2,494.9
|
)
|
|
(2,384.4
|
)
|
|
(110.5
|
)
|
|||
Financing activities
|
|
85.6
|
|
|
26.4
|
|
|
59.2
|
|
•
|
A $116.0 million decrease in cash due to higher collateral requirements in 2019, compared with 2018, driven by funding for both open natural gas contracts and settled natural gas contracts. See Note 17, Derivative Instruments, for more information.
|
•
|
A $44.4 million decrease in cash due to an increase in payments for interest related to higher long-term debt balances during 2019, compared with 2018.
|
•
|
A $40.5 million decrease in cash from higher payments for other operation and maintenance expense. During 2019, our payments were higher for transmission, benefits, and storm restoration, compared with 2018.
|
•
|
A $25.6 million decrease in cash related to higher payments for environmental remediation from work completed on former manufactured gas plant sites during 2019, compared with 2018.
|
•
|
A $74.0 million increase in cash primarily related to lower payments for natural gas and for fuel and purchased power. Lower payments for natural gas were due to a 14.5% decrease in the average per-unit cost of natural gas sold during 2019, compared with 2018. Lower payments for fuel and purchased power were due to the retirements of the Pleasant Prairie power plant in April 2018, Edgewater Unit 4 in September 2018, Pulliam Units 7 and 8 in October 2018, and the PIPP in March 2019.
|
•
|
A $41.2 million net increase in cash related to $24.9 million of cash received for income taxes during 2019, compared with $16.3 million of cash paid for income taxes during 2018. This increase in cash was primarily due to alternative minimum tax credits that were refunded to us during 2019.
|
•
|
An $11.7 million increase in cash related to a decrease in contributions and payments related to pension and OPEB plans during 2019, compared with 2018.
|
•
|
The acquisition of an 80% ownership interest in Upstream in January 2019 for $268.2 million, which is net of cash and restricted cash acquired of $9.2 million. See Note 2, Acquisitions, for more information.
|
•
|
A $145.1 million increase in cash paid for capital expenditures during 2019, compared with 2018, which is discussed in more detail below.
|
2019 Form 10-K
|
52
|
WEC Energy Group, Inc.
|
•
|
A $53.4 million net decrease in restricted cash during 2019, compared with 2018, due to a $118.4 million decrease in the proceeds received from the sale of investments held in the Integrys rabbi trust, partially offset by a $65.0 million decrease in the purchase of investments held in the rabbi trust.
|
•
|
The acquisition of Bishop Hill III during 2018 for $162.9 million, which is net of restricted cash acquired of $4.5 million. See Note 2, Acquisitions, for more information.
|
•
|
The acquisition of Forward Wind Energy Center in April 2018 for $77.1 million. See Note 2, Acquisitions, for more information.
|
•
|
The acquisition of an 80% ownership interest in Coyote Ridge during December 2018 for $61.4 million. See Note 2, Acquisitions, for more information.
|
•
|
A $32.4 million increase in cash related to a reimbursement received from ATC for construction costs during 2019. See Note 20, Investment in Transmission Affiliates, for more information.
|
•
|
A $25.5 million increase in proceeds received from the sale of assets and businesses, primarily related to the sale of four PDL solar power generation facilities during 2019, compared with 2018. See Note 3, Dispositions, for more information.
|
Reportable Segment
(in millions)
|
|
2019
|
|
2018
|
|
Change in 2019 Over 2018
|
||||||
Wisconsin
|
|
$
|
1,378.6
|
|
|
$
|
1,389.0
|
|
|
$
|
(10.4
|
)
|
Illinois
|
|
624.9
|
|
|
547.1
|
|
|
77.8
|
|
|||
Other states
|
|
109.1
|
|
|
103.6
|
|
|
5.5
|
|
|||
Non-utility energy infrastructure
|
|
121.7
|
|
|
36.3
|
|
|
85.4
|
|
|||
Corporate and other
|
|
26.5
|
|
|
39.7
|
|
|
(13.2
|
)
|
|||
Total capital expenditures
|
|
$
|
2,260.8
|
|
|
$
|
2,115.7
|
|
|
$
|
145.1
|
|
2019 Form 10-K
|
53
|
WEC Energy Group, Inc.
|
•
|
A $593.2 million increase in cash related to lower long-term debt repayments during 2019, compared with 2018.
|
•
|
A $155.0 million increase in cash due to higher issuances of long-term debt during 2019, compared with 2018.
|
•
|
A $37.9 million increase in cash from stock options exercised during 2019, compared with 2018.
|
•
|
A $604.8 million decrease in cash related to higher net repayments of commercial paper during 2019, compared with 2018.
|
•
|
A $67.7 million decrease in cash due to an increase in the number and cost of shares of our common stock purchased during 2019, compared with 2018, to satisfy requirements of our stock-based compensation plans.
|
•
|
A $47.2 million decrease in cash due to higher dividends paid on our common stock during 2019, compared with 2018. In January 2019, our Board of Directors increased our quarterly dividend by $0.0375 per share (6.8%) effective with the first quarter of 2019 dividend payment.
|
2019 Form 10-K
|
54
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
55
|
WEC Energy Group, Inc.
|
|
|
Payments Due by Period (1)
|
||||||||||||||||||
(in millions)
|
|
Total
|
|
Less Than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than 5 Years
|
||||||||||
Long-term debt obligations (2)
|
|
$
|
20,753.7
|
|
|
$
|
1,170.2
|
|
|
$
|
2,595.1
|
|
|
$
|
1,426.1
|
|
|
$
|
15,562.3
|
|
Finance lease obligations (3)
|
|
102.7
|
|
|
9.3
|
|
|
15.4
|
|
|
1.8
|
|
|
76.2
|
|
|||||
Operating lease obligations (4)
|
|
56.2
|
|
|
6.8
|
|
|
9.6
|
|
|
9.7
|
|
|
30.1
|
|
|||||
Energy and transportation purchase obligations (5)
|
|
11,570.0
|
|
|
1,231.1
|
|
|
2,152.9
|
|
|
1,667.5
|
|
|
6,518.5
|
|
|||||
Purchase orders (6)
|
|
886.0
|
|
|
463.3
|
|
|
250.2
|
|
|
85.1
|
|
|
87.4
|
|
|||||
Pension and OPEB funding obligations (7)
|
|
39.6
|
|
|
12.5
|
|
|
27.1
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
|
$
|
33,408.2
|
|
|
$
|
2,893.2
|
|
|
$
|
5,050.3
|
|
|
$
|
3,190.2
|
|
|
$
|
22,274.5
|
|
(1)
|
The amounts included in the table are calculated using current market prices, forward curves, and other estimates.
|
(2)
|
Principal and interest payments on long-term debt (excluding finance lease obligations). The interest due on our variable rate debt is based on the interest rates that were in effect on December 31, 2019.
|
(3)
|
Finance lease obligations for power purchase commitments and land leases related to solar projects. This amount does not include We Power leases to WE which are eliminated upon consolidation. See Note 14, Leases, for more information.
|
(4)
|
Operating lease obligations for office space, land, and rail car leases. See Note 14, Leases, for more information.
|
(5)
|
Energy and transportation purchase obligations under various contracts for the procurement of fuel, power, gas supply, and associated transportation related to utility and non-utility operations.
|
(6)
|
Purchase obligations related to normal business operations, information technology, and other services. Also includes construction obligations related to Two Creeks and Badger Hollow I.
|
(7)
|
Obligations for pension and OPEB plans cannot reasonably be estimated beyond 2022.
|
2019 Form 10-K
|
56
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2020
|
|
2021
|
|
2022
|
||||||
Wisconsin
|
|
$
|
1,482.0
|
|
|
$
|
1,881.1
|
|
|
$
|
1,630.5
|
|
Illinois
|
|
779.0
|
|
|
619.4
|
|
|
586.7
|
|
|||
Other states
|
|
117.4
|
|
|
111.6
|
|
|
87.4
|
|
|||
Non-utility energy infrastructure
|
|
852.5
|
|
|
159.7
|
|
|
393.0
|
|
|||
Corporate and other
|
|
24.6
|
|
|
22.7
|
|
|
2.7
|
|
|||
Total
|
|
$
|
3,255.5
|
|
|
$
|
2,794.5
|
|
|
$
|
2,700.3
|
|
2019 Form 10-K
|
57
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
58
|
WEC Energy Group, Inc.
|
•
|
Prior to its acquisition by us, Integrys initiated an information technology project with the goal of improving the customer experience at its subsidiaries. Specifically, the project is expected to provide functional and technological benefits to the billing, call center, and credit collection functions. As of December 31, 2019, we had not received any significant disallowances of the costs incurred for this project. WPS received approval to recover these costs in the rate order it received from the PSCW in December 2019. See Note 25, Regulatory Environment, for more information.
|
•
|
In January 2014, the ICC approved PGL's use of the QIP rider as a recovery mechanism for costs incurred related to investments in QIP. This rider is subject to an annual reconciliation whereby costs are reviewed for accuracy and prudency. In March 2019, PGL filed its 2018 reconciliation with the ICC, which, along with the 2017 and 2016 reconciliations, are still pending. In July 2019, the ICC approved a settlement of the 2015 reconciliation, which includes a rate base reduction of $7.0 million and a $7.3 million refund to ratepayers. As of December 31, 2019, all amounts had been refunded to customers. As of December 31, 2019, there can be no assurance that all costs incurred under the QIP rider during the open reconciliation years will be deemed recoverable by the ICC.
|
2019 Form 10-K
|
59
|
WEC Energy Group, Inc.
|
(in millions)
|
|
As of December 31, 2019
|
|
Expected Return on Assets in 2020
|
|||
Pension trust funds
|
|
$
|
3,007.0
|
|
|
6.87
|
%
|
OPEB trust funds
|
|
$
|
879.6
|
|
|
7.00
|
%
|
2019 Form 10-K
|
60
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
61
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
62
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
63
|
WEC Energy Group, Inc.
|
(in millions, except percentages)
|
|
Goodwill
|
|
Percentage of Total Goodwill
|
|||
Wisconsin
|
|
$
|
2,104.3
|
|
|
68.9
|
%
|
Illinois
|
|
758.7
|
|
|
24.9
|
%
|
|
Other states
|
|
183.2
|
|
|
6.0
|
%
|
|
Bluewater
|
|
6.6
|
|
|
0.2
|
%
|
|
Total goodwill
|
|
$
|
3,052.8
|
|
|
100.0
|
%
|
2019 Form 10-K
|
64
|
WEC Energy Group, Inc.
|
Actuarial Assumption
(in millions, except percentages)
|
|
Percentage-Point Change in Assumption
|
|
Impact on Projected Benefit Obligation
|
|
Impact on 2019
Pension Cost
|
||||
Discount rate
|
|
(0.5)
|
|
$
|
206.6
|
|
|
$
|
17.4
|
|
Discount rate
|
|
0.5
|
|
(178.2
|
)
|
|
(10.6
|
)
|
||
Rate of return on plan assets
|
|
(0.5)
|
|
N/A
|
|
|
13.3
|
|
||
Rate of return on plan assets
|
|
0.5
|
|
N/A
|
|
|
(13.3
|
)
|
2019 Form 10-K
|
65
|
WEC Energy Group, Inc.
|
Actuarial Assumption
(in millions, except percentages)
|
|
Percentage-Point Change in Assumption
|
|
Impact on Postretirement
Benefit Obligation
|
|
Impact on 2019 Postretirement
Benefit Cost
|
||||
Discount rate
|
|
(0.5)
|
|
$
|
35.3
|
|
|
$
|
3.8
|
|
Discount rate
|
|
0.5
|
|
(30.6
|
)
|
|
(3.8
|
)
|
||
Health care cost trend rate
|
|
(0.5)
|
|
(18.6
|
)
|
|
(4.5
|
)
|
||
Health care cost trend rate
|
|
0.5
|
|
21.3
|
|
|
5.1
|
|
||
Rate of return on plan assets
|
|
(0.5)
|
|
N/A
|
|
|
3.8
|
|
||
Rate of return on plan assets
|
|
0.5
|
|
N/A
|
|
|
(3.8
|
)
|
2019 Form 10-K
|
66
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
67
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
68
|
WEC Energy Group, Inc.
|
•
|
We tested the effectiveness of management’s controls over regulatory assets and liabilities, including management’s controls over the identification of costs recorded as regulatory assets and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates.
|
•
|
We inquired of Company management and read: (1) relevant regulatory orders issued by the Commissions for the Company and other public utilities in each respective state, (2) company filings, (3) filings made by intervenors and (4) other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedence of the Commissions’ treatment of similar costs under similar circumstances.
|
•
|
For regulatory matters in process, we inspected the Company’s filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions.
|
•
|
We obtained management’s analysis regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management’s assertion that amounts are probable of recovery or a future reduction in rates.
|
•
|
We evaluated the Company’s disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
|
2019 Form 10-K
|
69
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
70
|
WEC Energy Group, Inc.
|
Year Ended December 31
|
|
|
|
|
|
|
||||||
(in millions, except per share amounts)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Operating revenues
|
|
$
|
7,523.1
|
|
|
$
|
7,679.5
|
|
|
$
|
7,648.5
|
|
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
||||||
Cost of sales
|
|
2,678.8
|
|
|
2,897.9
|
|
|
2,822.8
|
|
|||
Other operation and maintenance
|
|
2,184.8
|
|
|
2,270.5
|
|
|
2,056.1
|
|
|||
Depreciation and amortization
|
|
926.3
|
|
|
845.8
|
|
|
798.6
|
|
|||
Property and revenue taxes
|
|
201.8
|
|
|
196.9
|
|
|
194.9
|
|
|||
Total operating expenses
|
|
5,991.7
|
|
|
6,211.1
|
|
|
5,872.4
|
|
|||
|
|
|
|
|
|
|
||||||
Operating income
|
|
1,531.4
|
|
|
1,468.4
|
|
|
1,776.1
|
|
|||
|
|
|
|
|
|
|
||||||
Equity in earnings of transmission affiliates
|
|
127.6
|
|
|
136.7
|
|
|
154.3
|
|
|||
Other income, net
|
|
102.2
|
|
|
70.3
|
|
|
73.7
|
|
|||
Interest expense
|
|
501.5
|
|
|
445.1
|
|
|
415.7
|
|
|||
Other expense
|
|
(271.7
|
)
|
|
(238.1
|
)
|
|
(187.7
|
)
|
|||
|
|
|
|
|
|
|
||||||
Income before income taxes
|
|
1,259.7
|
|
|
1,230.3
|
|
|
1,588.4
|
|
|||
Income tax expense
|
|
125.0
|
|
|
169.8
|
|
|
383.5
|
|
|||
Net income
|
|
1,134.7
|
|
|
1,060.5
|
|
|
1,204.9
|
|
|||
|
|
|
|
|
|
|
||||||
Preferred stock dividends of subsidiary
|
|
1.2
|
|
|
1.2
|
|
|
1.2
|
|
|||
Net loss attributed to noncontrolling interests
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|||
Net income attributed to common shareholders
|
|
$
|
1,134.0
|
|
|
$
|
1,059.3
|
|
|
$
|
1,203.7
|
|
|
|
|
|
|
|
|
||||||
Earnings per share
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
3.60
|
|
|
$
|
3.36
|
|
|
$
|
3.81
|
|
Diluted
|
|
$
|
3.58
|
|
|
$
|
3.34
|
|
|
$
|
3.79
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding
|
|
|
|
|
|
|
||||||
Basic
|
|
315.4
|
|
|
315.5
|
|
|
315.6
|
|
|||
Diluted
|
|
316.7
|
|
|
316.9
|
|
|
317.2
|
|
2019 Form 10-K
|
71
|
WEC Energy Group, Inc.
|
Year Ended December 31
|
|
|
|
|
|
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
|
$
|
1,134.7
|
|
|
$
|
1,060.5
|
|
|
$
|
1,204.9
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
||||||
Derivatives accounted for as cash flow hedges
|
|
|
|
|
|
|
||||||
Net derivative losses, net of tax benefits of $1.3, $0.8, and $0.0, respectively
|
|
(3.5
|
)
|
|
(2.1
|
)
|
|
—
|
|
|||
Reclassification of net gains to net income, net of tax
|
|
(0.8
|
)
|
|
(1.2
|
)
|
|
(1.3
|
)
|
|||
Cumulative effect adjustment from adoption of ASU 2018-02
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|||
Cash flow hedges, net
|
|
(4.3
|
)
|
|
(1.7
|
)
|
|
(1.3
|
)
|
|||
|
|
|
|
|
|
|
||||||
Defined benefit plans
|
|
|
|
|
|
|
||||||
Pension and OPEB adjustments arising during the period, net of tax expense (benefit) of $1.0, $(1.2), and $0.6, respectively
|
|
2.6
|
|
|
(3.1
|
)
|
|
0.9
|
|
|||
Amortization of pension and OPEB costs included in net periodic benefit cost, net of tax
|
|
0.2
|
|
|
0.3
|
|
|
0.4
|
|
|||
Cumulative effect adjustment from adoption of ASU 2018-02
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|||
Defined benefit plans, net
|
|
2.8
|
|
|
(3.8
|
)
|
|
1.3
|
|
|||
|
|
|
|
|
|
|
||||||
Other comprehensive loss, net of tax
|
|
(1.5
|
)
|
|
(5.5
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive income
|
|
1,133.2
|
|
|
1,055.0
|
|
|
1,204.9
|
|
|||
|
|
|
|
|
|
|
||||||
Preferred stock dividends of subsidiary
|
|
1.2
|
|
|
1.2
|
|
|
1.2
|
|
|||
Comprehensive loss attributed to noncontrolling interests
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive income attributed to common shareholders
|
|
$
|
1,132.5
|
|
|
$
|
1,053.8
|
|
|
$
|
1,203.7
|
|
2019 Form 10-K
|
72
|
WEC Energy Group, Inc.
|
At December 31
|
|
|
|
|
||||
(in millions, except share and per share amounts)
|
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
37.5
|
|
|
$
|
84.5
|
|
Accounts receivable and unbilled revenues, net of reserves of $140.0 and $149.2, respectively
|
|
1,176.5
|
|
|
1,280.9
|
|
||
Materials, supplies, and inventories
|
|
549.8
|
|
|
548.2
|
|
||
Prepayments
|
|
261.8
|
|
|
256.8
|
|
||
Other
|
|
68.0
|
|
|
77.2
|
|
||
Current assets
|
|
2,093.6
|
|
|
2,247.6
|
|
||
|
|
|
|
|
||||
Long-term assets
|
|
|
|
|
||||
Property, plant, and equipment, net of accumulated depreciation and amortization of $8,878.7 and $8,636.6, respectively
|
|
23,620.1
|
|
|
22,000.9
|
|
||
Regulatory assets
|
|
3,506.7
|
|
|
3,805.1
|
|
||
Equity investment in transmission affiliates
|
|
1,720.8
|
|
|
1,665.3
|
|
||
Goodwill
|
|
3,052.8
|
|
|
3,052.8
|
|
||
Other
|
|
957.8
|
|
|
704.1
|
|
||
Long-term assets
|
|
32,858.2
|
|
|
31,228.2
|
|
||
Total assets
|
|
$
|
34,951.8
|
|
|
$
|
33,475.8
|
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Short-term debt
|
|
$
|
830.8
|
|
|
$
|
1,440.1
|
|
Current portion of long-term debt
|
|
693.2
|
|
|
365.0
|
|
||
Accounts payable
|
|
908.1
|
|
|
876.4
|
|
||
Accrued payroll and benefits
|
|
199.8
|
|
|
185.4
|
|
||
Other
|
|
550.8
|
|
|
464.8
|
|
||
Current liabilities
|
|
3,182.7
|
|
|
3,331.7
|
|
||
|
|
|
|
|
||||
Long-term liabilities
|
|
|
|
|
||||
Long-term debt
|
|
11,211.0
|
|
|
9,994.0
|
|
||
Deferred income taxes
|
|
3,769.3
|
|
|
3,388.1
|
|
||
Deferred revenue, net
|
|
497.1
|
|
|
520.4
|
|
||
Regulatory liabilities
|
|
3,992.8
|
|
|
4,251.6
|
|
||
Environmental remediation liabilities
|
|
589.2
|
|
|
616.4
|
|
||
Pension and OPEB obligations
|
|
326.2
|
|
|
422.8
|
|
||
Other
|
|
1,128.9
|
|
|
1,108.1
|
|
||
Long-term liabilities
|
|
21,514.5
|
|
|
20,301.4
|
|
||
|
|
|
|
|
||||
Commitments and contingencies (Note 23)
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Common shareholders' equity
|
|
|
|
|
||||
Common stock – $0.01 par value; 325,000,000 shares authorized; 315,434,531 and 315,523,192 shares outstanding, respectively
|
|
3.2
|
|
|
3.2
|
|
||
Additional paid in capital
|
|
4,186.6
|
|
|
4,250.1
|
|
||
Retained earnings
|
|
5,927.7
|
|
|
5,538.2
|
|
||
Accumulated other comprehensive loss
|
|
(4.1
|
)
|
|
(2.6
|
)
|
||
Common shareholders' equity
|
|
10,113.4
|
|
|
9,788.9
|
|
||
|
|
|
|
|
||||
Preferred stock of subsidiary
|
|
30.4
|
|
|
30.4
|
|
||
Noncontrolling interests
|
|
110.8
|
|
|
23.4
|
|
||
Total liabilities and equity
|
|
$
|
34,951.8
|
|
|
$
|
33,475.8
|
|
2019 Form 10-K
|
73
|
WEC Energy Group, Inc.
|
Year Ended December 31
|
|
|
|
|
|
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
1,134.7
|
|
|
$
|
1,060.5
|
|
|
$
|
1,204.9
|
|
Reconciliation to cash provided by operating activities
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
926.3
|
|
|
845.8
|
|
|
798.6
|
|
|||
Deferred income taxes and investment tax credits, net
|
|
162.9
|
|
|
297.3
|
|
|
271.7
|
|
|||
Contributions and payments related to pension and OPEB plans
|
|
(65.9
|
)
|
|
(77.6
|
)
|
|
(120.5
|
)
|
|||
Equity income in transmission affiliates, net of distributions
|
|
(2.9
|
)
|
|
(18.6
|
)
|
|
(4.8
|
)
|
|||
Change in –
|
|
|
|
|
|
|
||||||
Accounts receivable and unbilled revenues
|
|
98.2
|
|
|
23.5
|
|
|
(86.4
|
)
|
|||
Materials, supplies, and inventories
|
|
(1.5
|
)
|
|
(8.8
|
)
|
|
49.3
|
|
|||
Other current assets
|
|
(7.1
|
)
|
|
(10.0
|
)
|
|
(7.1
|
)
|
|||
Accounts payable
|
|
1.5
|
|
|
110.6
|
|
|
8.5
|
|
|||
Other current liabilities
|
|
78.7
|
|
|
(67.6
|
)
|
|
161.8
|
|
|||
Other, net
|
|
20.6
|
|
|
290.4
|
|
|
(197.4
|
)
|
|||
Net cash provided by operating activities
|
|
2,345.5
|
|
|
2,445.5
|
|
|
2,078.6
|
|
|||
|
|
|
|
|
|
|
||||||
Investing activities
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(2,260.8
|
)
|
|
(2,115.7
|
)
|
|
(1,959.5
|
)
|
|||
Acquisition of Upstream, net of cash and restricted cash acquired of $9.2
|
|
(268.2
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition of Bishop Hill III, net of restricted cash acquired of $4.5
|
|
—
|
|
|
(162.9
|
)
|
|
—
|
|
|||
Acquisition of Forward Wind Energy Center
|
|
—
|
|
|
(77.1
|
)
|
|
—
|
|
|||
Acquisition of Coyote Ridge
|
|
—
|
|
|
(61.4
|
)
|
|
—
|
|
|||
Acquisition of Bluewater
|
|
—
|
|
|
—
|
|
|
(226.0
|
)
|
|||
Capital contributions to transmission affiliates
|
|
(52.6
|
)
|
|
(53.5
|
)
|
|
(109.6
|
)
|
|||
Proceeds from the sale of assets and businesses
|
|
37.6
|
|
|
12.1
|
|
|
24.0
|
|
|||
Proceeds from the sale of investments held in rabbi trust
|
|
0.2
|
|
|
118.6
|
|
|
8.7
|
|
|||
Purchase of investments held in rabbi trust
|
|
—
|
|
|
(65.0
|
)
|
|
(3.7
|
)
|
|||
Reimbursement for ATC's construction costs
|
|
32.4
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
16.5
|
|
|
20.5
|
|
|
12.0
|
|
|||
Net cash used in investing activities
|
|
(2,494.9
|
)
|
|
(2,384.4
|
)
|
|
(2,254.1
|
)
|
|||
|
|
|
|
|
|
|
||||||
Financing activities
|
|
|
|
|
|
|
||||||
Exercise of stock options
|
|
67.0
|
|
|
29.1
|
|
|
30.8
|
|
|||
Purchase of common stock
|
|
(140.1
|
)
|
|
(72.4
|
)
|
|
(71.3
|
)
|
|||
Dividends paid on common stock
|
|
(744.5
|
)
|
|
(697.3
|
)
|
|
(656.5
|
)
|
|||
Issuance of long-term debt
|
|
1,895.0
|
|
|
1,740.0
|
|
|
435.0
|
|
|||
Retirement of long-term debt
|
|
(360.1
|
)
|
|
(953.3
|
)
|
|
(154.5
|
)
|
|||
Change in short-term debt
|
|
(609.3
|
)
|
|
(4.5
|
)
|
|
584.4
|
|
|||
Other, net
|
|
(22.4
|
)
|
|
(15.2
|
)
|
|
(6.5
|
)
|
|||
Net cash provided by financing activities
|
|
85.6
|
|
|
26.4
|
|
|
161.4
|
|
|||
|
|
|
|
|
|
|
||||||
Net change in cash, cash equivalents, and restricted cash
|
|
(63.8
|
)
|
|
87.5
|
|
|
(14.1
|
)
|
|||
Cash, cash equivalents, and restricted cash at beginning of year
|
|
146.1
|
|
|
58.6
|
|
|
72.7
|
|
|||
Cash, cash equivalents, and restricted cash at end of year
|
|
$
|
82.3
|
|
|
$
|
146.1
|
|
|
$
|
58.6
|
|
2019 Form 10-K
|
74
|
WEC Energy Group, Inc.
|
|
|
WEC Energy Group Common Shareholders' Equity
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
Common Stock
|
|
Additional Paid In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Common Shareholders' Equity
|
|
Preferred Stock of Subsidiary
|
|
Non-controlling Interests
|
|
Total Equity
|
||||||||||||||||
(in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Balance at December 31, 2016
|
|
$
|
3.2
|
|
|
$
|
4,309.8
|
|
|
$
|
4,613.9
|
|
|
$
|
2.9
|
|
|
$
|
8,929.8
|
|
|
$
|
30.4
|
|
|
$
|
—
|
|
|
$
|
8,960.2
|
|
Net income attributed to common shareholders
|
|
—
|
|
|
—
|
|
|
1,203.7
|
|
|
—
|
|
|
1,203.7
|
|
|
—
|
|
|
—
|
|
|
1,203.7
|
|
||||||||
Common stock dividends of $2.08 per share
|
|
—
|
|
|
—
|
|
|
(656.5
|
)
|
|
—
|
|
|
(656.5
|
)
|
|
—
|
|
|
—
|
|
|
(656.5
|
)
|
||||||||
Exercise of stock options
|
|
—
|
|
|
30.8
|
|
|
—
|
|
|
—
|
|
|
30.8
|
|
|
—
|
|
|
—
|
|
|
30.8
|
|
||||||||
Purchase of common stock
|
|
—
|
|
|
(71.3
|
)
|
|
—
|
|
|
—
|
|
|
(71.3
|
)
|
|
—
|
|
|
—
|
|
|
(71.3
|
)
|
||||||||
Cumulative effect adjustment from ASU 2016-09 adoption
|
|
—
|
|
|
—
|
|
|
15.7
|
|
|
—
|
|
|
15.7
|
|
|
—
|
|
|
—
|
|
|
15.7
|
|
||||||||
Stock-based compensation and other
|
|
—
|
|
|
9.2
|
|
|
—
|
|
|
—
|
|
|
9.2
|
|
|
—
|
|
|
—
|
|
|
9.2
|
|
||||||||
Balance at December 31, 2017
|
|
$
|
3.2
|
|
|
$
|
4,278.5
|
|
|
$
|
5,176.8
|
|
|
$
|
2.9
|
|
|
$
|
9,461.4
|
|
|
$
|
30.4
|
|
|
$
|
—
|
|
|
$
|
9,491.8
|
|
Net income attributed to common shareholders
|
|
—
|
|
|
—
|
|
|
1,059.3
|
|
|
—
|
|
|
1,059.3
|
|
|
—
|
|
|
—
|
|
|
1,059.3
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|
(6.1
|
)
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
||||||||
Common stock dividends of $2.21 per share
|
|
—
|
|
|
—
|
|
|
(697.3
|
)
|
|
—
|
|
|
(697.3
|
)
|
|
—
|
|
|
—
|
|
|
(697.3
|
)
|
||||||||
Exercise of stock options
|
|
—
|
|
|
29.1
|
|
|
—
|
|
|
—
|
|
|
29.1
|
|
|
—
|
|
|
—
|
|
|
29.1
|
|
||||||||
Purchase of common stock
|
|
—
|
|
|
(72.4
|
)
|
|
—
|
|
|
—
|
|
|
(72.4
|
)
|
|
—
|
|
|
—
|
|
|
(72.4
|
)
|
||||||||
Cumulative effect adjustment from ASU 2018-02 adoption
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Acquisition of noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.8
|
|
|
23.8
|
|
||||||||
Stock-based compensation and other
|
|
—
|
|
|
14.9
|
|
|
—
|
|
|
—
|
|
|
14.9
|
|
|
—
|
|
|
(0.4
|
)
|
|
14.5
|
|
||||||||
Balance at December 31, 2018
|
|
$
|
3.2
|
|
|
$
|
4,250.1
|
|
|
$
|
5,538.2
|
|
|
$
|
(2.6
|
)
|
|
$
|
9,788.9
|
|
|
$
|
30.4
|
|
|
$
|
23.4
|
|
|
$
|
9,842.7
|
|
Net income attributed to common shareholders
|
|
—
|
|
|
—
|
|
|
1,134.0
|
|
|
—
|
|
|
1,134.0
|
|
|
—
|
|
|
—
|
|
|
1,134.0
|
|
||||||||
Net loss attributed to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
(0.5
|
)
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
||||||||
Common stock dividends of $2.36 per share
|
|
—
|
|
|
—
|
|
|
(744.5
|
)
|
|
—
|
|
|
(744.5
|
)
|
|
—
|
|
|
—
|
|
|
(744.5
|
)
|
||||||||
Exercise of stock options
|
|
—
|
|
|
67.0
|
|
|
—
|
|
|
—
|
|
|
67.0
|
|
|
—
|
|
|
—
|
|
|
67.0
|
|
||||||||
Purchase of common stock
|
|
—
|
|
|
(140.1
|
)
|
|
—
|
|
|
—
|
|
|
(140.1
|
)
|
|
—
|
|
|
—
|
|
|
(140.1
|
)
|
||||||||
Acquisition of a noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69.0
|
|
|
69.0
|
|
||||||||
Capital contributions from noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.0
|
|
|
21.0
|
|
||||||||
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|
(2.1
|
)
|
||||||||
Stock-based compensation and other
|
|
—
|
|
|
9.6
|
|
|
—
|
|
|
—
|
|
|
9.6
|
|
|
—
|
|
|
—
|
|
|
9.6
|
|
||||||||
Balance at December 31, 2019
|
|
$
|
3.2
|
|
|
$
|
4,186.6
|
|
|
$
|
5,927.7
|
|
|
$
|
(4.1
|
)
|
|
$
|
10,113.4
|
|
|
$
|
30.4
|
|
|
$
|
110.8
|
|
|
$
|
10,254.6
|
|
2019 Form 10-K
|
75
|
WEC Energy Group, Inc.
|
•
|
Wisconsin segment – Consists of WE, WPS, and WG, which are engaged primarily in the generation of electricity and the distribution of electricity and natural gas in Wisconsin; and UMERC, which generates electricity and distributes electricity and natural gas to customers located in the Upper Peninsula of Michigan.
|
•
|
Illinois segment – Consists of PGL and NSG, which are engaged primarily in the distribution of natural gas in Illinois.
|
•
|
Other states segment – Consists of MERC and MGU, which are engaged primarily in the distribution of natural gas in Minnesota and Michigan, respectively.
|
•
|
Electric transmission segment – Consists of our approximate 60% ownership interest in ATC, a for-profit, electric transmission company regulated by the FERC and certain state regulatory commissions, and our approximate 75% ownership interest in ATC Holdco, which invests in transmission-related projects outside of ATC's traditional footprint.
|
•
|
Non-utility energy infrastructure segment – Consists of We Power, which is principally engaged in the ownership of electric power generating facilities for long-term lease to WE, and Bluewater, which owns underground natural gas storage facilities in Michigan. WECI, which holds our ownership interests in several wind generating facilities, is also included in this segment. See Note 2, Acquisitions, for more information on Bluewater and the WECI wind generating facilities.
|
•
|
Corporate and other segment – Consists of the WEC Energy Group holding company, the Integrys holding company, the PELLC holding company, Wispark, Bostco, Wisvest, WECC, WBS, and PDL. In the first quarter of 2017, we sold substantially all of the remaining assets of Bostco, and, in October 2018, Bostco was dissolved. In 2019, we sold certain PDL solar power generating facilities. See Note 3, Dispositions, for more information on these sales.
|
2019 Form 10-K
|
76
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
77
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
78
|
WEC Energy Group, Inc.
|
•
|
The rates of PGL, NSG, and MERC include decoupling mechanisms. These mechanisms differ by state and allow the utilities to recover or refund the differences between actual and authorized margins for certain customer classes. See Note 25, Regulatory Environment, for more information.
|
•
|
MERC’s rates include a conservation improvement program rider, which includes a financial incentive for meeting energy savings goals.
|
•
|
WE and WPS provide wholesale electric service to customers under market-based rates and FERC formula rates. The customer is charged a base rate each year based upon a formula using prior year actual costs and customer demand. A true-up is calculated based on the difference between the amount billed to customers for the demand component of their rates and what the actual cost of service was for the year. The true-up can result in an amount that we will recover from or refund to the customer. We consider the true-up portion of the wholesale electric revenues to be alternative revenues.
|
(in millions)
|
|
2019
|
|
2018
|
||||
Materials and supplies
|
|
$
|
234.2
|
|
|
$
|
226.6
|
|
Natural gas in storage
|
|
227.7
|
|
|
232.9
|
|
||
Fossil fuel
|
|
87.9
|
|
|
88.7
|
|
||
Total
|
|
$
|
549.8
|
|
|
$
|
548.2
|
|
2019 Form 10-K
|
79
|
WEC Energy Group, Inc.
|
*
|
The 2018 rate reflects the impact of a new depreciation study approved by the MPUC in May 2018. The rates approved were effective retroactive to January 2017. An approximate $1.4 million reduction in depreciation expense was recorded in 2018 related to this depreciation study.
|
2019 Form 10-K
|
80
|
WEC Energy Group, Inc.
|
|
|
2019
|
||
|
|
Average AFUDC Retail Rate
|
|
Average AFUDC Wholesale Rate
|
WE
|
|
8.45%
|
|
5.11%
|
WPS
|
|
7.72%
|
|
2.58%
|
WG
|
|
8.33%
|
|
N/A
|
UMERC
|
|
6.28%
|
|
N/A
|
WBS
|
|
7.72%
|
|
N/A
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
AFUDC – Debt
|
|
|
|
|
|
|
|
|
|
|||
WE
|
|
$
|
1.5
|
|
|
$
|
1.5
|
|
|
$
|
1.2
|
|
WPS
|
|
2.4
|
|
|
1.9
|
|
|
1.6
|
|
|||
WG
|
|
0.5
|
|
|
0.2
|
|
|
0.3
|
|
|||
UMERC
|
|
1.3
|
|
|
2.4
|
|
|
0.1
|
|
|||
WBS
|
|
0.1
|
|
|
0.2
|
|
|
1.1
|
|
|||
Other
|
|
0.1
|
|
|
0.7
|
|
|
0.6
|
|
|||
Total AFUDC – Debt
|
|
$
|
5.9
|
|
|
$
|
6.9
|
|
|
$
|
4.9
|
|
|
|
|
|
|
|
|
||||||
AFUDC – Equity
|
|
|
|
|
|
|
|
|
|
|||
WE
|
|
$
|
3.7
|
|
|
$
|
3.9
|
|
|
$
|
3.1
|
|
WPS
|
|
5.7
|
|
|
4.6
|
|
|
4.1
|
|
|||
WG
|
|
1.3
|
|
|
0.6
|
|
|
0.9
|
|
|||
UMERC
|
|
3.3
|
|
|
5.4
|
|
|
0.2
|
|
|||
WBS
|
|
0.2
|
|
|
0.6
|
|
|
3.0
|
|
|||
Other
|
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
|||
Total AFUDC – Equity
|
|
$
|
14.4
|
|
|
$
|
15.2
|
|
|
$
|
11.4
|
|
2019 Form 10-K
|
81
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
82
|
WEC Energy Group, Inc.
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Stock options granted
|
|
476,418
|
|
|
710,710
|
|
|
552,215
|
|
|||
|
|
|
|
|
|
|
||||||
Estimated weighted-average fair value per stock option
|
|
$
|
8.60
|
|
|
$
|
7.71
|
|
|
$
|
7.45
|
|
|
|
|
|
|
|
|
||||||
Assumptions used to value the options:
|
|
|
|
|
|
|
||||||
Risk-free interest rate
|
|
2.5% – 2.7%
|
|
|
1.6% – 2.8%
|
|
|
0.7% – 2.5%
|
|
|||
Dividend yield
|
|
3.6
|
%
|
|
3.5
|
%
|
|
3.5
|
%
|
|||
Expected volatility
|
|
17.0
|
%
|
|
18.0
|
%
|
|
19.0
|
%
|
|||
Expected life (years)
|
|
8.5
|
|
|
5.9
|
|
|
6.8
|
|
2019 Form 10-K
|
83
|
WEC Energy Group, Inc.
|
•
|
We did not reassess whether any expired or existing contracts were leases or contained leases.
|
•
|
We did not reassess the lease classification for any expired or existing leases (that is, all leases that were classified as operating leases in accordance with Topic 840 continue to be classified as operating leases, and all leases that were classified as capital leases in accordance with Topic 840 are classified as finance leases).
|
•
|
We did not reassess the accounting for initial direct costs for any existing leases.
|
2019 Form 10-K
|
84
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
85
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
86
|
WEC Energy Group, Inc.
|
*
|
Includes $8.1 million of restricted cash.
|
2019 Form 10-K
|
87
|
WEC Energy Group, Inc.
|
(in millions)
|
|
|
||
Net property, plant, and equipment
|
|
$
|
66.4
|
|
Noncontrolling interest
|
|
(5.0
|
)
|
|
Total purchase price
|
|
$
|
61.4
|
|
*
|
Represents restricted cash.
|
2019 Form 10-K
|
88
|
WEC Energy Group, Inc.
|
(in millions)
|
|
|
||
Current assets
|
|
$
|
0.2
|
|
Net property, plant, and equipment
|
|
76.9
|
|
|
Total purchase price
|
|
$
|
77.1
|
|
(in millions)
|
|
|
||
Current assets
|
|
$
|
2.0
|
|
Net property, plant, and equipment
|
|
217.6
|
|
|
Goodwill
|
|
7.3
|
|
|
Current liabilities
|
|
(0.9
|
)
|
|
Total purchase price
|
|
$
|
226.0
|
|
2019 Form 10-K
|
89
|
WEC Energy Group, Inc.
|
(in millions)
|
|
Wisconsin
|
|
Illinois
|
|
Other States
|
|
Total Utility
Operations
|
|
Non-Utility Energy Infrastructure
|
|
Corporate
and Other
|
|
Reconciling
Eliminations
|
|
WEC Energy Group Consolidated
|
||||||||||||||||
Year ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Electric
|
|
$
|
4,307.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,307.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,307.7
|
|
Natural gas
|
|
1,324.1
|
|
|
1,332.4
|
|
|
411.6
|
|
|
3,068.1
|
|
|
47.4
|
|
|
—
|
|
|
(44.1
|
)
|
|
3,071.4
|
|
||||||||
Total regulated revenues
|
|
5,631.8
|
|
|
1,332.4
|
|
|
411.6
|
|
|
7,375.8
|
|
|
47.4
|
|
|
—
|
|
|
(44.1
|
)
|
|
7,379.1
|
|
||||||||
Other non-utility revenues
|
|
—
|
|
|
0.1
|
|
|
16.6
|
|
|
16.7
|
|
|
55.2
|
|
|
4.0
|
|
|
(5.7
|
)
|
|
70.2
|
|
||||||||
Total revenues from contracts with customers
|
|
5,631.8
|
|
|
1,332.5
|
|
|
428.2
|
|
|
7,392.5
|
|
|
102.6
|
|
|
4.0
|
|
|
(49.8
|
)
|
|
7,449.3
|
|
||||||||
Other operating revenues
|
|
15.3
|
|
|
24.6
|
|
|
(2.2
|
)
|
|
37.7
|
|
|
393.3
|
|
|
0.4
|
|
|
(357.6
|
)
|
|
73.8
|
|
||||||||
Total operating revenues
|
|
$
|
5,647.1
|
|
|
$
|
1,357.1
|
|
|
$
|
426.0
|
|
|
$
|
7,430.2
|
|
|
$
|
495.9
|
|
|
$
|
4.4
|
|
|
$
|
(407.4
|
)
|
|
$
|
7,523.1
|
|
(in millions)
|
|
Wisconsin
|
|
Illinois
|
|
Other States
|
|
Total Utility
Operations
|
|
Non-Utility Energy Infrastructure
|
|
Corporate
and Other
|
|
Reconciling
Eliminations
|
|
WEC Energy Group Consolidated
|
||||||||||||||||
Year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Electric
|
|
$
|
4,432.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,432.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,432.4
|
|
Natural gas
|
|
1,350.6
|
|
|
1,406.9
|
|
|
428.4
|
|
|
3,185.9
|
|
|
45.4
|
|
|
—
|
|
|
(36.4
|
)
|
|
3,194.9
|
|
||||||||
Total regulated revenues
|
|
5,783.0
|
|
|
1,406.9
|
|
|
428.4
|
|
|
7,618.3
|
|
|
45.4
|
|
|
—
|
|
|
(36.4
|
)
|
|
7,627.3
|
|
||||||||
Other non-utility revenues
|
|
—
|
|
|
0.2
|
|
|
16.1
|
|
|
16.3
|
|
|
34.6
|
|
|
7.9
|
|
|
(5.8
|
)
|
|
53.0
|
|
||||||||
Total revenues from contracts with customers
|
|
5,783.0
|
|
|
1,407.1
|
|
|
444.5
|
|
|
7,634.6
|
|
|
80.0
|
|
|
7.9
|
|
|
(42.2
|
)
|
|
7,680.3
|
|
||||||||
Other operating revenues
|
|
11.7
|
|
|
(7.1
|
)
|
|
(6.3
|
)
|
|
(1.7
|
)
|
|
388.4
|
|
|
0.8
|
|
|
(388.3
|
)
|
|
(0.8
|
)
|
||||||||
Total operating revenues
|
|
$
|
5,794.7
|
|
|
$
|
1,400.0
|
|
|
$
|
438.2
|
|
|
$
|
7,632.9
|
|
|
$
|
468.4
|
|
|
$
|
8.7
|
|
|
$
|
(430.5
|
)
|
|
$
|
7,679.5
|
|
2019 Form 10-K
|
90
|
WEC Energy Group, Inc.
|
|
|
Electric Utility Operating Revenues
|
||||||
|
|
Year Ended December 31
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Residential
|
|
$
|
1,608.6
|
|
|
$
|
1,636.3
|
|
Small commercial and industrial
|
|
1,384.6
|
|
|
1,408.6
|
|
||
Large commercial and industrial
|
|
871.9
|
|
|
912.2
|
|
||
Other
|
|
29.6
|
|
|
29.9
|
|
||
Total retail revenues
|
|
3,894.7
|
|
|
3,987.0
|
|
||
Wholesale
|
|
189.5
|
|
|
210.1
|
|
||
Resale
|
|
163.1
|
|
|
192.2
|
|
||
Steam
|
|
23.3
|
|
|
24.1
|
|
||
Other utility revenues
|
|
37.1
|
|
|
19.0
|
|
||
Total electric utility operating revenues
|
|
$
|
4,307.7
|
|
|
$
|
4,432.4
|
|
(in millions)
|
|
Wisconsin
|
|
Illinois
|
|
Other States
|
|
Total Natural Gas Utility Operating Revenues
|
||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential
|
|
$
|
837.9
|
|
|
$
|
857.8
|
|
|
$
|
258.2
|
|
|
$
|
1,953.9
|
|
Commercial and industrial
|
|
419.9
|
|
|
261.7
|
|
|
148.7
|
|
|
830.3
|
|
||||
Total retail revenues
|
|
1,257.8
|
|
|
1,119.5
|
|
|
406.9
|
|
|
2,784.2
|
|
||||
Transport
|
|
72.6
|
|
|
245.3
|
|
|
31.6
|
|
|
349.5
|
|
||||
Other utility revenues *
|
|
(6.3
|
)
|
|
(32.4
|
)
|
|
(26.9
|
)
|
|
(65.6
|
)
|
||||
Total natural gas utility operating revenues
|
|
$
|
1,324.1
|
|
|
$
|
1,332.4
|
|
|
$
|
411.6
|
|
|
$
|
3,068.1
|
|
(in millions)
|
|
Wisconsin
|
|
Illinois
|
|
Other States
|
|
Total Natural Gas Utility Operating Revenues
|
||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential
|
|
$
|
834.5
|
|
|
$
|
877.5
|
|
|
$
|
263.3
|
|
|
$
|
1,975.3
|
|
Commercial and industrial
|
|
436.7
|
|
|
266.9
|
|
|
140.0
|
|
|
843.6
|
|
||||
Total retail revenues
|
|
1,271.2
|
|
|
1,144.4
|
|
|
403.3
|
|
|
2,818.9
|
|
||||
Transport
|
|
70.8
|
|
|
244.1
|
|
|
31.8
|
|
|
346.7
|
|
||||
Other utility revenues *
|
|
8.6
|
|
|
18.4
|
|
|
(6.7
|
)
|
|
20.3
|
|
||||
Total natural gas utility operating revenues
|
|
$
|
1,350.6
|
|
|
$
|
1,406.9
|
|
|
$
|
428.4
|
|
|
$
|
3,185.9
|
|
*
|
Includes amounts collected from (refunded to) customers for purchased gas adjustment costs.
|
2019 Form 10-K
|
91
|
WEC Energy Group, Inc.
|
|
|
Year Ended December 31
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
We Power revenues
|
|
$
|
25.4
|
|
|
$
|
25.3
|
|
Wind generation revenues
|
|
24.0
|
|
|
3.6
|
|
||
Appliance service revenues
|
|
16.6
|
|
|
15.9
|
|
||
Distributed renewable solar project revenues
|
|
4.0
|
|
|
8.0
|
|
||
Other
|
|
0.2
|
|
|
0.2
|
|
||
Total other non-utility operating revenues
|
|
$
|
70.2
|
|
|
$
|
53.0
|
|
|
|
Year Ended December 31
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Late payment charges
|
|
$
|
43.7
|
|
|
$
|
40.3
|
|
Alternative revenues *
|
|
(9.6
|
)
|
|
(45.6
|
)
|
||
Other
|
|
39.7
|
|
|
4.5
|
|
||
Total other operating revenues
|
|
$
|
73.8
|
|
|
$
|
(0.8
|
)
|
*
|
Negative amounts can result from alternative revenues being reversed to revenues from contracts with customers as the customer is billed for these alternative revenues. Negative amounts can also result from revenues to be refunded to customers subject to decoupling mechanisms and wholesale true-ups, as discussed in Note 1(d), Operating Revenues.
|
(in millions)
|
|
2019
|
|
2018
|
|
See Note
|
||||
Regulatory assets (1) (2)
|
|
|
|
|
|
|
||||
Pension and OPEB costs (3)
|
|
$
|
1,066.6
|
|
|
$
|
1,193.5
|
|
|
19
|
Plant retirements (4)
|
|
856.4
|
|
|
832.3
|
|
|
6
|
||
Environmental remediation costs (5)
|
|
685.5
|
|
|
687.1
|
|
|
23
|
||
Income tax related items (6)
|
|
457.8
|
|
|
369.1
|
|
|
15
|
||
SSR (7)
|
|
151.5
|
|
|
316.7
|
|
|
25
|
||
AROs
|
|
137.5
|
|
|
185.4
|
|
|
8
|
||
Uncollectible expense (8)
|
|
52.2
|
|
|
38.7
|
|
|
1(d)
|
||
Derivatives
|
|
33.8
|
|
|
17.8
|
|
|
1(q)
|
||
We Power generation (9)
|
|
25.8
|
|
|
43.0
|
|
|
|
||
Electric transmission costs
|
|
0.3
|
|
|
58.1
|
|
|
25
|
||
Other, net
|
|
60.2
|
|
|
114.1
|
|
|
|
||
Total regulatory assets
|
|
$
|
3,527.6
|
|
|
$
|
3,855.8
|
|
|
|
|
|
|
|
|
|
|
||||
Balance sheet presentation
|
|
|
|
|
|
|
||||
Other current assets
|
|
$
|
20.9
|
|
|
$
|
50.7
|
|
|
|
Regulatory assets
|
|
3,506.7
|
|
|
3,805.1
|
|
|
|
||
Total regulatory assets
|
|
$
|
3,527.6
|
|
|
$
|
3,855.8
|
|
|
|
(1)
|
Based on prior and current rate treatment, we believe it is probable that our utilities will continue to recover from customers the regulatory assets in this table. In accordance with GAAP, our regulatory assets do not include the allowance for ROE that is capitalized for regulatory purposes. This allowance was $24.3 million and $18.2 million at December 31, 2019 and 2018, respectively.
|
(2)
|
As of December 31, 2019, we had $175.1 million of regulatory assets not earning a return, $29.1 million of regulatory assets earning a return based on short-term interest rates, and $151.5 million of regulatory assets earning a return based on long-term interest rates. The regulatory
|
2019 Form 10-K
|
92
|
WEC Energy Group, Inc.
|
(3)
|
Primarily represents the unrecognized future pension and OPEB costs related to our defined benefit pension and OPEB plans. We are authorized recovery of these regulatory assets over the average remaining service life of each plan.
|
(4)
|
In accordance with the rate orders issued by the PSCW in December 2019, amounts previously collected from customers for the future removal of our recently retired plants were used to reduce our unrecovered plant balances during December 2019. Any additional removal costs that we incur will increase our plant retirement regulatory assets.
|
(5)
|
As of December 31, 2019, we had made cash expenditures of $96.3 million related to these environmental remediation costs. The remaining $589.2 million represents our estimated future cash expenditures.
|
(6)
|
For information on the flow through of tax repairs and the regulatory treatment of the impacts of the Tax Legislation in our various jurisdictions, see Note 25, Regulatory Environment.
|
(7)
|
As a result of the rate order WE received from the PSCW in December 2019, the regulatory liability related to its mines deferral was offset against its SSR regulatory asset during December 2019. The rate order also authorized recovery of WE's SSR regulatory asset over a 15-year period that began on January 1, 2020.
|
(8)
|
Represents amounts recoverable from customers related to our uncollectible expense tracking mechanisms and riders. These mechanisms allow us to recover or refund the difference between actual uncollectible write-offs and the amounts recovered in rates.
|
(9)
|
Represents amounts recoverable from customers related to WE's costs of the generating units leased from We Power, including subsequent capital additions.
|
(in millions)
|
|
2019
|
|
2018
|
|
See Note
|
||||
Regulatory liabilities
|
|
|
|
|
|
|
||||
Income tax related items (1)
|
|
$
|
2,248.8
|
|
|
$
|
2,406.6
|
|
|
15
|
Removal costs (2)
|
|
1,181.5
|
|
|
1,329.6
|
|
|
|
||
Pension and OPEB benefits (3)
|
|
354.9
|
|
|
238.3
|
|
|
19
|
||
Energy costs refundable through rate adjustments (4)
|
|
89.8
|
|
|
39.6
|
|
|
1(d)
|
||
Earnings sharing mechanisms (5)
|
|
43.5
|
|
|
30.0
|
|
|
25
|
||
Electric transmission costs (5)
|
|
42.2
|
|
|
9.7
|
|
|
25
|
||
Uncollectible expense (6)
|
|
39.1
|
|
|
30.5
|
|
|
1(d)
|
||
Decoupling
|
|
36.8
|
|
|
30.5
|
|
|
1(d)
|
||
Energy efficiency programs (7)
|
|
30.7
|
|
|
31.7
|
|
|
|
||
Derivatives
|
|
6.7
|
|
|
16.4
|
|
|
1(q)
|
||
Mines deferral (8)
|
|
—
|
|
|
120.8
|
|
|
|
||
Other, net
|
|
6.4
|
|
|
4.7
|
|
|
|
||
Total regulatory liabilities
|
|
$
|
4,080.4
|
|
|
$
|
4,288.4
|
|
|
|
|
|
|
|
|
|
|
||||
Balance sheet presentation
|
|
|
|
|
|
|
||||
Other current liabilities
|
|
$
|
87.6
|
|
|
$
|
36.8
|
|
|
|
Regulatory liabilities
|
|
3,992.8
|
|
|
4,251.6
|
|
|
|
||
Total regulatory liabilities
|
|
$
|
4,080.4
|
|
|
$
|
4,288.4
|
|
|
|
(1)
|
For information on the regulatory treatment of the impacts of the Tax Legislation in our various jurisdictions, see Note 25, Regulatory Environment.
|
(2)
|
Represents amounts collected from customers to cover the future cost of property, plant, and equipment removals that are not legally required. Legal obligations related to the removal of property, plant, and equipment are recorded as AROs. See Note 8, Asset Retirement Obligations, for more information on our legal obligations.
|
(3)
|
Primarily represents the unrecognized future pension and OPEB benefits related to our defined benefit pension and OPEB plans. We will amortize these regulatory liabilities into net periodic benefit cost over the average remaining service life of each plan.
|
2019 Form 10-K
|
93
|
WEC Energy Group, Inc.
|
(4)
|
Represents an over-collection of energy costs that will be refunded to customers in the future. When the rates we charge to customers include energy costs that are higher than our actual energy costs, any over-collection outside of the allowable energy cost price variance is refunded to customers.
|
(5)
|
Based on orders received from the PSCW, WE was required to apply the refunds due to customers from its earnings sharing mechanism to its electric transmission escrow through 2019. As a result, $38.6 million of WE's earnings sharing refunds were reflected in its electric transmission regulatory liability at December 31, 2019, and $37.2 million of WE's earnings sharing refunds were netted against its electric transmission regulatory asset at December 31, 2018.
|
(6)
|
Represents amounts refundable to customers related to our uncollectible expense tracking mechanisms and riders. These mechanisms allow us to recover or refund the difference between actual uncollectible write-offs and the amounts recovered in rates.
|
(7)
|
Represents amounts refundable to customers related to programs at the utilities designed to meet energy efficiency standards.
|
(8)
|
Represents the deferral of revenues less the associated cost of sales related to Tilden, which were not included in the PSCW's 2015 rate order. As a result of the rate order WE received from the PSCW in December 2019, this regulatory liability was offset against WE's SSR regulatory asset during December 2019.
|
(in millions)
|
|
2019
|
|
2018
|
||||
Electric – generation
|
|
$
|
6,858.8
|
|
|
$
|
6,410.6
|
|
Electric – distribution
|
|
7,018.1
|
|
|
6,534.6
|
|
||
Natural gas – distribution, storage, and transmission
|
|
11,602.7
|
|
|
10,766.3
|
|
||
Property, plant, and equipment to be retired, net
|
|
—
|
|
|
174.8
|
|
||
Other
|
|
1,696.7
|
|
|
1,649.1
|
|
||
Less: Accumulated depreciation
|
|
8,073.7
|
|
|
7,573.6
|
|
||
Net
|
|
19,102.6
|
|
|
17,961.8
|
|
||
CWIP
|
|
820.4
|
|
|
707.5
|
|
||
Net utility property, plant, and equipment
|
|
19,923.0
|
|
|
18,669.3
|
|
||
|
|
|
|
|
||||
We Power generation
|
|
3,245.7
|
|
|
3,244.4
|
|
||
Renewable generation
|
|
716.5
|
|
|
193.3
|
|
||
Natural gas storage
|
|
245.9
|
|
|
244.8
|
|
||
Net non-utility energy infrastructure
|
|
4,208.1
|
|
|
3,682.5
|
|
||
Corporate services
|
|
180.4
|
|
|
171.0
|
|
||
Other
|
|
88.8
|
|
|
127.1
|
|
||
Less: Accumulated depreciation
|
|
805.0
|
|
|
731.5
|
|
||
Net
|
|
3,672.3
|
|
|
3,249.1
|
|
||
CWIP
|
|
24.8
|
|
|
82.5
|
|
||
Net non-utility and other property, plant, and equipment
|
|
3,697.1
|
|
|
3,331.6
|
|
||
|
|
|
|
|
||||
Total property, plant, and equipment
|
|
$
|
23,620.1
|
|
|
$
|
22,000.9
|
|
2019 Form 10-K
|
94
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
95
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
||||
Severance liability at January 1
|
|
$
|
15.7
|
|
|
$
|
29.4
|
|
Severance payments
|
|
(7.2
|
)
|
|
(10.7
|
)
|
||
Other
|
|
(6.4
|
)
|
|
(3.0
|
)
|
||
Total severance liability at December 31
|
|
$
|
2.1
|
|
|
$
|
15.7
|
|
|
|
We Power
|
|
WPS
|
||||||||||||
(in millions, except for percentages and MW)
|
|
Elm Road Generating Station Units 1 and 2
|
|
Weston Unit 4
|
|
Columbia Energy Center Units 1
and 2 (2)
|
|
Forward Wind Energy Center
|
||||||||
Ownership
|
|
83.34
|
%
|
|
70.0
|
%
|
|
27.6
|
%
|
|
44.6
|
%
|
||||
Share of rated capacity (MW) (1)
|
|
1,054.3
|
|
|
386.0
|
|
|
313.9
|
|
|
8.4
|
|
||||
In-service date
|
|
2010 and 2011
|
|
|
2008
|
|
|
1975 and 1978
|
|
|
2008
|
|
||||
Property, plant, and equipment
|
|
$
|
2,447.9
|
|
|
$
|
663.2
|
|
|
$
|
422.3
|
|
|
$
|
118.7
|
|
Accumulated depreciation
|
|
$
|
(416.1
|
)
|
|
$
|
(232.4
|
)
|
|
$
|
(129.5
|
)
|
|
$
|
(46.4
|
)
|
CWIP
|
|
$
|
0.8
|
|
|
$
|
5.3
|
|
|
$
|
1.8
|
|
|
$
|
0.1
|
|
(1)
|
Capacity for our electric generation facilities is based on rated capacity, which is the net power output under average operating conditions with equipment in an average state of repair as of a given month in a given year. Values are primarily based on the net dependable expected capacity ratings for summer 2020 established by tests and may change slightly from year to year. The summer period is the most relevant for capacity planning purposes. This is a result of continually reaching demand peaks in the summer months, primarily due to air conditioning demand.
|
(2)
|
Columbia Energy Center is jointly owned by Wisconsin Power and Light, Madison Gas and Electric, and WPS. In October 2016, Wisconsin Power and Light received an order from the PSCW approving amendments to the Columbia Energy Center joint operating agreement between the parties allowing WPS and Madison Gas and Electric to forgo certain capital expenditures at the Columbia Energy Center. As a result, Wisconsin Power and Light will incur these capital expenditures in exchange for a proportional increase in its ownership share of the Columbia Energy Center. Based upon the additional capital expenditures Wisconsin Power and Light expects to incur through June 1, 2020, WPS's ownership interest would decrease to 27.5%.
|
2019 Form 10-K
|
96
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance as of January 1
|
|
$
|
461.4
|
|
|
$
|
573.7
|
|
|
$
|
557.7
|
|
Accretion
|
|
22.1
|
|
|
28.0
|
|
|
27.5
|
|
|||
Additions and revisions to estimated cash flows
|
|
39.1
|
|
(1)
|
(104.5
|
)
|
(2)
|
26.5
|
|
|||
Liabilities settled
|
|
(39.1
|
)
|
|
(35.8
|
)
|
|
(38.0
|
)
|
|||
Balance as of December 31
|
|
$
|
483.5
|
|
|
$
|
461.4
|
|
|
$
|
573.7
|
|
(1)
|
AROs increased $40.1 million in 2019, primarily due to new natural gas distribution lines being placed into service at PGL. Also in 2019, AROs increased $10.7 million as a result of AROs being recorded for the legal requirement to dismantle, at retirement, the wind generation projects known as Upstream and Coyote Ridge. See Note 2, Acquisitions, for more information on Upstream and Coyote Ridge. AROs decreased $7.3 million due to revisions made to estimated cash flows for the abatement of asbestos at WE.
|
(2)
|
AROs decreased $127.3 million in 2018 due to revisions made to estimated cash flows primarily for changes in the cost to retire natural gas distribution pipe at PGL. Also in 2018, AROs increased $10.7 million as a result of revisions made to estimated cash flows for the abatement of asbestos at WPS's Pulliam power plant, and a $10.9 million ARO was recorded for the legal requirement to dismantle, at retirement, the wind generation projects known as Forward Wind Energy Center and Bishop Hill III. See Note 2, Acquisitions, for more information on Forward Wind Energy Center and Bishop Hill III.
|
|
|
Wisconsin
|
|
Illinois
|
|
Other States
|
|
Non-Utility Energy Infrastructure
|
|
Total
|
||||||||||||||||||||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||
Goodwill balance as of January 1
|
|
$
|
2,104.3
|
|
|
$
|
2,104.3
|
|
|
$
|
758.7
|
|
|
$
|
758.7
|
|
|
$
|
183.2
|
|
|
$
|
183.2
|
|
|
$
|
6.6
|
|
|
$
|
7.3
|
|
|
$
|
3,052.8
|
|
|
$
|
3,053.5
|
|
Adjustment to Bluewater purchase price allocation (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
||||||||||
Goodwill balance as of December 31 (2)
|
|
$
|
2,104.3
|
|
|
$
|
2,104.3
|
|
|
$
|
758.7
|
|
|
$
|
758.7
|
|
|
$
|
183.2
|
|
|
$
|
183.2
|
|
|
$
|
6.6
|
|
|
$
|
6.6
|
|
|
$
|
3,052.8
|
|
|
$
|
3,052.8
|
|
(1)
|
See Note 2, Acquisitions, for more information on the acquisition of Bluewater.
|
(2)
|
We had no accumulated impairment losses related to our goodwill as of December 31, 2019.
|
2019 Form 10-K
|
97
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Stock options
|
|
$
|
4.4
|
|
|
$
|
5.2
|
|
|
$
|
3.4
|
|
Restricted stock
|
|
7.1
|
|
|
10.7
|
|
|
5.4
|
|
|||
Performance units
|
|
38.7
|
|
|
20.2
|
|
|
20.2
|
|
|||
Stock-based compensation expense
|
|
$
|
50.2
|
|
|
$
|
36.1
|
|
|
$
|
29.0
|
|
Related tax benefit
|
|
$
|
13.8
|
|
|
$
|
9.9
|
|
|
$
|
11.6
|
|
Stock Options
|
|
Number of Options
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Life
(in years)
|
|
Aggregate Intrinsic Value (in millions)
|
|||||
Outstanding as of January 1, 2019
|
|
4,452,533
|
|
|
$
|
48.86
|
|
|
|
|
|
||
Granted
|
|
476,418
|
|
|
$
|
68.18
|
|
|
|
|
|
||
Exercised
|
|
(1,609,948
|
)
|
|
$
|
41.63
|
|
|
|
|
|
||
Forfeited
|
|
(69,085
|
)
|
|
$
|
62.33
|
|
|
|
|
|
||
Outstanding as of December 31, 2019
|
|
3,249,918
|
|
|
$
|
54.98
|
|
|
6.3
|
|
$
|
121.0
|
|
Exercisable as of December 31, 2019
|
|
1,744,386
|
|
|
$
|
46.92
|
|
|
4.8
|
|
$
|
79.0
|
|
Restricted Shares
|
|
Number of Shares
|
|
Weighted-Average Grant Date Fair Value
|
|||
Outstanding and unvested as of January 1, 2019
|
|
234,627
|
|
|
$
|
61.01
|
|
Granted
|
|
97,343
|
|
|
$
|
68.18
|
|
Released
|
|
(192,291
|
)
|
|
$
|
60.76
|
|
Forfeited
|
|
(5,570
|
)
|
|
$
|
62.99
|
|
Outstanding and unvested as of December 31, 2019
|
|
134,109
|
|
|
$
|
66.48
|
|
2019 Form 10-K
|
98
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
99
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Shares purchased
|
|
1.8
|
|
|
1.1
|
|
|
1.1
|
|
|||
Cost of shares purchased
|
|
$
|
140.1
|
|
|
$
|
72.4
|
|
|
$
|
71.3
|
|
Date Declared
|
|
Date Payable
|
|
Per Share
|
|
Period
|
January 17, 2019
|
|
March 1, 2019
|
|
$0.59
|
|
First quarter
|
April 18, 2019
|
|
June 1, 2019
|
|
$0.59
|
|
Second quarter
|
July 18, 2019
|
|
September 1, 2019
|
|
$0.59
|
|
Third quarter
|
October 17, 2019
|
|
December 1, 2019
|
|
$0.59
|
|
Fourth quarter
|
(in millions, except share and per share amounts)
|
|
Shares Authorized
|
|
Shares Outstanding
|
|
Redemption Price Per Share
|
|
Total
|
||||||
WEC Energy Group
|
|
|
|
|
|
|
|
|
||||||
$.01 par value Preferred Stock
|
|
15,000,000
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||
WE
|
|
|
|
|
|
|
|
|
||||||
$100 par value, Six Per Cent. Preferred Stock
|
|
45,000
|
|
|
44,498
|
|
|
—
|
|
|
4.4
|
|
||
$100 par value, Serial Preferred Stock 3.60% Series
|
|
2,286,500
|
|
|
260,000
|
|
|
$
|
101
|
|
|
26.0
|
|
|
$25 par value, Serial Preferred Stock
|
|
5,000,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
||||||
WPS
|
|
|
|
|
|
|
|
|
||||||
$100 par value, Preferred Stock
|
|
1,000,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
||||||
PGL
|
|
|
|
|
|
|
|
|
||||||
$100 par value, Cumulative Preferred Stock
|
|
430,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
||||||
NSG
|
|
|
|
|
|
|
|
|
||||||
$100 par value, Cumulative Preferred Stock
|
|
160,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
|
|
|
|
|
|
$
|
30.4
|
|
2019 Form 10-K
|
100
|
WEC Energy Group, Inc.
|
(in millions, except percentages)
|
|
2019
|
|
2018
|
||||
Commercial paper
|
|
|
|
|
||||
Amount outstanding at December 31
|
|
$
|
830.8
|
|
|
$
|
1,440.1
|
|
Average interest rate on amounts outstanding at December 31
|
|
2.00
|
%
|
|
2.92
|
%
|
(in millions)
|
|
Maturity
|
|
2019
|
||
WEC Energy Group
|
|
October 2022
|
|
$
|
1,200.0
|
|
WE
|
|
October 2022
|
|
500.0
|
|
|
WPS
|
|
October 2022
|
|
400.0
|
|
|
WG
|
|
October 2022
|
|
350.0
|
|
|
PGL
|
|
October 2022
|
|
350.0
|
|
|
Total short-term credit capacity
|
|
|
|
$
|
2,800.0
|
|
|
|
|
|
|
||
Less:
|
|
|
|
|
|
|
Letters of credit issued inside credit facilities
|
|
|
|
$
|
2.3
|
|
Commercial paper outstanding
|
|
|
|
830.8
|
|
|
Available capacity under existing agreements
|
|
|
|
$
|
1,966.9
|
|
2019 Form 10-K
|
101
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
||||||||||||
Long-term debt
|
|
Maturity Date
|
|
Weighted Average Interest Rate
|
|
Balance
|
|
Weighted Average Interest Rate
|
|
Balance
|
||||||
WEC Energy Group Senior Notes (unsecured) (1)
|
|
2020-2033
|
|
3.47
|
%
|
|
$
|
2,050.0
|
|
|
3.54
|
%
|
|
$
|
1,700.0
|
|
WEC Energy Group Junior Notes (unsecured) (1) (2)
|
|
2067
|
|
4.50
|
%
|
|
500.0
|
|
|
4.85
|
%
|
|
500.0
|
|
||
WE Debentures (unsecured)
|
|
2021-2095
|
|
4.26
|
%
|
|
2,785.0
|
|
|
4.50
|
%
|
|
2,735.0
|
|
||
WPS Senior Notes (unsecured)
|
|
2021-2049
|
|
4.04
|
%
|
|
1,625.0
|
|
|
4.21
|
%
|
|
1,325.0
|
|
||
WG Debentures (unsecured)
|
|
2024-2046
|
|
3.65
|
%
|
|
640.0
|
|
|
4.04
|
%
|
|
490.0
|
|
||
Integrys Senior Notes (unsecured)
|
|
2020
|
|
4.17
|
%
|
|
250.0
|
|
|
4.17
|
%
|
|
250.0
|
|
||
Integrys Junior Notes (unsecured) (3)
|
|
2073
|
|
6.00
|
%
|
|
400.0
|
|
|
6.00
|
%
|
|
400.0
|
|
||
PGL First and Refunding Mortgage Bonds (secured) (4)
|
|
2024-2047
|
|
3.59
|
%
|
|
1,520.0
|
|
|
3.88
|
%
|
|
1,195.0
|
|
||
NSG First Mortgage Bonds (secured) (5)
|
|
2027-2043
|
|
3.81
|
%
|
|
132.0
|
|
|
3.81
|
%
|
|
132.0
|
|
||
MERC Senior Notes (unsecured)
|
|
2027-2047
|
|
3.51
|
%
|
|
120.0
|
|
|
3.51
|
%
|
|
120.0
|
|
||
MGU Senior Notes (unsecured)
|
|
2027-2047
|
|
3.51
|
%
|
|
90.0
|
|
|
3.51
|
%
|
|
90.0
|
|
||
UMERC Senior Notes (unsecured)
|
|
2029
|
|
3.26
|
%
|
|
160.0
|
|
|
N/A
|
|
|
—
|
|
||
Bluewater Gas Storage Senior Notes (unsecured) (6)
|
|
2020-2047
|
|
3.76
|
%
|
|
120.3
|
|
|
3.76
|
%
|
|
122.7
|
|
||
ATC Holding Senior Notes (unsecured)
|
|
2025-2030
|
|
4.05
|
%
|
|
475.0
|
|
|
4.34
|
%
|
|
240.0
|
|
||
We Power Subsidiaries Notes (secured, nonrecourse) (6) (7)
|
|
2020-2041
|
|
5.57
|
%
|
|
1,005.2
|
|
|
5.56
|
%
|
|
1,037.9
|
|
||
WECC Notes (unsecured)
|
|
2028
|
|
6.94
|
%
|
|
50.0
|
|
|
6.94
|
%
|
|
50.0
|
|
||
Total
|
|
|
|
|
|
11,922.5
|
|
|
|
|
10,387.6
|
|
||||
Integrys acquisition fair value adjustment
|
|
|
|
|
|
14.3
|
|
|
|
|
20.6
|
|
||||
Unamortized debt issuance costs
|
|
|
|
|
|
(52.9
|
)
|
|
|
|
(44.7
|
)
|
||||
Unamortized discount, net and other
|
|
|
|
|
|
(25.6
|
)
|
|
|
|
(27.8
|
)
|
||||
Total long-term debt, including current portion (8)
|
|
|
|
|
|
11,858.3
|
|
|
|
|
10,335.7
|
|
||||
Current portion of long-term debt
|
|
|
|
|
|
(686.9
|
)
|
|
|
|
(360.1
|
)
|
||||
Total long-term debt
|
|
|
|
|
|
$
|
11,171.4
|
|
|
|
|
$
|
9,975.6
|
|
(1)
|
In connection with our outstanding 2007 Junior Notes, we executed an RCC, which we amended on June 29, 2015, for the benefit of persons that buy, hold, or sell a specified series of our long-term indebtedness (covered debt). Our 6.20% Senior Notes due April 1, 2033 have been designated as the covered debt under the RCC. The RCC provides that we may not redeem, defease, or purchase, and that our subsidiaries may not purchase, any 2007 Junior Notes on or before May 15, 2037, unless, subject to certain limitations described in the RCC, we have received a specified amount of proceeds from the sale of qualifying securities.
|
(2)
|
Variable interest rate reset quarterly. The rates were 4.02% and 4.73% as of December 31, 2019 and 2018, respectively. On July 12, 2018 we executed two interest rate swaps that provided a fixed rate of 4.9765% on $250.0 million of the outstanding notes. The effective rates of 4.50% and 4.85% as of December 31, 2019 and 2018, respectively, were blended rates of the variable and fixed portions.
|
(3)
|
Effective August 2023, Integrys's $400.0 million of 2013 6.00% Junior Subordinated Notes due 2073 will bear interest at the three-month LIBOR plus 322 basis points and will reset quarterly.
|
(4)
|
PGL's First Mortgage Bonds are subject to the terms and conditions of PGL's First Mortgage Indenture dated January 2, 1926, as supplemented. Under the terms of the Indenture, substantially all property owned by PGL is pledged as collateral for these outstanding debt securities.
|
(5)
|
NSG's First Mortgage Bonds are subject to the terms and conditions of NSG's First Mortgage Indenture dated April 1, 1955, as supplemented. Under the terms of the Indenture, substantially all property owned by NSG is pledged as collateral for these outstanding debt securities.
|
(6)
|
The long-term debt of Bluewater and We Power's subsidiaries amortizes on a mortgage-style basis.
|
2019 Form 10-K
|
102
|
WEC Energy Group, Inc.
|
(7)
|
We Power's subsidiaries' senior notes are secured by a collateral assignment of the leases between We Power's subsidiaries and WE related to PWGS and ERGS, as applicable.
|
(8)
|
The amount of long-term debt on our balance sheets includes finance/capital lease obligations of $45.9 million and $23.3 million at December 31, 2019 and 2018, respectively.
|
2019 Form 10-K
|
103
|
WEC Energy Group, Inc.
|
(in millions)
|
|
Interest Rate
|
|
Maturity Date *
|
|
Principal Amount
|
||
WEC Energy Group Senior Notes (unsecured)
|
|
2.45%
|
|
June
|
|
$
|
400.0
|
|
Integrys Senior Notes (unsecured)
|
|
4.17%
|
|
November
|
|
250.0
|
|
|
Bluewater Gas Storage Senior Notes (unsecured)
|
|
3.76%
|
|
Semi-annually
|
|
2.5
|
|
|
We Power Subsidiaries Notes – PWGS (secured, nonrecourse)
|
|
4.91%
|
|
Monthly
|
|
6.6
|
|
|
We Power Subsidiaries Notes – ERGS (secured, nonrecourse)
|
|
5.209%
|
|
Semi-annually
|
|
12.6
|
|
|
We Power Subsidiaries Notes – ERGS (secured, nonrecourse)
|
|
4.673%
|
|
Semi-annually
|
|
9.7
|
|
|
We Power Subsidiaries Notes – PWGS (secured, nonrecourse)
|
|
6.00%
|
|
Monthly
|
|
5.5
|
|
|
Total
|
|
|
|
|
|
$
|
686.9
|
|
*
|
Maturity dates listed as semi-annually and monthly are associated with debt that amortizes on a mortgage-style basis.
|
(in millions)
|
|
Payments
|
||
2020
|
|
$
|
686.9
|
|
2021
|
|
1,338.8
|
|
|
2022
|
|
390.8
|
|
|
2023
|
|
42.8
|
|
|
2024
|
|
570.0
|
|
|
Thereafter
|
|
8,893.2
|
|
|
Total
|
|
$
|
11,922.5
|
|
•
|
Leases of office space, primarily related to several floors we are leasing in the Aon Center office building in Chicago, Illinois, though April 2029.
|
•
|
Land we are leasing related to our Rothschild biomass plant through June 2051.
|
•
|
Rail cars we are leasing to transport coal to various generating facilities through February 2021.
|
2019 Form 10-K
|
104
|
WEC Energy Group, Inc.
|
•
|
We recorded our minimum lease payments as purchased power expense in cost of sales on our income statement.
|
•
|
We recorded the difference between the minimum lease payments and the sum of imputed interest and amortization costs calculated under finance lease accounting rules as a deferred regulatory asset on our balance sheets.
|
•
|
Effective January 1, 2019, the minimum lease payments under the power purchase contract were no longer classified within cost of sales in our income statements, but were instead recorded as a component of depreciation and amortization and interest expense in accordance with Topic 980-842, Regulated Operations – Leases.
|
•
|
In accordance with Topic 980-842, the timing of lease expense did not change for this finance lease upon adoption of Topic 842, and still resembled the expense recognition pattern of an operating lease, as the amortization of the right of use assets was modified from what would typically be recorded for a finance lease under Topic 842.
|
•
|
We continue to record the difference between the minimum lease payments and the sum of imputed interest and unadjusted amortization costs calculated under the finance lease accounting rules as a deferred regulatory asset on our balance sheets.
|
2019 Form 10-K
|
105
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Finance/capital lease expense (1)
|
|
$
|
8.2
|
|
|
$
|
7.7
|
|
|
$
|
7.2
|
|
Operating lease expense (2)
|
|
5.5
|
|
|
5.6
|
|
|
6.4
|
|
|||
Short-term lease expense (2)
|
|
0.6
|
|
|
1.5
|
|
|
0.8
|
|
|||
Total lease expense
|
|
$
|
14.3
|
|
|
$
|
14.8
|
|
|
$
|
14.4
|
|
|
|
|
|
|
|
|
||||||
Other information
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
|
|
|
|
||||||
Operating cash flows from finance/capital leases (3)
|
|
$
|
3.3
|
|
|
$
|
7.7
|
|
|
$
|
7.2
|
|
Operating cash flows from operating leases
|
|
$
|
6.0
|
|
|
$
|
6.5
|
|
|
$
|
7.1
|
|
Financing cash flows from finance leases (3)
|
|
$
|
4.9
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||||||
Non-cash activities:
|
|
|
|
|
|
|
|
|||||
Right of use assets obtained in exchange for finance lease liabilities
|
|
$
|
27.2
|
|
|
|
|
|
||||
Right of use assets obtained in exchange for operating lease liabilities
|
|
$
|
49.0
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
||||||
Weighted-average remaining lease term – finance leases
|
|
31.5 years
|
|
|
|
|
|
|||||
Weighted-average remaining lease term – operating leases
|
|
12.9 years
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
||||||
Weighted-average discount rate – finance lease (4)
|
|
6.7
|
%
|
|
|
|
|
|||||
Weighted average discount rate – operating leases (4)
|
|
4.4
|
%
|
|
|
|
|
(1)
|
For the year ended December 31, 2019, finance lease expense included amortization of right of use assets in the amount of $4.9 million (included in depreciation and amortization expense) and interest on lease liabilities of $3.3 million (included in interest expense). For the years ended December 31, 2018 and 2017, total capital lease expense related to the long-term power purchase agreement was included in cost of sales.
|
(2)
|
Operating and short-term lease expense were included as a component of operation and maintenance for the years ended December 31, 2019, 2018, and 2017.
|
(3)
|
Prior to our adoption of Topic 842 on January 1, 2019, all cash flows related to the finance lease were recorded as a component of operating cash flows.
|
(4)
|
Because our operating leases do not provide an implicit rate of return, we used the fully collateralized incremental borrowing rates based upon information available for similarly rated companies in determining the present value of lease payments for our operating leases. For our power purchase agreement that meets the definition of a finance lease, the rate implicit in the lease was readily determinable. For our solar land leases that are finance leases, we used the fully collateralized incremental borrowing rates based upon information available for similarly rated companies in determining the present value of lease payments.
|
2019 Form 10-K
|
106
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
||||
Long-term power purchase commitment
|
|
|
|
|
||||
Under finance/capital lease
|
|
$
|
140.3
|
|
|
$
|
140.3
|
|
Accumulated amortization
|
|
(126.6
|
)
|
|
(120.9
|
)
|
||
Total long-term power purchase commitment
|
|
$
|
13.7
|
|
|
$
|
19.4
|
|
|
|
|
|
|
||||
Two Creeks land leases
|
|
|
|
|
||||
Under finance leases
|
|
$
|
7.7
|
|
|
$
|
—
|
|
Accumulated amortization
|
|
(0.1
|
)
|
|
—
|
|
||
Total Two Creeks land leases
|
|
$
|
7.6
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Badger Hollow I land leases
|
|
|
|
|
||||
Under finance leases
|
|
$
|
19.5
|
|
|
$
|
—
|
|
Accumulated amortization
|
|
(0.2
|
)
|
|
—
|
|
||
Total Badger Hollow I land leases
|
|
$
|
19.3
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Total finance lease right of use assets/capital lease asset
|
|
$
|
40.6
|
|
|
$
|
19.4
|
|
(in millions)
|
|
Total Operating Leases
|
|
Power Purchase Commitment
|
|
Two Creeks
|
|
Badger Hollow I
|
|
Total Finance Leases
|
||||||||||
2020
|
|
$
|
6.8
|
|
|
$
|
8.8
|
|
|
$
|
0.2
|
|
|
$
|
0.3
|
|
|
$
|
9.3
|
|
2021
|
|
4.8
|
|
|
9.4
|
|
|
0.2
|
|
|
0.7
|
|
|
10.3
|
|
|||||
2022
|
|
4.8
|
|
|
4.2
|
|
|
0.2
|
|
|
0.7
|
|
|
5.1
|
|
|||||
2023
|
|
4.9
|
|
|
—
|
|
|
0.2
|
|
|
0.7
|
|
|
0.9
|
|
|||||
2024
|
|
4.8
|
|
|
—
|
|
|
0.2
|
|
|
0.7
|
|
|
0.9
|
|
|||||
Thereafter
|
|
30.1
|
|
|
—
|
|
|
22.8
|
|
|
53.4
|
|
|
76.2
|
|
|||||
Total minimum lease payments
|
|
56.2
|
|
|
22.4
|
|
|
23.8
|
|
|
56.5
|
|
|
102.7
|
|
|||||
Less: Interest
|
|
(14.8
|
)
|
|
(4.0
|
)
|
|
(16.1
|
)
|
|
(36.7
|
)
|
|
(56.8
|
)
|
|||||
Present value of minimum lease payments
|
|
41.4
|
|
|
18.4
|
|
|
7.7
|
|
|
19.8
|
|
|
45.9
|
|
|||||
Less: Short-term lease liabilities
|
|
(4.4
|
)
|
|
(6.3
|
)
|
|
—
|
|
|
—
|
|
|
(6.3
|
)
|
|||||
Long-term lease liabilities
|
|
$
|
37.0
|
|
|
$
|
12.1
|
|
|
$
|
7.7
|
|
|
$
|
19.8
|
|
|
$
|
39.6
|
|
2019 Form 10-K
|
107
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current tax expense (benefit)
|
|
$
|
(37.9
|
)
|
|
$
|
(127.5
|
)
|
|
$
|
111.8
|
|
Deferred income taxes, net
|
|
167.7
|
|
|
300.1
|
|
|
274.4
|
|
|||
Investment tax credit, net
|
|
(4.8
|
)
|
|
(2.8
|
)
|
|
(2.7
|
)
|
|||
Total income tax expense
|
|
$
|
125.0
|
|
|
$
|
169.8
|
|
|
$
|
383.5
|
|
|
|
2019
|
|
2018
|
|
2017 (2)
|
|||||||||||||||
|
|
|
|
Effective
|
|
|
|
Effective
|
|
|
|
Effective
|
|||||||||
(in millions)
|
|
Amount
|
|
Tax Rate
|
|
Amount
|
|
Tax Rate
|
|
Amount
|
|
Tax Rate
|
|||||||||
Statutory federal income tax
|
|
$
|
264.4
|
|
|
21.0
|
%
|
|
$
|
258.1
|
|
|
21.0
|
%
|
|
$
|
555.5
|
|
|
35.0
|
%
|
State income taxes net of federal tax benefit
|
|
80.4
|
|
|
6.4
|
%
|
|
71.8
|
|
|
5.8
|
%
|
|
100.8
|
|
|
6.4
|
%
|
|||
Tax repairs (1)
|
|
(122.8
|
)
|
|
(9.8
|
)%
|
|
(120.7
|
)
|
|
(9.8
|
)%
|
|
—
|
|
|
—
|
%
|
|||
Federal excess deferred tax amortization
|
|
(34.9
|
)
|
|
(2.8
|
)%
|
|
(16.8
|
)
|
|
(1.4
|
)%
|
|
—
|
|
|
—
|
%
|
|||
Wind production tax credits
|
|
(34.1
|
)
|
|
(2.7
|
)%
|
|
(12.1
|
)
|
|
(1.0
|
)%
|
|
(16.8
|
)
|
|
(1.1
|
)%
|
|||
Excess tax benefits – stock options
|
|
(15.8
|
)
|
|
(1.3
|
)%
|
|
(5.9
|
)
|
|
(0.5
|
)%
|
|
(10.0
|
)
|
|
(0.6
|
)%
|
|||
Investment tax credit restored
|
|
(4.8
|
)
|
|
(0.4
|
)%
|
|
(2.8
|
)
|
|
(0.2
|
)%
|
|
(2.7
|
)
|
|
(0.2
|
)%
|
|||
AFUDC – Equity
|
|
(3.0
|
)
|
|
(0.2
|
)%
|
|
(3.2
|
)
|
|
(0.3
|
)%
|
|
(4.0
|
)
|
|
(0.3
|
)%
|
|||
Federal tax reform
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
(226.9
|
)
|
|
(14.3
|
)%
|
|||
Other, net
|
|
(4.4
|
)
|
|
(0.3
|
)%
|
|
1.4
|
|
|
0.2
|
%
|
|
(12.4
|
)
|
|
(0.8
|
)%
|
|||
Total income tax expense
|
|
$
|
125.0
|
|
|
9.9
|
%
|
|
$
|
169.8
|
|
|
13.8
|
%
|
|
$
|
383.5
|
|
|
24.1
|
%
|
(1)
|
In accordance with a settlement agreement with the PSCW, WE flowed through the tax benefit of its repair related deferred tax liabilities in 2018 and 2019, to maintain certain regulatory asset balances at their December 31, 2017 levels. The flow through treatment of the repair related deferred tax liabilities offsets the negative income statement impact of holding the regulatory assets level, resulting in no change to net income. See Note 25, Regulatory Environment, for more information about the impact of the Tax Legislation and the Wisconsin rate order.
|
(2)
|
In 2017, the net impact of tax reform in the amount of $206.7 million is represented in both the Federal tax reform and State income taxes net of federal tax benefit lines above.
|
2019 Form 10-K
|
108
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
||||
Deferred tax assets
|
|
|
|
|
||||
Tax gross up – regulatory items
|
|
$
|
519.8
|
|
|
$
|
579.2
|
|
Deferred revenues
|
|
106.3
|
|
|
129.3
|
|
||
Future tax benefits
|
|
101.0
|
|
|
70.6
|
|
||
Other
|
|
159.8
|
|
|
194.4
|
|
||
Total deferred tax assets
|
|
886.9
|
|
|
973.5
|
|
||
Valuation allowance
|
|
(2.3
|
)
|
|
(11.4
|
)
|
||
Net deferred tax assets
|
|
$
|
884.6
|
|
|
$
|
962.1
|
|
|
|
|
|
|
||||
Deferred tax liabilities
|
|
|
|
|
||||
Property-related
|
|
$
|
3,609.0
|
|
|
$
|
3,436.9
|
|
Investment in affiliates
|
|
531.7
|
|
|
420.6
|
|
||
Deferred costs – Plant retirements
|
|
232.0
|
|
|
176.0
|
|
||
Employee benefits and compensation
|
|
131.4
|
|
|
121.2
|
|
||
Other
|
|
149.8
|
|
|
195.5
|
|
||
Total deferred tax liabilities
|
|
4,653.9
|
|
|
4,350.2
|
|
||
Deferred tax liability, net
|
|
$
|
3,769.3
|
|
|
$
|
3,388.1
|
|
2019
(in millions)
|
|
Gross Value
|
|
Deferred Tax Effect
|
|
Valuation Allowance
|
|
Earliest Year of Expiration
|
||||||
Future tax benefits as of December 31, 2019
|
|
|
|
|
|
|
|
|
||||||
Federal tax credit
|
|
$
|
—
|
|
|
$
|
75.4
|
|
|
$
|
—
|
|
|
2037
|
State net operating loss
|
|
287.1
|
|
|
17.6
|
|
|
(2.3
|
)
|
|
2023
|
|||
Other state benefits
|
|
—
|
|
|
8.0
|
|
|
—
|
|
|
2019
|
|||
Balance as of December 31, 2019
|
|
$
|
287.1
|
|
|
$
|
101.0
|
|
|
$
|
(2.3
|
)
|
|
|
2018
(in millions)
|
|
Gross Value
|
|
Deferred Tax Effect
|
|
Valuation Allowance
|
|
Earliest Year of Expiration
|
||||||
Future tax benefits as of December 31, 2018
|
|
|
|
|
|
|
|
|
||||||
Federal foreign tax credit
|
|
$
|
—
|
|
|
$
|
9.7
|
|
|
$
|
(9.7
|
)
|
|
2018
|
Other federal tax credit
|
|
—
|
|
|
39.3
|
|
|
(1.7
|
)
|
|
2038
|
|||
State net operating loss
|
|
275.9
|
|
|
17.0
|
|
|
—
|
|
|
2023
|
|||
Other state benefits
|
|
—
|
|
|
4.6
|
|
|
—
|
|
|
2018
|
|||
Balance as of December 31, 2018
|
|
$
|
275.9
|
|
|
$
|
70.6
|
|
|
$
|
(11.4
|
)
|
|
|
2019 Form 10-K
|
109
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
||||
Balance as of January 1
|
|
$
|
20.0
|
|
|
$
|
17.3
|
|
Additions for tax positions of prior years
|
|
1.9
|
|
|
2.8
|
|
||
Additions based on tax positions related to the current year
|
|
0.2
|
|
|
0.1
|
|
||
Reductions for tax positions of prior years
|
|
(4.2
|
)
|
|
(0.2
|
)
|
||
Balance as of December 31
|
|
$
|
17.9
|
|
|
$
|
20.0
|
|
Jurisdiction
|
|
Years
|
Federal
|
|
2015–2019
|
Illinois
|
|
2015–2019
|
Michigan
|
|
2015–2019
|
Minnesota
|
|
2015–2019
|
Wisconsin
|
|
2015–2019
|
2019 Form 10-K
|
110
|
WEC Energy Group, Inc.
|
|
|
December 31, 2019
|
||||||||||||||
(in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative assets
|
|
|
|
|
|
|
|
|
||||||||
Natural gas contracts
|
|
$
|
1.4
|
|
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
3.4
|
|
FTRs
|
|
—
|
|
|
—
|
|
|
3.1
|
|
|
3.1
|
|
||||
Coal contracts
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
||||
Total derivative assets
|
|
$
|
1.4
|
|
|
$
|
2.4
|
|
|
$
|
3.1
|
|
|
$
|
6.9
|
|
|
|
|
|
|
|
|
|
|
||||||||
Investments held in rabbi trust
|
|
$
|
85.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
85.3
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
|
|
|
|
|
|
|
|
||||||||
Natural gas contracts
|
|
$
|
21.4
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
22.7
|
|
Coal contracts
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Interest rate swaps
|
|
—
|
|
|
6.0
|
|
|
—
|
|
|
6.0
|
|
||||
Total derivative liabilities
|
|
$
|
21.4
|
|
|
$
|
7.5
|
|
|
$
|
—
|
|
|
$
|
28.9
|
|
|
|
December 31, 2018
|
||||||||||||||
(in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative assets
|
|
|
|
|
|
|
|
|
||||||||
Natural gas contracts
|
|
$
|
6.3
|
|
|
$
|
1.8
|
|
|
$
|
—
|
|
|
$
|
8.1
|
|
FTRs
|
|
—
|
|
|
—
|
|
|
7.4
|
|
|
7.4
|
|
||||
Coal contracts
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
||||
Total derivative assets
|
|
$
|
6.3
|
|
|
$
|
2.2
|
|
|
$
|
7.4
|
|
|
$
|
15.9
|
|
|
|
|
|
|
|
|
|
|
||||||||
Investments held in rabbi trust
|
|
$
|
65.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65.0
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
|
|
|
|
|
|
|
|
||||||||
Natural gas contracts
|
|
$
|
4.7
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
5.5
|
|
Coal contracts
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Interest rate swaps
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
2.3
|
|
||||
Total derivative liabilities
|
|
$
|
4.7
|
|
|
$
|
3.2
|
|
|
$
|
—
|
|
|
$
|
7.9
|
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at the beginning of the period
|
|
$
|
7.4
|
|
|
$
|
4.4
|
|
|
$
|
5.1
|
|
Purchases
|
|
12.8
|
|
|
18.4
|
|
|
13.8
|
|
|||
Settlements
|
|
(17.1
|
)
|
|
(15.4
|
)
|
|
(14.5
|
)
|
|||
Balance at the end of the period
|
|
$
|
3.1
|
|
|
$
|
7.4
|
|
|
$
|
4.4
|
|
2019 Form 10-K
|
111
|
WEC Energy Group, Inc.
|
|
|
2019
|
|
2018
|
||||||||||||
(in millions)
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Preferred stock of subsidiary
|
|
$
|
30.4
|
|
|
$
|
29.5
|
|
|
$
|
30.4
|
|
|
$
|
28.3
|
|
Long-term debt, including current portion *
|
|
11,858.3
|
|
|
13,035.9
|
|
|
10,335.7
|
|
|
10,554.9
|
|
*
|
The carrying amount of long-term debt excludes finance and capital lease obligations of $45.9 million and $23.3 million at December 31, 2019 and 2018, respectively.
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
(in millions)
|
|
Derivative Assets
|
|
Derivative Liabilities
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||
Other current
|
|
|
|
|
|
|
|
|
||||||||
Natural gas contracts
|
|
$
|
3.4
|
|
|
$
|
21.8
|
|
|
$
|
7.7
|
|
|
$
|
5.3
|
|
FTRs
|
|
3.1
|
|
|
—
|
|
|
7.4
|
|
|
—
|
|
||||
Coal contracts
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|
0.1
|
|
||||
Interest rate swaps
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
0.4
|
|
||||
Total other current
|
|
6.7
|
|
|
24.8
|
|
|
15.3
|
|
|
5.8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other long-term
|
|
|
|
|
|
|
|
|
||||||||
Natural gas contracts
|
|
—
|
|
|
0.9
|
|
|
0.4
|
|
|
0.2
|
|
||||
Coal contracts
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Interest rate swaps
|
|
—
|
|
|
3.2
|
|
|
—
|
|
|
1.9
|
|
||||
Total other long-term
|
|
0.2
|
|
|
4.1
|
|
|
0.6
|
|
|
2.1
|
|
||||
Total
|
|
$
|
6.9
|
|
|
$
|
28.9
|
|
|
$
|
15.9
|
|
|
$
|
7.9
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
(in millions)
|
|
Volumes
|
|
Gains (Losses)
|
|
Volumes
|
|
Gains
|
|
Volumes
|
|
Gains (Losses)
|
||||||
Natural gas contracts
|
|
183.9 Dth
|
|
$
|
(27.1
|
)
|
|
173.2 Dth
|
|
$
|
24.6
|
|
|
123.1 Dth
|
|
$
|
(8.0
|
)
|
Petroleum products contracts
|
|
— gallons
|
|
—
|
|
|
6.0 gallons
|
|
1.6
|
|
|
18.0 gallons
|
|
(1.3
|
)
|
|||
FTRs
|
|
31.2 MWh
|
|
16.3
|
|
|
30.5 MWh
|
|
15.9
|
|
|
36.2 MWh
|
|
14.0
|
|
|||
Total
|
|
|
|
$
|
(10.8
|
)
|
|
|
|
$
|
42.1
|
|
|
|
|
$
|
4.7
|
|
2019 Form 10-K
|
112
|
WEC Energy Group, Inc.
|
|
|
December 31, 2019
|
|
December 31, 2018
|
|
||||||||||||
(in millions)
|
|
Derivative Assets
|
|
Derivative Liabilities
|
|
Derivative Assets
|
|
Derivative Liabilities
|
|
||||||||
Gross amount recognized on the balance sheet
|
|
$
|
6.9
|
|
|
$
|
28.9
|
|
|
$
|
15.9
|
|
|
$
|
7.9
|
|
|
Gross amount not offset on the balance sheet
|
|
(1.4
|
)
|
|
(21.4
|
)
|
(1)
|
(4.0
|
)
|
(2)
|
(4.9
|
)
|
(3)
|
||||
Net amount
|
|
$
|
5.5
|
|
|
$
|
7.5
|
|
|
$
|
11.9
|
|
|
$
|
3.0
|
|
|
(1)
|
Includes cash collateral posted of $20.0 million.
|
(2)
|
Includes cash collateral received of $0.2 million.
|
(3)
|
Includes cash collateral posted of $1.1 million.
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Derivative losses recognized in other comprehensive loss
|
|
$
|
(4.8
|
)
|
|
$
|
(2.9
|
)
|
|
$
|
—
|
|
Net derivative gains reclassified from accumulated other comprehensive loss to interest expense
|
|
1.1
|
|
|
1.6
|
|
|
2.2
|
|
|||
Total interest expense line item on the income statements
|
|
501.5
|
|
|
445.1
|
|
|
415.7
|
|
2019 Form 10-K
|
113
|
WEC Energy Group, Inc.
|
|
|
|
|
Expiration
|
||||||||||||
(in millions)
|
|
Total Amounts Committed at December 31, 2019
|
|
Less Than 1 Year
|
|
1 to 3 Years
|
|
Over 3 Years
|
||||||||
Guarantees
|
|
|
|
|
|
|
|
|
||||||||
Guarantees supporting transactions of subsidiaries (1)
|
|
$
|
31.4
|
|
|
$
|
10.2
|
|
|
$
|
0.2
|
|
|
$
|
21.0
|
|
Standby letters of credit (2)
|
|
103.0
|
|
|
1.2
|
|
|
0.2
|
|
|
101.6
|
|
||||
Surety bonds (3)
|
|
9.9
|
|
|
9.9
|
|
|
—
|
|
|
—
|
|
||||
Other guarantees (4)
|
|
11.7
|
|
|
0.9
|
|
|
—
|
|
|
10.8
|
|
||||
Total guarantees
|
|
$
|
156.0
|
|
|
$
|
22.2
|
|
|
$
|
0.4
|
|
|
$
|
133.4
|
|
(1)
|
Consists of $4.0 million, $6.2 million, and $21.2 million to support the business operations of UMERC, Bluewater, and WECI, respectively.
|
(2)
|
At our request or the request of our subsidiaries, financial institutions have issued standby letters of credit for the benefit of third parties that have extended credit to our subsidiaries. These amounts are not reflected on our balance sheets.
|
(3)
|
Primarily for workers compensation self-insurance programs and obtaining various licenses, permits, and rights-of-way. These amounts are not reflected on our balance sheets.
|
(4)
|
Consists of $11.7 million related to other indemnifications, for which a liability of $10.8 million related to workers compensation coverage was recorded on our balance sheets.
|
2019 Form 10-K
|
114
|
WEC Energy Group, Inc.
|
|
|
Pension Benefits
|
|
OPEB Benefits
|
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
|
||||||||
Obligation at January 1
|
|
$
|
2,927.2
|
|
|
$
|
3,163.7
|
|
|
$
|
608.2
|
|
|
$
|
818.5
|
|
Service cost
|
|
47.0
|
|
|
47.1
|
|
|
16.3
|
|
|
23.7
|
|
||||
Interest cost
|
|
120.4
|
|
|
114.3
|
|
|
25.7
|
|
|
29.9
|
|
||||
Participant contributions
|
|
—
|
|
|
—
|
|
|
12.3
|
|
|
15.5
|
|
||||
Plan amendments
|
|
—
|
|
|
—
|
|
|
(4.0
|
)
|
|
(3.5
|
)
|
||||
Actuarial loss (gain)
|
|
269.3
|
|
|
(171.8
|
)
|
|
(60.7
|
)
|
|
(222.6
|
)
|
||||
Benefit payments
|
|
(240.2
|
)
|
|
(226.1
|
)
|
|
(42.3
|
)
|
|
(55.4
|
)
|
||||
Federal subsidy on benefits paid
|
|
N/A
|
|
|
N/A
|
|
|
1.3
|
|
|
1.0
|
|
||||
Transfer
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
1.1
|
|
||||
Obligation at December 31
|
|
$
|
3,123.7
|
|
|
$
|
2,927.2
|
|
|
$
|
558.6
|
|
|
$
|
608.2
|
|
|
|
|
|
|
|
|
|
|
||||||||
Change in fair value of plan assets
|
|
|
|
|
|
|
|
|
||||||||
Fair value at January 1
|
|
$
|
2,690.8
|
|
|
$
|
2,966.8
|
|
|
$
|
771.7
|
|
|
$
|
841.5
|
|
Actual return on plan assets
|
|
494.1
|
|
|
(122.2
|
)
|
|
134.3
|
|
|
(35.2
|
)
|
||||
Employer contributions
|
|
62.3
|
|
|
72.3
|
|
|
3.6
|
|
|
5.3
|
|
||||
Participant contributions
|
|
—
|
|
|
—
|
|
|
12.3
|
|
|
15.5
|
|
||||
Benefit payments
|
|
(240.2
|
)
|
|
(226.1
|
)
|
|
(42.3
|
)
|
|
(55.4
|
)
|
||||
Fair value at December 31
|
|
$
|
3,007.0
|
|
|
$
|
2,690.8
|
|
|
$
|
879.6
|
|
|
$
|
771.7
|
|
Funded status at December 31
|
|
$
|
(116.7
|
)
|
|
$
|
(236.4
|
)
|
|
$
|
321.0
|
|
|
$
|
163.5
|
|
|
|
Pension Benefits
|
|
OPEB Benefits
|
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Other long-term assets
|
|
$
|
188.8
|
|
|
$
|
139.1
|
|
|
$
|
341.7
|
|
|
$
|
210.8
|
|
Pension and OPEB obligations
|
|
305.5
|
|
|
375.5
|
|
|
20.7
|
|
|
47.3
|
|
||||
Total net (liabilities) assets
|
|
$
|
(116.7
|
)
|
|
$
|
(236.4
|
)
|
|
$
|
321.0
|
|
|
$
|
163.5
|
|
(in millions)
|
|
2019
|
|
2018
|
||||
Projected benefit obligation
|
|
$
|
1,810.1
|
|
|
$
|
1,930.8
|
|
Accumulated benefit obligation
|
|
1,754.2
|
|
|
1,882.2
|
|
||
Fair value of plan assets
|
|
1,504.6
|
|
|
1,572.7
|
|
|
|
Pension Benefits
|
|
OPEB Benefits
|
||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Pre-tax accumulated other comprehensive loss (1)
|
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss (gain)
|
|
$
|
10.6
|
|
|
$
|
14.5
|
|
|
$
|
(1.6
|
)
|
|
$
|
(1.6
|
)
|
Prior service credits
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Total
|
|
$
|
10.6
|
|
|
$
|
14.5
|
|
|
$
|
(1.7
|
)
|
|
$
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net regulatory assets (liabilities) (2)
|
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss (gain)
|
|
$
|
1,067.7
|
|
|
$
|
1,184.1
|
|
|
$
|
(266.6
|
)
|
|
$
|
(133.0
|
)
|
Prior service costs (credits)
|
|
2.7
|
|
|
4.9
|
|
|
(88.6
|
)
|
|
(100.0
|
)
|
||||
Total
|
|
$
|
1,070.4
|
|
|
$
|
1,189.0
|
|
|
$
|
(355.2
|
)
|
|
$
|
(233.0
|
)
|
2019 Form 10-K
|
115
|
WEC Energy Group, Inc.
|
(1)
|
Amounts related to the nonregulated entities are included in accumulated other comprehensive loss.
|
(2)
|
Amounts related to the utilities and WBS are recorded as net regulatory assets or liabilities.
|
(in millions)
|
|
Pension Benefits
|
|
OPEB Benefits
|
||||
Net actuarial loss (gain)
|
|
$
|
97.1
|
|
|
$
|
(21.5
|
)
|
Prior service costs (credits)
|
|
1.6
|
|
|
(15.0
|
)
|
||
Total 2020 – estimated amortization
|
|
$
|
98.7
|
|
|
$
|
(36.5
|
)
|
|
|
Pension Benefits
|
|
OPEB Benefits
|
||||||||||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
|
$
|
47.0
|
|
|
$
|
47.1
|
|
|
$
|
44.6
|
|
|
$
|
16.3
|
|
|
$
|
23.7
|
|
|
$
|
24.1
|
|
Interest cost
|
|
120.4
|
|
|
114.3
|
|
|
121.8
|
|
|
25.7
|
|
|
29.9
|
|
|
32.9
|
|
||||||
Expected return on plan assets
|
|
(193.3
|
)
|
|
(196.5
|
)
|
|
(195.7
|
)
|
|
(54.7
|
)
|
|
(59.5
|
)
|
|
(55.5
|
)
|
||||||
Plan settlement
|
|
11.5
|
|
|
1.0
|
|
|
9.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost (credit)
|
|
2.2
|
|
|
2.7
|
|
|
2.9
|
|
|
(15.4
|
)
|
|
(15.4
|
)
|
|
(12.3
|
)
|
||||||
Amortization of net actuarial loss
|
|
77.3
|
|
|
94.0
|
|
|
86.1
|
|
|
(6.6
|
)
|
|
1.0
|
|
|
3.1
|
|
||||||
Net periodic benefit cost (credit)
|
|
$
|
65.1
|
|
|
$
|
62.6
|
|
|
$
|
68.7
|
|
|
$
|
(34.7
|
)
|
|
$
|
(20.3
|
)
|
|
$
|
(7.7
|
)
|
|
|
Pension Benefits
|
|
OPEB Benefits
|
||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Discount rate
|
|
3.41%
|
|
4.30%
|
|
3.39%
|
|
4.27%
|
Rate of compensation increase
|
|
4.00%
|
|
3.66%
|
|
N/A
|
|
N/A
|
Assumed medical cost trend rate (Pre 65)
|
|
N/A
|
|
N/A
|
|
6.00%
|
|
6.25%
|
Ultimate trend rate (Pre 65)
|
|
N/A
|
|
N/A
|
|
5.00%
|
|
5.00%
|
Year ultimate trend rate is reached (Pre 65)
|
|
N/A
|
|
N/A
|
|
2028
|
|
2024
|
Assumed medical cost trend rate (Post 65)
|
|
N/A
|
|
N/A
|
|
5.91%
|
|
6.01%
|
Ultimate trend rate (Post 65)
|
|
N/A
|
|
N/A
|
|
5.00%
|
|
5.00%
|
Year ultimate trend rate is reached (Post 65)
|
|
N/A
|
|
N/A
|
|
2028
|
|
2028
|
|
|
Pension Benefits
|
||||
|
|
2019
|
|
2018
|
|
2017
|
Discount rate
|
|
4.21%
|
|
3.71%
|
|
4.11%
|
Expected return on plan assets
|
|
7.12%
|
|
7.12%
|
|
7.11%
|
Rate of compensation increase
|
|
3.66%
|
|
3.66%
|
|
3.60%
|
2019 Form 10-K
|
116
|
WEC Energy Group, Inc.
|
|
|
OPEB Benefits
|
||||
|
|
2019
|
|
2018
|
|
2017
|
Discount rate
|
|
4.27%
|
|
3.63%
|
|
4.04%
|
Expected return on plan assets
|
|
7.25%
|
|
7.25%
|
|
7.25%
|
Assumed medical cost trend rate (Pre 65)
|
|
6.25%
|
|
6.50%
|
|
7.00%
|
Ultimate trend rate (Pre 65)
|
|
5.00%
|
|
5.00%
|
|
5.00%
|
Year ultimate trend rate is reached (Pre 65)
|
|
2024
|
|
2024
|
|
2021
|
Assumed medical cost trend rate (Post 65)
|
|
6.01%
|
|
6.09%
|
|
7.00%
|
Ultimate trend rate (Post 65)
|
|
5.00%
|
|
5.00%
|
|
5.00%
|
Year ultimate trend rate is reached (Post 65)
|
|
2028
|
|
2028
|
|
2021
|
(in millions)
|
|
1% Increase
|
|
1% Decrease
|
||||
Effect on total of service and interest cost components of net periodic postretirement health care benefit cost
|
|
$
|
4.7
|
|
|
$
|
(3.8
|
)
|
Effect on health care component of the accumulated postretirement benefit obligations
|
|
43.5
|
|
|
(36.5
|
)
|
2019 Form 10-K
|
117
|
WEC Energy Group, Inc.
|
|
|
December 31, 2019
|
||||||||||||||||||||||||||||||
|
|
Pension Plan Assets
|
|
OPEB Assets
|
||||||||||||||||||||||||||||
(in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Asset Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
United States equity
|
|
$
|
335.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
335.6
|
|
|
$
|
103.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
103.0
|
|
International equity
|
|
321.6
|
|
|
0.7
|
|
|
—
|
|
|
322.3
|
|
|
107.3
|
|
|
0.2
|
|
|
—
|
|
|
107.5
|
|
||||||||
Fixed income securities: *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
United States bonds
|
|
94.3
|
|
|
887.4
|
|
|
—
|
|
|
981.7
|
|
|
119.1
|
|
|
165.9
|
|
|
—
|
|
|
285.0
|
|
||||||||
International bonds
|
|
51.5
|
|
|
87.0
|
|
|
—
|
|
|
138.5
|
|
|
24.6
|
|
|
8.5
|
|
|
—
|
|
|
33.1
|
|
||||||||
|
|
$
|
803.0
|
|
|
$
|
975.1
|
|
|
$
|
—
|
|
|
$
|
1,778.1
|
|
|
$
|
354.0
|
|
|
$
|
174.6
|
|
|
$
|
—
|
|
|
$
|
528.6
|
|
Investments measured at net asset value
|
|
|
|
|
|
|
|
$
|
1,228.9
|
|
|
|
|
|
|
|
|
$
|
351.0
|
|
||||||||||||
Total
|
|
$
|
803.0
|
|
|
$
|
975.1
|
|
|
$
|
—
|
|
|
$
|
3,007.0
|
|
|
$
|
354.0
|
|
|
$
|
174.6
|
|
|
$
|
—
|
|
|
$
|
879.6
|
|
*
|
This category represents investment grade bonds of United States and foreign issuers denominated in United States dollars from diverse industries.
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||||||
|
|
Pension Plan Assets
|
|
OPEB Assets
|
||||||||||||||||||||||||||||
(in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Asset Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
United States equity
|
|
$
|
281.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
281.7
|
|
|
$
|
88.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
88.2
|
|
International equity
|
|
279.7
|
|
|
0.7
|
|
|
—
|
|
|
280.4
|
|
|
92.2
|
|
|
0.2
|
|
|
—
|
|
|
92.4
|
|
||||||||
Fixed income securities: *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
United States bonds
|
|
123.7
|
|
|
838.8
|
|
|
—
|
|
|
962.5
|
|
|
119.6
|
|
|
150.8
|
|
|
—
|
|
|
270.4
|
|
||||||||
International bonds
|
|
16.1
|
|
|
85.5
|
|
|
—
|
|
|
101.6
|
|
|
7.1
|
|
|
8.9
|
|
|
—
|
|
|
16.0
|
|
||||||||
|
|
$
|
701.2
|
|
|
$
|
925.0
|
|
|
$
|
—
|
|
|
$
|
1,626.2
|
|
|
$
|
307.1
|
|
|
$
|
159.9
|
|
|
$
|
—
|
|
|
$
|
467.0
|
|
Investments measured at net asset value
|
|
|
|
|
|
|
|
$
|
1,064.6
|
|
|
|
|
|
|
|
|
$
|
304.7
|
|
||||||||||||
Total
|
|
$
|
701.2
|
|
|
$
|
925.0
|
|
|
$
|
—
|
|
|
$
|
2,690.8
|
|
|
$
|
307.1
|
|
|
$
|
159.9
|
|
|
$
|
—
|
|
|
$
|
771.7
|
|
*
|
This category represents investment grade bonds of United States and foreign issuers denominated in United States dollars from diverse industries.
|
|
|
Private Equity and Real Estate
|
|
International Equity
|
||||||||||||
(in millions)
|
|
Pension
|
|
OPEB
|
|
Pension
|
|
OPEB
|
||||||||
Beginning balance at January 1, 2018
|
|
$
|
100.1
|
|
|
$
|
7.7
|
|
|
$
|
0.8
|
|
|
$
|
0.2
|
|
Realized and unrealized gains (losses)
|
|
8.0
|
|
|
1.1
|
|
|
(0.1
|
)
|
|
—
|
|
||||
Purchases
|
|
18.3
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
||||
Liquidations
|
|
(1.7
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
||||
Transfers out of level 3
|
|
(124.7
|
)
|
|
(10.1
|
)
|
|
(0.7
|
)
|
|
(0.2
|
)
|
||||
Ending balance at December 31, 2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2019 Form 10-K
|
118
|
WEC Energy Group, Inc.
|
(in millions)
|
|
Pension Benefits
|
|
OPEB Benefits
|
||||
2020
|
|
$
|
236.9
|
|
|
$
|
37.1
|
|
2021
|
|
236.7
|
|
|
34.7
|
|
||
2022
|
|
228.4
|
|
|
35.6
|
|
||
2023
|
|
226.8
|
|
|
36.1
|
|
||
2024
|
|
218.8
|
|
|
36.1
|
|
||
2025-2029
|
|
1,004.2
|
|
|
179.5
|
|
|
|
2019
|
||||||||||
(in millions)
|
|
ATC
|
|
ATC Holdco
|
|
Total
|
||||||
Balance at January 1
|
|
$
|
1,625.3
|
|
|
$
|
40.0
|
|
|
$
|
1,665.3
|
|
Add: Earnings (loss) from equity method investment *
|
|
132.8
|
|
|
(5.2
|
)
|
|
127.6
|
|
|||
Add: Capital contributions
|
|
51.3
|
|
|
1.3
|
|
|
52.6
|
|
|||
Less: Distributions
|
|
124.7
|
|
|
—
|
|
|
124.7
|
|
|||
Balance at December 31
|
|
$
|
1,684.7
|
|
|
$
|
36.1
|
|
|
$
|
1,720.8
|
|
*
|
In November 2019, the FERC issued an order that addressed the complaints related to ATC's allowed ROE. Due to the numerous rehearing requests filed related to this order, our financials continue to include a $41.9 million liability for potential future refunds that ATC may be required to provide, resulting in reduced equity earnings from ATC. This liability reflects a 10.38% ROE for all periods covered by the complaints.
|
|
|
2018
|
||||||||||
(in millions)
|
|
ATC
|
|
ATC Holdco
|
|
Total
|
||||||
Balance at January 1
|
|
$
|
1,515.8
|
|
|
$
|
37.6
|
|
|
$
|
1,553.4
|
|
Add: Earnings (loss) from equity method investment
|
|
139.6
|
|
|
(2.9
|
)
|
|
136.7
|
|
|||
Add: Capital contributions
|
|
48.2
|
|
|
5.3
|
|
|
53.5
|
|
|||
Less: Distributions
|
|
78.2
|
|
|
—
|
|
|
78.2
|
|
|||
Less: Other
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Balance at December 31
|
|
$
|
1,625.3
|
|
|
$
|
40.0
|
|
|
$
|
1,665.3
|
|
2019 Form 10-K
|
119
|
WEC Energy Group, Inc.
|
|
|
2017
|
||||||||||
(in millions)
|
|
ATC
|
|
ATC Holdco
|
|
Total
|
||||||
Balance at January 1
|
|
$
|
1,443.9
|
|
(1)
|
$
|
—
|
|
|
$
|
1,443.9
|
|
Add: Earnings (loss) from equity method investment
|
|
166.0
|
|
|
(11.7
|
)
|
|
154.3
|
|
|||
Add: Capital contributions
|
|
60.3
|
|
|
49.3
|
|
|
109.6
|
|
|||
Less: Distributions
|
|
154.2
|
|
(2)
|
—
|
|
|
154.2
|
|
|||
Less: Other
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||
Balance at December 31
|
|
$
|
1,515.8
|
|
|
$
|
37.6
|
|
|
$
|
1,553.4
|
|
(1)
|
Distributions of $35.2 million, received in the first quarter of 2017, were approved and recorded as a receivable from ATC in other current assets at December 31, 2016.
|
(2)
|
Of this amount, $39.9 million was recorded as a receivable from ATC in other current assets at December 31, 2017.
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Charges to ATC for services and construction
|
|
$
|
25.9
|
|
|
$
|
21.8
|
|
|
$
|
17.1
|
|
Charges from ATC for network transmission services
|
|
348.1
|
|
|
338.1
|
|
|
349.3
|
|
|||
Refund from ATC related to a FERC audit
|
|
—
|
|
|
22.0
|
|
|
—
|
|
|||
Refund from ATC per FERC ROE order
|
|
—
|
|
|
—
|
|
|
28.3
|
|
(in millions)
|
|
2019
|
|
2018
|
|
||||
Accounts receivable for services provided to ATC
|
|
$
|
3.5
|
|
|
$
|
3.4
|
|
|
Accounts payable for services received from ATC
|
|
29.0
|
|
|
28.2
|
|
|
||
Amounts due from ATC for transmission infrastructure upgrades
|
|
2.8
|
|
(1)
|
29.4
|
|
(2)
|
(1)
|
In connection with WPS's construction of its two new solar projects, Badger Hollow I and Two Creeks, WPS was required to initially fund the construction of the transmission infrastructure upgrades needed for the new generation. ATC owns these transmission assets and will reimburse WPS for these costs after the new generation has been placed in service.
|
(2)
|
In connection with UMERC's construction of the new natural gas-fired generation in the Upper Peninsula of Michigan, UMERC was required to initially fund the construction of the transmission infrastructure upgrades owned by ATC that were needed for the new generation. In the second quarter of 2019, ATC fully reimbursed UMERC for these costs.
|
|
|
Year Ended December 31
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Income statement data
|
|
|
|
|
|
|
||||||
Operating revenues
|
|
$
|
744.4
|
|
|
$
|
690.5
|
|
|
$
|
721.7
|
|
Operating expenses
|
|
373.5
|
|
|
358.7
|
|
|
345.0
|
|
|||
Other expense, net
|
|
110.5
|
|
|
108.3
|
|
|
104.1
|
|
|||
Net income
|
|
$
|
260.4
|
|
|
$
|
223.5
|
|
|
$
|
272.6
|
|
2019 Form 10-K
|
120
|
WEC Energy Group, Inc.
|
(in millions)
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Balance sheet data
|
|
|
|
|
||||
Current assets
|
|
$
|
84.7
|
|
|
$
|
87.2
|
|
Noncurrent assets
|
|
5,244.2
|
|
|
4,928.8
|
|
||
Total assets
|
|
$
|
5,328.9
|
|
|
$
|
5,016.0
|
|
|
|
|
|
|
||||
Current liabilities
|
|
$
|
502.6
|
|
|
$
|
640.0
|
|
Long-term debt
|
|
2,312.8
|
|
|
2,014.0
|
|
||
Other noncurrent liabilities
|
|
298.9
|
|
|
295.3
|
|
||
Shareholders' equity
|
|
2,214.6
|
|
|
2,066.7
|
|
||
Total liabilities and shareholders' equity
|
|
$
|
5,328.9
|
|
|
$
|
5,016.0
|
|
•
|
The Wisconsin segment includes the electric and natural gas utility operations of WE, WPS, WG, and UMERC.
|
•
|
The Illinois segment includes the natural gas utility and non-utility operations of PGL and NSG.
|
•
|
The other states segment includes the natural gas utility and non-utility operations of MERC and MGU.
|
•
|
The electric transmission segment includes our approximate 60% ownership interest in ATC, a for-profit, transmission-only company regulated by the FERC for cost of service and certain state regulatory commissions for routing and siting of transmission projects, and our approximate 75% ownership interest in ATC Holdco, which was formed to invest in transmission-related projects outside of ATC's traditional footprint.
|
•
|
The non-utility energy infrastructure segment includes:
|
◦
|
We Power, which owns and leases generating facilities to WE,
|
◦
|
Bluewater, which owns underground natural gas storage facilities in Michigan that provide approximately one-third of the current storage needs for our Wisconsin natural gas utilities, and
|
◦
|
WECI, which holds our ownership interests in the following wind generating facilities:
|
▪
|
90% ownership interest in Bishop Hill III, located in Henry County, Illinois,
|
▪
|
80% ownership interest in Coyote Ridge, located in Brookings County, South Dakota, and
|
▪
|
80% ownership interest in Upstream, located in Antelope County, Nebraska.
|
•
|
The corporate and other segment includes the operations of the WEC Energy Group holding company, the Integrys holding company, the PELLC holding company, Wispark, Bostco, Wisvest, WECC, WBS, and PDL. In the first quarter of 2017, we sold substantially all of the remaining assets of Bostco, and, in October 2018, Bostco was dissolved. In 2019, we sold certain PDL solar power generating facilities. See Note 3, Dispositions, for more information on these sales.
|
2019 Form 10-K
|
121
|
WEC Energy Group, Inc.
|
|
|
Utility Operations
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
2019 (in millions)
|
|
Wisconsin
|
|
Illinois
|
|
Other States
|
|
Total Utility
Operations
|
|
Electric Transmission
|
|
Non-Utility Energy Infrastructure
|
|
Corporate and Other
|
|
Reconciling
Eliminations
|
|
WEC Energy Group Consolidated
|
||||||||||||||||||
External revenues
|
|
$
|
5,647.1
|
|
|
$
|
1,357.1
|
|
|
$
|
426.0
|
|
|
$
|
7,430.2
|
|
|
$
|
—
|
|
|
$
|
88.5
|
|
|
$
|
4.4
|
|
|
$
|
—
|
|
|
$
|
7,523.1
|
|
Intersegment revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
407.4
|
|
|
—
|
|
|
(407.4
|
)
|
|
—
|
|
|||||||||
Other operation and maintenance
|
|
1,591.3
|
|
|
461.1
|
|
|
98.5
|
|
|
2,150.9
|
|
|
—
|
|
|
19.7
|
|
|
14.0
|
|
|
0.2
|
|
|
2,184.8
|
|
|||||||||
Depreciation and amortization
|
|
617.0
|
|
|
181.3
|
|
|
27.5
|
|
|
825.8
|
|
|
—
|
|
|
92.0
|
|
|
24.3
|
|
|
(15.8
|
)
|
|
926.3
|
|
|||||||||
Operating income (loss)
|
|
1,189.6
|
|
|
291.9
|
|
|
65.3
|
|
|
1,546.8
|
|
|
—
|
|
|
366.6
|
|
|
(34.4
|
)
|
|
(347.6
|
)
|
|
1,531.4
|
|
|||||||||
Equity in earnings of transmission affiliates
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127.6
|
|
|||||||||
Interest expense
|
|
572.0
|
|
|
59.0
|
|
|
8.5
|
|
|
639.5
|
|
|
13.1
|
|
|
62.1
|
|
|
140.9
|
|
|
(354.1
|
)
|
|
501.5
|
|
|||||||||
Capital
expenditures and asset acquisitions
|
|
1,378.6
|
|
|
624.9
|
|
|
109.1
|
|
|
2,112.6
|
|
|
—
|
|
|
389.9
|
|
|
26.5
|
|
|
—
|
|
|
2,529.0
|
|
|||||||||
Total assets *
|
|
23,934.8
|
|
|
6,932.5
|
|
|
1,237.8
|
|
|
32,105.1
|
|
|
1,723.1
|
|
|
3,654.1
|
|
|
814.0
|
|
|
(3,344.5
|
)
|
|
34,951.8
|
|
*
|
Total assets at December 31, 2019 reflect an elimination of $1,896.7 million for all lease activity between We Power and WE.
|
|
|
Utility Operations
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
2018 (in millions)
|
|
Wisconsin
|
|
Illinois
|
|
Other States
|
|
Total Utility
Operations
|
|
Electric Transmission
|
|
Non-Utility Energy Infrastructure
|
|
Corporate and Other
|
|
Reconciling
Eliminations
|
|
WEC Energy Group Consolidated
|
||||||||||||||||||
External revenues
|
|
$
|
5,794.7
|
|
|
$
|
1,400.0
|
|
|
$
|
438.2
|
|
|
$
|
7,632.9
|
|
|
$
|
—
|
|
|
$
|
37.9
|
|
|
$
|
8.7
|
|
|
$
|
—
|
|
|
$
|
7,679.5
|
|
Intersegment revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
430.5
|
|
|
—
|
|
|
(430.5
|
)
|
|
—
|
|
|||||||||
Other operation and maintenance
|
|
2,076.1
|
|
|
472.3
|
|
|
101.0
|
|
|
2,649.4
|
|
|
—
|
|
|
12.6
|
|
|
1.8
|
|
|
(393.3
|
)
|
|
2,270.5
|
|
|||||||||
Depreciation and amortization
|
|
546.6
|
|
|
170.3
|
|
|
24.1
|
|
|
741.0
|
|
|
—
|
|
|
75.7
|
|
|
29.1
|
|
|
—
|
|
|
845.8
|
|
|||||||||
Operating income (loss)
|
|
800.2
|
|
|
255.8
|
|
|
68.8
|
|
|
1,124.8
|
|
|
—
|
|
|
365.8
|
|
|
(22.2
|
)
|
|
—
|
|
|
1,468.4
|
|
|||||||||
Equity in earnings of transmission affiliates
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
136.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
136.7
|
|
|||||||||
Interest expense
|
|
200.7
|
|
|
51.2
|
|
|
8.7
|
|
|
260.6
|
|
|
0.3
|
|
|
63.7
|
|
|
125.8
|
|
|
(5.3
|
)
|
|
445.1
|
|
|||||||||
Capital
expenditures and asset acquisitions
|
|
1,466.1
|
|
|
547.1
|
|
|
103.6
|
|
|
2,116.8
|
|
|
—
|
|
|
260.6
|
|
|
39.7
|
|
|
—
|
|
|
2,417.1
|
|
|||||||||
Total assets *
|
|
23,407.0
|
|
|
6,483.3
|
|
|
1,147.9
|
|
|
31,038.2
|
|
|
1,665.3
|
|
|
3,227.2
|
|
|
959.6
|
|
|
(3,414.5
|
)
|
|
33,475.8
|
|
*
|
Total assets at December 31, 2018 reflect an elimination of $1,968.5 million for all lease activity between We Power and WE.
|
2019 Form 10-K
|
122
|
WEC Energy Group, Inc.
|
|
|
Utility Operations
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
2017 (in millions)
|
|
Wisconsin
|
|
Illinois
|
|
Other States
|
|
Total Utility
Operations
|
|
Electric Transmission
|
|
Non-Utility Energy Infrastructure
|
|
Corporate and Other
|
|
Reconciling
Eliminations
|
|
WEC Energy Group Consolidated
|
||||||||||||||||||
External revenues
|
|
$
|
5,829.2
|
|
|
$
|
1,355.5
|
|
|
$
|
411.2
|
|
|
$
|
7,595.9
|
|
|
$
|
—
|
|
|
$
|
38.9
|
|
|
$
|
13.7
|
|
|
$
|
—
|
|
|
$
|
7,648.5
|
|
Intersegment revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
446.3
|
|
|
—
|
|
|
(446.3
|
)
|
|
—
|
|
|||||||||
Other operation and maintenance
|
|
1,923.2
|
|
|
464.2
|
|
|
101.1
|
|
|
2,488.5
|
|
|
—
|
|
|
7.3
|
|
|
1.4
|
|
|
(441.1
|
)
|
|
2,056.1
|
|
|||||||||
Depreciation and amortization
|
|
523.9
|
|
|
152.6
|
|
|
24.8
|
|
|
701.3
|
|
|
—
|
|
|
71.4
|
|
|
25.9
|
|
|
—
|
|
|
798.6
|
|
|||||||||
Operating income (loss)
|
|
1,055.2
|
|
|
279.9
|
|
|
54.4
|
|
|
1,389.5
|
|
|
—
|
|
|
400.5
|
|
|
(13.9
|
)
|
|
—
|
|
|
1,776.1
|
|
|||||||||
Equity in earnings of transmission affiliates
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
154.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
154.3
|
|
|||||||||
Interest expense
|
|
193.7
|
|
|
45.0
|
|
|
8.7
|
|
|
247.4
|
|
|
—
|
|
|
62.8
|
|
|
107.3
|
|
|
(1.8
|
)
|
|
415.7
|
|
|||||||||
Capital
expenditures
|
|
1,152.3
|
|
|
545.2
|
|
|
74.5
|
|
|
1,772.0
|
|
|
—
|
|
|
35.4
|
|
|
152.1
|
|
|
—
|
|
|
1,959.5
|
|
|||||||||
Total assets *
|
|
22,237.1
|
|
|
6,144.7
|
|
|
1,067.8
|
|
|
29,449.6
|
|
|
1,593.4
|
|
|
2,992.8
|
|
|
953.6
|
|
|
(3,398.9
|
)
|
|
31,590.5
|
|
*
|
Total assets at December 31, 2017 reflect an elimination of $2,038.1 million for all lease activity between We Power and WE.
|
2019 Form 10-K
|
123
|
WEC Energy Group, Inc.
|
|
|
|
|
|
|
Payments Due By Period
|
||||||||||||||||||||||||
(in millions)
|
|
Date Contracts Extend Through
|
|
Total Amounts Committed
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Later Years
|
||||||||||||||
Electric utility:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Nuclear
|
|
2033
|
|
$
|
8,319.0
|
|
|
$
|
475.1
|
|
|
$
|
501.1
|
|
|
$
|
531.2
|
|
|
$
|
563.0
|
|
|
$
|
596.8
|
|
|
$
|
5,651.8
|
|
Coal supply and transportation
|
|
2024
|
|
983.2
|
|
|
306.9
|
|
|
255.7
|
|
|
223.4
|
|
|
196.5
|
|
|
0.7
|
|
|
—
|
|
|||||||
Purchased power
|
|
2051
|
|
428.3
|
|
|
88.9
|
|
|
58.5
|
|
|
51.5
|
|
|
46.5
|
|
|
43.4
|
|
|
139.5
|
|
|||||||
Natural gas utility:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Supply and transportation
|
|
2048
|
|
1,652.3
|
|
|
344.8
|
|
|
285.5
|
|
|
224.6
|
|
|
131.2
|
|
|
70.8
|
|
|
595.4
|
|
|||||||
Non-utility energy infrastructure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Purchased power
|
|
2061
|
|
173.6
|
|
|
7.7
|
|
|
8.8
|
|
|
8.6
|
|
|
8.8
|
|
|
8.9
|
|
|
130.8
|
|
|||||||
Natural gas storage and transportation
|
|
2048
|
|
13.6
|
|
|
7.7
|
|
|
2.7
|
|
|
1.3
|
|
|
0.8
|
|
|
0.1
|
|
|
1.0
|
|
|||||||
Total
|
|
|
|
$
|
11,570.0
|
|
|
$
|
1,231.1
|
|
|
$
|
1,112.3
|
|
|
$
|
1,040.6
|
|
|
$
|
946.8
|
|
|
$
|
720.7
|
|
|
$
|
6,518.5
|
|
•
|
the development of additional sources of renewable electric energy supply;
|
•
|
the addition of improvements for water quality matters such as treatment technologies to meet regulatory discharge limits and improvements to our cooling water intake systems;
|
•
|
the addition of emission control equipment to existing facilities to comply with ambient air quality standards and federal clean air rules;
|
2019 Form 10-K
|
124
|
WEC Energy Group, Inc.
|
•
|
the protection of wetlands and waterways, threatened and endangered species, and cultural resources associated with utility construction projects;
|
•
|
the retirement of older coal-fired power plants and conversion to modern, efficient, natural gas generation, super-critical pulverized coal generation, and/or replacement with renewable generation;
|
•
|
the beneficial use of ash and other products from coal-fired and biomass generating units; and
|
•
|
the remediation of former manufactured gas plant sites.
|
2019 Form 10-K
|
125
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
126
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
||||
Regulatory assets
|
|
$
|
685.5
|
|
|
$
|
687.1
|
|
Reserves for future environmental remediation
|
|
589.2
|
|
|
616.4
|
|
2019 Form 10-K
|
127
|
WEC Energy Group, Inc.
|
|
|
Year Ended December 31
|
||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash paid for interest, net of amount capitalized
|
|
$
|
485.9
|
|
|
$
|
441.5
|
|
|
$
|
413.7
|
|
Cash paid (received) for income taxes, net
|
|
(24.9
|
)
|
|
16.3
|
|
|
(5.2
|
)
|
|||
Significant non-cash investing and financing transactions:
|
|
|
|
|
|
|
||||||
Accounts payable related to construction costs
|
|
159.9
|
|
|
65.9
|
|
|
169.2
|
|
|||
Capital contributions from noncontrolling interest
|
|
21.0
|
|
|
—
|
|
|
—
|
|
|||
Receivable related to corporate-owned life insurance proceeds
|
|
—
|
|
|
7.7
|
|
|
—
|
|
|||
Portion of Bostco real estate holdings sale financed with note receivable *
|
|
—
|
|
|
—
|
|
|
7.0
|
|
*
|
See Note 3, Dispositions, for more information on this sale.
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash and cash equivalents
|
|
$
|
37.5
|
|
|
$
|
84.5
|
|
|
$
|
38.9
|
|
Restricted cash included in other current assets
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|||
Restricted cash included in other long term assets
|
|
44.8
|
|
|
59.1
|
|
|
19.7
|
|
|||
Cash, cash equivalents, and restricted cash
|
|
$
|
82.3
|
|
|
$
|
146.1
|
|
|
$
|
58.6
|
|
2019 Form 10-K
|
128
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
129
|
WEC Energy Group, Inc.
|
|
|
WE
|
|
WPS
|
|
WG
|
||||||||||||
2020 Effective rate increase (decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric (1) (2)
|
|
$
|
15.3
|
million
|
/
|
0.5%
|
|
$
|
15.8
|
million
|
/
|
1.6%
|
|
N/A
|
||||
Gas (3)
|
|
$
|
10.4
|
million
|
/
|
2.8%
|
|
$
|
4.3
|
million
|
/
|
1.4%
|
|
$
|
(1.5
|
) million
|
/
|
(0.2)%
|
Steam
|
|
$
|
1.9
|
million
|
/
|
8.6%
|
|
N/A
|
|
N/A
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
ROE
|
|
10.0%
|
|
10.0%
|
|
10.2%
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Common equity component average on a financial basis
|
|
52.5%
|
|
52.5%
|
|
52.5%
|
(1)
|
Amounts are net of certain deferred tax benefits from the Tax Legislation that were utilized to reduce near-term rate impact. The WE and WPS rate orders reflect the majority of the unprotected deferred tax benefits from the Tax Legislation being amortized over two years. For WE, approximately $65 million of tax benefits will be amortized in each of 2020 and 2021. For WPS, approximately $11 million of tax benefits are being amortized in 2020 and approximately $39 million will be amortized in 2021. The unprotected deferred tax benefits related to the unrecovered balances of WE's recently retired plants and its SSR regulatory asset are being used to reduce the related regulatory asset. Unprotected deferred tax benefits by their nature are eligible to be returned to customers in a manner and timeline determined to be appropriate by our regulators.
|
(2)
|
The WPS rate order is net of $21 million of refunds related to its 2018 earnings sharing mechanism. These refunds will be made to customers evenly over two years, with half being returned in 2020 and the remainder in 2021.
|
(3)
|
The WE amount includes certain deferred tax expense from the Tax Legislation, and the WPS and WG amounts are net of certain deferred tax benefits from the Tax Legislation that were utilized to reduce near-term rate impact. The rate orders for all three gas utilities reflect all of the unprotected deferred tax expense and benefits from the Tax Legislation being amortized evenly over four years. For WE, approximately $5 million of previously deferred tax expense will be amortized each year. For WPS and WG, approximately $5 million and $3 million, respectively, of previously deferred tax benefits will be amortized each year. Unprotected deferred tax expense and benefits by their nature are eligible to be recovered from or returned to customers in a manner and timeline determined to be appropriate by our regulators.
|
2019 Form 10-K
|
130
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
131
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
132
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
AFUDC – Equity
|
|
$
|
14.4
|
|
|
$
|
15.2
|
|
|
$
|
11.4
|
|
Non-service components of net periodic benefit costs
|
|
36.2
|
|
|
26.0
|
|
|
9.1
|
|
|||
Gains (losses) from investments held in rabbi trust
|
|
21.2
|
|
|
(1.8
|
)
|
|
21.5
|
|
|||
Other, net
|
|
30.4
|
|
|
30.9
|
|
|
31.7
|
|
|||
Other income, net
|
|
$
|
102.2
|
|
|
$
|
70.3
|
|
|
$
|
73.7
|
|
(in millions, except per share amounts)
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Total
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues
|
|
$
|
2,377.4
|
|
|
$
|
1,590.2
|
|
|
$
|
1,608.0
|
|
|
$
|
1,947.5
|
|
|
$
|
7,523.1
|
|
Operating income
|
|
542.8
|
|
|
314.6
|
|
|
310.9
|
|
|
363.1
|
|
|
1,531.4
|
|
|||||
Net income attributed to common shareholders
|
|
420.1
|
|
|
235.7
|
|
|
234.3
|
|
|
243.9
|
|
|
1,134.0
|
|
|||||
Earnings per share *
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
1.33
|
|
|
$
|
0.75
|
|
|
$
|
0.74
|
|
|
$
|
0.77
|
|
|
$
|
3.60
|
|
Diluted
|
|
1.33
|
|
|
0.74
|
|
|
0.74
|
|
|
0.77
|
|
|
3.58
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues
|
|
$
|
2,286.5
|
|
|
$
|
1,672.5
|
|
|
$
|
1,643.7
|
|
|
$
|
2,076.8
|
|
|
$
|
7,679.5
|
|
Operating income
|
|
545.1
|
|
|
330.8
|
|
|
302.7
|
|
|
289.8
|
|
|
1,468.4
|
|
|||||
Net income attributed to common shareholders
|
|
390.1
|
|
|
231.0
|
|
|
233.2
|
|
|
205.0
|
|
|
1,059.3
|
|
|||||
Earnings per share *
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
1.24
|
|
|
$
|
0.73
|
|
|
$
|
0.74
|
|
|
$
|
0.65
|
|
|
$
|
3.36
|
|
Diluted
|
|
1.23
|
|
|
0.73
|
|
|
0.74
|
|
|
0.65
|
|
|
3.34
|
|
2019 Form 10-K
|
133
|
WEC Energy Group, Inc.
|
*
|
Earnings per share for the individual quarters may not total the year ended earnings per share amount because of changes to the average number of shares outstanding and changes in incremental issuable shares throughout the year.
|
2019 Form 10-K
|
134
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
135
|
WEC Energy Group, Inc.
|
Plan Type
|
|
Number of Securities
to be Issued
Upon Exercise of
Outstanding Options,
Warrants, and Rights
(a)
|
|
Weighted Average
Exercise Price of
Outstanding Options,
Warrants, and Rights
(b)
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
(Excluding Shares Reflected in Column (a))
(c)
|
|||||
Equity Compensation Plans Approved by Security Holders
|
|
3,249,918
|
|
|
$
|
54.98
|
|
|
26,456,888
|
|
*
|
Equity Compensation Plans Not Approved by Security Holders
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
|
Total
|
|
3,249,918
|
|
|
$
|
54.98
|
|
|
26,456,888
|
|
|
*
|
Includes shares available for future issuance under our Omnibus Stock Incentive Plan, all of which could be granted as awards of stock options, stock appreciation rights, performance units, restricted stock, or other stock based awards.
|
2019 Form 10-K
|
136
|
WEC Energy Group, Inc.
|
2019 Form 10-K
|
137
|
WEC Energy Group, Inc.
|
1.
|
Financial Statements and Reports of Independent Registered Public Accounting Firm Included in Part II of This Report
|
|
|
|
|
|
|
|
Description
|
|
Page in 10-K
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
2.
|
Financial Statement Schedules Included in Part IV of This Report
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
Other schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the financial statements or notes thereto.
|
|
|
|
|
|
|
3.
|
Exhibits and Exhibit Index
|
|
|
|
|
|
|
|
The following exhibits are filed or furnished with or incorporated by reference in the report with respect to WEC Energy Group, Inc. (File No. 001-09057). An asterisk (*) indicates that the exhibit has previously been filed with the SEC and is incorporated herein by reference. Each management contract and compensatory plan or arrangement required to be filed as an exhibit to this report pursuant to Item 15(b) of Form 10-K is identified below by two asterisks (**) following the description of the exhibit.
|
|
Number
|
|
Exhibit
|
|
|
3
|
|
Articles of Incorporation and By-laws
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 Form 10-K
|
138
|
WEC Energy Group, Inc.
|
|
Number
|
|
Exhibit
|
|
|
4
|
|
Instruments defining the rights of security holders, including indentures
|
|
|
|
|
|
|
|
|
|
4.1*
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Indentures and Securities Resolutions:
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
2019 Form 10-K
|
139
|
WEC Energy Group, Inc.
|
|
Number
|
|
Exhibit
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
Certain agreements and instruments with respect to unregistered long-term debt not exceeding 10 percent of the total assets of the Registrant and its subsidiaries on a consolidated basis have been omitted as permitted by related instructions. The Registrant agrees pursuant to Item 601(b)(4) of Regulation S-K to furnish to the Securities and Exchange Commission, upon request, a copy of all such agreements and instruments.
|
|
|
|
|
|
|
10
|
|
Material Contracts
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
2019 Form 10-K
|
140
|
WEC Energy Group, Inc.
|
|
Number
|
|
Exhibit
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
2019 Form 10-K
|
141
|
WEC Energy Group, Inc.
|
|
Number
|
|
Exhibit
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
21
|
|
Subsidiaries of the registrant
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
23
|
|
Consents of experts and counsel
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
31
|
|
Rule 13a-14(a) / 15d-14(a) Certifications
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
32
|
|
Section 1350 Certifications
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 Form 10-K
|
142
|
WEC Energy Group, Inc.
|
|
Number
|
|
Exhibit
|
|
|
101
|
|
Interactive Data File
|
|
|
|
|
|
|
|
|
|
101.INS
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
|
|
|
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
|
|
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
|
|
|
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
|
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
|
104
|
|
Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101)
|
2019 Form 10-K
|
143
|
WEC Energy Group, Inc.
|
Year Ended December 31
|
|
|
|
|
|
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Operating expenses
|
|
$
|
4.7
|
|
|
$
|
5.0
|
|
|
$
|
6.0
|
|
Equity in earnings of subsidiaries
|
|
1,210.5
|
|
|
1,108.3
|
|
|
1,234.7
|
|
|||
Other income, net
|
|
6.3
|
|
|
6.8
|
|
|
2.1
|
|
|||
Interest expense
|
|
122.3
|
|
|
104.1
|
|
|
82.0
|
|
|||
Income before income taxes
|
|
1,089.8
|
|
|
1,006.0
|
|
|
1,148.8
|
|
|||
Income tax benefit
|
|
44.2
|
|
|
53.3
|
|
|
54.9
|
|
|||
Net income attributed to common shareholders
|
|
$
|
1,134.0
|
|
|
$
|
1,059.3
|
|
|
$
|
1,203.7
|
|
2019 Form 10-K
|
144
|
WEC Energy Group, Inc.
|
Year Ended December 31
|
|
|
|
|
|
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income attributed to common shareholders
|
|
$
|
1,134.0
|
|
|
$
|
1,059.3
|
|
|
$
|
1,203.7
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
||||||
Derivatives accounted for as cash flow hedges
|
|
|
|
|
|
|
||||||
Net derivative losses, net of tax benefits of $1.3, $0.8, and $0.0, respectively
|
|
(3.5
|
)
|
|
(2.1
|
)
|
|
—
|
|
|||
Reclassification of net gains to net income, net of tax
|
|
(0.8
|
)
|
|
(1.2
|
)
|
|
(1.3
|
)
|
|||
Cumulative effect adjustment from adoption of ASU 2018-02
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|||
Cash flow hedges, net
|
|
(4.3
|
)
|
|
(1.7
|
)
|
|
(1.3
|
)
|
|||
|
|
|
|
|
|
|
||||||
Defined benefit plans
|
|
|
|
|
|
|
||||||
Pension and OPEB adjustments arising during the period, net of tax
|
|
0.4
|
|
|
(0.9
|
)
|
|
(0.1
|
)
|
|||
Amortization of pension and OPEB costs included in net periodic benefit cost, net of tax
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|||
Cumulative effect adjustment from adoption of ASU 2018-02
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|||
Defined benefit plans, net
|
|
0.6
|
|
|
(1.0
|
)
|
|
0.1
|
|
|||
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss) from subsidiaries, net of tax
|
|
2.2
|
|
|
(2.8
|
)
|
|
1.2
|
|
|||
|
|
|
|
|
|
|
||||||
Other comprehensive loss, net of tax
|
|
(1.5
|
)
|
|
(5.5
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive income attributed to common shareholders
|
|
$
|
1,132.5
|
|
|
$
|
1,053.8
|
|
|
$
|
1,203.7
|
|
2019 Form 10-K
|
145
|
WEC Energy Group, Inc.
|
At December 31
|
|
|
|
|
||||
(in millions)
|
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
0.5
|
|
|
$
|
32.8
|
|
Accounts receivable from related parties
|
|
0.7
|
|
|
4.0
|
|
||
Notes receivable from related parties
|
|
22.5
|
|
|
71.0
|
|
||
Prepaid taxes
|
|
46.5
|
|
|
—
|
|
||
Other
|
|
—
|
|
|
0.6
|
|
||
Current assets
|
|
70.2
|
|
|
108.4
|
|
||
|
|
|
|
|
||||
Long-term assets
|
|
|
|
|
||||
Investments in subsidiaries
|
|
13,433.1
|
|
|
12,682.5
|
|
||
Notes receivable from UMERC
|
|
—
|
|
|
150.0
|
|
||
Other
|
|
23.0
|
|
|
31.8
|
|
||
Long-term assets
|
|
13,456.1
|
|
|
12,864.3
|
|
||
Total assets
|
|
$
|
13,526.3
|
|
|
$
|
12,972.7
|
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Short-term debt
|
|
$
|
334.7
|
|
|
$
|
548.4
|
|
Current portion of long-term debt
|
|
400.0
|
|
|
—
|
|
||
Accounts payable to related parties
|
|
2.5
|
|
|
7.7
|
|
||
Notes payable to related parties
|
|
489.3
|
|
|
398.9
|
|
||
Other
|
|
17.9
|
|
|
14.0
|
|
||
Current liabilities
|
|
1,244.4
|
|
|
969.0
|
|
||
|
|
|
|
|
||||
Long-term liabilities
|
|
|
|
|
||||
Long-term debt
|
|
2,141.6
|
|
|
2,190.8
|
|
||
Other
|
|
26.9
|
|
|
24.0
|
|
||
Long-term liabilities
|
|
2,168.5
|
|
|
2,214.8
|
|
||
|
|
|
|
|
||||
Common shareholders' equity
|
|
10,113.4
|
|
|
9,788.9
|
|
||
Total liabilities and equity
|
|
$
|
13,526.3
|
|
|
$
|
12,972.7
|
|
2019 Form 10-K
|
146
|
WEC Energy Group, Inc.
|
Year Ended December 31
|
|
|
|
|
|
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net income attributed to common shareholders
|
|
$
|
1,134.0
|
|
|
$
|
1,059.3
|
|
|
$
|
1,203.7
|
|
Reconciliation to cash provided by operating activities
|
|
|
|
|
|
|
||||||
Equity income in subsidiaries, net of distributions
|
|
(475.2
|
)
|
|
(419.4
|
)
|
|
(686.1
|
)
|
|||
Deferred income taxes
|
|
9.1
|
|
|
14.4
|
|
|
89.5
|
|
|||
Change in –
|
|
|
|
|
|
|
||||||
Accounts receivable from related parties
|
|
3.3
|
|
|
(2.1
|
)
|
|
(0.1
|
)
|
|||
Prepaid taxes
|
|
(46.5
|
)
|
|
17.5
|
|
|
28.4
|
|
|||
Accounts payable to related parties
|
|
(5.2
|
)
|
|
4.6
|
|
|
(0.5
|
)
|
|||
Other current liabilities
|
|
1.5
|
|
|
4.7
|
|
|
(1.4
|
)
|
|||
Other, net
|
|
7.0
|
|
|
5.6
|
|
|
0.9
|
|
|||
Net cash provided by operating activities
|
|
628.0
|
|
|
684.6
|
|
|
634.4
|
|
|||
|
|
|
|
|
|
|
||||||
Investing activities
|
|
|
|
|
|
|
||||||
Acquisition of Bluewater
|
|
—
|
|
|
—
|
|
|
(226.0
|
)
|
|||
Capital contributions to subsidiaries
|
|
(602.3
|
)
|
|
(448.7
|
)
|
|
(173.4
|
)
|
|||
Return of capital from subsidiaries
|
|
337.3
|
|
|
290.2
|
|
|
—
|
|
|||
Short-term notes receivable from related parties, net
|
|
48.5
|
|
|
(6.9
|
)
|
|
167.8
|
|
|||
Issuance of long-term notes receivable from UMERC
|
|
—
|
|
|
(100.0
|
)
|
|
(50.0
|
)
|
|||
Redemption of long-term notes receivable from UMERC
|
|
150.0
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
(0.6
|
)
|
|
6.4
|
|
|
4.5
|
|
|||
Net cash used in investing activities
|
|
(67.1
|
)
|
|
(259.0
|
)
|
|
(277.1
|
)
|
|||
|
|
|
|
|
|
|
||||||
Financing activities
|
|
|
|
|
|
|
||||||
Exercise of stock options
|
|
67.0
|
|
|
29.1
|
|
|
30.8
|
|
|||
Purchase of common stock
|
|
(140.1
|
)
|
|
(72.4
|
)
|
|
(71.3
|
)
|
|||
Dividends paid on common stock
|
|
(744.5
|
)
|
|
(697.3
|
)
|
|
(656.5
|
)
|
|||
Issuance of long-term debt
|
|
350.0
|
|
|
600.0
|
|
|
—
|
|
|||
Retirement of long-term debt
|
|
—
|
|
|
(300.0
|
)
|
|
—
|
|
|||
Change in short-term debt
|
|
(213.7
|
)
|
|
53.6
|
|
|
173.0
|
|
|||
Short-term notes payable to related parties, net
|
|
90.4
|
|
|
(6.2
|
)
|
|
169.5
|
|
|||
Other, net
|
|
(2.3
|
)
|
|
(3.6
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
|
(593.2
|
)
|
|
(396.8
|
)
|
|
(354.5
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net change in cash and cash equivalents
|
|
(32.3
|
)
|
|
28.8
|
|
|
2.8
|
|
|||
Cash and cash equivalents at beginning of year
|
|
32.8
|
|
|
4.0
|
|
|
1.2
|
|
|||
Cash and cash equivalents at end of year
|
|
$
|
0.5
|
|
|
$
|
32.8
|
|
|
$
|
4.0
|
|
2019 Form 10-K
|
147
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
WE
|
|
$
|
360.0
|
|
|
$
|
310.0
|
|
|
$
|
240.0
|
|
We Power
|
|
192.5
|
|
|
223.0
|
|
|
181.0
|
|
|||
ATC Holding
|
|
87.4
|
|
|
105.8
|
|
|
82.6
|
|
|||
WG
|
|
60.0
|
|
|
50.0
|
|
|
45.0
|
|
|||
WECI
|
|
25.4
|
|
|
—
|
|
|
—
|
|
|||
UMERC
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|||
Wisvest
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|||
Total
|
|
$
|
735.3
|
|
|
$
|
688.9
|
|
|
$
|
548.6
|
|
(in millions)
|
|
|
||
2020
|
|
$
|
400.0
|
|
2021
|
|
600.0
|
|
|
2022
|
|
350.0
|
|
|
2023
|
|
—
|
|
|
2024
|
|
—
|
|
|
Thereafter
|
|
1,200.0
|
|
|
Total
|
|
$
|
2,550.0
|
|
|
|
2019
|
|
2018
|
||||||||||||
(in millions)
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Long-term notes receivable from UMERC
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
150.0
|
|
|
$
|
145.5
|
|
Long-term debt, including current portion
|
|
2,541.6
|
|
|
2,619.4
|
|
|
2,190.8
|
|
|
2,132.8
|
|
2019 Form 10-K
|
148
|
WEC Energy Group, Inc.
|
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash paid for interest
|
|
$
|
117.7
|
|
|
$
|
102.9
|
|
|
$
|
82.5
|
|
Cash received for income taxes, net
|
|
(4.9
|
)
|
|
(85.9
|
)
|
|
(169.9
|
)
|
|||
Significant non-cash investing and financing transactions:
|
|
|
|
|
|
|
||||||
Issuance of short-term note receivable to Bluewater
|
|
—
|
|
|
—
|
|
|
115.0
|
|
|||
Issuance of short-term note receivable to UMERC
|
|
—
|
|
|
—
|
|
|
40.5
|
|
|||
Settlement of short-term note payable with Wisvest
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|||
Settlement of short-term note payable with Bostco
|
|
—
|
|
|
—
|
|
|
4.8
|
|
(in millions)
|
|
2019
|
|
2018
|
||||
Wispark
|
|
$
|
13.5
|
|
|
$
|
28.5
|
|
UMERC
|
|
9.0
|
|
|
42.5
|
|
||
Total
|
|
$
|
22.5
|
|
|
$
|
71.0
|
|
(in millions)
|
|
2019
|
|
2018
|
||||
WBS
|
|
$
|
168.9
|
|
|
$
|
123.5
|
|
Integrys
|
|
166.9
|
|
|
139.5
|
|
||
WECC
|
|
111.7
|
|
|
110.3
|
|
||
Bluewater Gas Storage
|
|
41.8
|
|
|
25.6
|
|
||
Total
|
|
$
|
489.3
|
|
|
$
|
398.9
|
|
2019 Form 10-K
|
149
|
WEC Energy Group, Inc.
|
Allowance for Doubtful Accounts
(in millions)
|
|
Balance at Beginning of Period
|
|
Expense (1)
|
|
Deferral
|
|
Net Write-offs (2)
|
|
Balance at End of Period
|
||||||||||
December 31, 2019
|
|
$
|
149.2
|
|
|
$
|
85.8
|
|
|
$
|
11.4
|
|
|
$
|
(106.4
|
)
|
|
$
|
140.0
|
|
December 31, 2018
|
|
143.2
|
|
|
94.7
|
|
|
(5.5
|
)
|
|
(83.2
|
)
|
|
149.2
|
|
|||||
December 31, 2017
|
|
108.0
|
|
|
96.7
|
|
|
16.4
|
|
|
(77.9
|
)
|
|
143.2
|
|
(1)
|
Net of recoveries.
|
(2)
|
Represents amounts written off to the reserve, net of adjustments to regulatory assets.
|
2019 Form 10-K
|
150
|
WEC Energy Group, Inc.
|
|
|
WEC ENERGY GROUP, INC.
|
|
|
|
|
By
|
/s/ J. KEVIN FLETCHER
|
Date:
|
February 27, 2020
|
J. Kevin Fletcher
|
|
|
President and Chief Executive Officer
|
2019 Form 10-K
|
151
|
WEC Energy Group, Inc.
|
/s/ J. KEVIN FLETCHER
|
|
February 27, 2020
|
J. Kevin Fletcher, President and Chief Executive Officer, and Director --
|
|
|
Principal Executive Officer
|
|
|
|
|
|
/s/ SCOTT J. LAUBER
|
|
February 27, 2020
|
Scott J. Lauber, Senior Executive Vice President and Chief Financial Officer --
|
|
|
Principal Financial Officer
|
|
|
|
|
|
/s/ WILLIAM J. GUC
|
|
February 27, 2020
|
William J. Guc, Vice President and Controller --
|
|
|
Principal Accounting Officer
|
|
|
|
|
|
/s/ GALE E. KLAPPA
|
|
February 27, 2020
|
Gale E. Klappa, Executive Chairman and Director
|
|
|
|
|
|
/s/ BARBARA L. BOWLES
|
|
February 27, 2020
|
Barbara L. Bowles, Director
|
|
|
|
|
|
/s/ ALBERT J. BUDNEY, JR.
|
|
February 27, 2020
|
Albert J. Budney, Jr., Director
|
|
|
|
|
|
/s/ PATRICIA W. CHADWICK
|
|
February 27, 2020
|
Patricia W. Chadwick, Director
|
|
|
|
|
|
/s/ CURT S. CULVER
|
|
February 27, 2020
|
Curt S. Culver, Director
|
|
|
|
|
|
/s/ DANNY L. CUNNINGHAM
|
|
February 27, 2020
|
Danny L. Cunningham, Director
|
|
|
|
|
|
/s/ WILLIAM M. FARROW, III
|
|
February 27, 2020
|
William M. Farrow, III, Director
|
|
|
|
|
|
/s/ THOMAS J. FISCHER
|
|
February 27, 2020
|
Thomas J. Fischer, Director
|
|
|
|
|
|
/s/ MARIA C. GREEN
|
|
February 27, 2020
|
Maria C. Green, Director
|
|
|
|
|
|
/s/ HENRY W. KNUEPPEL
|
|
February 27, 2020
|
Henry W. Knueppel, Director
|
|
|
|
|
|
/s/ THOMAS K. LANE
|
|
February 27, 2020
|
Thomas K. Lane, Director
|
|
|
|
|
|
/s/ ULICE PAYNE, JR.
|
|
February 27, 2020
|
Ulice Payne, Jr., Director
|
|
|
|
|
|
/s/ MARY ELLEN STANEK
|
|
February 27, 2020
|
Mary Ellen Stanek, Director
|
|
|
2019 Form 10-K
|
152
|
WEC Energy Group, Inc.
|
•
|
an anti-greenmail provision prohibiting the purchase of shares of Common Stock at a market premium from any person whom the Board believes to be a beneficial owner of more than 5% of the outstanding shares of Common Stock unless such holder owned the shares for at least two years, the purchase was approved by a majority of the combined voting power of the shareholders, or the purchase is pursuant to a tender offer to all holders of Common Stock on the same terms;
|
•
|
a provision permitting removal of a director without cause only by at least an 80% shareholder vote;
|
•
|
authorization for the Board, subject to any required regulatory approval, to issue Preferred Stock in series and to fix rights and preferences of the series, including, among other things, whether, and to what extent, the shares of any series will have voting rights and the extent of the preferences of the shares of any series with respect to dividends and other matters;
|
•
|
advance notice procedures with respect to shareholder nominations of directors or shareholder proposals at a meeting of shareholders; and
|
•
|
provisions permitting amendment of some of these and related provisions only by at least an 80% shareholder vote at a meeting.
|
•
|
approval of 80% of the total voting power of the corporation, and
|
•
|
approval of at least 66 2/3% of the voting power not beneficially owned by the significant shareholder or its affiliates or associates.
|
•
|
the consideration is in cash or in the form of consideration used to acquire the greatest number of shares, and
|
•
|
the amount of the consideration equals the greater of:
|
(a)
|
the highest price paid by the significant shareholder within the prior two-year period;
|
(b)
|
in the case of a tender offer, the market value of the shares on the date the significant shareholder commences the tender offer; or
|
(c)
|
the highest liquidation or dissolution distribution to which the shareholders would be entitled.
|
•
|
a merger or statutory share exchange;
|
•
|
a sale or other disposition of assets having a market value equal to at least 5% of the market value of the assets or outstanding stock of the corporation or representing at least 10% of its earning power or income;
|
•
|
the issuance or transfer of stock or rights to purchase stock with a market value equal to at least 5% of the outstanding stock;
|
•
|
the adoption of a plan or proposal for liquidation or dissolution;
|
•
|
receipt by the interested stockholder or the interested stockholder's affiliates or associates of a disproportionate direct or indirect benefit of a loan or other financial benefit provided by or through the resident domestic corporation or its subsidiaries; or
|
•
|
certain other transactions that have the direct or indirect effect of materially increasing the proportionate share of voting stock beneficially owned by the interested stockholder or the interested stockholder's affiliates or associates.
|
•
|
the acquisition of shares by the interested stockholder was approved by the board of directors of the resident domestic corporation before the share acquisition date;
|
•
|
the specified transaction is approved by a majority of the voting stock of the resident domestic corporation that is not owned by the interested stockholder; or
|
•
|
the consideration to be received by the corporation's shareholders satisfies the "fair price" provisions of the statute as to form and amount.
|
Subsidiary *
|
|
State of Incorporation or Organization
|
|
Percent Ownership
|
ATC Holding LLC
|
|
Wisconsin
|
|
100%
|
American Transmission Company LLC
|
|
Wisconsin
|
|
60.31%
|
ATC Development Manager, Inc.
|
|
Delaware
|
|
74.73%
|
ATC Holdco LLC
|
|
Delaware
|
|
75.17%
|
ATC Management Inc.
|
|
Wisconsin
|
|
60.32%
|
|
|
|
|
|
Bluewater Natural Gas Holding, LLC
|
|
Delaware
|
|
100%
|
BGS Kimball Gas Storage, LLC
|
|
Delaware
|
|
100%
|
Bluewater Gas Storage, LLC
|
|
Delaware
|
|
100%
|
|
|
|
|
|
Integrys Holding, Inc.
|
|
Wisconsin
|
|
100%
|
Michigan Gas Utilities Corporation
|
|
Delaware
|
|
100%
|
Minnesota Energy Resources Corporation
|
|
Delaware
|
|
100%
|
Peoples Energy, LLC
|
|
Delaware
|
|
100%
|
North Shore Gas Company
|
|
Illinois
|
|
100%
|
Peoples Energy Ventures, LLC
|
|
Delaware
|
|
100%
|
The Peoples Gas Light and Coke Company
|
|
Illinois
|
|
100%
|
Wisconsin Public Service Corporation
|
|
Wisconsin
|
|
100%
|
Wisconsin River Power Company
|
|
Wisconsin
|
|
50%
|
Wisconsin Valley Improvement Company
|
|
Wisconsin
|
|
27%
|
WPS Power Development, LLC
|
|
Wisconsin
|
|
100%
|
WPS Visions, Inc.
|
|
Wisconsin
|
|
100%
|
|
|
|
|
|
Upper Michigan Energy Resources Corporation
|
|
Michigan
|
|
100%
|
|
|
|
|
|
W.E. Power, LLC
|
|
Wisconsin
|
|
100%
|
Elm Road Generating Station Supercritical, LLC
|
|
Wisconsin
|
|
100%
|
Elm Road Services, LLC
|
|
Wisconsin
|
|
100%
|
Port Washington Generating Station, LLC
|
|
Wisconsin
|
|
100%
|
|
|
|
|
|
WEC Business Services LLC
|
|
Delaware
|
|
100%
|
|
|
|
|
|
WEC Infrastructure LLC
|
|
Delaware
|
|
100%
|
Bishop Hill Energy III Holdings LLC
|
|
Delaware
|
|
90%
|
Bishop Hill Energy III LLC
|
|
Delaware
|
|
100%
|
Coyote Ridge Wind, LLC
|
|
Oregon
|
|
80%
|
Upstream Wind Energy Holdings, LLC
|
|
Delaware
|
|
80%
|
Upstream Wind Energy LLC
|
|
Delaware
|
|
100%
|
|
|
|
|
|
WEC Investments, LLC
|
|
Delaware
|
|
100%
|
|
|
|
|
|
Wisconsin Electric Power Company
|
|
Wisconsin
|
|
100%
|
|
|
|
|
|
Wisconsin Energy Capital Corporation
|
|
Wisconsin
|
|
100%
|
|
|
|
|
|
Wisconsin Energy Services, LLC
|
|
Wisconsin
|
|
100%
|
State Energy Services, LLC
|
|
Wisconsin
|
|
50%
|
|
|
|
|
|
Wisconsin Gas LLC
|
|
Wisconsin
|
|
100%
|
|
|
|
|
|
Wispark LLC
|
|
Wisconsin
|
|
100%
|
|
|
|
|
|
Wisvest LLC
|
|
Wisconsin
|
|
100%
|
*
|
Omits the names of certain subsidiaries, which if considered in the aggregate as a single subsidiary, would not constitute a "significant subsidiary" as of December 31, 2019. Indirectly owned subsidiaries are listed under the subsidiaries through which WEC Energy Group, Inc. holds ownership.
|
1.
|
I have reviewed this Annual Report on Form 10-K of WEC Energy Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ J. KEVIN FLETCHER
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J. Kevin Fletcher
President and Chief Executive Officer
(Principal Executive Officer)
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1.
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I have reviewed this Annual Report on Form 10-K of WEC Energy Group, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ SCOTT J. LAUBER
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Scott J. Lauber
Senior Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ J. KEVIN FLETCHER
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J. Kevin Fletcher
President and Chief Executive Officer
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February 27, 2020
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ SCOTT J. LAUBER
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Scott J. Lauber
Senior Executive Vice President and Chief Financial Officer
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February 27, 2020
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