OTC: WELPP

B. UTILITY SEGMENT

Electric Utility Operations

We generate and distribute electric energy to customers located in southeastern Wisconsin (including the metropolitan Milwaukee area), east central Wisconsin, and northern Wisconsin.

Operating Revenues

For information about our operating revenues disaggregated by customer class for the years ended December 31, 2025, 2024, and 2023, see Note 1(d), Operating Revenues, and Note 5, Operating Revenues.

Electric Sales

Our electric energy deliveries included supply and distribution sales to retail, wholesale, and resale customers. In 2025, retail revenues accounted for 92.6% of total electric operating revenues, wholesale revenues accounted for 1.2% of total electric operating revenues, and resale revenues accounted for 5.3% of total electric operating revenues. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Utility Segment Contribution to Net Income Attributed to Common Shareholder for information on MWh sales by customer class.

We are authorized to provide retail electric service in designated territories in the state of Wisconsin, as established by indeterminate permits and boundary agreements with other utilities.

We provide wholesale electric service to various customers, including electric cooperatives, municipal joint action agencies, other investor-owned utilities, municipal utilities, and energy marketers.

The majority of our sales for resale are conducted within an energy market operated by MISO at market rates based on the availability of our generation and market demand. Retail fuel costs are reduced by the amount that revenue exceeds the costs of sales derived from these opportunity sales.

2025 Form 10-K

We buy and sell electric power by participating in the MISO Energy Markets. The cost of our individual generation offered into the MISO Energy Markets compared to our competitors affects how often our generating units are dispatched and whether we buy or sell power. For more information on the MISO Energy Markets, see C. Regulation.

Steam Sales

We have a steam utility that generates, distributes, and sells steam supplied by the VAPP to customers in metropolitan Milwaukee, Wisconsin. Steam is used by customers for processing, space heating, domestic hot water, and humidification. Annual sales of steam fluctuate from year to year based on system growth and variations in weather conditions.

Electric Sales Forecast

Our service territory experienced higher weather-normalized retail electric sales in 2025, compared with 2024, due to higher sales to commercial and industrial customers. We currently forecast retail electric sales volumes to increase 2.3% for 2026, compared with 2025, assuming normal weather. Excluding the very large data center customers, we currently forecast sales volumes to decrease slightly in 2026, assuming normal weather.

Customers

Year Ended December 31

(in thousands)202520242023

Electric customers – end of year

Residential1,061.1 1,052.2 1,044.9

Small commercial and industrial121.3 120.6 119.3

Large commercial and industrial0.6 0.6 0.6

Wholesale and other1.7 1.6 1.6

Total electric customers – end of year1,184.7 1,175.0 1,166.4

Steam customers – end of year0.4 0.4 0.4

Electric Commercial and Industrial Retail Customers

We provide electric utility service to a diversified base of customers in industries such as metals and other manufacturing, governmental, real estate, health services, and food manufacturing.

Electric Generation and Supply Mix

Our electric supply strategy is to provide our customers with energy from a diverse generation portfolio that balances a stable, reliable, and affordable supply of electricity with environmental stewardship. Through our participation in the MISO Energy Markets, we supply a significant amount of electricity to our customers from generation that we own or lease from We Power. We supplement our internally generated power supply with long-term PPAs, including the Point Beach PPA discussed under the heading "Power Purchase Commitments," and through spot purchases in the MISO Energy Markets. We also sell excess power supply into the MISO Energy Markets when it is economical, which reduces net fuel costs by offsetting costs of purchased power. On a real time basis, the MISO Energy Market continuously evaluates system load requirements and dispatches the lowest-cost generation resources, while respecting any limitations on the transmission system.

2025 Form 10-K

The table below indicates our sources of electric energy supply as a percentage of sales for the three years ended December 31, as well as estimates for 2026:

Estimate (1)
Actual

2026202520242023

Company-owned or leased generation units:

Coal28.0 %27.8 %28.9 %30.6 %

Natural gas:

Combined cycle27.0 %24.3 %25.6 %28.4 %

Steam turbine0.7 %1.2 %1.5 %1.2 %

Natural gas/oil peaking units5.2 %7.2 %6.7 %3.5 %

Renewables (2)
8.1 %7.6 %5.1 %4.0 %

Total company-owned or leased generation units69.0 %68.1 %67.8 %67.7 %

Power purchase contracts:

Nuclear28.7 %30.1 %30.6 %30.0 %

Renewables (3)
0.6 %0.7 %0.7 %0.8 %

Other0.1 %— %— %0.2 %

Total power purchase contracts29.4 %30.8 %31.3 %31.0 %

Purchased power from MISO1.6 %1.1 %0.9 %1.3 %

Total purchased power31.0 %31.9 %32.2 %32.3 %

Total electric utility supply100.0 %100.0 %100.0 %100.0 %

(1) The values included in the estimate assume a natural gas price based on the December 2025 NYMEX.

(2) Includes hydroelectric, biomass, solar, BESS, and wind generation.

(3) Includes hydroelectric, wind, and customer-owned renewable generation.

Electric Generation Facilities

Our generation portfolio is a mix of energy resources having different operating characteristics and fuel sources. We own or lease 5,462 MWs of generation capacity, including wholly owned and jointly owned facilities. Our generation facilities include natural gas-fired plants, coal-fired plants, renewable generation, and BESSs. Certain of our natural gas-fired generation units have the ability to burn oil if natural gas is not available due to delivery constraints. For more information about our facilities, see Item 2. Properties.

We are engaged in discussions with a small number of customers to provide power to large-scale data centers being constructed in our service territories. We anticipate electric demand growth in the years ahead from these VLCs. Subject to pending regulatory approvals from the PSCW as discussed below, we are planning to make significant infrastructure investments in new natural gas-fired plants, wind, solar and battery projects, and other generation and distribution assets to power and serve these large-scale data centers and other projects. We are working closely with the new data center customers to provide bespoke resources, which are generation resources assigned to the VLCs that match their growing demand in order to minimize the impact on our other retail customers.

Generation from Leased W.E. Power, LLC Units

We supply electricity to our customers from power plants that we lease from We Power. These plants include the ERGS units and the PWGS units. Lease payments are billed from We Power to us and then recovered in our rates as authorized by the PSCW and the FERC. We operate the We Power units and are authorized by the PSCW and state law to fully recover prudently incurred operating and maintenance costs in our electric rates. As the operator of the units, we may request We Power to make capital improvements to, or further investments in, the units. Under the lease terms, these capital improvements or further investments will increase lease payments paid by us and should ultimately be recovered in our rates.

Supporting Economic Growth Within Our Communities

WEC Energy Group's capital plan reflects the planned retirement of older, fossil-fueled generation, which we expect to replace with natural gas-fired generation and zero-carbon-emitting renewables. These retirements are intended to address compliance with EPA regulations established under the CAA, as well as contribute to meeting WEC Energy Group's and our goal to reduce CO2 emissions

2025 Form 10-K

from electric generation. When taken together, the retirements and new investments in natural gas generation and renewables discussed in more detail below should better balance WEC Energy Group's supply with its demand, while helping to address compliance and maintaining reliable, affordable energy for our customers. As described in the preceding section, we are planning to make significant investments in generation and distribution assets for the future demands of VLCs.

Environmental Goal

WEC Energy Group's long-term goal is to achieve net carbon neutral electric generation by the end of 2050. WEC Energy Group expects to achieve this goal by continuing to make operating refinements, retiring less efficient generating units, and executing its capital plan. WEC Energy Group expects to use coal only as a backup fuel by the end of 2030 and to be in a position to eliminate coal as an energy source by the end of 2032. As of the end of 2025, WEC Energy Group's electric generation fleet has achieved a 53% reduction in carbon emissions from the 2005 baseline.

As part of our path toward this goal, we have started implementing co-firing with natural gas at the ERGS coal-fired units. Additionally, WEC Energy Group has retired nearly 2,500 MWs of fossil-fueled generation since the beginning of 2018, which includes the 2024 retirement of OCPP Units 5 and 6, the 2019 retirement of the PIPP, and the 2018 retirement of the Pleasant Prairie power plant. See Note 7, Regulatory Assets and Liabilities, for more information related to certain of these power plant retirements. WEC Energy Group expects to retire approximately 900 MWs of additional coal-fired generation by the end of 2031, which includes the planned retirements of OCPP Units 7 and 8. See Note 8, Property, Plant, and Equipment, for more information.

See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Corporate Developments for more information on WEC Energy Group's capital plan.

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