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WEC Energy Gains From Demand Growth & New Investment

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Key Takeaways

  • WEC Energy sees stronger sales from commercial, industrial and residential demand growth.
  • The company plans $28B investment by 2029, with $9.1B for regulated renewable projects.
  • WEC faces headwinds from rising competition and strict regulatory oversight on operations.

WEC Energy Group’s (WEC - Free Report) strategic investments strengthen the infrastructure and improve demand from large and small commercial and industrial (C&I) customers, which are going to drive its performance. 

Yet, the company faces risks related to increased competition in the electric and natural gas markets.

Factors Acting as Tailwinds for WEC Stock

WEC Energy is benefiting from rising demand across large and small C&I customers, along with steady growth in the residential segment. With more than 60% of its electricity sales attributed to the C&I group, strengthening demand from this sector is poised to further enhance the company’s performance.

The company is benefiting from improving conditions in its service territory, leading to rising customer volumes. In the Wisconsin segment, weather-normalized electric sales are estimated to grow 4.5-5% and gas sales 0.7-1% year over year during 2027-2029. Supported by strong regional expansion, WEC Energy anticipates 1.8 gigawatts (“GW”) of additional load growth by 2029.

The company is focusing on cost-efficient zero-carbon generation, such as solar and wind energy. Between 2025 and 2029, it plans to invest $28 billion, including $13.2 billion dedicated to expanding electric generation assets. Of this, $9.1 billion will be allocated toward regulated renewables, with plans to build and own nearly 4.4 GW. This portfolio includes 2.9 GW of solar ($5.5 billion investment), 565 MW of battery storage ($0.9 billion investment) and 900 MW of wind ($2.7 billion investment). Collectively, these initiatives support the company’s goal of achieving net carbon neutrality by 2050.

Some other utilities like Dominion Energy (D - Free Report) , PPL Corporation (PPL - Free Report) and Duke Energy (DUK - Free Report) , among others, have set zero carbon emission targets. The companies are implementing various measures to reduce emissions, such as shutting down fossil fuel based generating units, adding more renewable power generation units to produce electricity.

Headwinds for WEC

Rising competition in the electric and natural gas markets, along with stringent government regulations, could pressure margins. WEC Energy’s operations are heavily regulated at the state, local and federal levels, including oversight by utility commissions in the regions it serves. Such regulations may limit the company’s ability to recover costs from customers and could also lead to significant compliance and operational expenses.

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