WEC能源集团2026年第三季度业绩电话会议：上调每股收益指引，475亿美元资本计划

核心要点

• WEC Energy Group公布2026年第三季度稀释后每股收益（EPS）为1.18美元，较2025年第三季度的0.83美元增加0.35美元。天气偏暖、资本投资以及运营效率提升推动了增长。
• 假设今年剩余时间天气正常，管理层将2026年EPS指引从5.51-5.61美元上调并收窄至5.60-5.64美元。
• 该公司推出了2027-2031年475亿美元的资本计划，较先前计划增加100亿美元，即增长超过26%。增加的大部分投资与特大型客户（VLC）的需求相关。
• 2026-2031年预测电力需求增长增加了1吉瓦，达到4.9吉瓦。该计划包括I-94地区的3.2吉瓦需求、Vantage数据中心选址的1.3吉瓦需求以及另一潜在客户的400兆瓦需求。
• WEC预计新计划将支持截至2031年的资产基数年复合增长率（CAGR）达到13.4%，年度EPS增长率为7%至9%+（以原始2026年指引中位数5.56美元为基准计算）。
• 随着EPS增长加快，管理层预计股息增长率为6.5%至7%，预计派息率为60%至70%。

核心财务数据

业务与运营表现

公用事业运营推动EPS同比提升0.28美元。投资增长贡献了0.19美元，其中包括来自在建项目新增AFUDC权益和现金回报的0.15美元。在这些新增回报中，0.12美元来自VLC支持的项目。VLC客户还贡献了0.02美元的利润率，而有利的日常运营与维护费用贡献了0.08美元。

这些有利因素被更高的折旧与摊销、利息支出、税费及其他项目部分抵消。美国输电公司（American Transmission Company）为季度EPS贡献了0.03美元，而能源基础设施板块同比贡献了0.02美元的增长。

在VLC需求驱动下，气候正常化零售电量增长了4.1%。扣除VLC客户和铁矿石矿山后，电量增长0.4%。WEC继续预计全年气候正常化电量将与2025年基本持平。

微软（Microsoft）在芒特普莱森特（Mount Pleasant）的数据中心建设仍是主要的需求驱动因素。WEC准备在2031年前为I-94地区提供3.2吉瓦的服务，比先前计划增加了600兆瓦。管理层估计威斯康星州东南部的需求最终可能达到4.5至5吉瓦，尽管目前计划包含了3.2吉瓦。

Vantage Data Centers正在为甲骨文（Oracle）开发设施，WEC截至2031年的预测中包含1.3吉瓦。管理层表示，随着时间推移，该设施容量可能达到3.5吉瓦。甲骨文已满足威斯康星州VLC资费标准下的财务担保要求。

该公司还为另一潜在客户纳入了400兆瓦。管理层表示，目前预计该需求来自单一客户，具体细节取决于社区、输电和容量方面的考量。

资本计划与融资

这项475亿美元的资本计划侧重于受监管的发电和输电领域。与先前的计划相比，WEC计划新增68亿美元的天然气发电投资，包括一个联合循环项目、燃气轮机以及对现有设施的升级。

规划的可再生能源发电和电池储能投资净增11亿美元。其中电池储能投资增加了30亿美元，而规划的光伏和风电支出减少了19亿美元，部分反映了2026年已完成的工作。

在等待监管部门批准的前提下，WEC还计划将来自庞特比奇核电站（Point Beach Nuclear Plant）约1000兆瓦零碳基荷电力购电协议延长20年。

2027-2031年期间对美国输电公司（American Transmission Company）项目的投资预计总计约53亿美元，增加12亿美元。该计划还为电力和天然气配电基础设施增加了10亿美元，其中包括芝加哥管道退役计划。

总资本计划中约45%（即超过200亿美元）分配给VLC相关投资。管理层预计，到2031年，VLC专享资产将占总资产的近30%，而电力业务预计将占资产基数的80%。

WEC预计五年内运营现金流为260亿至270亿美元，新增债务为190亿美元（包括混合资本工具）。普通股融资预计保持在约55亿美元，尽管资本规模增加了100亿美元，但与先前计划相比基本保持不变。管理层将其归因于建设期间更高的现金回报以及项目投产后的现金生成。

管理层指引

假设今年剩余时间天气正常，WEC将其2026年EPS指引上调并收窄至5.60-5.64美元。据管理层介绍，该区间意味着较调整后的2025年指引中位数实现7.7%的EPS增长。

对于2027-2031年，管理层预计自原始2026年指引中位数5.56美元起，EPS年复合增长率将达到7%至9%+。该公司表示，如果监管部门的批准允许项目更快推进，那么“+”更有可能在2028年或2029年实现。管理层指出，如果不出重大意外情况，五年CAGR可能会达到9%的上限。

该公司预计将股息提高6.5%至7%。正式的2027年业绩和股息指引预计将于12月公布。

风险与核心关注事项

• 几项重大的发电和输电投资需要获得监管批准，这会影响项目进度以及EPS增长中“+”部分的潜在实现。
• ATC已重新提交服务于Vantage选址的输电项目方案（包括E-STATCOM系统）。管理层预计申报流程将于2026年完成，并估计在获批后施工时间约为12至15个月。
• 威斯康星州2027年和2028年的费率申请仍在审议中，最终指令预计将于年底出炉。在伊利诺伊州，拟议指令建议Peoples Gas和North Shore Gas的净资产收益率（ROE）为9.48%，股权比例为50%；最终决定预计于12月作出。
• 据管理层称，更高的利率已纳入融资计划。计划的执行还取决于在为190亿美元新增债务融资的同时保持强劲的信用指标。
• 建设资源限制减缓了伊利诺伊州部分基础设施建设的推进进度。管理层预计，从2028年前后开始，该地区的年支出将增至约5亿美元。
• 预计2031年资产基数的近30%将用于支持VLC客户。WEC表示，其VLC资费标准要求这些客户全额承担其服务成本，并提供财务担保和信用支持。

分析师问答精选

分析师密切关注WEC上调后的增长展望的时间节点和持续性。管理层表示，项目审批和资本部署节奏可能会推动2028年或2029年的EPS增长超过9%。数据中心进一步扩建以及未来的资本计划更新可能会在2031年之后带来更多机遇。

在融资方面，管理层解释称，预计将有更多VLC项目在在建工程阶段提供现金回报，而不是主要依赖非现金AFUDC。该计划未假定VLC客户预付款。对于超出当前计划的新增资本支出，管理层估计股权融资比例可能在40%左右，低于此前约50%的框架。

管理层表示，微软（Microsoft）目前为计划需求提供了更大的近期上行空间，因为其有更多独立施工场地正在建设中，且在继续购地。甲骨文（Oracle）和Vantage仍专注于初始670英亩的阶段以及当前预测中包含的1.3吉瓦。

WEC还澄清称，新增的1吉瓦需求需要大约1.4至1.5吉瓦的容量以满足MISO（中部独立系统运营商）的要求。因此，资本计划增加的100亿美元包含了发电、输电、配电以及延伸至2032年和2033年需求的部分长周期设备。

业绩电话会议完整文字记录

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完整财报电话会议逐字稿

管理层陈述

Operator

Good afternoon, and welcome to WEC Energy Group's conference call for the third quarter 2026 results. This call is being recorded for rebroadcast. [Operator Instructions] In conjunction with this call, a package of detailed financial information is posted at wecenergygroup.com. A replay will be available approximately 2 hours after the conclusion of this call.

Before the conference call begins, please note that all statements in the presentation, other than historical facts, are forward-looking statements that involve risks and uncertainties that are subject to change at any time. Such statements are based on management's expectations at the time they are made. In addition to the assumptions and other factors referred to in connection with the statements, factors described in WEC Energy Group's latest Form 10-K and subsequent reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those contemplated. During the discussions, referenced earnings per share will be based on diluted earnings per share, unless otherwise noted.

And now it's my pleasure to introduce Scott Lauber, Chairman, CEO and President of WEC Energy Group.

Scott Lauber

Good afternoon, everyone, and thank you for joining us today as we review our results for the third quarter of 2026. Here with me are Xia Liu, our Chief Financial Officer; and Beth Straka, Senior Vice President of Corporate Communications and Investor Relations.

As you saw in our news release this morning, we reported third quarter 2026 earnings of $1.18 per share compared to $0.83 per share in the third quarter last year. These results were driven by warmer-than-normal weather, execution of our capital plan and operating efficiency. With another solid quarter, we remain on track to deliver strong results for 2026.

Our continued focus on the fundamentals of our business is creating value for our customers and stockholders. Today, we're raising and narrowing our earnings guidance for 2026 to a range of $5.60 to $5.64 per share, assuming normal weather for the remainder of the year. This reflects 7.7% growth in earnings per share from our 2025 adjusted guidance midpoint.

As a reminder, our previous guidance was in the range of $5.51 to $5.61 per share. I'm also pleased to share our new 5-year capital plan. Let's start by talking about the economic growth that's driving it. Overall, we expect our demand -- our electric demand to grow 4.9 gigawatts between 2026 and 2031, an increase of 1 gigawatt compared to the prior plan.

Microsoft continues to make good progress on its large data center complex in Mount Pleasant, Wisconsin, with the first facility operating Construction is underway on additional facilities as Microsoft expands at the site. As a reminder, Microsoft has purchased more than 2,200 acres to date in the I-94 corridor south of Milwaukee. Just last week, Microsoft announced its purchase of an additional 70 acres next to the site.

We are preparing to serve forecasted demand of 3.2 gigawatts in the I-94 region through 2031, with opportunity for further expansion. That's up 600 megawatts from the previous plan. You'll notice an additional 400 megawatts in the new capital plan. We're making good progress with another customer, and you can expect more details in the future. Stay tuned.

And to the north of Milwaukee, you'll recall that Vantage data centers is developing facilities for Oracle on approximately 1,900 acres. Construction continues on the initial phase of the data center project, which is being built on 670 acres. Vantage said that it expects to invest $15 billion to complete the phase in 2028. We currently have 1.3 gigawatts of demand for this Vantage site in our forecast through 2031.

Looking to the future, it has the potential to reach 3.5 gigawatts of demand over time. The project is well on its way and Oracle has met its financial security obligations, which are consistent with the Wisconsin Commission's very large customer tariff requirements. To serve this project, ATC has refiled a proposal with the Public Service Commission of Wisconsin.

In addition to the transmission line, this filing includes proposed investment in an E-STATCOM system to maintain grid reliability. ATC is working through the process now with the commission. As a reminder, both Microsoft and Oracle have committed to paying their full share for energy costs.

We solidified this through our very large customer tariff, which protects other customers. Microsoft, Vantage and Oracle have made significant investments to support our communities. Just recently, we worked with Oracle to save our customers an estimated $300 million in fuel costs. Oracle agreed to subscribe to a portion of the energy we purchased from Point Beach Nuclear Power plant. We expect the full details to be submitted to the Wisconsin Commission in the coming months.

As we work with these hyperscalers, we are confident our very large customer tariff provides a strong framework for growth while maintaining affordable energy service for all our customers. We continue to see local growth in small commercial and large businesses as well. For example, both [ Janeric and Boden ] are expanding and adding jobs. We have designed our new capital plan to reliably serve our customers while supporting the significant growth we continue to see across our service areas.

As you may have seen from our announcement this morning, we expect to invest $47.5 billion in capital projects between 2027 and 2031. This is an increase of $10 billion or more than 26% above our previous 5-year plan. The majority of this increase is being driven and therefore paid for by our very large customers. The updated plan is expected to support asset-based growth at a 13.4% compound annual growth rate. This should drive compound annual earnings per share growth of 7% to 9-plus percent from 2027 to 2031. This is based off the midpoint of our original 2026 guidance.

The increase in our plan is mostly driven by investments in regulated electric generation and transmission largely due to very large customer demand. Let me give you a few more details. Over the next 5 years, we'll continue to take an all-of-the-above approach for generation to support economic growth and reliability by investing in new natural gas, batteries and renewables.

And dispatchable generation is a key component of our reliability strategy. Between 2027 and 2031, we expect to invest an incremental $6.8 billion in modern, efficient natural gas generation versus the prior plan. This includes a combined cycle turbine project that we expect to come online by the end of the 5-year forecast period as well as combustion turbines and upgrade to our existing facilities.

We are increasing planned investment in renewable generation in battery storage by $1.1 billion, with the total planned battery storage increased by $3 billion, while planned solar and wind investment decreased by $1.9 billion. Some of this decrease relates to the work already completed in 2026.

Continuing our all-of-the-above approach, we also reached an agreement with NextEra that pending regulatory approval, will support long-term electric liability and customer savings. We plan to extend our purchase power agreement for approximately 1,000 megawatts of carbon-free baseload capacity from the Point Beach Nuclear Plant. The new PPA would extend the existing agreement by 20 years.

Outside of generation, American Transmission Company plans to continue investing in transmission capabilities to serve our region's economic growth, connecting new facilities and strengthening the system. Our plan calls for us to invest approximately $5.3 billion in ATC projects between 2027 and 2031. This represents a $1.2 billion increase from the previous plan.

Adding to strength and reliability and support economic growth, we continue to invest in our electric and natural gas distribution networks. Our plan includes an additional $1 billion to improve distribution infrastructure. This supports the continued investment in our pipe retirement program in Chicago. Recall the Illinois Commerce Commission directed us to focus on retiring more than 1,000 miles of older pipe by January 1, 2035.

Now turning to the regulatory front. I have a couple of updates across our service area. In Wiscantan, progress continues on the rate request we filed in April for forward-looking test years 2027 and 2028. The procedural calendar has now been completed. We expect final orders from the commission by the end of the year with new rates effective in January '27 and 2028. We also have rate filings under review in Illinois for test years 2027 at Peoples Gas and North Shore Gas.

Recently, the administrative law judge issued a proposed order that is largely consistent with the [ SAS ] recommendation. The order recommends a 9.48% ROE and a 50% equity ratio at both utilities. We expect the final decision in December. Of course, we'll keep you updated on future developments. In summary, we're excited about the strong economic development in our region. And we believe our capital plan, along with our very large customer tariff positioned us well to support that growth. Now I'll turn it over to Xia for more details.

Liu Xia

Thank you, Scott. Our third quarter 2026 earnings of $1.18 per share reflects a $0.35 increase compared to the third quarter of 2025. Our earnings package includes a comparison of third quarter results on Page 15. I'll walk through the significant drivers.

Starting with our utility operations, earnings were $0.28 higher versus the third quarter of 2025. Let me highlight a couple of factors. Weather favorably impacted quarter-over-quarter earnings by approximately $0.05. Compared to normal conditions, we estimate that weather had an $0.08 positive impact in the third quarter of '26 compared to a $0.03 positive impact in the third quarter of 2025.

Rig-based growth contributed $0.19 to earnings. This includes $0.15 of growth from incremental AFUDC equity and cash returns associated with projects under construction.

I'll note that $0.12 or 80% of these incremental returns are from projects for and supported by the VLCs. In addition, VLCs added $0.02 of margin quarter-over-quarter. And favorable day-to-day O&M drove an $0.08 variance. This was primarily driven by our stock-based plans, which could be timing. These positive drivers were partially offset by higher depreciation and amortization expense higher interest expense and tax and other items.

Next, let me provide some additional color on our weather-normal retail electric delivery. Compared to Q3 last year, total weather-normal retail electric sales grew 4.1%, driven by growth from the VLCs. Excluding the iron ore mine and VLC customers, we saw sales growth 0.4% during the quarter. For the year, we continue to expect weather-normalized electric sales to be relatively flat with 2025.

At American Transmission Company, Capital investment growth contributed an incremental $0.03 to Q3 earnings compared to 2025. At our Energy Infrastructure segment, earnings were $0.02 higher in the third quarter compared to the same period in 2025. This was driven by additional capital investment at [ We Power ] and a better operating income at [ Waki ].

Lastly, that earnings from the Corporate and Other segment increased $0.04 driven primarily by tax timing. In terms of common equity, we lapped in about $1.16 billion during the first 9 months of the year. This includes $50 million issued under our dividend reinvestment and employee benefit plans. The remaining $1.1 billion are under the ATM program, which includes approximately $350 million from forward contracts that have been settled and $765 million still under forward contracts that will be settled in the future.

As Scott noted, we are raising and narrowing our 2026 earnings guidance range to $5.60 to $5.64 per share, assuming normal weather for the rest of the year. Going forward, with the updated capital plan, as Scott discussed earlier, we expect our long-term EPS growth to increase. Again, based off the midpoint of the original 2026 guidance range, $5.56 per share, our long-term EPS CAGR is expected to be 7 to 9-plus percent through 2031.

Now let me comment on the financing plan that supports this growth and the new capital plan. Slide 22 of the earnings package outlines the funding sources. Over the next 5 years, we expect to generate $26 billion to $27 billion in cash from operations, funding more than half of our cash needs.

We expect $19 billion to come from incremental debt, including hybrid instruments, and we plan to fund the remaining cash needs with [indiscernible] to $5.5 billion of common equity.

Although our current capital plan increased $10 billion, we expect common equity needs to remain relatively flat with the prior plan. This is largely due to incremental cash from operations in the new plan. As projects are completed and placed in service in the planning horizon, they begin generating cash revenues. Many of which are supported by the VLCs that comes with a 10.48% to 10.98% ROE. The new plan also includes more projects for which the VLCs are expected to provide cash returns during construction rather than AFUDC.

The additional cash from operations helps us keep common equity needs at a modest 10% of total cash sources and relatively flat compared with the prior plan. In closing, a Scott discussed previously, strong economic development and load growth in Wisconsin are the foundation of our new capital plan.

As illustrated on Page 21 of the earnings package, over the next 5 years, we expect to transform our business while staying true to our fundamentals. Our asset base is expected to more than double over the next 5 years with the electric business representing 80% of the asset base by 2031.

Furthermore, with almost half of the capital plan or more than $20 billion allocated to the VLCs, the asset base dedicated to lead customers is projected to represent almost 30% of our total assets by 2031. As you know, these assets are supported by the VLC tariff, which is designed to ensure that these large customers pay their full share of the costs and are not subsidized by other customers. In addition, the tariff provides very strong financial security and credit support requirements. We are excited about our company's future and the investment opportunities ahead. With that, I'll turn it back to Scott.

Scott Lauber

Thank you, Shaw. Finally, a quick reminder about the dividend. As usual, I expect we'll provide our 2027 dividend plan and earnings guidance in December. We expect to grow the dividend at a rate of 6.5% to 7%, consistent with our past practice. This results in a projected payout ratio of 60% to 70% -- 60% to 70% due to the forecasted earnings per share growing at a faster pace. .

Before I open it up for Q&A, I want to summarize some of the key highlights of the call. Economic growth is driving another gigawatt of forecasted demand for a total 4.9 gigawatts of growth in our plan. This growth is adding $10 billion to our 5-year capital plan, which is now at $47.5 billion. These developments give us confidence in our EPS compound annual growth rate of 7 to 9 plus percent.

We remain committed to 6.5% to 7% dividend growth. We expect the total equity funding to be flat in our 5-year plan versus the 5-year plan at approximately $5.5 billion, maintaining a strong balance sheet. Overall, we're optimistic about our 5-year plan and the longer-term outlook. We look forward to discussing our plan at the EEI conference. Operator, we're now ready for the question-and-answer portion of the call.

Operator

[Operator Instructions] The first question is from the line of Shar Pourreza, with Wells Fargo.

分析师问答

Shahriar Pourreza

Just the updated guidance, obviously, you now see 7% to 9% plus. Just help us frame what is assumed in the plus? That's always the question mark you get when you come out with the plus. The $10 billion is included in the range. But just help us frame the plus and obviously why [ you even keep ] the 7% to 8% at this point?

Scott Lauber

Sure. Sure. It's a great question. And as we look at it and we look at the capital projects we have and you saw our growth of another gigawatt, we felt really confident with that 7% to 9% range and feel confident not only in this 5-year plan that we think it will continue. The second part is when you think about the plus, you really got to look at the pattern of our growth of our capital plan that's illustrated in our handout.

There's a lot of projects that need regulatory approval. But if there's an opportunity that we can get the approvals and move faster than we anticipate, there's an opportunity that the growth may be a little faster in a couple of years, maybe like in '28 or '29. So it really depends on a lot of stuff, but I think there's an opportunity as we continue to execute on plan for potential upside in some of those years.

Shahriar Pourreza

Got it. No, that's perfect. That's what I was trying to get into. That's perfect. And then, Scott, switching to Oracle, the ATC line project to serve the Vantage side in its second application filing. It appears the filing is still under review with the commission. So I guess what's the time line there? And do you see a potential delay to the start of the project or can the site start taking the megawatts before the line is completed?

Scott Lauber

So great question. And they're still working feverishly on the construction. So listening to the Oracle conference call, the last quarter, I don't think it's going to delay any of their projects in the time line. We expect we'll get a complete this year, and it will get approval, and we'll be right back on schedule.

Just to put it in perspective, I mean, remember, this filing is a big filing. In addition, we just added the [ E STATCOM ] to the filing to make sure we have true transparency. When you think about it, there's over 20,000 pages in the filing. So the commission having 35 questions, I think that's pretty reasonable. So it's really a complete filing and understand we wanted to ask those questions upfront and work it through so we can get a quick result here. So everything is on schedule here, although we had a little pause with that refiling, I feel good where we're at.

Operator

Your next question is from the line of Nicholas Campanella with Barclays.

Nicholas Campanella

I just wanted to ask, you're raising the capital plan pretty significantly, and this is for about 1 gigawatt of incremental load in the forecast period. You also talked about progress with another customer. You also talked about the fact that Microsoft and Oracle could be expanding. Just does this capital plan build into that load? Or would those expansions result in incremental capital?

Scott Lauber

Sure, sure. And when you look at it, there'll be potential expansions. We factored in the 400 megawatts on this to be announced, and we're making progress on those customer -- on that customer there. But we do have some long lead time equipment in here anticipating we'll have some spending done, but those megawatts probably won't come in until like a 2032, '33.

But true transparency. We think this growth will extend beyond 2031 and opportunities in 2032 and '33. So we have a little bit of long lead time equipment, as you can see in some of the public filings of [ plans ] being filed. So more to come on that. So I think as we grow, there will continue to be upside if there's additional data center growth beyond 2031.

Nicholas Campanella

Okay. And then just with the plan being out to 2031 now, you talked about the long lead time equipment, and you still have some chunky generation, you're probably going to be building in 2032. You also have some load ramping by then how do equity needs look like kind of beyond this plan? Just is there something idiosyncratic that's causing you to basically have flat-to-declining needs on the CapEx raise? Or is this type of CapEx increase to equity needs sustainable on a roll forward, if you understand my point.

Scott Lauber

Yes, it's a great question, and I'll start and then Xia will back clean up as we're in the brewer fever here. When you think about it, we really worked hard getting more cash upfront and getting some cash returns with some of our very large customers. And as we always said, having [ plants ] still into service was also going to help with our cash.

So this was kind of a step change to get into that realign our cash needs and working with our very large customers who have been great partners here. As we go forward, though, Xia has looked at what additional capital would mean and potential there.

Liu Xia

Yes. So just to build on that, we think that we traditionally guided you that every $1 million of incremental capital will require $0.50 with equity content with the factors that Scott just outlined, we expect that number to come down over time. So I would be comfortable to say it could be around 40%. So every incremental dollar would come with 40% of equity content comfortably.

So that would be the going forward guidance for you, Nick.

Nicholas Campanella

If I could just squeeze 1 more in just in response to kind of Shar's question before on the plus, just is it really with the capital plan essentially peaking here in '28. Is is '29 and beyond that you'd really be in that plus range if things go correctly. We're just trying to make sure we heard that right. I'm sorry.

Scott Lauber

Sure, sure. I think it all depends upon when we get the regulatory approvals, potentially '28, more likely '29. And as we continue, you can see our capital plan actually falls down a little bit in 2030 and '31. I wouldn't read too much into that because as we look at 2032, et cetera, there will be more opportunities there. So I felt the most confident in that '28, '29 time frame, but '30 and '31 aren't that far off. So we have some time here to look at those also.

Operator

Your next question is from the line of Stephen D’Ambrisi with RBC Capital Markets.

Stephen D’Ambrisi

Scott, just had a quick one -- a couple of quick ones. Just in terms of Microsoft and the 600-megawatt expansion to [indiscernible] load, can you just talk maybe at a high level about how much of the acreage that relates to or they keep adding acreage, but it also seems like power density per acre is moving up with newer generations of racks. But just how we can think about -- you've given a good estimate of what Vantage could potentially size to, but just interested about Microsoft on the other side.

Scott Lauber

Sure, sure. And Microsoft hasn't disclosed anything in particular, this is more us just looking at other comparable sites. I think those sites -- and they've talked about -- you just saw them buying another 70 acres right next door. I think the opportunity for these sites to have another -- not another, but in total, 4.5 to 5 gigawatts.

So right now, Southeastern Wisconsin is about 3.2 gigawatts, potentially that could get up to 4.5 gigawatts to 5 gigawatts. As you see, they just bought some more land. So I agree with you. I think the technology continues to get more capacity on the same location. So more to come on that, but those are just our kind of rough estimates. But right now, we're very comfortable with the 3.2 gigawatts that's in the plan for Southeastern Wisconsin.

Stephen D’Ambrisi

And then just obviously, more to come, I guess, on the 400 megawatts. But can you talk about whether it's within [ WABCO or WPS ] service territory? Or any color on just what that could look like? Understand that we'll get more details there.

Scott Lauber

Yes. We'll get more details too. I know people are looking at locations in both territories. So once again, you got to make sure you have a community that's excited about it and interested in it. You got to make sure the transmission lines are available and the capacity. So there's a lot of factors going in. So I don't want to really get much more there, more to come on this, though.

Operator

Your next question is from the line of Michael Sullivan with Wolfe Research.

Michael Sullivan

Sorry, I got to try 1 more -- Scott, I got to try 1 more on the growth rate. So is the takeaway here, the plus as it stands now is for 1, maybe 2 years and then you're back within more the [ 7 to 9 ] and all the other years?

Scott Lauber

So I feel good that we're going to get a couple of years out of here. But once again, we'll have another update in a year here on our capital plan or maybe interim as we get more customers here. So a little too early to tell, but feel really good that it'll be into that 9 plus probably the upper end or a plus sign based on where we're all at. .

Michael Sullivan

Okay. And on the equity piece, can you just maybe unpack a little more about what changed here for the nearer term that you were able to -- I mean because you really have 2 large customers. And so I guess there was a negotiation on -- with 1 or both that brought the needs down and then like why that wouldn't sustain if they -- if you expand with those same customers out in future years?

Liu Xia

Yes, Michael, I'll take that one. So remember, the tariff allows us to recognize AFUDC or current returns. So we have the options there. We've been assuming conservatively before that most of the projects would come with AFUDC. And in this plan, to your point, we've been working with our VOC customers to try to charge more cash returns.

So as a result, you're basically reducing the AFUDC originally assumed in the prior year plan and increasing cash returns in this plan. So it's kind of like a -- like Scott mentioned, it's a step change. So that's why it's -- that's why it's a relative equity even though we have added $10 billion.

Going forward, you wouldn't be doing this unwinding AFUDC and adding cash return thing, but we will continue to encourage the customers to pay cash returns. So incrementally, you would need a little more equity as a result. I don't know if that makes sense.

Michael Sullivan

It does. And the last thing just for me, the 400 megawatts, is that all with 1 customer? And then just any detail on the gating items there?

Scott Lauber

Sure. And right now, it's anticipated to be all with 1 customer. More to come on this. They're still working with the different communities on this. So it's anticipated to be with one customer, but more to come. .

Operator

Your next question is from the line of Andrew Weisel with Scotia Bank.

Andrew Weisel

Congrats to the Brewers, not a lot of love there, but quite a world series. Congrats to the brewers and congrats to you guys. They're not the only ones winning in Milwaukee. Great updates.

Scott Lauber

Thank you. Thank you. The Brewers have been exciting and fun to watch and glad to bring a World Series home..

That's great.

Andrew Weisel

So my first question is on the sales growth. You add a gigawatt to the outlook there and yet the forecast still shows 6% to 8%. Why wouldn't that be increasing the 6% to 8%? I understand there's a roll forward. But why didn't that number come up? And can you talk a little bit about why the pace of gas growth came down a little bit from the prior forecast? Is it all in Wisconsin, I believe, not Illinois. So could you please talk to the 2 numbers?

Liu Xia

Sure. Happy to. So on the first one, remember, we continue to add sales along the way between now and 2029. So when you look at '29 to '31, the base is very high. So when you grow from a very high base, you continue to have a 6% to 8%. So it's really just a timing of the growth rate.

On the gas sales side, nothing to read too much into it. We forecasted a pretty flat gas sales this year. And we -- through the 3 quarters, remember, we had a mild quarter in the first quarter and the next 2 quarters were really not gas focused. I mean our normalization process is never perfect. So there's a little bit of that in there, but we don't see any trend in the gas sales side to make us question the growth rate. So just don't read too much into it.

Scott Lauber

Yes. And remember, on the electric side, the very large customers are really -- remember the way our tariff is set up, the very large customers, you got to really look at the returns on the assets versus the volumetric. The volumetric does make a difference, but a lot of that volumetric is completely passed through as it relates to energy prices, et cetera. It's really the return on those assets is where the earnings come from. .

Andrew Weisel

Great. That makes a lot of sense on the electric side. Sorry, Shah for gas, I was talking about the '29 to '31 outlook. You're now saying 0.5%. You previously said [ 0.7 to 0.1 ]. Is it the same story about the '28, for '29.

Liu Xia

Yes, it's still in that neighborhood. As I said, from last year to this year, we're expecting that to be even -- so growing from that, we feel good about the 0.5 to 0.8. It could be better than that.

Scott Lauber

Yes. I think we're just making sure we factor in conservation where the price of gas be go factoring in what could happen. Usually, use per customer continues to go down a little bit. This is largely driven by customer growth. So I'm not too concerned about it. And remember on those gas sales, we'll factor all that into your rate cases as we look at it.

Andrew Weisel

Right. Good point. That's all rate case cycle away. Okay. Then 1 more on equity, if I may. How should we think about the timing of this? Your commentary on the magnitude and the customers was pretty clear. But given all of that, how should we think about the timing of when the equity would be drawn down? And common equity versus JASN within the cycle? Should it be ratable? Or would it be more back-end loaded within the 5-year plan?

Liu Xia

We always say that equity comes -- goes with capital. So it could be a little bit front-end loaded because we are still in the construction phase in the front end of the planning horizon. So again, as we continue to place the projects in service, you have more cash coming in, in the latter part of the plan. So overall, it's a little bit front-end loaded on the equity.

Operator

Your next question is from the line of Anthony Crowdell with Mizuho.

Anthony Crowdell

I reiterate Andrew's comments. Congrats on the World Series, must be nice. I think I wanted to follow up on Steve's questions earlier on Microsoft and Oracle. I think Steve was kind of talking on the Microsoft angle. I guess my question is between Microsoft and Oracle or Vantage, which customer has the greatest potential to exceed the load currently in your plan right now? And what would trigger that?

Scott Lauber

Sure. And that's hard -- I mean they're both building extremely fast. They're both going -- they're both have their construction sites under construction extremely fast here. So I think when you look at it, probably Microsoft has a lot more individual construction sites going. Oracle is really concentrated on that first 670 acres, really concentrated on that first 1.3 gigawatts. As you noticed, we didn't increase anything in the plan here. They want to get that up and running, get that transmission line. So I would say right now, potential Microsoft has a little more opportunity, especially as they continue to buy more land if you think of our current 5-year plan.

Anthony Crowdell

Great. And just one follow-up. I guess, it's on -- and I hope I have these numbers right, like customer concentration, I think by like 2031, nearly like 30% of your assets would be supporting very large customers. I mean, is there a point maybe. .

[Audio Gap]

Operator

Your next question is from Brian Russo with Jefferies. .

Brian Russo

Just a follow-up on like the cadence of the EPS growth. Is it kind of following the same pattern as the prior 7% to 8% and kind of follows the capital plan on Slide 22. But as the VLT generation investments ramp up, that requires in theory less equity because you're getting some upfront cash recovery from those customers? Is that how to think about it?

Scott Lauber

Yes, I would really go with the pattern of the capital plan, I think. And if we can do something and some more capital could come in a little earlier, I think there's opportunities to be in that plus section. So I would look at the capital plan because that's a return on those assets. .

And then the equity, as we've talked about, it's really a step change here to get more of that cash flow from our very large customers to stick to that balanced approach here. And then I think as you go forward, as we get more in service, the equity needs will continue to go lower.

Brian Russo

Okay. Understood. And then could you be more specific on the actual construction time needed for that ATC line. I could see on the CapEx, it looks like majority might be in '27 and '28. Just with the being complete CCN filing and refiling. I just want to make sure that there's adequate time, which is an already condensed time line for construction.

Scott Lauber

Yes. And I don't have the exact time line in my mind here. I imagine it's going to take 12 to 15 months. I have not fleshed that out completely. But I know American Transmission Company is ready. They have people working on other projects, so we're maintaining the workforce so that when this project does get approved, if we have to go ahead, we're ready to go with -- we have the equipment, just ready to go with the construction. So as soon as we get approval, there will be no delay [indiscernible], we're going to keep moving. So it's probably about 12 to 15 months.

Brian Russo

Okay. Great. And then lastly, any insights into this B&R environmental review following the Port Washington settlement, it seems like it's not an obstacle for this new 400-megawatt customer. Just wondering what you're hearing or seeing on the ground related to that.

Scott Lauber

Yes. So this environmental review. I don't see it as an obstacle at all. And actually, we kind of welcome having a reasonable environmental review to get the facts out. So having a study, getting all the clarity on the facts and the environmental impact, I think is positive. And hopefully, there's even clarity of what rules have to be filed for future environmental reviews.

So there's less interpretation. So we see this as net positive. It shouldn't affect any of the current sites. I think everyone thinks it's going to be very manageable. We expect the environmental review to be on a reasonable basis. It sounds like it should be done very quickly by beginning of '28. So I think all of that and having the facts out there and having the true on an environmental review is all net positive.

Operator

Your next question is from the line of Jeremy Tonet with JPMorgan.

Unknown Analyst

This is Diana Niles on the call for Jeremy.

If you could elaborate more on the relatively unchanged equity plan and maybe more broadly on the financing plan, [indiscernible] considering the allocation of debt equity under a higher rate environment, it would be possible to speak to that and potentially speak to rate exposure?

Scott Lauber

Sure, sure. And Xia will kind of look at how it's all laid out and some concepts here. But in reality, we kind of look at it every day, we're going to do some financing. What's the most efficient. So Xia, why don't you kind of lay out some of our base concepts?

Liu Xia

Oh, absolutely. so on the debt front, we are keenly aware of the increase in the interest rates and as a matter of fact, [Audio Gap] so we have taken into consideration all of that related to the cost of debt. On the equity front, I don't know if you have a specific question you wanted me to address? .

Unknown Analyst

I think that generally covers. That it was more or less the decision to increase the percentage of the debt in the financing plan while decreasing the percentage of equity, but understand the puts and takes there.

Liu Xia

Yes. It's all driven by the cash flow forecast. So as we pick up more cash from operations, and that could be in the form of current returns, as we talked about or incremental revenue in cash or selling the ITCs and PTCs whatever we do in the plan that increases the cash flows. That gives us the capacity to increase a little bit of the debt until maintain really strong financial metrics, credit metrics. It's really a function of the cash flows.

Unknown Analyst

Okay. Got it. if I may ask 1 more.

Scott Lauber

Sure.

Unknown Analyst

Are there any particularities to consider when it comes to cash inflows from VLC customers, either in terms of upfront payments or cash recovery when it comes to how the rating agencies look at your cash flow statements?

Liu Xia

In the plan, we're not assuming any of the upfront payment from the VLCs. We are assuming that they would pay cash returns on CWIP. So it would be really just like earning a return on the rate base. but nothing like upfront payment from the VLC.

Scott Lauber

But we think those cash returns and receivable receive positively from the rating agencies. I think they'll consider that very positive.

Operator

Your next question is from the line of Steve Fleishman with Wolf Research.

Steven Fleishman

Sorry for the double teaming question here. And congrats on the Brewers, by the way. Just to kind of tie up maybe some of the questions on the growth rate and CAGR. Instead of looking year-by-year or looking more at the 5-year CAGR? Is the plus on the table with the plan as it is for the 5-year growth rate? Or is the plus more representative of '28 or '29, so to speak?

Scott Lauber

So right now, I would say the plus is more representative of the '28 to '29, but feel comfortable over that 5-year growth rate, assuming we don't have any wild cards here would be at that upper end of the 9%.

Steven Fleishman

Got it. And then, of course, as you update plans, you probably fill in more in the latter parts as well.

Scott Lauber

Exactly. Exactly. As we update plans and give more clarity on a very large customer and very large customers...

Operator

Your next question is from the line of Carly Davenport with Goldman Sachs.

Carly Davenport

Just 1 quick one for me. Just on the capital plan. I think you quantified the amount of distribution and generation CapEx tied to the VLCs. Do you have a comparable number that you're sharing for the transmission piece of the plan?

Scott Lauber

I think in our plan right now for the transmission, specifically related to economic development is about $1.4 billion in our plan right now. So I think as you look across the state of Wisconsin, I think there's potential upside as more VLCs come in, it all depends upon how much -- of course, they're going to be substation, but what kind of transmission will be needed or their location of it. So right now, we only have $1.4 billion.

Operator

Your next question is from the line of Richard Sunderland with Truist Securities.

Richard Sunderland

Just one clean-up question on the VLC side, the disclosures there. That 29% asset-based component in 2031, does that include the 400 megawatts kind of unidentified customer and that longer lead time equipment, I think you called out for like a 2032, 2033 basis. Is that all in that 29%?

Scott Lauber

Yes, it is. Yes, it is. It's all a part that we think is going to be paid for by those very large customers, and that's all part of the 29%. .

Richard Sunderland

Then how that's informing kind of rate case discussions as well. Could you speak a little bit to the workflows there?

Scott Lauber

Sure. Sure. And so the Illinois -- and you've seen a couple of updates in our Illinois filing that the capital amount has gone down a little bit this year just because we're ramping up and it's been hard to get resources or some of the occupations since the economy is strong and there's a lot of construction progress going on across the country, largely in Wisconsin and other places also.

So it's been hard to ramp that up. We're beginning -- we've updated the forecast, trying to have that true transparency to the commission down there of the time line of that. But we're making really good progress. It's going to continue to ramp up and the plans in here ramp up to about $500 million a year spending starting in that '28 time frame as we continue to ramp. So making progress. It's been a little slower than what we'd like.

But we got to make sure we have the quality and the right resources to do it. And we've put in programs to help get new resources in by working with trade associations and other colleges and training to get more beginning workers up to speed to be able to help us on the program.

Operator

the final question will be from the line of Paul Patterson with Glenrock Association.

Paul Patterson

So my -- just to sort of follow up, and I apologize, but just trying to connect all the dots. The 1 gigawatt of demand and the $10 billion of CapEx incremental CapEx, the $10 billion, it sounds if I heard you guys correctly, the 1 gigawatt is not directly -- there's more than just the 1 gigawatt of demand because you're getting more demand that's not in the forecast period in 2032 and what have you. Am I thinking about that correctly?

Scott Lauber

So there's a combination. You have to -- we've got the -- we've got the 1 gigawatt of demand. That 1 gigawatt demand, we need to get about 1.4 gigawatts, 1.5 gigawatts to make sure we make the MISO requirement. So it's a little bit more to make sure we have the MISO requirements for that capacity need. We also have the transmission in there to serve this. That's up plus there's a little bit of long lead time equipment in addition to that, plus we have some distribution.

So significantly related to generation, but a lot of it's in or some of it is in transmission also and a little bit in this long lead time equipment. So kind of all of the above.

Paul Patterson

Okay. But most of that $10 billion is associated with VLCC customers.

Scott Lauber

That is right.

Paul Patterson

And could you guys just -- I saw the rate base pie charts and everything, but just in general, when we think about that incremental number, how much should we think about as roughly speaking, associated with the VLCC guys?

Scott Lauber

I think as you look about the $10 million increase, probably about $8 million plus is related to the VLTs. .

Liu Xia

And the entire 47.5% of the capital, about 45% is VLC. That's another way to look at it.

Paul Patterson

Of the total capital, not the incremental?

Liu Xia

Correct. .

Paul Patterson

Okay. And then when we -- and I think this question was answered, but you mentioned that really the OpEx differentials really have to do simply with Quip versus AFUDC. And there's no deposits or collateral or anything like that in that large CapEx, OpEx, excuse me, that large OpEx increase other than obviously some growth, but is that the way that might -- I understood that correctly?

Scott Lauber

So there is no like customer deposit or prepayment for that. It's all related to our current return on AFUDC. However, as you think of the credit requirements, we do if there's a credit requirement need, we do have letter of credits or whatever is required under the commission order to make sure we have the credit requirements met. So you got to think of 2 different ones. One is credit requirement and one is the cash flow to support it.

Liu Xia

And our credit department is just on the side for security, that's not part of our financials anywhere in the financials that we represent to you.

Paul Patterson

Awesome. And then I just noticed on the footnote on Page 20. Electric distribution includes $200 million in substations dedicated to VLCCs, a portion of which whatever. Is there any [ Kayak ] or anything in any of these things that we should be thinking about? Or is this pretty much minus any or contribution native construction or anything like that?

Scott Lauber

Yes. That's really just -- there's no contributions in that. That is just some miscellaneous distribution capital. We needed to serve some of the very large customers. That's dedicated We just want to make sure as you tie stuff out, you recognize that.

All right. Thank you. Well, thank you, everyone. That concludes our conference call today. Thank you for participating. If you have more questions, feel -- please feel free to contact [ Best Track ] at (414) 221-4639. Thank you. .

Operator

This concludes today's call. Thank you for attending. You may now disconnect.