--- ticker: WEC company: WEC Energy Group Inc. filing_type: 10-K year_current: 2025 year_prior: 2024 risks_added: 1 risks_removed: 0 risks_modified: 9 risks_unchanged: 21 source: SEC EDGAR url: https://riskdiff.com/wec/2025-vs-2024/ markdown_url: https://riskdiff.com/wec/2025-vs-2024/index.md generated: 2026-06-01 --- # WEC Energy Group Inc.: 10-K Risk Factor Changes 2025 vs 2024 > Source: U.S. Securities and Exchange Commission (EDGAR) > Generated: 2026-06-01 > All data extracted directly from official filings. No hallucinated content. ## Summary | Status | Count | |--------|-------| | New risks added | 1 | | Risks removed | 0 | | Risks modified | 9 | | Unchanged | 21 | --- ## New in Current Filing: Adoption of AI technologies could adversely affect our business, reputation, or financial results. We are using AI primarily through services provided by our third party vendors. In addition, we are exploring the use of AI, including generative AI, and its ability to enhance the services we offer. There are significant risks involved in developing and deploying AI, and there can be no assurance that the use of AI will enhance our services or be beneficial to our business, including with respect to the efficiency and resiliency of our systems. Our AI-related efforts may give rise to risks related to accuracy, bias, discrimination, intellectual property infringement or misappropriation, data privacy, and cybersecurity, among others. In addition, the adoption of AI may subject us to new or enhanced governmental or regulatory scrutiny, laws, rules, directives, or regulations governing the use of AI, as well as litigation, ethical concerns, negative customer perceptions as to automation and AI, legal liability or other complications that could adversely affect our business, reputation, or financial results. We may not be able to recover our investments in AI technology through our regulatory proceedings. Similarly, as AI continues to evolve, we may not be able to adopt and implement AI as quickly as our customers or communities desire or regulators may require. AI is a relatively new and rapidly evolving technology, and we are unable to predict all of the risks that may result from our and our vendors' adoption of AI initiatives. --- ## Modified: We are actively involved with multiple significant capital projects, which are subject to a number of risks and uncertainties that could adversely affect project costs and completion of construction projects. **Key changes:** - Reworded sentence: "We also expect to continue constructing and investing in renewable energy and natural gas generating facilities as part of our capital plan and our goal to be net carbon neutral by 2050." - Reworded sentence: "For example, the UFLPA's prohibition on imports of solar panels manufactured with certain silica-based products originating in Xinjiang, China, has and could delay the release of solar panels to us for our renewables projects." - Reworded sentence: "Efforts to pause approvals related to wind development could threaten our ability to execute our capital plan." - Reworded sentence: "We may not be allowed to recover these penalties and other costs incurred in customer rates, which could have a material adverse effect on our results of operations." **Prior (2024):** Our business requires substantial capital expenditures for investments in, among other things, capital improvements to our electric generating facilities, electric and natural gas distribution infrastructure, natural gas and LNG storage, and other projects, including projects for environmental compliance. We also expect to continue constructing and investing in renewable energy generating 2023 Form 10-K30WEC Energy Group, Inc. 2023 Form 10-K30WEC Energy Group, Inc. 2023 Form 10-K30WEC Energy Group, Inc. 30 Table of Contents Table of Contents facilities as part of the ESG Progress Plan and our goal to be net carbon neutral by 2050, including projects in our non-utility energy infrastructure segment. In addition, WBS continues to invest in technology and the development of software applications to support our businesses. Achieving the intended benefits of any large construction project is subject to many uncertainties, some of which we will have limited or no control over, that could adversely affect project costs and completion time. Supply chain disruptions, including solar panel shortages and delays, increasing material costs, government tariffs, and other factors, could impact the timing of completion of our renewable projects. For example, the UFLPA's prohibition on imports of solar panels manufactured with certain silica-based products originating in Xinjiang, China, has delayed the release of solar panels to us for our renewables projects. Additional risks include, but are not limited to, the ability to adhere to established budgets and time frames; the availability of labor or materials at estimated costs; the ability of contractors to perform under their contracts; strikes; adverse weather conditions; potential legal challenges; changes in applicable laws or regulations; rising interest rates; the impact of public health crises, including epidemics and pandemics; other governmental actions; continued public and policymaker support for such projects; and events in the global economy. Certain of these projects require the approval of our regulators. If construction of commission-approved projects should materially and adversely deviate from the schedules, estimates, and/or projections on which the approval was based, our regulators may deem the additional capital costs as imprudent and disallow recovery of them through rates, and otherwise available PTCs and ITCs for renewable energy projects could be lost or lose value. In addition, regulators, in a future rate proceeding, may alter the timing or amount of certain costs for which recovery is allowed, such as the case in the ICC's November 2023 rate orders for PGL and NSG. Our subsidiaries sometimes enter into equipment purchase orders and construction contracts and incur engineering and design service costs in advance of receiving necessary regulatory approvals and/or siting or environmental permits. If any of these projects are canceled for any reason, including failure to receive necessary regulatory approvals and/or siting or environmental permits, significant cancellation penalties under the equipment purchase orders and construction contracts could occur. In addition, if any construction work or investments have been recorded as an asset, an impairment may need to be recorded in the event the project is canceled. To the extent that delays occur, costs become unrecoverable, tax credits are lost or lose value, or we or third parties with whom we invest and/or partner otherwise become unable to effectively manage and complete capital projects, our results of operations, cash flows, and financial condition may be adversely affected. **Current (2025):** Our business requires substantial capital expenditures for investments in, among other things, capital improvements to our electric generating facilities, electric and natural gas distribution infrastructure, natural gas and LNG storage, and other projects, including projects for environmental compliance. We also expect to continue constructing and investing in renewable energy and natural gas generating facilities as part of our capital plan and our goal to be net carbon neutral by 2050. In addition, we continue to invest in technology and the development of software applications to support our businesses. Achieving the intended benefits of any large construction project is subject to many uncertainties, some of which we will have limited or no control over, that could adversely affect project costs and completion time. Supply chain disruptions, including solar panel shortages and delays, increasing material costs, government tariffs, and other factors, could impact the timing of completion of our renewable projects. For example, the UFLPA's prohibition on imports of solar panels manufactured with certain silica-based products originating in Xinjiang, China, has and could delay the release of solar panels to us for our renewables projects. Additional risks include, but are not limited to, the ability to adhere to established budgets and time frames; the availability of labor or materials at estimated costs; the ability of contractors to perform under their contracts; strikes; adverse weather conditions; potential legal challenges; changes in applicable laws or regulations; rising interest rates; inflation; tariffs; the impact of public health crises; other governmental actions; continued public and policymaker support for such projects; and events in the global economy. Certain of these projects require the approval of our regulators. If construction of commission-approved projects should materially and adversely deviate from the schedules, estimates, and/or projections on which the approval was based, our regulators may deem the additional capital costs as imprudent and disallow recovery of them through rates, and otherwise available PTCs and ITCs for renewable energy projects could be lost or lose value. Efforts to pause approvals related to wind development could threaten our ability to execute our capital plan. Other renewable energy sources, including solar developments, could also be at risk. In addition, regulators, in a future rate proceeding, may alter the timing or amount of certain costs for which recovery is allowed, such as was the case in the ICC's November 2023 rate orders for PGL and NSG. Our subsidiaries sometimes incur significant engineering, design, and equipment costs in advance of receiving necessary regulatory approvals and/or siting or environmental permits. If any of these projects are canceled for any reason, including failure to receive necessary regulatory approvals and/or siting or environmental permits, significant cancellation penalties under the equipment purchase orders and construction contracts could occur. We may not be allowed to recover these penalties and other costs incurred in customer rates, which could have a material adverse effect on our results of operations. In addition, if any construction work or investments have already been recorded as an asset, an impairment may need to be recorded. Despite mitigation efforts we have undertaken, we may still experience significant losses or delayed recovery of these costs. To the extent that delays occur, costs become unrecoverable, tax credits are lost or lose value, or we or third parties with whom we invest and/or partner otherwise become unable to effectively manage and complete capital projects, our results of operations, cash flows, and financial condition may be adversely affected. --- ## Modified: Our electric utilities could be subject to higher costs and penalties as a result of mandatory reliability standards. **Key changes:** - Reworded sentence: "Compliance with the mandatory reliability standards could subject our 2024 Form 10-K28WEC Energy Group, Inc." - Removed sentence: "2023 Form 10-K27WEC Energy Group, Inc." - Removed sentence: "2023 Form 10-K27WEC Energy Group, Inc." - Removed sentence: "2023 Form 10-K27WEC Energy Group, Inc." - Removed sentence: "27 Table of Contents Table of Contents" **Prior (2024):** Our electric utilities are subject to mandatory reliability and critical infrastructure protection standards established by the North American Electric Reliability Corporation and enforced by the FERC. The critical infrastructure protection standards focus on controlling access to critical physical and cybersecurity assets. Compliance with the mandatory reliability standards could subject our electric utilities to higher operating costs. If our electric utilities are found to be in noncompliance with the mandatory reliability standards, they could be subject to sanctions, including substantial monetary penalties, or damage to our reputation. 2023 Form 10-K27WEC Energy Group, Inc. 2023 Form 10-K27WEC Energy Group, Inc. 2023 Form 10-K27WEC Energy Group, Inc. 27 Table of Contents Table of Contents **Current (2025):** Our electric utilities are subject to mandatory reliability and critical infrastructure protection standards established by the North American Electric Reliability Corporation and enforced by the FERC. The critical infrastructure protection standards focus on controlling access to critical physical and cybersecurity assets. Compliance with the mandatory reliability standards could subject our 2024 Form 10-K28WEC Energy Group, Inc. 2024 Form 10-K28WEC Energy Group, Inc. 2024 Form 10-K28WEC Energy Group, Inc. 28 Table of Contents Table of Contents electric utilities to higher operating costs. If our electric utilities are found to be in noncompliance with the mandatory reliability standards, they could be subject to sanctions, including substantial monetary penalties, or damage to our reputation. --- ## Modified: Our business is significantly impacted by governmental regulation and oversight. **Key changes:** - Reworded sentence: "Many aspects of our operations are regulated and impacted by government regulation, including, but not limited to: the rates we charge our retail electric, natural gas, and steam customers; the authorized rates of return of our utilities; construction and operation of electric generating facilities and electric and natural gas distribution systems, including the ability to recover such costs; decommissioning generating facilities, the ability to recover the related costs, and continuing to recover the return on the net book value of these facilities; wholesale power service practices; electric reliability requirements; participation in the interstate natural gas pipeline capacity market; standards of service; issuance of securities; short-term debt obligations; transactions with affiliates; and billing practices." - Reworded sentence: "In its November 2023 final rate orders for PGL and NSG, the ICC disallowed certain previously incurred capital costs, which resulted in PGL and NSG recording impairment losses in the fourth quarter of 2023, and caused PGL to pause spending on its SMP." - Reworded sentence: "There can be no assurance that all costs incurred under the QIP rider during the open reconciliation years, which include 2017 through 2023, will be deemed recoverable by the ICC." **Prior (2024):** We are subject to significant state, local, and federal governmental regulations, including regulations by the various utility commissions in the states where we serve customers. These regulations significantly influence our operating environment, may affect our ability to recover costs from utility customers, affect our ability to implement our corporate strategy, and cause us to incur substantial compliance and other costs. Changes in regulations, interpretations of regulations, or the imposition of new regulations could also significantly impact us, including requiring us to change our business operations. Many aspects of our operations are regulated and impacted by government regulation, including, but not limited to: the rates we charge our retail electric, natural gas, and steam customers; the authorized rates of return of our utilities; construction and operation of electric generating facilities and electric and natural gas distribution systems, including the ability to recover such costs; decommissioning generating facilities, the ability to recover the related costs, and continuing to recover the return on the net book value of these facilities; wholesale power service practices; electric reliability requirements and accounting; participation in the interstate natural gas pipeline capacity market; standards of service; issuance of securities; short-term debt obligations; transactions with affiliates; and billing practices. Failure to comply with any applicable rules or regulations may lead to customer refunds, penalties, and other payments, which could materially and adversely affect our results of operations and financial condition. The rates, including adjustments determined under riders, we are allowed to charge our customers for retail and wholesale services have the most significant impact on our financial condition, results of operations, and liquidity. Rate regulation provides us an opportunity to recover prudently incurred costs and earn a reasonable rate of return on invested capital. However, our ability to obtain rate adjustments in the future is dependent upon regulatory action, the outcome of which can be influenced by the level of opposition by intervening parties; potential rate impacts; increasing levels of regulatory review; and changes in the political, regulatory, or legislative environments. There is no assurance that our regulators will consider all of our costs to have been prudently incurred. In addition, our rate proceedings may not always result in rates that fully recover our costs or provide for a reasonable ROE. We defer certain costs and revenues as regulatory assets and liabilities for future recovery from or refund to customers, as authorized by our regulators. Future recovery of regulatory assets is not assured and is subject to review and approval by our regulators. If recovery of regulatory assets is not approved or is no longer deemed probable, these costs would be recognized in current period expense and could have a material adverse impact on our results of operations, cash flows, and financial condition. Changes in the local and national political, regulatory, and economic environment have had, and may in the future have, an adverse effect on regulatory decisions, which could impair the ability of our utility subsidiaries to recover costs historically collected from customers. These decisions, which may come from any level of government, may cause us to cancel or delay current or planned projects, to reduce or delay other planned capital expenditures, or to pay for investments or otherwise incur costs that our utilities may not be able to recover through rates or otherwise. In November 2023, the ICC issued final rate orders for PGL and NSG, with PGL rates effective December 1, 2023. In the rate order, the ICC disallowed certain previously incurred capital costs in Illinois, which resulted in PGL and NSG recording an impairment loss in the fourth quarter of 2023. In addition, the ICC paused spending on PGL's SMP for at least one year, causing uncertainty of recovery of costs for existing and future projects. Due to the expiration of the QIP rider in December 2023, PGL had included the costs of necessary infrastructure improvements related to the SMP in its rate case. In January 2024, the ICC granted a rehearing to PGL and NSG with a limited scope. Disallowance of PGL's and NSG's capital costs will not be part of the rehearing. Subsequent to the rehearing, we anticipate appealing the ICC's disallowance of these capital costs to the Illinois Circuit Court, which may result in extended uncertainty related to the recovery of existing and future investments in capital expenditures and our natural gas infrastructure in Illinois, and may impact future capital plans. Prior to its expiration, the QIP rider provided PGL with recovery of, and a return on, qualifying natural gas infrastructure investments that are placed in service between regulatory rate reviews. This rider continues to be subject to an annual reconciliation whereby costs are reviewed for accuracy and prudency. There can be no assurance that all costs incurred under the QIP rider during the open reconciliation years, which include 2016 through 2023, will be deemed recoverable by the ICC. Regulatory lag, as well as the risk of costs being deemed unrecoverable during the review of the outstanding reconciliations, could have a material adverse impact on PGL's, and correspondingly our, results of operations, financial position, and liquidity. 2023 Form 10-K24WEC Energy Group, Inc. 2023 Form 10-K24WEC Energy Group, Inc. 2023 Form 10-K24WEC Energy Group, Inc. 24 Table of Contents Table of Contents We believe we have obtained the necessary permits, approvals, authorizations, certificates, and licenses for our existing operations, have complied in all material respects with all of their associated terms, and that our businesses are conducted in accordance with applicable laws. These permits, approvals, authorizations, certificates, and licenses may be revoked or modified by the agencies that granted them if facts develop that differ significantly from the facts assumed when they were issued. In addition, permits and other approvals and licenses are often granted for a term that is less than the expected life of the associated facility. Licenses and permits may require periodic renewal, which may result in additional requirements being imposed by the granting agency. In addition, existing regulations may be revised or reinterpreted by federal, state, and local agencies, or these agencies may adopt new laws and regulations that apply to us. We cannot predict the impact on our business and operating results of any such actions by these agencies. If we are unable to recover costs of complying with regulations or other associated costs in customer rates in a timely manner, or if we are unable to obtain, renew, or comply with these governmental permits, approvals, authorizations, certificates, or licenses, our results of operations and financial condition could be materially and adversely affected. **Current (2025):** We are subject to significant state, local, and federal governmental regulations, including regulations by the various utility commissions in the states where we serve customers. These regulations significantly influence our operating environment, may affect our ability to recover costs from utility customers, affect our ability to implement our corporate strategy, and cause us to incur substantial compliance and other costs. Changes in regulations, interpretations of regulations, or the imposition of new regulations could also significantly impact us, including requiring us to change our business operations. Many aspects of our operations are regulated and impacted by government regulation, including, but not limited to: the rates we charge our retail electric, natural gas, and steam customers; the authorized rates of return of our utilities; construction and operation of electric generating facilities and electric and natural gas distribution systems, including the ability to recover such costs; decommissioning generating facilities, the ability to recover the related costs, and continuing to recover the return on the net book value of these facilities; wholesale power service practices; electric reliability requirements; participation in the interstate natural gas pipeline capacity market; standards of service; issuance of securities; short-term debt obligations; transactions with affiliates; and billing practices. Failure to comply with any applicable rules or regulations may lead to customer refunds, penalties, and other payments, which could materially and adversely affect our results of operations and financial condition. The rates, including adjustments determined under riders, we are allowed to charge our customers for retail and wholesale services have the most significant impact on our financial condition, results of operations, and liquidity. Rate regulation provides us an opportunity to recover prudently incurred costs and earn a reasonable rate of return on invested capital. However, our ability to obtain rate adjustments in the future is dependent upon regulatory action, the outcome of which can be influenced by the level of opposition by intervening parties; potential rate impacts; increasing levels of regulatory review; and changes in the political, regulatory, or legislative environments. There is no assurance that our regulators will consider all of our costs to have been prudently incurred. In addition, our rate proceedings may not always result in rates that fully recover our costs or provide for a reasonable ROE. We defer certain costs and revenues as regulatory assets and liabilities for future recovery from or refund to customers, as authorized by our regulators. Future recovery of regulatory assets is not assured and is subject to review and approval by our regulators. If recovery of regulatory assets is not approved or is no longer deemed probable, these costs would be recognized in current period expense and could have a material adverse impact on our results of operations, cash flows, and financial condition. Changes in the local and national political, regulatory, and economic environment have had, and may in the future have, an adverse effect on regulatory decisions, which could impair the ability of our utility subsidiaries to recover costs historically collected from customers. These decisions, which may come from any level of government, may cause us to cancel or delay current or planned projects, to reduce or delay other planned capital expenditures, or to pay for investments or otherwise incur costs that our utilities may not be able to recover through rates or otherwise. In its November 2023 final rate orders for PGL and NSG, the ICC disallowed certain previously incurred capital costs, which resulted in PGL and NSG recording impairment losses in the fourth quarter of 2023, and caused PGL to pause spending on its SMP. After a limited rehearing, the ICC issued a written order in May 2024 approving additional spending for emergency work related to SMP projects. PGL and NSG have appealed the orders to the Illinois Appellate Court. On February 20, 2025, the ICC issued an order setting expectations for PGL's prospective operations under its SMP. The ICC directed us to focus on replacing all cast and ductile iron pipe that has a diameter under 36 inches by January 1, 2035. The ICC also indicated that failure to comply with this directive could subject us to civil penalties under Illinois statute. As a result of these proceedings and order, the recovery of existing and future investments in capital expenditures and our natural gas infrastructure in Illinois is uncertain and future capital plans may be impacted. Prior to its expiration in December 2023, the QIP rider provided PGL with recovery of, and a return on, qualifying natural gas infrastructure investments that were placed in service between regulatory rate reviews. Due to the expiration of the QIP rider, PGL included the costs of necessary infrastructure improvements related to the SMP in its rate case, thereby subjecting the recovery of these costs to regulatory lag. In its August 2024 final order on PGL's 2016 annual reconciliation, the ICC disallowed certain capital costs, which resulted in PGL recording a pre-tax charge to income during the third quarter of 2024 related to the disallowance and the previously recognized return on these investments. This rider continues to be subject to an annual reconciliation whereby costs are reviewed for accuracy and prudency. There can be no assurance that all costs incurred under the QIP rider during the open reconciliation years, which include 2017 through 2023, will be deemed recoverable by the ICC. The risk of costs being deemed 2024 Form 10-K25WEC Energy Group, Inc. 2024 Form 10-K25WEC Energy Group, Inc. 2024 Form 10-K25WEC Energy Group, Inc. 25 Table of Contents Table of Contents unrecoverable during the review of the outstanding reconciliations, could have a material adverse impact on PGL's, and correspondingly our, results of operations, financial position, and liquidity. We believe we have obtained the necessary permits, approvals, authorizations, certificates, and licenses for our existing operations, have complied in all material respects with all of their associated terms, and that our businesses are conducted in accordance with applicable laws. These permits, approvals, authorizations, certificates, and licenses may be revoked or modified by the agencies that granted them if facts develop that differ significantly from the facts assumed when they were issued. In addition, permits and other approvals and licenses are often granted for a term that is less than the expected life of the associated facility. Licenses and permits may require periodic renewal, which may result in additional requirements being imposed by the granting agency. In addition, existing regulations may be revised or reinterpreted by federal, state, and local agencies, or these agencies may adopt new laws and regulations that apply to us. We cannot predict the impact on our business and operating results of any such actions by these agencies. If we are unable to recover costs of complying with regulations or other associated costs in customer rates in a timely manner, or if we are unable to obtain, renew, or comply with these governmental permits, approvals, authorizations, certificates, or licenses, our results of operations and financial condition could be materially and adversely affected. --- ## Modified: Our operations, capital expenditures, and financial results may be affected by the impact of greenhouse gas legislation, regulation, and emission reduction goals. **Key changes:** - Reworded sentence: "There has been significant attention to issues concerning climate change as well as activism from certain stakeholders, including institutional investors and other sources of financing, to accelerate the transition to lower and limit GHG emissions." - Removed sentence: "In addition, there is increasing activism from other stakeholders, including institutional investors and other sources of financing, to accelerate the transition to lower GHG emissions." - Reworded sentence: "New or additional GHG regulations, at either the federal or state level, may cause our environmental compliance spending to differ materially from the amounts currently estimated." - Reworded sentence: "These regulations, as well as changes in the fuel markets and advances in technology, could make additional electric generating units uneconomic to maintain or operate, may impact how we operate our existing fossil-fueled power plants and biomass facility, and could cause us to retire and replace units earlier than planned under our capital plan, which could lead to a possible loss on abandonment and reduced revenues." - Reworded sentence: "For example, the ICC is exploring the role of natural gas in the future and issues related to decarbonization of the natural gas distribution system in Illinois." **Prior (2024):** There is significant attention to issues concerning climate change. Management expects this attention to continue since climate change is one of President Biden's primary initiatives, with significant actions being taken by his administration. As a result, we expect the EPA and states to finalize and implement additional regulations to restrict emissions of GHGs. There have also been increasing efforts to introduce and adopt electrification initiatives and/or mandates and other efforts to reduce or eliminate reliance on natural gas as an energy source. In addition, there is increasing activism from other stakeholders, including institutional investors and other sources of financing, to accelerate the transition to lower GHG emissions. Costs associated with such legislation, regulation, and emission reduction goals could be significant within our electric and natural gas operations. GHG regulations that may be finalized in the future, at either the federal or state level, may cause our environmental compliance spending to differ materially from the amounts currently estimated. There is no guarantee that we will be allowed to fully recover costs incurred to comply with these and other federal and state regulations or that cost recovery will not be delayed or otherwise conditioned. These regulations, as well as changes in the fuel markets and advances in technology, could make additional electric generating units uneconomic to maintain or operate, may impact how we operate our existing fossil-fueled power plants and biomass facility, and could cause us to retire and replace units earlier than planned under the ESG Progress Plan, which could lead to a possible loss on abandonment and reduced revenues. In addition, our natural gas delivery systems and natural gas storage fields may generate fugitive gas as a result of normal operations and as a result of excavation, construction, and repair. Fugitive gas typically vents to the atmosphere and consists primarily of methane. CO2 is also a byproduct of natural gas consumption. In a movement toward electrification, certain states and municipalities near or in our service territories have passed legislation or are considering ordinances banning natural gas used in new construction in order to limit GHG emissions. For example, the city of Chicago is considering an ordinance that would ban the use of natural gas in most new buildings, and the ICC is exploring the role of natural gas in the future and issues related to decarbonization of the natural gas distribution system in Illinois. There have also been efforts to restrict residential natural gas-fired appliances. Future local, statewide, or nationwide actions like these to regulate GHG emissions could increase the price of natural gas, reduce the demand for natural gas, cause us to accelerate the replacement and/or updating of our natural gas delivery systems, and adversely affect our ability to operate our natural gas facilities. A significant increase in the price of natural gas may increase rates for our natural gas customers, which could also reduce natural gas demand and revenues. The adoption of electrification initiatives and/or mandates could also result in an increase in electrical demand and increased investment costs for existing or new electrical systems. These types of initiatives and/or mandates could result in increased costs associated with permitting and siting of new technologies and delayed installation and start-up timelines. In addition, financial investments in older carbon intensive technologies may not be fully realized. We have set goals to achieve reductions in carbon emissions from our electric generation fleet by 60% by the end of 2025 and by 80% by the end of 2030, both from a 2005 baseline. Over the longer term, the target for our generation fleet is to be net carbon neutral by 2050. We also believe we will be in a position to eliminate coal as an energy source by the end of 2032. We continue to monitor the financial and operational feasibility of taking more aggressive action to further reduce GHG emissions in order to limit future global temperature increases. We continue to reduce methane emissions by improving our natural gas 2023 Form 10-K26WEC Energy Group, Inc. 2023 Form 10-K26WEC Energy Group, Inc. 2023 Form 10-K26WEC Energy Group, Inc. 26 Table of Contents Table of Contents distribution systems. We set a target across our natural gas distribution operations to achieve net-zero methane emissions by the end of 2030. The ability to achieve these reductions in CO2 and methane emissions depends on many external factors, including the ability to make operating refinements, the retirement of less efficient generating units, the development of relevant energy technologies, the use of RNG throughout our natural gas utility systems, and the ability to execute our capital plan. These efforts could impact how we operate our electric generating units and natural gas facilities and lead to increased competition and regulation, all of which could have a material adverse effect on our operations and financial condition. **Current (2025):** There has been significant attention to issues concerning climate change as well as activism from certain stakeholders, including institutional investors and other sources of financing, to accelerate the transition to lower and limit GHG emissions. The EPA and some states have adopted and are implementing regulations to restrict emissions of GHGs. There have also been increasing efforts to introduce and adopt electrification initiatives and/or mandates and other efforts to reduce or eliminate reliance on natural gas as an energy source. Costs associated with such legislation, regulation, and emission reduction goals could be significant within our electric and natural gas operations. New or additional GHG regulations, at either the federal or state level, may cause our environmental compliance spending to differ materially from the amounts currently estimated. There is no guarantee that we will be allowed to fully recover costs incurred to comply with these and other federal and state regulations or that cost recovery will not be delayed or otherwise conditioned. These regulations, as well as changes in the fuel markets and advances in technology, could make additional electric generating units uneconomic to maintain or operate, may impact how we operate our existing fossil-fueled power plants and biomass facility, and could cause us to retire and replace units earlier than planned under our capital plan, which could lead to a possible loss on abandonment and reduced revenues. In a movement toward electrification, certain states and municipalities near or in our service territories have passed legislation or are considering ordinances banning natural gas used in new construction in order to limit GHG emissions. For example, the ICC is exploring the role of natural gas in the future and issues related to decarbonization of the natural gas distribution system in Illinois. There have also been efforts to restrict residential natural gas-fired appliances. Future local, statewide, or nationwide actions like these to regulate GHG emissions could increase the price of natural gas, reduce the demand for natural gas, cause us to accelerate the replacement and/or updating of our natural gas delivery systems, and adversely affect our ability to operate our natural gas facilities. A significant increase in the price of natural gas may increase rates for our natural gas customers, which could also reduce natural gas demand and revenues. The adoption of electrification initiatives and/or mandates could also result in an increase in electrical demand and increased investment costs for existing or new electrical systems. These types of initiatives and/or mandates could result in increased costs associated with permitting and siting of new technologies and delayed installation and start-up timelines. In addition, financial investments in older carbon intensive technologies may not be fully realized. We have set goals to achieve reductions in carbon emissions from our electric generation fleet by 60% by the end of 2025 and by 80% by the end of 2030, both from a 2005 baseline. Over the longer term, the target for our generation fleet is to be net carbon neutral by 2050. We have a goal to eliminate coal as an energy source by the end of 2032. 2024 Form 10-K27WEC Energy Group, Inc. 2024 Form 10-K27WEC Energy Group, Inc. 2024 Form 10-K27WEC Energy Group, Inc. 27 Table of Contents Table of Contents We continue to monitor the financial and operational feasibility of taking more aggressive action to further reduce GHG emissions in order to limit future global temperature increases. We continue to focus on methane emission reductions by improving our natural gas distribution systems. We set a target across our natural gas distribution operations to achieve net-zero methane emissions by the end of 2030. The ability to achieve these reductions in CO2 and methane emissions depends on many external factors, including the ability to make operating refinements, the retirement of less efficient generating units, the development of relevant energy technologies, the use of RNG throughout our natural gas utility systems, the ability to procure RTCs, legislative and regulatory support for renewable generation, the ability to maintain reliability with demand growth, and the ability to execute our capital plan. These efforts could impact how we operate our electric generating units and natural gas facilities and lead to increased competition and regulation, all of which could have a material adverse effect on our operations and financial condition. There can be no guarantee that we will achieve our targets. --- ## Modified: We face significant costs to comply with existing and future environmental laws and regulations. **Key changes:** - Reworded sentence: "The EPA has recently adopted and implemented new environmental regulations, which include regulations that govern the emission of NOx, ozone, fine particulates, and other air pollutants under the CAA through the NAAQS, climate change, other air quality regulations, and water quality regulations." - Reworded sentence: "As part of our commitment to a cleaner energy future, we have already retired nearly 2,500 MWs of fossil-fueled generation since the beginning of 2018." - Reworded sentence: "We accrue liabilities and defer 2024 Form 10-K26WEC Energy Group, Inc." - Reworded sentence: "Litigation over environmental issues and claims of various types, including property damage, personal injury, common law nuisance, and citizen enforcement of environmental laws and regulations, occurs frequently throughout the United States." **Prior (2024):** Our operations are subject to extensive and evolving federal, state, and local environmental laws, regulations, and permit requirements related to, among other things, air emissions (including, but not limited to: CO2, methane, mercury, SO2, and NOx), protection of natural resources, water quality, wastewater discharges, and management of hazardous and toxic substances and solid wastes and soils. The EPA has recently adopted and implemented (or is in the process of implementing) new environmental regulations, with more in the proposal process. These include regulations that govern the emission of NOx, ozone, fine particulates, and other air pollutants under the CAA through the NAAQS, climate change, NSPS for GHG emissions from new, modified, and reconstructed fossil-fueled power plants, other air quality regulations, and water quality regulations. For example, the EPA finalized regulations under the CWA that govern cooling water intake structures at our power plants, revised again the effluent guidelines for steam electric generating plants, and along with the Army Corps, released a final rule revising the definition of WOTUS that may impact projects requiring federal permits. Several of these rules were challenged or reviewed by agencies under the Biden Administration's Executive Order 13990, which creates additional uncertainty. As a result of these challenges and reviews, existing environmental laws and regulations may be revised or new laws or regulations may be adopted at the federal, state, or local level. We incur significant capital and operating resources to comply with environmental laws, regulations, and requirements, including costs associated with the installation of pollution control equipment; operating restrictions on our facilities; and environmental monitoring, emissions fees, and permits at our facilities. The operation of emission control equipment and compliance with rules regulating our intake and discharge of water could also increase our operating costs and reduce the generating capacity of our power plants. These regulations may create substantial additional costs in the form of taxes or emission allowances and could affect the availability and/or cost of fossil fuels and our ability to continue operating certain generating units. Failure to comply with these laws, regulations, and requirements, even if caused by factors beyond our control, may result in the assessment of civil or criminal penalties and fines. We continue to assess the potential cost of complying, and to explore different alternatives in order to comply, with these and other environmental regulations. As a result of these compliance costs and other factors, certain of our coal-fired electric generating facilities have become uneconomical to maintain and operate, which has resulted in these units being retired or converted to an alternative type of fuel. As part of our commitment to a cleaner energy future, we have already retired more than 1,900 MWs of coal-fired generation since the beginning of 2018. We expect to retire approximately 1,800 MWs of additional fossil-fueled generation by the end of 2031, and plan to replace a portion of the retired capacity by building and owning zero-carbon-emitting renewable generation facilities. We continue to evaluate the conversion of certain coal units to natural gas. Our electric and natural gas utilities are also subject to significant liabilities related to the investigation and remediation of environmental impacts at certain of our current and former facilities and at third-party owned sites. We accrue liabilities and defer costs (recorded as regulatory assets) incurred in connection with our former manufactured gas plant sites. These costs include all costs incurred to date that we expect to recover, management's best estimates of future costs for investigation and remediation and related legal expenses, and are net of amounts recovered (or that may be recovered) from insurance or other third parties. Due to the potential for the imposition of stricter standards and greater regulation in the future, the possibility that other potentially responsible parties may not be willing or financially able to contribute to cleanup costs, a change in conditions or the discovery of additional contamination, our remediation costs could increase, and the timing of our capital and/or operating expenditures in the future may accelerate or could vary from the amounts currently accrued. 2023 Form 10-K25WEC Energy Group, Inc. 2023 Form 10-K25WEC Energy Group, Inc. 2023 Form 10-K25WEC Energy Group, Inc. 25 Table of Contents Table of Contents Litigation over environmental issues and claims of various types, including property damage, personal injury, common law nuisance, and citizen enforcement of environmental laws and regulations, occurs frequently throughout the United States. This litigation has included claims for damages alleged to have been caused by GHG and other emissions and exposure to regulated substances and/or requests for injunctive relief in connection with such matters. In addition to claims relating to our current facilities, we may also be subject to potential liability in connection with the environmental condition of facilities that we previously owned and operated, regardless of whether the liabilities arose before, during, or after the time we owned or operated these facilities. If we fail to comply with environmental laws and regulations or cause (or caused) harm to the environment or persons, that failure or harm may result in the assessment of civil penalties and damages against us. The incurrence of a material environmental liability or a material judgment in any action for personal injury or property damage related to environmental matters could have a material adverse effect on our results of operations and financial condition. In the event we are not able to recover all of our environmental expenditures and related costs from our customers in the future, our results of operations and financial condition could be adversely affected. Further, increased costs recovered through rates could contribute to reduced demand for electricity and natural gas, which could adversely affect our results of operations, cash flows, and financial condition. **Current (2025):** Our operations are subject to extensive and evolving federal, state, and local environmental laws, regulations, and permit requirements related to, among other things, air emissions (including, but not limited to: CO2, methane, mercury, SO2, and NOx), protection of natural resources, water quality, wastewater discharges, and management of hazardous and toxic substances and solid wastes and soils. The EPA has recently adopted and implemented new environmental regulations, which include regulations that govern the emission of NOx, ozone, fine particulates, and other air pollutants under the CAA through the NAAQS, climate change, other air quality regulations, and water quality regulations. For example, in 2024, the EPA revised the effluent guidelines for steam electric generating plants, published a final rule lowering the PM limit under the MATS, lowered the primary (health-based) annual PM 2.5 NAAQS, published the Greenhouse Gas Power Plant Rule for fossil-fired steam generating units, issued a final Mandatory Greenhouse Gas Reporting Rule, and finalized a rule for CCR that applies to landfills, historic fill sites, and projects where CCR was placed at a power plant site. Some of these rules could be challenged or reviewed by agencies under the new presidential administration, which creates additional uncertainty. As a result of these potential challenges and reviews, existing environmental laws and regulations may be revised or new laws or regulations may be adopted at the federal, state, or local level. Certain of our service territories in Wisconsin are located in areas determined to be in "serious" nonattainment status under the EPA's ozone standard. This nonattainment status could affect future permitting activities for our facilities, including additional costs associated with more strenuous emission control requirements or the need to purchase emission reduction credits. In addition, economic growth in these areas may be constrained by the inability to obtain the required permits, limiting investment and expansion over the coming years, including our ability to execute on our capital plan. We incur significant capital and operating resources to comply with environmental laws, regulations, and requirements, including costs associated with the installation of pollution control equipment; operating restrictions on our facilities; and environmental monitoring, emissions fees, and permits at our facilities. The operation of emission control equipment and compliance with rules regulating our intake and discharge of water could also increase our operating costs and reduce the generating capacity of our power plants. These regulations may create substantial additional costs in the form of taxes or emission allowances and could affect the availability and/or cost of fossil fuels and our ability to continue operating certain generating units. Failure to comply with these laws, regulations, and requirements, even if caused by factors beyond our control, may result in the assessment of civil or criminal penalties and fines. We continue to assess the potential cost of complying, and to explore different alternatives in order to comply, with these and other environmental regulations. As a result of these compliance costs and other factors, certain of our coal-fired electric generating facilities have become uneconomical to maintain and operate, which has resulted in these units being retired or converted to an alternative type of fuel. As part of our commitment to a cleaner energy future, we have already retired nearly 2,500 MWs of fossil-fueled generation since the beginning of 2018. We expect to retire approximately 1,200 MWs of additional coal-fired generation by the end of 2031, and plan to replace a portion of the retired capacity by building and owning zero-carbon-emitting renewable and reliable, efficient natural gas generation facilities. We have also started implementing co-firing with natural gas at certain of our coal-fired units and are evaluating the conversion to natural gas. Our electric and natural gas utilities are also subject to significant liabilities related to the investigation and remediation of environmental impacts at certain of our current and former facilities and at third-party owned sites. We accrue liabilities and defer 2024 Form 10-K26WEC Energy Group, Inc. 2024 Form 10-K26WEC Energy Group, Inc. 2024 Form 10-K26WEC Energy Group, Inc. 26 Table of Contents Table of Contents costs (recorded as regulatory assets) incurred in connection with our former manufactured gas plant sites. These costs include all costs incurred to date that we expect to recover, management's best estimates of future costs for investigation and remediation and related legal expenses, and are net of amounts recovered (or that may be recovered) from insurance or other third parties. Due to the potential for the imposition of stricter standards and greater regulation in the future, the possibility that other potentially responsible parties may not be willing or financially able to contribute to cleanup costs, a change in conditions or the discovery of additional contamination, our remediation costs could increase, and the timing of our capital and/or operating expenditures in the future may accelerate or could vary from the amounts currently accrued. Litigation over environmental issues and claims of various types, including property damage, personal injury, common law nuisance, and citizen enforcement of environmental laws and regulations, occurs frequently throughout the United States. This litigation has included claims for damages alleged to have been caused by GHG and other emissions and exposure to regulated substances and/or requests for injunctive relief in connection with such matters. In addition to claims relating to our current facilities, we may also be subject to potential liability in connection with the environmental condition of facilities that we previously owned and operated, regardless of whether the liabilities arose before, during, or after the time we owned or operated these facilities. If we fail to comply with environmental laws and regulations or cause (or caused) harm to the environment or persons, that failure or harm may result in the assessment of civil penalties and damages against us. The incurrence of a material environmental liability or a material judgment in any action for personal injury or property damage related to environmental matters could have a material adverse effect on our results of operations and financial condition. In the event we are not able to recover all of our environmental expenditures and related costs from our customers in the future, our results of operations and financial condition could be adversely affected. Further, increased costs recovered through rates could contribute to reduced demand for electricity and natural gas, which could adversely affect our results of operations, cash flows, and financial condition. --- ## Modified: Our operations and corporate strategy may be adversely affected by supply chain disruptions and inflation. **Key changes:** - Reworded sentence: "Protracted, expanding or escalating regional or international conflicts, including the conflicts involving Ukraine, Israel, and parts of the Middle East, as well as strained relationships between the United States and other countries related to such conflicts, could result in domestic and global supply chain disruptions that delay the delivery, or result in shortages of, materials, equipment, and other resources that are critical to our business operations." - Reworded sentence: "Moreover, prices of equipment, materials, and other resources have increased as a result of supply chain disruptions and may continue to increase in the future, as a result of inflation." - Added sentence: "In addition, the imposition of new tariffs, or other changes in United States trade policy, could trigger retaliatory actions by affected countries." - Added sentence: "A "trade war" of this nature or other governmental action related to tariffs or international trade agreements or policies has the potential to result in or exacerbate global supply chain disruptions and/or inflation, which could result in an adverse impact on our business operations, financial condition, and/or capital plan." - Added sentence: "2024 Form 10-K31WEC Energy Group, Inc." **Prior (2024):** Our business is dependent on the global supply chain to ensure that equipment, materials, and other resources are available to both expand and maintain services in a safe and reliable manner. Protracted, expanding or escalating regional conflicts, including the conflicts in Ukraine, Israel, and parts of the Middle East, as well as strained relationships between the United States and other countries related to such conflicts, could further contribute to current domestic and global supply chain disruptions that are delaying the delivery, and in some cases resulting in shortages of, materials, equipment, and other resources that are critical to our business operations. Failure to eliminate or manage the constraints in the supply chain may eventually impact the availability of items that are necessary to support normal operations as well as materials that are required to implement our corporate strategy for continued utility and infrastructure growth, including our renewable energy projects. Moreover, prices of equipment, materials, and other resources have increased as a result of these supply chain disruptions and may continue to increase in the future, as a result of inflation. Increases in inflation raise our costs for labor, materials, and services, and failure to secure these resources on economically acceptable terms, as well as any regulatory delay in adjusting rates to account for increased costs, may adversely impact our financial condition and results of operations. **Current (2025):** Our business is dependent on the global supply chain to ensure that equipment, materials, and other resources are available to both expand and maintain services in a safe and reliable manner. Protracted, expanding or escalating regional or international conflicts, including the conflicts involving Ukraine, Israel, and parts of the Middle East, as well as strained relationships between the United States and other countries related to such conflicts, could result in domestic and global supply chain disruptions that delay the delivery, or result in shortages of, materials, equipment, and other resources that are critical to our business operations. Failure to eliminate or manage the constraints in the supply chain may eventually impact the availability of items that are necessary to support normal operations as well as materials that are required to implement our corporate strategy for continued utility and infrastructure growth, including our renewable energy projects. Moreover, prices of equipment, materials, and other resources have increased as a result of supply chain disruptions and may continue to increase in the future, as a result of inflation. Increases in inflation raise our costs for labor, materials, and services, and failure to secure these resources on economically acceptable terms, as well as any regulatory delay in adjusting rates to account for increased costs, may adversely impact our financial condition and results of operations. In addition, the imposition of new tariffs, or other changes in United States trade policy, could trigger retaliatory actions by affected countries. A "trade war" of this nature or other governmental action related to tariffs or international trade agreements or policies has the potential to result in or exacerbate global supply chain disruptions and/or inflation, which could result in an adverse impact on our business operations, financial condition, and/or capital plan. 2024 Form 10-K31WEC Energy Group, Inc. 2024 Form 10-K31WEC Energy Group, Inc. 2024 Form 10-K31WEC Energy Group, Inc. 31 Table of Contents Table of Contents --- ## Modified: We generate and distribute electricity and transport, distribute, and store natural gas, which involves numerous risks that may result in accidents and other operating risks and costs. **Key changes:** - Reworded sentence: "Inherent in electric generation and distribution and natural gas transportation, distribution, and storage activities are a variety of hazards and operational risks, such as leaks, accidental explosions, mechanical problems, fires, discharges or releases of toxic or hazardous substances or gases, and other environmental risks, which could materially and adversely affect our results of operations, financial condition, and cash flows." - Reworded sentence: "The location of natural gas pipelines and storage facilities near populated areas could increase the level of damages resulting from these risks." - Reworded sentence: "Further, delays in the replacement of aging infrastructure as a result of the ICC's orders in the 2023 PGL and NSG rate cases, as well as the ICC's decision in PGL's 2016 QIP rider reconciliation proceeding, may lead to increased costs and disruptions in operations that could also negatively impact our financial results." **Prior (2024):** Inherent in natural gas distribution and storage activities are a variety of hazards and operational risks, such as leaks, accidental explosions, and mechanical problems, which could materially and adversely affect our results of operations, financial condition, and cash flows. In addition, these risks could result in serious injury to employees and non-employees, loss of human life, significant damage to property, environmental pollution, impairment of operations, and substantial losses to us. The location of natural gas pipelines and storage facilities near populated areas, including residential areas, commercial business centers, and industrial sites, could increase the level of damages resulting from these risks. These activities may subject us to litigation and/or administrative proceedings from time to time, which could result in substantial monetary judgments, fines, or penalties against us, or be resolved on unfavorable terms. Further, delays in the replacement of aging infrastructure as a result of the ICC's orders in the PGL and NSG rate cases may lead to increased costs and disruptions in operations that could also negatively impact our financial results. **Current (2025):** Inherent in electric generation and distribution and natural gas transportation, distribution, and storage activities are a variety of hazards and operational risks, such as leaks, accidental explosions, mechanical problems, fires, discharges or releases of toxic or hazardous substances or gases, and other environmental risks, which could materially and adversely affect our results of operations, financial condition, and cash flows. In addition, these risks could result in serious injury to employees and non-employees, loss of human life, significant damage to property, environmental pollution, impairment of operations, and substantial losses to us. The location of natural gas pipelines and storage facilities near populated areas could increase the level of damages resulting from these risks. These activities may subject us to litigation and/or administrative proceedings from time to time, which could result in substantial monetary judgments, fines, or penalties against us, or be resolved on unfavorable terms. Further, delays in the replacement of aging infrastructure as a result of the ICC's orders in the 2023 PGL and NSG rate cases, as well as the ICC's decision in PGL's 2016 QIP rider reconciliation proceeding, may lead to increased costs and disruptions in operations that could also negatively impact our financial results. --- ## Modified: The fluctuation in demand for certain commodities and their respective prices could negatively impact our operations. **Key changes:** - Added sentence: "Our electric utilities also burn coal at certain of their electric generation facilities." - Added sentence: "We may be obligated to pay for coal deliveries under our contracts even if our coal-fired generating facilities do not operate enough to fully utilize the amounts of coal covered by the contracts." - Reworded sentence: "Changes in the demand for commodities and their respective prices could result in: •Higher working capital requirements, particularly related to natural gas inventory, accounts receivable, and cash collateral postings; 2024 Form 10-K37WEC Energy Group, Inc." **Prior (2024):** Our operating and liquidity requirements are impacted by changes in the forward and current market prices of natural gas, coal, electricity, renewable energy credits, and ancillary services. Our electric utilities burn natural gas in several of their electric generation plants and as a supplemental fuel at several coal-fired plants. In many instances the cost of purchased power is tied to the cost of natural gas. The cost of natural gas may increase because of disruptions in the supply of natural gas due to a curtailment in production or distribution, international market conditions, the demand for natural gas, and the availability of shale gas and potential regulations and/or other government action affecting its accessibility. For Wisconsin retail electric customers, our utilities bear the risk for the recovery of fuel and purchased power costs within a symmetrical 2% fuel tolerance band compared to the forecast of fuel and purchased power costs established in their respective rate structures. Prudently incurred fuel and purchased power costs are recovered dollar-for-dollar from our Michigan retail electric customers and our wholesale electric customers. Our natural gas utilities receive dollar-for-dollar recovery of prudently incurred natural gas costs from their natural gas customers. Changes in commodity prices could result in: •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 higher 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; •Reduced growth prospects from renewable energy projects related to lower cost alternative energy sources and a limited number of purchasers of electricity; and •Shutting down of generation facilities if the cost of generation exceeds the market price for electricity. **Current (2025):** Our operating and liquidity requirements are impacted by changes in the forward and current market prices of natural gas, coal, electricity, renewable energy credits, and ancillary services. Our electric utilities burn natural gas in several of their electric generation plants and as a supplemental fuel at several coal-fired plants. In many instances the cost of purchased power is tied to the cost of natural gas. The cost of natural gas may increase because of disruptions in the supply of natural gas due to a curtailment in production or distribution, international market conditions, the demand for natural gas, and the availability of shale gas and potential regulations and/or other government action affecting its accessibility. Our electric utilities also burn coal at certain of their electric generation facilities. We may be obligated to pay for coal deliveries under our contracts even if our coal-fired generating facilities do not operate enough to fully utilize the amounts of coal covered by the contracts. For Wisconsin retail electric customers, our utilities bear the risk for the recovery of fuel and purchased power costs within a symmetrical 2% fuel tolerance band compared to the forecast of fuel and purchased power costs established in their respective rate structures. Prudently incurred fuel and purchased power costs are recovered dollar-for-dollar from our Michigan retail electric customers and our wholesale electric customers. Our natural gas utilities receive dollar-for-dollar recovery of prudently incurred natural gas costs from their natural gas customers. Changes in the demand for commodities and their respective prices could result in: •Higher working capital requirements, particularly related to natural gas inventory, accounts receivable, and cash collateral postings; 2024 Form 10-K37WEC Energy Group, Inc. 2024 Form 10-K37WEC Energy Group, Inc. 2024 Form 10-K37WEC Energy Group, Inc. 37 Table of Contents Table of Contents •Reduced profitability to the extent that lower revenues, higher fuel costs, increased bad debt, and higher 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; •Reduced growth prospects from renewable energy projects related to lower cost alternative energy sources and a limited number of purchasers of electricity; and •Shutting down of generation facilities if the cost of generation exceeds the market price for electricity. --- ## Modified: Our operations and future results may be impacted by changing expectations and demands of our customers, regulators, investors, and other stakeholders. **Key changes:** - Reworded sentence: "Failure to meet these expectations or to adequately address the risks and external pressures may impact our reputation and affect our ability to achieve favorable outcomes in future rate cases or our results of operations." - Removed sentence: "Furthermore, with this heightened emphasis on environmental, social, and governance concerns, and climate change in particular, there is an increased risk of litigation." **Prior (2024):** Our ability to execute our strategy and achieve anticipated financial outcomes are influenced by the expectations of our customers, regulators, investors, and other stakeholders. Those expectations are based in part on the core fundamentals of affordability and reliability but are also increasingly focused on our ability to meet rapidly changing demands for new and varied products, services, and offerings. Additionally, the risks of global climate change continues to shape our customers' sustainability goals and energy needs, as well as the investment and financing criteria of investors. Failure to meet these increasing expectations or to adequately address the risks and external pressures from regulators, customers, investors, and other stakeholders may impact our reputation and affect our ability to achieve favorable outcomes in future rate cases or our results of operations. Furthermore, the increasing use of social media may accelerate and increase the potential scope of negative publicity we might receive and could increase the negative impact on our reputation, business, results of operations, and financial condition. As it relates to electric generation, a diversified fleet with increasingly clean generation resources may facilitate more efficient financing and lower costs. Conversely, jurisdictions utilizing more carbon-intensive generation such as coal may experience difficulty attracting certain investors and obtaining the most economical financing terms available. Furthermore, with this heightened emphasis on environmental, social, and governance concerns, and climate change in particular, there is an increased risk of litigation. **Current (2025):** Our ability to execute our strategy and achieve anticipated financial outcomes are influenced by the expectations of our customers, regulators, investors, and other stakeholders. Those expectations are based in part on the core fundamentals of affordability and reliability but are also increasingly focused on our ability to meet rapidly changing demands for new and varied products, services, and offerings. Additionally, the risks of global climate change continues to shape our customers' sustainability goals and energy needs, as well as the investment and financing criteria of investors. Failure to meet these expectations or to adequately address the risks and external pressures may impact our reputation and affect our ability to achieve favorable outcomes in future rate cases or our results of operations. The new presidential administration's efforts to roll back certain climate and diversity, equity, and inclusion policies and programs may conflict with the expectations of our customers, regulators, and investors, creating additional uncertainty as we look to balance our stakeholders' competing priorities, and could lead to litigation and government investigations. Furthermore, the increasing use of social media may accelerate and increase the potential scope of negative publicity we might receive and could increase the negative impact on our reputation, business, results of operations, and financial condition. As it relates to electric generation, a diversified fleet with increasingly clean generation resources may facilitate more efficient financing and lower costs. Conversely, jurisdictions utilizing more carbon-intensive generation such as coal may experience difficulty attracting certain investors and obtaining the most economical financing terms available. --- *Data sourced from SEC EDGAR. Last updated 2026-06-01.*