Research Update: WEC Energy Group Inc. Outlook Revised To Negative On Weakening Financial Measures; Outlook Stable

WEC Energy Group Inc. (WEC) recently announced its first-quarter 2023 earnings, during which it reaffirmed its expectation to fund its capital plan without any new equity issuance. This plan incorporates $12.4 billion of investments through 2025. WEC's negative operating cash flow has grown in recent years primarily from high capital spending and large nonutility acquisitions. We believe the company is disproportionately funding this cash deficit with incremental debt, weakening financial measures. As a result, we believe its consolidated funds from operations (FFO) to debt could reside below our downgrade threshold for the next three years. We affirmed our ratings and revised our outlook on WEC, and subsidiaries Integrys Holding Inc. and Elm Road Generating Station Supercritical LLC (Elm Road) to

...- WEC Energy Group Inc. (WEC) recently announced its first-quarter 2023 earnings, during which it reaffirmed its expectation to fund its capital plan without any new equity issuance. This plan incorporates $12.4 billion of investments through 2025. - WEC's negative operating cash flow has grown in recent years primarily from high capital spending and large nonutility acquisitions. We believe the company is disproportionately funding this cash deficit with incremental debt, weakening financial measures. - As a result, we believe its consolidated funds from operations (FFO) to debt could reside below our downgrade threshold for the next three years. - We affirmed our ratings and revised our outlook on WEC, and subsidiaries Integrys Holding Inc. and Elm Road Generating Station Supercritical LLC (Elm Road) to negative from stable. Due to our assessment that the insulating measures in place are sufficient rate certain subsidiaries above the group credit profile (GCP), the outlooks on Wisconsin...

Research Update