Wisconsin Gas LLC

The stable outlook on WG is based on S&P Global Ratings' expectation that management will continue to focus on core utility operations and reach constructive regulatory outcomes to avoid any meaningful increase in business risk. The outlook also reflects our base-case scenario of adjusted funds from operations (FFO) to debt averaging around 19%, which is in line with the current financial risk profile. We could lower ratings on WG if we lower the rating on parent WEC Energy Group Inc. (WEC) to below 'A-' or if WG's financial measures weaken significantly such that FFO to total debt is consistently below 17%. We could also lower the ratings if, in our opinion, there is material degradation in the insulation measures that

... stable cash flows. Wisconsin Gas LLC (WG) benefits from various credit-supportive recovery mechanisms in Wisconsin, including forward-looking test periods that support stable and predictable operating cash flow and mitigate regulatory lag. Negative discretionary cash flow as a result of capital spending. Higher capital spending including about $185 million in 2020 is leading to discretionary cash flow that is negative. The capital spending includes new information technology to improve billing, call center, and credit collection functions....

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