WEC Energy to phase out coal by 2035

Executive Chairman Gale Klappa announced that WEC Energy Group Inc. will phase out coal-fired generation by 2035, with an interim goal for the fuel to make up an "immaterial" less than 5% of its operations by the end of 2030.

"We're very confident about the trajectory between now and 2030, and if the trajectory is even better, then we'll see where we go," Klappa said during a Nov. 2 third-quarter earnings conference call. "But it's really our best estimate of how to make continued progress on aggressive environmental goals and maintaining reliability."

Klappa also reassured investors that the Oak Creek coal-fired power plant owned by subsidiary Wisconsin Electric Power Co., also known as the Elm Road Generating Station, will continue service beyond 2035 as the utility introduces a blend with 30% natural gas over the next two years. The two-unit plant began operating in 2010 and 2011.

Getting to a 30% blend, according to COO Scott Lauber, will require a "modest" approximately $30 million investment, with the complete conversion costing about $150 million.

The South Oak Creek retrofit is part of WEC's goal to spend $17.7 billion from 2022 through 2026 to accelerate decarbonization.

When it comes to the Wisconsin regulated business, that capital plan includes about 700 MW of solar capacity and 500 MW of battery capacity that has not yet been announced, Lauber added.

During the third quarter, WEC also agreed to acquire a 90% stake in a wind project in Illinois planned by Invenergy LLC for $412 million. That 250-MW Sapphire Sky Wind Energy Center, which is expected to begin commercial operation in McLean County, Ill., by the end of 2022, is expected to have "the best returns of any of the eight [wind] projects" in WEC's pipeline, Klappa said.

As part of its weatherization strategy, meanwhile, the company's We Energies utility is waiting for the Public Service Commission of Wisconsin to greenlight construction on two LNG storage facilities.

"They are projected to save our We Energies customers approximately $200 million over time," WEC President and CEO Kevin Fletcher said during the call.

WEC recorded net income of $290.0 million, or 92 cents per share, for the third quarter, up from $266.8 million, or 84 cents per share, during the prior-year period.