WEC Energy Group (WEC) risk factors, FY2024 10-K

Risks Related to Legislation and Regulation

1. 01Our business is significantly impacted by governmental regulation and oversight
2. 02unrecoverable 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
3. 03We face significant costs to comply with existing and future environmental laws and regulations
4. 04Our operations, capital expenditures, and financial results may be affected by the impact of greenhouse gas legislation, regulation, and emission reduction goals
5. 05Changes in tax legislation, IRS audits, or our inability to use certain tax benefits and carryforwards, may adversely affect our financial condition, results of operations, and cash flows, as well as our credit ratings
6. 06Our electric utilities could be subject to higher costs and penalties as a result of mandatory reliability standards
7. 07Provisions of the Wisconsin Utility Holding Company Act limit our ability to invest in non-utility businesses and could deter takeover attempts by a potential purchaser of our common stock that would be willing to pay a premium for our common stock

Risks Related to the Operation of Our Business

1. 08Public health crises, including epidemics and pandemics, could adversely affect our business functions, financial condition, liquidity, and results of operations
2. 09Our operations are subject to risks arising from the reliability of our electric generation, transmission, and distribution facilities, natural gas infrastructure facilities, natural gas storage fields, renewable energy facilities, and other facilities, as well as the reliability of third-party transmission providers
3. 10The operations of our natural gas utilities depend upon the availability of adequate interstate pipeline transportation capacity and natural gas
4. 11Our operations are subject to various conditions that can result in fluctuations in energy sales to customers, including customer growth and general economic conditions in our service areas, varying weather conditions, and energy conservation efforts
5. 12Our operations are subject to the effects of global climate change
6. 13winter weather expectations. Although our utilities have regulatory mechanisms in place for recovering all prudently incurred natural gas costs, our regulators could disallow recovery or order the refund of any costs determined to be imprudent
7. 14Our operations and future results may be impacted by changing expectations and demands of our customers, regulators, investors, and other stakeholders
8. 15Our operations and corporate strategy may be adversely affected by supply chain disruptions and inflation
9. 16We 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
10. 17Our operations are subject to risks beyond our control, including but not limited to, cybersecurity intrusions, terrorist or other physical attacks, acts of war, or unauthorized access to personally identifiable information
11. 18Adoption of AI technologies could adversely affect our business, reputation, or financial results
12. 19Advances in technology, and legislation or regulations supporting such technology, could make our electric generating facilities less competitive and may impact the demand for natural gas
13. 20cells, and related energy storage devices, have technologically improved and have become more cost competitive than they were in the past
14. 21We 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
15. 22We face risks related to our non-utility renewable energy facilities that could impact our return on investment or have a negative impact on our financial condition or results of operations
16. 23We are a holding company and rely on the earnings of our subsidiaries to meet our financial obligations
17. 24We may fail to attract and retain an appropriately qualified workforce
18. 25Our counterparties may fail to meet their obligations, including obligations under power purchase, natural gas supply, natural gas pipeline capacity, and transportation agreements

Risks Related to Economic and Market Volatility

1. 26Our business is dependent on our ability to successfully access credit and capital markets on competitive terms and rates
2. 27earn their approved rates of return. High interest rates may also impair our ability to cost-effectively finance capital expenditures and to refinance maturing debt
3. 28A downgrade in our credit ratings could negatively affect our ability to access capital at reasonable costs and/or require the posting of collateral
4. 29Our 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
5. 30We may not be able to obtain an adequate supply of coal, which could limit our ability to operate our coal-fired facilities
6. 31Our use of derivative contracts could result in financial losses
7. 32Restructuring in the regulated energy industry and competition in the retail and wholesale markets could have a negative impact on our business and revenues
8. 33Volatility in the securities markets, interest rates, changes in assumptions, market conditions, and other factors may impact the performance of our benefit plan holdings and other investment funds

General Risks

1. 34We have recorded goodwill and other long-lived assets, including intangible assets, which could become impaired
2. 35We may be unable to obtain insurance on acceptable terms or at all, and the insurance coverage we do obtain may not provide protection against all significant losses