ITEM 8.01 OTHER EVENTS
On January 6, 2023, The Peoples Gas Light and Coke Company ("PGL") and North
Shore Gas Company ("NSG"), utility subsidiaries of WEC Energy Group, Inc., filed
requests with the Illinois Commerce Commission ("ICC") for regulatory review to
set customer rates for natural gas for 2024.
As part of its first rate case filed in nine years, PGL is not seeking an
extension of the Qualified Infrastructure Plant ("QIP") rider, which provides an
automatic bill adjustment to recover prudently incurred costs under PGL's safety
modernization program. Instead, PGL will return to the regular ratemaking
process to recover the costs of necessary infrastructure improvements.
The proposed customer bill impacts of the requested base rate adjustments for
2024 are:
•$194.7 million (13.0%) for PGL's natural gas customers.
•$18.7 million (7.8%) for NSG's natural gas customers.
Overall, the rate filings are not expected to increase the typical customer's
bill. With natural gas prices currently forecasted to decline in 2023 and 2024,
customer bills are expected to stay largely flat as new rates take effect in
2024.
The primary driver of the requested rate increases is capital investments made
to strengthen the safety and reliability of each utility's natural gas
distribution system. PGL is also seeking to recover costs incurred to upgrade
its natural gas storage field and operations facilities and to continue
improving customer service.
The utilities proposed increasing their current authorized returns on equity
from 9.05% to 9.90% for PGL and from 9.67% to 9.90% for NSG. PGL and NSG also
requested that the common equity component average for each of them be set at
54.0%. Currently, the common equity component for PGL and NSG is 50.33% and
51.58%, respectively.
An ICC decision is anticipated in the fourth quarter of 2023, with any rate
adjustments expected to be effective January 1, 2024.
Forward-Looking Statements
Certain statements contained in this Current Report on Form 8-K are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
statements are based upon management's current expectations and are subject to
risks and uncertainties that could cause actual results to differ materially
from those contemplated in the statements. Readers are cautioned not to place
undue reliance on these statements. Forward-looking statements include, among
other things, statements concerning management's expectations and projections
regarding regulatory decisions and natural gas costs. The following factors, in
addition to those discussed in WEC Energy Group, Inc.'s Annual Report on Form
10-K for the year ended December 31, 2021 and in subsequent reports filed with
the Securities and Exchange Commission, could cause actual results to differ
materially from those contemplated in any forward-looking statements: the
possibility that the ICC's order will differ from the terms of the proposals;
the timing, resolution and impact of the rate case and other regulatory
decisions; general economic conditions, including business and competitive
conditions in WEC Energy Group, Inc.'s service territories; WEC Energy Group
Inc.'s ability to continue to successfully integrate the operations of its
subsidiaries; availability of natural gas distribution systems; unanticipated
changes in natural gas costs; key personnel changes; varying, adverse or
unusually severe weather conditions; continued industry restructuring and
consolidation; continued advances in, and adoption of, new technologies that
produce power or reduce power consumption; energy and environmental conservation
efforts; WEC Energy
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Group Inc.'s ability to successfully acquire and/or dispose of assets and to
execute on its capital plan; cyber-security threats and data security breaches;
construction risks; equity and bond market fluctuations; changes in WEC Energy
Group, Inc.'s and its subsidiaries' ability to access the capital markets;
changes in tax legislation or WEC Energy Group, Inc.'s and its subsidiaries'
ability to use certain tax benefits and carryforwards; the impact of legislative
and regulatory changes, including changes to environmental standards and
greenhouse gas regulations, the enforcement of these laws and the regulations
and changes in the interpretation by regulatory agencies; supply chain
disruptions; inflation; political and geopolitical developments, including the
impacts on the global economy, supply chain and fuel prices, generally, from the
ongoing conflict between Russia and Ukraine; the impact from new developments
relating to the COVID-19 pandemic or any future health pandemics; current and
future litigation and regulatory investigations, proceedings or inquiries; and
changes in accounting standards. Except as may be required by law, WEC Energy
Group, Inc. expressly disclaims any obligation to publicly update or revise any
forward-looking information.
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