Company: WELPM
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000107815-25-000105
Chunk: 100

Company: WISCONSIN ELECTRIC POWER CO
Filing Date: 2025-02-21
Form: 10-K
Item: Item 7
Chunk 100
---
 related to a sales tax audit.

•A $7.4 million decrease in expense related to the earnings sharing mechanism in place, as discussed in the notes under the other operation and maintenance table above. See Note 24, Regulatory Environment, for more information.

Other Income, Net

Other income, net increased $10.2 million during 2024, compared with 2023, driven by higher interest income earned on amounts due from ATC for the construction of transmission infrastructure upgrades needed for new generation projects. We are required to initially fund these expenditures, and ATC reimburses us when the new generation is placed in service. Higher AFUDC-Equity due to 

2024 Form 10-K41Wisconsin Electric Power Company

continued capital investment also contributed to the increase in other income. See Note 25, Other Income, Net, for more information.

Interest Expense

Interest expense increased $22.9 million during 2024, compared with 2023, driven by the impact of our long-term debt issuances in 2024. See Note 14, Long-Term Debt, for more information.

Income Tax Expense

Income tax expense decreased $6.3 million during 2024, compared with 2023, driven by a $7.4 million increase in PTCs and a $5.3 million positive impact related to the amortization of the unprotected excess deferred tax benefits from the Tax Legislation. This amortization was completed in 2023. The amortization of the unprotected excess deferred tax benefits did not impact earnings as there was an offsetting impact in operating income. Partially offsetting these positive income tax impacts was an increase in pre-tax income.

2023 Compared with 2022

Gross margin (GAAP) at the utility segment increased $48.3 million during 2023, compared with 2022, and utility margin (non-GAAP) increased $216.6 million during 2023, compared with 2022. Both measures were driven by:

•A $294.0 million increase in margins related to the impact of our rate order approved by the PSCW, effective January 1, 2023. 

•A $15.7 million increase in margins during 2023, related to the expiration of a capacity purchase contract in connection with the acquisition of the Whitewater facility, effective January 1, 2023.

These increases in margins were partially offset by:

•A $69.0 million decrease in margins related to lower