Company: WELPM
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000107815-25-000207
Chunk: 35

Company: WISCONSIN ELECTRIC POWER CO
Filing Date: 2025-10-31
Form: 10-Q
Item: Part II, Item 1A
Chunk 35
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 VLC terminates the payment and cancellation agreement or reduces its anticipated load, or regulatory approval is not received for the construction of a project. Despite these risk mitigating efforts, we may still experience significant losses or delayed recovery of these costs. In addition, the ability to obtain regulatory approval of one or more projects and/or the VLC and Bespoke Resources Tariffs may affect our ability to recover costs with acceptable conditions for these large-scale customers.

The ability to complete large capital projects is dependent upon a number of factors, including the ability to obtain financing of such projects on satisfactory terms and conditions, secure regulatory permits, secure sufficient land for the siting of power generation facilities, obtain necessary interconnection or transmission service in MISO, garner public support for these projects, and the ability of suppliers and contractors to fulfill their obligations under contracts. Successful completion of these projects may be further influenced by changes in law or regulation, such as environmental compliance requirements, trade and tariff issues, including those associated with imported solar panels, as well as supply chain delays or disruptions, workforce challenges, and other events beyond our control. If these projects are significantly delayed or become subject to cost overruns or cancellation due to these or other 

09/30/2025 Form 10-Q50Wisconsin Electric Power Company

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factors, we could incur additional costs and termination payments or face increased risk of potential write-offs of our investments in these projects. The occurrence of any of these events may materially affect the schedule, cost, and performance of these projects.

This concentration of business with a small number of customers in an industry based on emerging technologies, including AI and machine learning, presents several risks. We cannot predict the rate at which or the extent to which these emerging technologies will be broadly adopted and successful as business models. Changes in industry practice or advances in these technologies could reduce the demand for electricity to power data centers. Additionally, these customers may experience business downturn, which may cause the loss of these customers or may weaken their financial condition, including their creditworthiness. Similarly, customers may reduce their investment in these new technologies or abandon them entirely.

Any of these situations may result in the early termination or non-renewal of these customers’ electric service agreements or renewal on terms less favorable to us. Electric service agreements with these customers include provisions for early termination payments, but they may not fully protect against all risks. While the assets constructed to serve these customers may otherwise be useful in our utility operations, there is a risk that we may not be able to fully recover our investment