Company: WELPM
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000107815-25-000207
Chunk: 170

Company: WISCONSIN ELECTRIC POWER CO
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 8
Chunk 170
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 equipment costs in advance of receiving approval of the tariffs as well as necessary regulatory and other approvals for the needed generation, distribution, and transmission projects. If any of these projects are canceled for any reason, including failure to receive necessary regulatory approvals and/or siting or environmental permits, significant cancellation penalties under the equipment purchase orders and construction contracts could occur. In addition, if any construction work or investments have already been recorded as an asset, an impairment loss may need to be recorded. We may not be allowed to recover these penalties, other costs incurred, or impairment losses in customer rates, which could have a material adverse effect on our results of operations. We require VLCs to enter into payment and cancellation agreements which obligate the VLC to reimburse us for all costs associated with projects requested by the customer until service agreements are executed under the approved tariffs. Reimbursement is also required if, among other things, the 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

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.