Company: WELPM
Filing Date: 2025-03-27
Form Type: DEF 14C
Source: 0000107815-25-000155
Chunk: 167

Company: WISCONSIN ELECTRIC POWER CO
Filing Date: 2025-03-27
Form: DEF 14C
Chunk 167
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 us, and subsequently to our customers. Because variability in the lease payments is dependent upon a rate (interest rate or tax rate), the lease payments are considered unavoidable under Topic 842, and are included in the measurement of the right of use asset and lease liability.

When the ER 1 and ER 2 contracts expire in 2040 and 2041, respectively, we may, at our option and with proper notice, choose to renew one or both contracts for up to three consecutive renewal terms (each renewal term would approximate 80% of the then remaining economic useful life of the respective generation unit), purchase one or both generating facilities at fair market value, or allow the contracts to expire.

#### Land Leases
#### –

#### Utility Solar Generation
We have entered into various land leases related to our investments in utility solar generation. Each lease has an initial term and one or more optional extensions. We expect the optional extensions to be exercised, and, as a result, all of the land leases are being amortized over an extended term of approximately 50 years. Once a solar project achieves commercial operation, the lease liability is remeasured to reflect the final total acres being leased. Our payments related to these leases are being recovered through rates.

Amounts Recognized in the Financial Statements and Other Information

The components of lease expense and supplemental cash flow information related to our leases for the years ended December 31 are as follows:

| (in millions)                                                             
 Finance lease expense                                                     |     | 2024 |       |            |     | 2023 |       |            |     | 2022 |       |            |
|:--------------------------------------------------------------------------|:----|:-----|------:|:-----------|:----|:-----|------:|:-----------|:----|:-----|------:|:-----------|
| Amortization of right of use assets(1)                                    |     | $    |  88.5 |            |     | $    |  77.5 |            |     | $    |  74.2 |            |
| Interest on lease liabilities(2)                                          |     |      | 331.2 |            |     |      | 329.5 |            |     |      | 334.3 |            |
| Operating lease expense(3)                                                |     |      |   2.0 |            |     |      |   1.6 |            |     |      |   1.8 |            |