Rewrites to focus on data center growth throughout

Feb 4 (Reuters) - WEC Energy Group WEC.N said on Tuesday that its profit more than doubled in the fourth quarter, with the electric utility benefiting from lower operating expenses and higher revenue as it grows its service to data centers like Microsoft MSFT.O.

U.S. power companies like Milwaukee-based WEC Energy are welcoming a rise in electricity demand from the recent proliferation of AI data centers along with the electrification of buildings and industries.

WEC is planning to supply electricity to a $3.3 billion Microsoft data center campus being developed in southeast Wisconsin, as reports come in that the technology giant is buying up more land in the state.

Data center power demand in the United States is expected to nearly triple in the next three years and consume as much as 12% of the country's electricity, according to a study by Lawrence Berkeley National Laboratory.

WEC is planning for 1,800 megawatts of added power demand over the next five years. That plan doesn't include the development of a 1,700-acre Wisconsin data center campus, which was announced this year by Cloverleaf Infrastructure, WEC executives said on a conference call.

The site, which was initially expected to amount to 1 gigawatt of capacity, may end up being much larger, WEC executives said.

Construction on the site may begin in the fall, but it would likely be between 2028 and 2029 before energy begins to substantially increase to the site, WEC said.

As data center development ramps up, utilities like WEC are racing to develop power agreements with terms aimed specifically at these new major customers.

"We're actively working with very large customers on tariffs," WEC CEO Scott Lauber said.

Residential power use rose 0.5% while electricity consumption by small commercial and industrial customers rose 0.7% in 2024, compared to a decline in 2023.

The utility reported total operating expenses of $1.69 billion in the fourth quarter, a drop from $1.88 billion last year, with sales costs down about 3% to $738.4 million.

Revenue for the fourth quarter rose about 3% to $2.28 billion from a year earlier.

WEC provides electricity and gas to nearly 4.7 million customers in Wisconsin, Illinois, Michigan and Minnesota.

(Reporting by Laila Kearney in New York and Pooja Menon; Editing by Shailesh Kuber and Mark Porter)

((Laila.kearney@thomsonreuters.com))