July 31 (Reuters) - Utility company WEC Energy Group (WEC.N) , opens new tab reported a 27% drop in second-quarter profit on Wednesday, hurt by higher operating costs and a rise in interest expenses.

Higher interest rates by the U.S. Federal Reserve to curb inflation has boosted borrowing costs for utility companies, which typically incur major capital expenditures.

The company's interest expenses rose 12.5% to $200.6 million in the quarter from a year earlier, while operation and maintenance expenses jumped 7.5% to $533.4 million.

The company said , opens new tab on a weather-normal basis, retail deliveries of electricity during the second quarter – excluding the iron ore mine — slipped by 0.3%.

The utility reaffirmed its full-year profit forecast of between $4.80 and $4.90 per share.

The company said net income attributed to common shareholders fell to $211.3 million, or 67 cents per share, for the quarter ended June 30, from $289.7 million, or 92 cents, a year ago.

Its residential electricity use rose by 1.4%. Retail deliveries of electricity — excluding the iron ore mine in Michigan's Upper Peninsula — were up by 0.5% compared a year ago.

Electricity consumption by small commercial and industrial customers rose 0.3%, while power use by large commercial and industrial customers — excluding the iron ore mine — declined by 0.1%.

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https://www.reuters.com/business/energy/wec-energys-second-quarter-profit-falls-higher-expenses-2024-07-31/