Wec Energy Group, Inc. · NYSE:WEC
Wec Energy — Wisconsin Energy — Investor Presentation (September 2010)
23 slides from Wec Energy's investor presentation, Sep 14, 2010
Slide 1: September 2010
September 2010 September 2010 September 2010 Exhibit 99.1
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information Much of the information contained in this presentation is forward-looking information based upon management's current expectations and projections that involve risks and uncertainties. Forward-looking information includes, among other things
Slide 3: Key Areas to be Covered
Key Areas to be Covered Overview of Wisconsin Energy Retail Electric and Gas Utilities Power the Future Wholesale Electric Transmission Earnings Outlook
Slide 4: Overview of Wisconsin Energy
Overview of Wisconsin Energy Estimated Rate Base and Power the Future Investment at 12/31/10 Utilities 5.7 PTF 2.7 Transmission 0.7 Retail Electric and Gas Utilities Wisconsin, Michigan, and FERC jurisdictions 48.5% to 53.5% equity for Wisconsin Electric 10.4% allowed ROE 45% to 50% equity for Wisco
Slide 5: Retail Electric and Gas Utilities
Largest electric and gas company in Wisconsin 1.1 million electric customers 1.0 million natural gas customers Retail Electric and Gas Utilities
Slide 6: Retail Electric and Gas Utilities Expected Levels of Investment and Depreciation
Retail Electric and Gas Utilities Expected Levels of Investment and Depreciation 2009A 2010E 2011E 2012E Base 341 369 404 446 Renewable 8 97 385 179 Environmental 201 229 194 81 Depreciation 310 250 260 300 *Total depreciation expense was $310 million in 2009, and is expected to be $250, $260 and $3
Slide 7: Renewable Energy Opportunity: Renewable Portfolio Standard in Wisconsin
Renewable Energy Opportunity Renewable Portfolio Standard in Wisconsin 2001-03 Baseline 2010 2015 0.0227 0.0427 0.0827 Required Percentage for Wisconsin Electric Retail Sales *Requirements at a Wisconsin state level are 5% and 10% in 2010 and 2015 respectively. In terms of energy this is estimated t
Slide 8: Renewable Energy Opportunity: Wind Projects
Renewable Energy Opportunity Wind Projects Blue Sky Green Field Completed May 2008 145 MW $295 million investment Glacier Hills Construction began May 2010 160 MW Estimated investment of $367 million Wisconsin Electric has executed 75 MW of short term Power Purchase Agreements
Slide 9: Renewable Energy Opportunity: Biomass and Solar Projects
Renewable Energy Opportunity Biomass and Solar Projects Biomass Filed application for a 50MW project with PSCW on March 15 Estimated investment of $255 million with a target in-service date of 2013 Decision expected by early 2011 12.5 MW of solar Expected investment of $85 to $90 million Targeting 2
Slide 10: Electric Fuel Cost Recovery
Electric Fuel Cost Recovery Wisconsin Jurisdiction Electric fuel case for 2010 was filed on February 19 Interim relief was granted on March 25 Wisconsin jurisdictional increase of $60.5 million, subject to refund Final decision expected in December Limited reopening of fuel rates for 2011 filed on S
Slide 11: Power the Future Plan
Power the Future Plan Natural Gas Coal Capacity 1,090 MW 1 1,030 MW 1 Investment $664 million $2.0 billion ROE 12.7% 12.7% Equity 53% 55% Initial Lease Term 25 Years 30 Years Actual & Targeted In-service Dates Unit 1 - July 16, 2005 Unit 2 - May 23, 2008 Unit 1 - February 2, 2010 Unit 2 - 4th Quarte
Slide 12: Power the Future Expected Earnings
Power the Future Expected Earnings 2009 2010 2011 Port Washington #1 & #2 32 32 32 Oak Creek #1 10 62 70 Oak Creek #2 10 31 Key Assumptions Oak Creek Unit 2 in service November 1, 2010 - one month change results in +/- 2 cents per share in 2010 Cost estimate of $2 billion for WEC's ownership of the
Slide 13: Wholesale Electric Transmission
Wholesale Electric Transmission Wisconsin Energy owns 26.2% of American Transmission Company (ATC) ATC is projected to contribute approximately 32 cents to our EPS this year Represents almost 9% of consolidated earnings ATC's projected capital investment over the next ten years is $3.4 billion ATC r
Slide 14: Wholesale Electric Transmission Expected Earnings
Wholesale Electric Transmission Expected Earnings 2010E 2011E 2012E ATC 220 273 261 WEC portion (26.2%) 58 72 68 Key Assumptions In its latest 10-year assessment ATC projects a need for $3.4 billion of transmission improvements in its footprint from 2010 to 2019 Implies average $30 million effective
Slide 15: Projected Earnings Base for 2010 - 2012
Projected Earnings Base for 2010 - 2012 2010 2011 2012 Electric and Gas Utilities $2.55 to $2.60 $2.71 to $2.81 $7 billion rate base Power the Future (1) $1.00 $1.33 $1.33 Wholesale Electric Transmission (2) $0.32 $0.33 $0.34 Unallocated holding company debt ($0.17) ($0.27) ($0.17) $3.70 to $3.75 $4
Slide 16: Financing and Dividend Policy
Financing and Dividend Policy Capital Structure Goals Reach and maintain 55% debt to capital by the end of 2013 Assumes half of hybrid securities are treated as common equity Current Dividend Policy Target a dividend payout ratio of 40-45 percent of earnings this year as well as 2011 Target 45-50 pe
Slide 17: Projected Growth in Earnings and Dividends
2009 2010 2011 1.35 1.6 1.64 $1.64 to $1.89* Projected Growth in Earnings and Dividends 2009 2010 2011 3.2 3.65 4.1 Earnings per Share Dividends per Share $3.70 to $3.75 $4.10 to $4.20 *Projected dividend is based on 40% payout on $4.10 of earnings at low end and 45% payout on $4.20 of earnings at h
Slide 18: Key Takeaways on Wisconsin Energy
Power the Future program almost complete Highly visible earnings and strong cash flow Solid utility franchises with rate base growth Driven by environmental upgrades, renewable energy projects and network improvements Investment in American Transmission Company provides an additional regulated growt
Slide 19: Appendix
Appendix
Slide 20: Consolidated Capital Expenditures Actual and Projected
Consolidated Capital Expenditures Actual and Projected 2007 2008 2009 2010E 2011E 2012E Utility 539 606 550 695 983 706 We Power/Other 671 530 268 122 16 36 1210 1136 818 817 999 742
Slide 21: Average Total Utility Rate Base
Retail Electric and Gas Utilities Average Total Utility Rate Base 2009A 2010E 2011E 2012E Property, Plant, & Equipment 4.9 5 5.2 6.4 CWIP 0.3 0.6 1 0.4 All Other* 0.1 0.1 0.2 0.2 5.3 5.7 6.4 7 *All other is comprised of customer advances, def. taxes, inventory and implied working capital. Their appr
Slide 22: Retail Electric and Gas Utilities Rate Base Detail
Retail Electric and Gas Utilities Rate Base Detail Major Capital Projects 2010 2012 In-Service Value In-Service Value Oak Creek - AQCS *In-service 2012 $460 $890 $935 Glacier Hills Wind Park *In-service by year-end 2011 50 380 395 Biomass - Domtar *In-service Fall 2013 10 210 295 $520 $1,480 $1,625
Slide 23: Forecast of Electric Sales for 2010
Forecast of Electric Sales for 2010 Annual YTD - June YTD - June 2010 Forecast vs. 2009 Normalized 2010 Normalized vs. 2009 Normalized 2010 Forecast vs. 2009 Normalized Residential -0.2% -1.0% -0.3% Small C&I -3.0% -0.1% -2.8% Large C&I (ex. Mines) 1.7% 2.6% 2.5% Total Large C&I 1.6%* 10.0% 2.8% Tot
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