Wec Energy Group, Inc. · NYSE:WEC

Wec Energy — Investor Presentation (October 2022)

50 slides from Wec Energy's investor presentation, Oct 3, 2022

1. Slide 1: Investor Update: October 2022

   Investor Update: October 2022 Our “ESG” Progress Plan Investing in Efficiency, Sustainability and Growth Best in the U.S. in Large Customer Satisfaction ESource We Energies Named #1 Energy Company in America by Business Customers Escalent Best ESG Growth Strategy in the U.S. Capital Finance Internat

2. Slide 2: Cautionary Statement Regarding Forward-Looking Information

   2 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 thin

3. Slide 3: The Premier Energy Company in America's Heartland

   3 The Premier Energy Company in America’s Heartland  $28.2 billion market cap*  4.6 million retail customers  60% ownership of American Transmission Company  $39.6 billion of assets * As of September 30, 2022

4. Slide 4: A History of Quality Earnings Growth

   4 A History of Quality Earnings Growth $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 GAAP Adjusted** 2022 Guidance * Estimated based on 2022 guidance of $4.36 to $4.40 per share. ** See Appendix for recon

5. Slide 5: Consistent Performance Over Time

   5 Consistent Performance Over Time EPS Guidance 2021 Exceeded  2020 Exceeded  2019 Exceeded  2018 Exceeded  2017 Exceeded  2016 Exceeded  2015 Exceeded  2014 Exceeded  2013 Exceeded  2012 Exceeded  2011 Exceeded  2010 Exceeded  2009 Exceeded  2008 Exceeded  2007 Exceeded  2006 Exceede

6. Slide 6: Strong Dividend Growth Continues

   6 In January, raised the dividend by 7.4% to a new annual rate of $2.91 per share* Strong Dividend Growth Continues *Annualized based on 1st quarter 2022 dividend of 72.75 cents per share Top decile dividend growth in industry** ** Reflects current and expected dividends declared in 2022

7. Slide 7: What's New?

   7 What’s New?

8. Slide 8: Rate Case Settlements for our Wisconsin Utilities

   8  Base revenue increases totaling $507 million  Equity component of capital structure rises to 53 percent  Earnings sharing mechanism unchanged from 2022  Wisconsin Electric to seek approval to securitize $100 million of the remaining book balance of older Oak Creek coal units by 2024  Upon re

9. Slide 9: Inflation Reduction Act Customer Benefit and Investment Opportunity

   9  Extension of Production Tax Credits (PTC) and Investment Tax Credits (ITC)  PTC option for solar projects  Potential opportunities at WEC infrastructure segment  ITC for stand-alone electric storage projects  Tax Credit “transferability” likely to provide additional options for monetization

10. Slide 10: American Transmission Company - Opportunity

    10 Transmission Planning – Future One Estimated investment opportunity in Tranche 1 is approximately $900 million (2022 dollars). Investments in these long-dated projects are expected to be made in the last few years of this decade. American Transmission Company - Opportunity

11. Slide 11: Exiting Coal

    11  Near-term retirements planned*:  Oak Creek Units 5-6: 528 MW (May 2024)  Oak Creek Units 7-8: 611 MW (late in 2025)  Columbia Units 1-2: 300 MW (by June 1, 2026)  Enhancing fuel flexibility (gas blending) at Oak Creek Power the Future units  By the end of 2030, we expect to use coal only a

12. Slide 12: Recent Project Approvals Advancing Our ESG Progress Plan

    12 Recent Project Approvals Advancing Our ESG Progress Plan Approved Investment1 Paris Solar-Battery Park $390 million LNG Storage Facilities $370 million Weston RICE Units2 $170 million Red Barn Wind Park $140 million Effluent Limit Compliance for Oak Creek Expansion Plant $90 million Since we anno

13. Slide 13: Hydrogen Pilot Program

    13  Leading a pilot program to test hydrogen as a fuel source for power generation  Partnering with the Electric Power Research Institute (EPRI)  Blending hydrogen with natural gas at one of our RICE units  One of the first hydrogen pilot programs of its kind in the United States WEC Energy Grou

14. Slide 14: ESG Progress Plan

    14 ESG Progress Plan

15. Slide 15: Robust Growth in Asset Base

    15 $25 billion $35 billion 2021A 2026E* Robust Growth in Asset Base *Estimated year-end average asset base Expect long-term EPS growth of 6-7% per year. 7% Growth

16. Slide 16: Investing in Efficiency and Sustainability Drives Growth

    16 $2.7 15% $12.2 69% $2.8 16% Sustainability Renewables $5.4 Grid and Fleet Reliability $6.8 Efficiency Technology $1.1 Grid and Fleet Modernization $1.6 Growth Gas Distribution $1.3 Electric (G,T&D) $1.5 2022-2026 Capital Plan ($ in billions) Investing in Efficiency and Sustainability Drives Growt

17. Slide 17: Carbon Reduction Goals – Electric Generation

    17 *Includes projection of potential carbon offsets by 2050 Carbon Reduction Goals – Electric Generation We have established ambitious greenhouse gas reduction goals for our electric generating fleet, aligned with or surpassing global emissions pathways aimed at limiting warming to 1.5°C. Reduction

18. Slide 18: Investing in Carbon-Free Generation

    18 Solar and Battery Storage  379 MW currently under construction  Badger Hollow II Solar Park and Paris Solar-Battery Park  Solar:  Filed for approval 495 MW  Planning for additional 700 MW  Qualifies for Tax Credits (ITC or PTC)  Battery Storage:  Filed for approval 217 MW (qualifies for I

19. Slide 19: WEC Infrastructure Portfolio – Green and Growing

    19 SD IL NE Plan to invest $1.9 Billion (2022-2026) WEC Infrastructure Portfolio – Green and Growing In-service Under development Total Project Capacity (MW) Investment (in millions) Upstream 200 $307 Bishop Hill III 132 166 Coyote Ridge 97 145 Blooming Grove 250 389 Tatanka Ridge 155 240 Jayhawk 19

20. Slide 20: Modernizing Our Gas-Fueled Generation Fleet

    20 Modernizing Our Gas-Fueled Generation Fleet Retiring  200 MW of older, less-efficient gas generation expected  Target: 2024 Building Weston RICE units  Received regulatory approval on March 31st  128 MW  Expected investment: $170 million  Target in-service: 2023 * Filed and pending regulato

21. Slide 21: Our ESG Progress Plan Methane Reduction

    21 Goal: Net zero by the year 2030** *Represents a decrease in the rate of methane emissions, per mile, from the natural gas distribution lines in our network from a 2011 baseline. **This goal applies to emissions from WEC Energy Group natural gas distribution companies calculated in accordance with

22. Slide 22: Regional Economy

    22 Regional Economy

23. Slide 23: Powering Industry Leaders in our Region

    23 Powering Industry Leaders in our Region

24. Slide 24: Wisconsin Segment Economic Growth Driving Longer-Term Sales Forecast

    24 Wisconsin Segment Economic Growth Driving Longer-Term Sales Forecast 2024-2026 Electric 0.7%-1.0% Gas 0.7%-1.0% Sales Growth Forecast (weather-normalized) Year-Over-Year

25. Slide 25: Key Takeaways for WEC Energy Group

    25  Track record of top decile performance among regulated utilities  Industry leading earnings quality  ESG Progress Plan drives premium EPS growth of 6-7%  No need to issue equity through forecast period  100% of capital allocated to regulated businesses or contracted renewables  Dividend gr

26. Slide 26: Appendix

    Appendix | VAie VA Energy Group

27. Slide 27: Business Overview

    27 Electric Distribution Electric Transmission 60% ownership Electric Generation Energy Infrastructure Natural Gas Distribution

28. Slide 28: Commitment to ESG

    28 Reduce carbon dioxide emissions from electric generation 60% by the end of 2025 and 80% by the end of 2030 – both from a 2005 baseline. Long-term goal of net-zero carbon emissions from our generating fleet by 2050 Planned exit from coal by the end of 2035 Targeting net-zero methane emissions from

29. Slide 29: Electricity Supply by Fuel Type

    29 Electricity Supply by Fuel Type (megawatt-hours delivered to regulated utility customers) 73% 39% 7% 33% 32% 17% 21% 24% 3% 7% 39% 2005 2021 2030E 2035 2050 Coal Natural Gas Nuclear Renewables Exiting Coal <5% Net carbon neutral goal Planned exit from coal

30. Slide 30: Reducing Greenhouse Gas Emissions

    30 Reducing Greenhouse Gas Emissions 0.78 0.48 0.33 0.16 0** 2005 2021 2025E 2030E 2050E Greenhouse gas intensity* (metric tons CO2/MWh) *Includes owned electric generation, purchased power and WEC Infrastructure (WECI). The environmental attributes of the WECI renewable facilities are or may be the

31. Slide 31: Investment in Regulated Renewables

    31 Plan to invest $3.5 Billion (2022-2026) Investment in Regulated Renewables Target Project Utility WEC Ownership1 Expected WEC Investment ($M) WEC Capacity (MWs) In Service Two Creeks Solar Project WPS 66.7% $130 100 In Service Badger Hollow I Solar Park WPS 130 100 1st Half 2023 Badger Hollow II

32. Slide 32: WEC Infrastructure Projects

    32 Project Developer Location Investment Offtake Agreement WEC Commercial Operations Total Project Capacity Bishop Hill III Wind Energy Center Invenergy Henry County, IL $166M for 90% ownership WPPI Energy 22 years 80% on 8/31/18 Incremental 10% on 12/5/18 132MW Upstream Wind Energy Center Invenergy

33. Slide 33: Why Our Natural Gas Distribution Networks Matter

    33 Today and Tomorrow Why Our Natural Gas Distribution Networks Matter Our Service Area  65-78% of homes use natural gas for heating  Growth continues as customers convert to natural gas Hydrogen and RNG Opportunities  Potential to blend  Investment potential to convert existing distribution net

34. Slide 34: New Liquefied Natural Gas (LNG) Storage Facilities

    34 New Liquefied Natural Gas (LNG) Storage Facilities LNG will provide a solution for Southeastern Wisconsin to meet peak customer demand on the coldest days of the year. Taking Steps to Maintain Reliable and Affordable Service for Our Customers  We Energies received approval for two LNG facilities

35. Slide 35: Electric Delivery Redesign / Resilience

    35 Electric delivery redesign / resilience  Addressing aging infrastructure and system hardening  Enhancing efficiencies and reducing operating costs  Expect to spend $3.4 billion (2022-2026) with continued investment over next decade Project Highlights Efficiency, Growth and Sustainability Progr

36. Slide 36: Natural Gas Safety Modernization

    36 Natural Gas Safety Modernization  Increasing capacity and reliability of natural gas service in our territories Illinois  Expected replacement of 2,000 miles of piping for safety and reliability in Chicago  Project $280 million-$300 million annual average investment  Illinois law authorizes r

37. Slide 37: Utility Capital Plan Drives EPS Growth

    37 998 987 858 890 960 579 665 685 711 716 649 559 596 494 513 578 591 636 645 603 120 104 107 107 104 333 343 278 208 183 $3,257 $3,249 $3,160 $3,055 $3,079 - 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 2022 2023 2024 2025 2026 ATC Investment MERC/MGU Illinois WI Gas Delivery WI Electric Delivery

38. Slide 38: Capital Plan Projections By Company

    38 2022 2023 2024 Wisconsin Electric $1,204.2 $1,360.2 $1,173.9 Wisconsin Gas $280.5 $233.6 $263.4 Wisconsin Public Service $627.2 $537.3 $621.6 Upper Michigan Energy $19.8 $16.9 $55.2 Wisconsin Segment $2,131.7 $2,148.0 $2,114.1 Peoples Gas $521.1 $538.0 $580.4 North Shore Gas $52.0 $48.8 $54.6 Ill

39. Slide 39: Composition of Asset Base

    39 Composition of Asset Base Total 2021 Average Asset Base of $25.0 Billion Note: We Power value represents investment book value. Company Asset Base - $B % of Total Wisconsin Electric $6.8 27.2% Wisconsin Gas 1.7 6.8 Wisconsin Public Service 4.0 16.0 Upper Michigan Energy Resources 0.4 1.6 Peoples

40. Slide 40: National Leader in Operating Efficiency and Financial Discipline

    40 National Leader in Operating Efficiency and Financial Discipline $13.20 $16.20 $18.50 $18.80 $20.80 $21.10 $21.90 $22.00 $23.00 $23.20 $33.40 $10 $15 $20 $25 $30 $35 2020 Non-Fuel O&M per MWh* Source: FERC Form 1 Reports *For all companies, excluded 1) pensions and other employee benefits, 2) cos

41. Slide 41: Focused on Efficiency

    41 Focused on Efficiency $1,342 $1,281 $1,234 $1,143 $1,107 $1,088 2016 2017 2018 2019 2020 2021 2022E 4.5% $ I n m ill io n s *Excludes costs that have a revenue offset such as operation and maintenance costs associated with the We Power generation units, transmission expenses that are collected in

42. Slide 42: Balance Sheet Remains Strong

    42 Balance Sheet Remains Strong Entity S&P Rating Moody’s Rating WEC Energy Group A- Baa1 Wisconsin Electric A- A2 Wisconsin Gas A A3 Wisconsin Public Service A- A2 Peoples Gas A- A2 Issuer Credit Ratings WEC Energy Group Target S&P FFO to Debt >15% Moody’s CFO Pre-WC/Debt >16% Holding Company Debt

43. Slide 43: Balanced Sales Mix

    43 34% Large C&I by Segment Paper/Packaging 26% Mining/Minerals 11% Foundry (SIC 33) 9% Metal (SIC 34,35,37) 8% Other Manufacturing 8% Food/Agriculture 7% Medical 7% Education 4% Printing 3% Chemical 2% Office 2% Other 13% Balanced Sales Mix Large C&I 34% Residential and Farm 31% Small C&I 35% 2021

44. Slide 44: Diverse Portfolio of Businesses

    44 Diverse Portfolio of Businesses Based on 2021 average asset base. WI 63% IL 17% MI/MN 5% WECI 5% ATC 10% By Jurisdiction By Business Electric generation and distribution 49%Natural gas distribution 36% WECI 5% Electric transmission 10% *ATC is accounted for using the equity method; this represent

45. Slide 45: Regulatory Matters

    45 Regulatory Matters Wisconsin (apps.psc.wi.gov) Estimated Decision Date  Commission decision on general rate review for new base rates effective Jan. 1, 2023 (Dockets: WE and WG: 5-UR-110 and WPS 6690-UR-127) Q4 2022  Decision on Whitewater Acquisition (Docket: 5-BS-264 filed 12/21/2021) 2022 

46. Slide 46: Regulatory Environment

    46 Regulatory Environment Wisconsin  Governor Tony Evers (D)  Commission  Gubernatorial appointment, Senate confirmation  Chairman: Gubernatorial appointment  6-year staggered terms Illinois  Governor J.B. Pritzker (D)  Commission  Gubernatorial appointment, Senate confirmation  Chairman: G

47. Slide 47: Rate-Making Parameters by Company

    47 Rate-Making Parameters by Company Utility Equity Layer1 Authorized ROE Wisconsin Electric 50.0%-55.0% 10.0% Wisconsin Public Service 50.0%-55.0% 10.0% Wisconsin Gas 50.0%-55.0% 10.2% Peoples Gas 50.33% 9.05% North Shore Gas 51.58% 9.67% Minnesota Energy Resources 50.9% 9.7% Michigan Gas Utilities

48. Slide 48: Key Rate Making Components

    48 Key Rate Making Components Area Illinois– Gas Minnesota– Gas Michigan– Electric & Gas Wisconsin– Gas Wisconsin– Electric Gas Pipeline Replacement Rider PGL MGU Bad Debt Rider ✓ Bad Debt Escrow Accounting Residential Residential Decoupling ✓ ✓ Fuel Cost Recovery 1 for 1 recovery of prudent fuel co

49. Slide 49: Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP)

    49 Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) 2014 2015 2016 2017 Reported EPS – GAAP basis $2.59 $2.34 $ 2.96 $ 3.79 Acquisition Costs $0.06 $0.39 $ 0.01 – Integrys Earnings $(0.47) Impact of Additional Shares $0.47 Tax Benefit Related to Tax Cuts and Jobs Act of 2017 – – – $

50. Slide 50: Contact Information

    Contact Information M. Beth Straka Senior Vice President – Investor Relations and Corporate Communications Beth.Straka@wecenergygroup.com 414-221-4639

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