Mge Energy Inc. · NASDAQ:MGEE
Mge Energy — Investor Presentation (August 2023)
33 slides from Mge Energy's investor presentation, Aug 4, 2023
Slide 1: MGE Energy
PEOPLE mGe anf ENERGY.
Slide 2: Disclaimer
DISCLAIMER This presentation contains summarized information concerning MGE Energy, Inc. (“MGE Energy”) and its subsidiaries (principally Madison Gas and Electric Company (“MGE”)) and MGE Energy's consolidated business, operations, financial performance and trends. No representation is made that the
Slide 3: Cautionary Note - Forward Looking Information
CAUTIONARY NOTE - FORWARD LOOKING INFORMATION All statements in this presentation, other than historical facts, are forward-looking statements (including but not limited to forecasted capital expenditures, expected in-service dates and carbon dioxide projections) that involve risks and uncertainties
Slide 4: Company Mission and Values
COMPANY MISSION AND VALUES MGE Energy is the parent company of Madison Gas and Electric Company (MGE). MGE is your community energy company, committed to engaging with our customers in different ways to meet their needs and to providing safe, reliable, affordable and sustainable energy to power our
Slide 5: Company Highlights
COMPANY HIGHLIGHTS DIVERSIFIED CUSTOMER BASE AND REVENUE PROFILE Resilient Revenue Stream and Customer Base REGULATED, HIGHLY VISIBLE GROWTH Historical 5-Year Regulated PPE“) CAGR of ~8% ¢ Electric service to ~161,000 customers located in the city of Madison and + Forecasted capital investment of ~$
Slide 6: Earnings and Dividends Growth
EARNINGS AND DIVIDENDS GROWTH Earnings Per Share Dividends Per Share $3.50 $1.75 $3.00 $1.50 $2.50 $1.25 $2.00 $1.00 $1.50 $0.75 $1.00 $0.50 $0.50 $0.25 & ra 2017) 2018 2019 2020 2021 2022 2017") 2018 2019 2020 2021 (1) 2017 Non-Regulated earnings per share includes one-time tax benefit of $20.4 mil
Slide 7: Transition Toward Cleaner Energy
TRANSITION TOWARD CLEANER ENERGY Track Record of Increasing Pace of Decarbonization + MGE’s clean energy transition has reduced emissions while maintaining top-ranked electric N e@ { . fi e@ ( 'Z) reliability, strengthening key infrastructure, and providing affordable power to customers. * 2015: Ene
Slide 8: Environmental Initiatives - Natural Gas Distribution
ENVIRONMENTAL INITIATIVES - NATURAL GAS DISTRIBUTION Building upon our long-standing commitment to providing affordable, sustainable energy, MGE has set a goal to achieve Net-Zero Methane Emissions from its natural gas distribution system by 2035. * If MGE can accelerate plans to achieve net-zero me
Slide 9: Plan to Eliminate Coal-Fired Generation
PLAN TO ELIMINATE COAL-FIRED GENERATION Retiring the coal-fired Columbia Energy Center In 2022, the target retirement date for both units at the Columbia Energy Center was updated to June 2026. The revised retirement date reflects tight energy supply conditions in the Midwest power market and supply
Slide 10: Expanding Clean Energy Portfolio
EXPANDING CLEAN ENERGY PORTFOLIO Planned wind, solar and battery storage resources comprise over 40% of planned capital investment between 2023 and 2027. In Progress - Regulatory Approval Granted Project Investment Ownership Nameplate Estimated > (0) Interest (MW) In-Service Date 30% Badger Hollow I
Slide 11: Focus on Clean Energy Investment
FOCUS ON CLEAN ENERGY INVES Actual and Projected Capital Expenditures $250 Forecasted $226 $212 $215 $219 $219 $203 $200 $175 $88 $164 sale $98 $153 $117 a $150 2 & = $108 no $100 $139 $138 $121 $112 $50 $102 2017 2018 2019 2020 2021 2022 2023P 2024P 2025P 2026P 2027P m Renewables and Clean Energy I
Slide 12: Transmission Investment Outlook
TRANSMISSION INVESTMENT OUTLOOK v MGE Energy anticipates material transmission 2 investment opportunities later this decade through ee ATC. * MGE Energy holds 3.6% equity ownership interest in ATC. v MISO Long-Range Transmission Plan (LRTP) Tranche ‘rao ever 1 Portfolio proposal addresses needs acro
Slide 13: Constructive Regulation
CONSTRUCTIVE REGU Both S&P and Moody’s view the Wisconsin regulatory environment as highly credit supportive with timely operating and capital cost recovery, and view MGE's relationship with the Public Service Commission as constructive. Regulatory approvals of utility-scale renewable investments an
Slide 14: PSCW Regulation
PSCW REGU WISCONSIN COMMISSIONERS PARTY TERM BEGAN Rebecca Valeq (Chair) D Jan 2019 Mar 2025 Tyler Huebner * D Mar 2020 Mar 2027 Summer Strand * D Mar 2023 Mar 2029 * Not confirmed COMMISSION: - Gubernatorial appointment, Senate confirmation - Chair: Gubernatorial appointed - 6-year staggered terms
Slide 15: MGE Rate Case Update - 2024 / 2025 Test Year
MGE RATE CASE UPDATE - 2024 / 2025 TEST YEAR (TY) TERMS APPROVED APPROVED FILED FILED ($000's where applicable) 2022 TY 2023 TY 2024 TY 2025 TY Average Electric Rate Base $1,044,362 $1,162,516 $1,202,123 $1,281,236 Average Gas Rate Base $299,319 $312,270 $338,417 $345,463 Average Common Stock Equity
Slide 16: Customer Affordability
CUSTOMER AFFORDABILITY Average residential electric customer bill as % of Wisconsin median household income 2011 2012 2013 2014 — MGE 2015 2016 2017 2018 2019 2020 - -- Wisconsin Peer Average ‘Sources: Median household income data sourced from Federal Reserve Economic Data (FRED). Average Residentia
Slide 17: Inflation Reduction Act of 2022 (IRA)
INFLATION REDUCTION ACT OF 2022 (IRA) Inflation Reduction Act supports MGE’s carbon reduction strategy and increases flexibility toward meeting customer needs for affordable and reliable clean energy resources. Y Positioned to deliver material benefits to customers * Long-term extension of tax credi
Slide 18: Electric Vehicles and Deep Decarbonization
ELECTRIC VEHICLES AND DEEP DECARBONIZATION MGE has been supporting the adoption of alternative fuel vehicles since the launch of its public charging network more than a decade ago and anticipates continued electrification of transportation could drive incremental sales growth over the long term. Ele
Slide 19: ESG Summary - Environmental
ESG SUMMARY - ENVIRONMENTAL As your community energy company, MGE recognizes its responsibility to preserve and protect the environment while serving our communities with safe, reliable, affordable and sustainable energy. Leadership Energy Efficiency & Conservation Electrification of Transportation
Slide 20: ESG Summary - Social
ESG SUMMARY - SOCIAL As your community energy company, we consider it part of our responsibility to engage with our customers “where they are.” Our commitment to equitable service and to the power of working together drives how we seek to fulfill our mission and strengthen our communities. Safety /
Slide 21: ESG Summary - Governance
UMMARY - GOVERNANCE Our Board of Directors has a strong commitment to corporate responsibility and accountability. Community-focused and with a breadth and diversity of experience, board members bring strong effective oversight in their service to MGE and MGE Energy. Corporate Governance Highlights
Slide 22: ESG - Disclosures
ESG - DISC Below are links to where you can find ESG information: : an MUU AUNOWwWW—o—=EaMBLAUg MAME.) . TR \ % ¥ Corporate Responsibility and Sustainability Report e CDP Climate Change Questionnaire e EEl Qualitative Template e EE! Quantitative Template e EEO-1 Data Report Statement on Human Rights
Slide 23: Appendix
APPENDIX 23 OOOQOOOOO
Slide 24: Attractive Service Territory
ATTRACTIVE SERVICE TERRITORY The Madison area and Dane County lead the state in population growth. Our service territory is a growing and diverse community of urban, suburban and rural communities. =the Sianni*! Home to the flagship University of Wisconsin at Madison a @R— rosie Wind Fam EAE Robust
Slide 25: Corporate Structure
CORPORATE STRUCTURE Over 98% of MGE Energy assets are dedicated to regulated and quasi-regulated u Madison Gas and MGE Transco Electric Company Investment LLC Holds a 3.6% interest in American Transmission Company LLC®) MGEE Transco, LLC Holds a 4.4% interest in ATC Holdco LLC®) (1) Owns and operate
Slide 26: Strong Credit Ratings
STRONG CREDIT RATINGS , S&P (UTILITY RATINGS) MOODY'S (UTILITY RATINGS) Corporate credit AA- Secured Aa2 Business risk Excellent Unsecured Al Commercial paper A-1+ Commercial paper P= Outlook Stable Outlook Stable * Effective management of regulatory risk ¢ Supportive regulatory environment * Focus
Slide 27: Financing and Liquidity
FINANCING AND LIQUIDITY Long-Term Debt Short-Term Liquidity: MGE Energy + $75M of long-term debt priced October 2022 - $180M consolidated, committed, syndicated lines Dec 2022 funding: $25M 10-year notes (5.43% coupon) of credit Feb 2023 funding: $15M 10-year notes (5.43% coupon) + Termination date
Slide 28: EPS by Segment - Second Quarter
EPS BY SEGMENT - Second Quarter Three Months Ended June 30 2023 2022 — a n ti 3 3 2 $0.03 2 Ej = SS = $0.79 5 6 $0.60 $0.60 $0.36 Electric Utility Gas Utility | NonRegEnergy Transmission Other MGE Energy Electric Utility Gas Utility NonReg Energy Transmission Other MGE Energy Note: Sum of EPS by seg
Slide 29: EPS by Segment - YTD
EPS BY SEGMENT - YTD Six Months Ended June 30 a 7 0 $0.36 3 a = rT) 2 $1.65 3 a ¢ 3 $1.55 a $0.96 $0.76 Electric Utility Gas Utility NonReg Energy Transmission Other MGE Energy Electric Utility Gas Utility NonReg Energy Transmission Other MGE Energy Note: Sum of EPS by segment may differ from consol
Slide 30: Strong Track Record of Regulated Asset Growth
STRONG TRACK RECORD OF REGULATED ASSET GROWTH OQOOQOOOOO
Slide 31: Electric Utility Mix
ELECTRIC UTILITY MIX Six Months Ended June 30, 2023 Electric Revenues Electric Volumes Electric Customers 57% 53% = Residential Commercial = Industrial = Other Note: Electric customers are as of 12/31/2022 OQOOQOOOOO
Slide 32: Gas Utility Mix
GAS UTILITY MIX Six Months Ended June 30, 2023 Gas Revenues Gas Volumes Gas Customers 196 Note: Gas customers are as of 12/31/2022 = Residential Commercial/Industrial = Other OQOOQOOOOO
Slide 33: For more information, visit
For more information, visit mgeenergy.com Director Shareholder Services ENERGY and Treasury Management kfrassetto@mge.com a 608-252-4723 [ . 4 P.O. Box 1231 iD j Madison WI 53701-1231 : 7