Mge Energy Inc. · NASDAQ:MGEE
Mge Energy — AGA Virtual Financial Forum 2021
28 slides from Mge Energy's conference presentation, May 19, 2021
Slide 1: AGA Virtual Financial Forum
AGA VIRTUAL FINANCIAL FORUM MAY 2021 Responsibility Reliability Resiliency
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 Regarding Forward-looking Information
Cautionary Note Regarding 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 uncer
Slide 4: Company Highlights
Company Highlights Diversified Customer Base and Revenue Profile Regulated, Highly Visible Growth Resilient Revenue Stream and Customer Base 5-Year Regulated PPE(1) CAGR of 7.3% • Electric service to ~157,000 customers with locations in the cities of Fitchburg, • Total forecasted regulated capex of
Slide 5: Corporate Structure
Corporate Structure Central Wisconsin Madison Gas and MGE Transco MGEE Transco, MGE State Energy MGE Services, MGE Power LLC MAGAEL, LLC Development Electric Company Investment LLC LLC Services, LLC(3) LLC Corporation North Mendota MGE Power MGE Power Elm Energy & State Energy West Campus, LLC Road,
Slide 6: Attractive Service Territory
Attractive Service Territory Major customers include: • University of Wisconsin-Madison • Hospitals and medical facilities • State of Wisconsin government Complete In progress Proposed 6
Slide 7: Earnings and Dividends per Share Growth
Earnings and Dividends per Share Growth Earnings Per Share Dividends Paid Per Share $3.00 $1.60 $1.40 $2.50 $1.20 $2.00 $1.00 $1.50 $0.80 $0.60 $1.00 $0.40 $0.50 $0.20 $- $- 2015 2016 2017 (1.) 2018 2019 2020 2015 2016 2017 2018 2019 2020 (1.) 2017 Non-Regulated earnings per share includes one-time
Slide 8: Stable Asset Growth
Stable Asset Growth Asset Growth ($ Millions) $2,254 $2,270 $2,082 $1,989 $1,855 $1,801 $1,690 $1,726 $1,559 $1,574 $1,454 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 2021 Assets 8
Slide 9: Focused ESG strategy
Focused ESG strategy Foundational objectives under Energy 2030 Framework • Transition MGE to a more environmentally sustainable energy supply; • Provide customers with options they want today and in the future; • Help customers use energy efficiently and control future costs for all customers; • Pro
Slide 10: Focused ESG Strategy
Focused ESG Strategy Net-Zero Carbon Electricity by 2050 Strategies for deep decarbonization • Grow our use of renewable energy • Further engage customers in energy efficiency • Electrify transportation and other end uses 10
Slide 11: Retirement of Legacy Fossil Fuel Power Plant
Retirement of Legacy Fossil Fuel Power Plant MGE, along with its co-owners, WP&L (operator and majority owner) and WPSC, announced plans to retire the approximately 1,100-MW coal-fired Columbia Energy Center. • MGE currently owns 19% of the facility (216 MW), which accounts for nearly 30% of MGE’s n
Slide 12: Consistent Capital Expenditure Growth
Consistent Capital Expenditure Growth Focused on clean energy and progress toward net-zero carbon Actual and Projected Capital Expenditures Forecasted $250 $212 $209 $203 $202 $200 $175 $164 $ Millions $150 $119 $106 $58 Approximately 45% Clean Energy $100 $50 $108 $106 $97 $84 $93 $72 - 2015 2016 2
Slide 13: Transition to Clean Energy Generation
Transition to Clean Energy Generation Since 2015 when MGE announced its Energy 2030 Framework, MGE's clean energy projects will grow our renewables capacity by 960%, by investing an estimated $565 million in wind, solar and battery storage. Investment Capital Expenditures Nameplate Capacity In Servi
Slide 14: ESG & Sustainability Summary
ESG & Sustainability Summary Leadership Safety Workforce • Environmental and Sustainability • Safety Steering Team – examines safety • Career development and training Policy topics and prioritizes continuous programs to increase job proficiency • Sustainability Executive Team improvement opportuniti
Slide 15: Constructive Regulatory Environment
Constructive Regulatory Environment 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 rene
Slide 16: 2021 PSCW Approved Rate Settlement
2021 PSCW Approved Rate Settlement Approved PSCW Rate Settlement Test Year 2020 Test Year 2021 ($000’s, where applicable) Authorized Electric Rate Base $860,538 $1,019,177 Authorized Gas Rate Base $250,743 $282,360 CSE Authorized 56.06% 55.84% Authorized ROE 9.8% 9.8% Electric – 0% increase • Increa
Slide 17: 2022 and 2023 Rate Filing Update
2022 and 2023 Rate Filing Update Filed application with PSCW requesting: 2022 Test Year • 5.9% increase in electric base rates with proposal to partially offset with 2020 fuel credit ✓ Driven by increased rate base investments, including full-year of BH I and new customer information system; ✓ Also
Slide 18: Technology Investments
Technology Investments • In 2017, MGE committed to undertake a multiyear project aimed at transforming our foundational customer engagement capabilities to enable flexibility and capability in delivering new products and services as outlined in our Energy 2030 Framework. MGE has forecasted $50M of c
Slide 19: Commitment to Dividends & Shareholder Value
Commitment to Dividends & Shareholder Value • Recent dividend increase was approximately 5% • Increased dividend in July for the 45th consecutive year • Paid dividends for over 110 years • Dividend payout ratio in the 50-60% range in recent years • No dividend payout range targeted • Dividend flexib
Slide 20: Company Highlights
Company Highlights Diversified Customer Base and Revenue Profile Regulated, Highly Visible Growth Resilient Revenue Stream and Customer Base 5-Year Regulated PPE(1) CAGR of 7.3% • Electric service to ~157,000 customers with locations in the cities of Fitchburg, • Total forecasted regulated capex of
Slide 21: Appendix
Appendix 21
Slide 22: MGE's Strong Credit Ratings
MGE’s Strong Credit Ratings (1) S&P (UTILITY RATINGS) MOODY’S (UTILITY RATINGS) Corporate credit AA- Secured Aa2 Business risk Excellent Unsecured A1 Commercial paper A-1+ Commercial paper P-1 Outlook Stable Outlook Stable • Effective management of regulatory risk • Rating reflects a credit supporti
Slide 23: Total Shareholder Return
Total Shareholder Return As of December 31, 2020 15.22% 13.26% 13.26% 12.44% 11.74% 11.23% 10.86% 10.77% MGEE S&P 500 - Electric Russell 2000 S&P 500 5 Year 10 Year 23
Slide 24: MGE Electric and Gas Sales
MGE – Electric Three Months Ended March 31st and Gas Sales 8.5% 7.0% -0.6% -3.7% -3.5% Residential Electric Commerical Electric Industrial Electric Total Retail Electric Total Retail Natural Gas 2021 2020 % Heating Degree Days (Normal 3,531) 3,593 3,225 11.4% • Increased residential sales offset by
Slide 25: Earnings per Share Segments
Earnings per Share Segments Three Months Ended March 31st 2020 2021 $0.05 ($0.01) $0.05 $0.14 ($0.01) $0.15 $0.97 $0.75 $0.79 $0.56 25
Slide 26: Electric Retail Sales Mix
Electric Retail Three Months Ended March 31st Sales Mix 2020 2021 11% 10% 5% 27% 5% 30% 57% 55% Residential Commercial Industrial Other Residential Commercial Industrial Other 26
Slide 27: Gas Retail Sales Mix
Gas Retail Sales Three Months Ended March 31st Mix 2020 2021 46% 46% 54% 54% Residential Commercial / Industrial Residential Commercial / Industrial 27
Slide 28: For more information: Visit mgeenergy.com
For more information: Visit mgeenergy.com Ken Frassetto Director Shareholder Services AGA Financial Forum May 2021 and Treasury Management kfrassetto@mge.com 608-252-4723 PO Box 1231 Madison WI 53701-1231 28