WEC Energy Group, Inc. · NYSE:WEC

WEC Energy — Wisconsin Energy — Investor Presentation (March 2011)

20 slides from WEC Energy's investor presentation, March 2011

  1. Slide 1: Wisconsin Energy Corporation March 2011

    Yau Wisconsin Energy (7m Corporation March 2011

  2. 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

  3. 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 „ All per share values reflect two-for-one share split effective March 1, 2011 3

  4. Slide 4: Overview of Wisconsin Energy

    Overview of Wisconsin Energy Estimated Rate Base and Power the Future Investment at 12/31/11 „ Retail Electric and Gas Utilities „ Wisconsin, Michigan, and FERC $9.7 Billion jurisdictions „ 48.5% to 53.5% equity for Wisconsin $2.7 $0.7 Electric „ 10.4% allowed ROE $2.7 „ 45% to 50% equity for Wiscon

  5. Slide 5: Retail Electric and Gas Utilities

    Retail Electric and Gas Utilities „ Largest electric and gas company in Wisconsin „ 1.1 million electric customers „ 1.0 million natural gas customers 5

  6. Slide 6: Expected Levels of Investment and Depreciation

    Retail Electric and Gas Utilities Expected Levels of Investment and Depreciation $1,000 $914 $900 $166 $800 Millions of Dollars $687 $700 $625 $600 $212 $333 $68 $493 $500 $132 $71 $400 $146 $10 $300 $200 $415 $425 $412 $329 310 320 250 260 $100 $0 2010A 2011E 2012E 2013E Base Renewable Environmenta

  7. Slide 7: Projected Rate Base

    Retail Electric and Gas Utilities Projected Rate Base Average Total Utility Rate Base $8 $6.7 $6.7 $7 $6.3 $0.4 $0.3 $0.2 $6 $5.5 Billions of Dollars $1.0 $5 $0.6 $4 $6.4 $6.7 $3 $4.9 $5.1 $2 $1 $0 ($0.1) ($0.3) 2010A 2011E 2012E 2013E -$1 PPE CWIP All Other* *All other is comprised of customer adva

  8. Slide 8: Renewable Energy Opportunity: Renewable Portfolio Standard

    Renewable Energy Opportunity Renewable Portfolio Standard in Wisconsin Required Percentage for Wisconsin Electric Retail Sales 8.27% * 4.27% * 2.27% 2001-03 2010 2015 Baseline *Requirements at a Wisconsin state level are 5% and 10% in 2010 and 2015 respectively. In terms of energy this is estimated

  9. Slide 9: 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 165MW of renewable energy transactions to help ach

  10. Slide 10: Renewable Energy Opportunity: Biomass Project

    Renewable Energy Opportunity Biomass Project „ Biomass „ Filed application for a 50MW project with PSCW on March 15, 2010 „ Estimated investment of $255 million with a target in-service date of 2013 „ All local permits have been obtained „ Decision by the PSCW is expected in the first quarter of 201

  11. Slide 11: Electric Fuel Cost Recovery

    Electric Fuel Cost Recovery Wisconsin Jurisdiction „ Electric fuel case for 2010 was filed on February 19, 2010 „ Interim relief was granted on March 25, 2010 „ Wisconsin jurisdictional increase of $60.5 million, subject to refund „ Final decision expected in early 2011 „ Limited reopening of fuel r

  12. Slide 12: 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 Unit 1 – July 16, 2005 Unit 1 – February 2, 2010 In-service Dates Unit 2 – May 23, 2008 Unit 2 – January 12

  13. Slide 13: Power the Future: Expected Earnings

    Power the Future Expected Earnings Earnings per Share Contribution Key Assumptions Consolidated Basis „ Oak Creek Unit 2 in service $0.66 $0.67 January 12, 2011 „ Cost estimate of $2 billion for $0.48 WEC’s ownership of the coal units $0.21 „ Free cash flow of $225 million in 2011 – after capex and

  14. Slide 14: Wholesale Electric Transmission

    Wholesale Electric Transmission „ Wisconsin Energy owns 26.2% of American Transmission Company (ATC) „ ATC is projected to contribute approximately 16 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 billi

  15. Slide 15: Wholesale Electric Transmission: Expected Earnings

    Wholesale Electric Transmission Expected Earnings Projected Capital Expenditures Key Assumptions (Millions of Dollars) $271 „ In its latest 10-year $252 $252 assessment ATC projects a need for $3.4 billion of transmission improvements in its footprint from 2010 to 2019 „ Implies average $30 million

  16. Slide 16: Projected Earnings Base for 2010 - 2012

    Projected Earnings Base for 2010 - 2012 2010A 2011E 2012E Electric and Gas Utilities $1.34 $1.36 to $1.41 $6.7 billion rate base Power the Future (1) $0.48 $0.66 $0.67 Wholesale Electric Transmission (2) $0.15 $0.16 $0.17 Unallocated holding company debt(3) ($0.05) ($0.13) ($0.09) $1.92 $2.05 to $2.

  17. Slide 17: Financing and Dividend Policy

    Financing and Dividend Policy „ Capital Structure Goals „ Maintain debt to capital below 55% by the end of 2013 „ Actual ratio was 54.1% at the end of 2010 „ Assumes half of hybrid securities are treated as common equity „ Dividend Policy „ Target a dividend payout ratio of 50-55 percent of earnings

  18. Slide 18: Free Cash Flow Generation

    Free Cash Flow Generation „ Base Assumptions „ 50% dividend payout ratio „ $450 million April 1, 2011 WEC debt maturity repaid „ $3.4 billion capital budget over 2011 to 2015 period „ After funding requirements listed above we estimate additional free cash flow of about $600 million from 2011 to 201

  19. Slide 19: Projected Growth in Earnings and Dividends

    Projected Growth in Earnings and Dividends Earnings per Share Dividends per Share $2.05 to $1.04 $1.92 $2.10 $1.60 $0.80 $0.68 2009A 2010A 2011E 2009A 2010A 2011E 19

  20. Slide 20: Key Takeaways on Wisconsin Energy

    Key Takeaways on Wisconsin Energy „ Power the Future program now 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 Compa

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