Wec Energy Group, Inc. · NYSE:WEC

Wec Energy — Investor Presentation (November 2023)

55 slides from Wec Energy's investor presentation, Nov 9, 2023

1. Slide 1: Investing in Efficiency, Sustainability and Growth

   1 Investing in Efficiency, Sustainability and Growth Investor Update: November 2023

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 * As of October 31, 2023 $25.7 billion market cap* 4.6 million retail customers 60% ownership of American Transmission Company $43.4 billion of assets

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 '23 GAAP Adjusted** 2023 Guidance * Estimated based on 2023 guidance midpoint of $4.60 per share. ** See Appendix for r

5. Slide 5: EPS Guidance Exceeded: Consistent Performance Over Time

   5 EPS Guidance 2022 Exceeded  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 Exceeded  2005 Exceeded

6. Slide 6: Strong Dividend Growth Continues

   6  In January, raised the dividend by 7.2% to a new annual rate of $3.12 per share*  Top decile dividend growth in industry**  Marks the 20th consecutive year of rewarding shareholders with higher dividends  Named one of Morningstar’s 10 Best Dividend Stocks*** Strong Dividend Growth Continues *

7. Slide 7: What's New?

   7 What’s New?

8. Slide 8: A Range of Investment Opportunities: 2024-2028 Capital Plan

   8 Driven by:  Solid economic growth in Wisconsin  New transmission assets to ensure reliability  MISO's seasonal capacity rules  Continued hardening of our distribution networks A Range of Investment Opportunities 2024-2028 Capital Plan

9. Slide 9: Capital Plan – Key Drivers

   9 Capital Plan – Key Drivers Identified $3.3 billion of additional investments compared to previous five-year plan.  Regulated renewables – $1.4 billion increase  Natural gas generation – $1.3 billion increase  LNG capacity – $800 million increase  Transmission investments – $1.0 billion increas

10. Slide 10: Increasing Five-Year Capital Plan by $3.3 Billion

    10 $6.4 $9.3 $0.2 $1.0 $3.6 $3.7 $6.0 $6.0 $2.0 $3.0 $1.9 $0.4 $20.1 $23.4 2023-2027 2024-2028 Energy Infrastructure ATC* Gas Delivery** WI/MI Electric Delivery WI LNG Capacity WI/MI GenerationN e w p la n F o rm e r p la n $ In billions *ATC is accounted for using the equity method; this represents

11. Slide 11: Robust Growth in Asset Base

    11 $29.4 billion $43.3 billion 2023E* 2028E* Robust Growth in Asset Base *Estimated year-end average asset base. Expect compound annual EPS growth of 6.5% to 7.0% 8.1% Growth

12. Slide 12: Business Portfolio Growing in Electric Transmission and Generation

    12 Business Portfolio Growing in Electric Transmission and Generation 2028E*2023E* Electric generation and distribution 48% Natural gas distribution 35% WECI 7% Electric transmission** 10% ** ATC is accounted for using the equity method; this represents WEC Energy Group’s portion of the asset base.

13. Slide 13: Exiting Coal

    13 We now plan to eliminate coal as an energy source three years earlier - by end of 2032.  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)  Weston Unit 3: 328 MW (end of 2031)  Enhancing fue

14. Slide 14: Announced Projects: Investing $6.8 Billion in Regulated Renewables

    14 Target Project Utility WEC Ownership1 WEC Investment ($M) WEC Capacity (MW) 2023/Early 2024 Badger Hollow II Solar Park WEPCO 66.7% 172E 100 S: 2024/B: 2025 Paris Solar-Battery Park WEPCO and WPS 90% 542E 279 2024 Darien Solar Park2 405E 225 2026 Koshkonong Solar Park2 486E 270 1. Madison Gas & E

15. Slide 15: Modernizing Our Gas-Fueled Generation Fleet

    15 Modern, efficient natural gas generation will serve as a critical resource in our energy transformation. Modernizing Our Gas-Fueled Generation Fleet West Riverside Energy Center Combined-Cycle  Additional 100 MW option*  Expected investment: $100 million  Target: 2024 Combustion Turbines  1,1

16. Slide 16: Investing in Our Natural Gas Reliability and Capacity

    16 Investing in Our Natural Gas Reliability and Capacity  New proposed LNG storage facilities are needed to ensure gas supply for winter reliability.  Expected investment: $860 million  4 Bcf planned  LNG storage facilities under construction address the need to support our natural gas distribut

17. Slide 17: Growing Transmission Investment

    17 $547 $636 $867 $1,148 $1,187 $1,152 $328 $382 $520 $689 $712 $691 2023 2024 2025 2026 2027 2028 ATC WEC portion 60%  Tranche 1 in 2022 dollars:  ATC: $900 million  WEC portion: $540 million  $330 million in this plan  MISO Tranche 2 planning underway WEC portion of ATC investment expected fr

18. Slide 18: Projected Cash Flows and Financing Plan

    18 Projected Cash Flows and Financing Plan ($ in billions) Cash from Operations $16.5 - $17.5 Incremental Debt $7.0 - $8.0 Dividends $6.0 - $6.2 Capital Plan* $20.4 Cash Uses Cash Sources Common Equity $1.8 - $2.2 * Excludes ATC’s capital. ATC is accounted for using the equity method. 2024 - 2028

19. Slide 19: Credit Quality – Maintaining a Healthy Balance Sheet

    19 Credit Quality – Maintaining a Healthy Balance Sheet Current Issuer Credit Ratings 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 FFO/Debt Metrics 2024-2028 WEC Energy Group Target GAAP FFO to

20. Slide 20: Wisconsin Utilities — Rate Review Scope for 2024

    20 Wisconsin Utilities — Rate Review Scope for 2024 Limited Reopener  Addresses the recovery of new renewable facilities, RICE generation and LNG reliability investments that achieve commercial operation in 2023 and 2024  Addresses projected O&M savings from the planned retirement of two older coa

21. Slide 21: Illinois Rate Review

    21  Peoples Gas is not seeking an extension of the automatic bill adjustment rider QIP.  With natural gas prices expected to decline this year and next year, we project customer bills to stay largely flat as new rates take effect in 2024.  Chicago home heating bills are below other major U.S. cit

22. Slide 22: Carbon Reduction Goals – Electric Generation

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

23. Slide 23: Methane Reduction

    23 Goal: Net zero by end of 2030** * Represents a decrease in the rate of methane emissions across our system from a 2011 baseline. ** This goal applies to emissions from WEC Energy Group natural gas distribution companies calculated in accordance with EPA’s 40 Code of Federal Regulations Part 98, S

24. Slide 24: Organic Flow Battery Storage: New Clean Energy Pilot Project

    24  Leading a pilot project to test a new form of long-duration energy storage.  Partnering with EPRI and CMBlu Energy  This system uses a proprietary technology that incorporates environmentally friendly materials - ‘a green battery.’  The project will test battery system performance, including

25. Slide 25: Regional Economy

    e Regional Economy ose

26. Slide 26: Powering Industry Leaders in Our Region

    26 Powering Industry Leaders in Our Region

27. Slide 27: Longer-Term Sales Forecast

    27 Longer-Term Sales Forecast Wisconsin Segment Year-Over-Year 2026-2028 Electric 4.5%-5.0% Gas 0.7%-1.0% Sales Growth Forecast (weather-normalized)

28. Slide 28: Key Takeaways for WEC Energy Group

    28  Track record of top decile performance among regulated utilities.  Industry leading earnings quality.  Capital plan drives premium EPS growth of 6.5% to 7.0%.  98%+ of capital allocated to regulated businesses.  Dividend growth projected to be in line with earnings growth.  Aggressive envi

29. Slide 29: Appendix

    Appendix Wa wec VA Energy Group

30. Slide 30: Electric Distribution Electric Transmission 60% ownership Electric Generation Energy Infrastructure Natural Gas Distr…

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

31. Slide 31: Inflation Reduction Act: Customer Benefit and Investment Opportunity

    31  Extension of production tax credits (PTC) and investment tax credits (ITC).  PTC option for solar projects.  ITC for stand-alone electric storage projects.  Tax credit “transferability” to provide additional options for monetization.  Credit positive.  At WEC, no material impact expected f

32. Slide 32: Commitment to ESG

    32 Reduce carbon dioxide emissions from electric generation 60% by end of 2025 and 80% by 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 end of 2032 Targeting net-zero methane emissions from distributi

33. Slide 33: Electricity Supply by Fuel Type

    33 Electricity Supply by Fuel Type (megawatt-hours delivered to regulated utility customers) 73% 32% 7% 38% 43% 17% 22% 21% 3% 8% 34% 2005 2022 2030E 2032 2050 Coal Natural Gas Nuclear Renewables Exiting Coal <2% Net carbon neutral goal Planned exit from coal

34. Slide 34: Reducing Greenhouse Gas Emissions

    34 Reducing Greenhouse Gas Emissions 0.78 0.43 0.33 0.16 0** 2005 2022 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

35. Slide 35: WEC Infrastructure Portfolio

    35 SD IL NE WEC Infrastructure Portfolio In service Under development Total Project Capacity (MW) Investment (in millions) Wind ● Upstream 200 $307 ● Bishop Hill III 132 166 ● Coyote Ridge 97 145 ● Blooming Grove 250 389 ● Tatanka Ridge 155 240 ● Jayhawk 190 282 ● Thunderhead 300 381 ● Sapphire Sky

36. Slide 36: WEC Infrastructure Project Details and Offtake Agreements

    36 Project Developer Investment Offtake Agreement WEC Commercial Operations Total Project Capacity Bishop Hill III Wind Energy Center Invenergy $166M for 90% ownership WPPI Energy 22 years 8/31/18 132 MW Upstream Wind Energy Center Invenergy $307M for 90% ownership Affiliate of Allianz 10 years 1/10

37. Slide 37: Why Our Natural Gas Distribution Networks Matter

    37 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 ne

38. Slide 38: Maintaining Reliable and Affordable Service: Electric Delivery

    38 Efficiency, Sustainability and Growth Progress Electric delivery redesign/resilience  Addressing aging infrastructure and system hardening  Enhancing efficiencies and reducing operating costs  Expect to spend $3.7 billion (2024- 2028) with continued investment over next decade Taking Steps to

39. Slide 39: Maintaining Reliable and Affordable Service: Natural Gas Safety

    39 Efficiency, Sustainability and Growth Progress 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-$300 million annual average

40. Slide 40: Utility Capital Plan Drives EPS Growth

    40 Utility Capital Plan Drives EPS Growth $23.0 Billion Projected Capital Spend From 2024-2028 1,026 1,288 1,616 1,918 2,229 2,277 140 26 110 384 344 100 630 775 790 729 737 730 1,027 1,220 1,214 1,176 1,265 1,113 311 382 520 689 712 691 $3,134 $3,691 $4,250 $4,896 $5,287 $4,911 - 1,000 2,000 3,000

41. Slide 41: Capital Plan Projections

    41 Company 2023 2024 2025 Wisconsin Electric $1,240.3 $1,661.6 $1,877.4 Wisconsin Gas 232.5 228.1 227.7 Wisconsin Public Service 652.7 620.7 783.8 Upper Michigan Energy 16.5 32.1 90.6 Wisconsin Segment $2,142.0 $2,542.5 $2,979.5 Peoples Gas 468.0 541.7 539.2 North Shore Gas 40.9 49.2 61.7 Illinois S

42. Slide 42: Composition of Asset Base

    42 Composition of Asset Base Total 2022 Average Asset Base of $26.5 Billion Note: We Power value represents investment book value. Company Asset Base - $B % of Total Wisconsin Electric $7.3 27.5% Wisconsin Gas 1.9 7.2 Wisconsin Public Service 4.2 15.9 Upper Michigan Energy Resources 0.4 1.5 Peoples

43. Slide 43: Diverse Portfolio of Businesses

    43 Diverse Portfolio of Businesses Based on 2022 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 represe

44. Slide 44: Power the Future Investments

    44 Power the Future Investments 1 Port Washington (Natural Gas) Oak Creek Expansion (Coal/Co-Fire Gas3) Capacity 1,090 MW 1,030 MW 2 Investment $664 million $2 billion 2 ROE 12.7% 12.7% Equity 53% 55% In Service Dates Unit 1 – July 2005 Unit 2 – May 2008 Unit 1 – February 2010 Unit 2 – January 2011

45. Slide 45: National Leader in Operating Efficiency and Financial Discipline

    45 National Leader in Operating Efficiency and Financial Discipline $28.10 $12.30 $15.40 $17.90 $20.40 $22.20 $24.30 $24.90 $26.80 $39.20 $77.20 $0 $10 $20 $30 $40 $50 $60 $70 $80 2022 Non-Fuel O&M per MWh* Source: FERC Form 1 Reports *For all companies, excluded 1) pensions and other employee benef

46. Slide 46: Focused on Efficiency

    46 Focused on Efficiency $1,342 $1,281 $1,234 $1,143 $1,107 $1,088 $1,082 2016 2017 2018 2019 2020 2021 2022 2023E $ 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 colle

47. Slide 47: Financing Plans for 2023

    47 Existing Facilities $1.9B net liquidity (as of Oct. 31, 2023) Financing Plans for 2023 1 $2,050 $100-$150$0 $500 $1,000 $1,500 $2,000 $2,500 Holding Company Utilities & Energy Infrastructure (i n m ill io n s ) YTD Financing Planned Financing 2 1. Amounts and timing are subject to material change

48. Slide 48: Projected Financing Plans for 2024

    48 Projected Financing Plans for 2024 1 $1,900- $2,300 $100-$200 $0 $500 $1,000 $1,500 $2,000 $2,500 Holding Company Utilities & Energy Infrastructure Equity Issuance (i n m ill io n s ) $700-$1,200 2 1. Amounts and timing are subject to material change based upon numerous factors, including market

49. Slide 49: Balanced Sales Mix

    49 34% Large C&I by Segment Paper/Packaging 26% Foundry (SIC 33) 11% Mining/Minerals 10% Metal (SIC 34,35,37) 8% Other Manufacturing 8% Food/Agriculture 7% Medical 6% 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% 2022

50. Slide 50: Regulatory Matters

    50 Estimated Decision Date Wisconsin (apps.psc.wi.gov)  Commission decision on limited re-opener for new base rates effective 1/1/24 (Dockets: WE and WG: 5-UR-110 and WPS 6690-UR-127) Q4 2023 Illinois (icc.illinois.gov)  Decision on general rate review for new base rates effective 1/1/24 (Dockets:

51. Slide 51: Regulatory Environment

    51 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

52. Slide 52: Rate-Making Parameters by Company

    52 Rate-Making Parameters by Company Utility Equity Layer1 Authorized ROE Wisconsin Electric 50.50%-55.50% 9.80% Wisconsin Public Service 50.50%-55.50% 9.80% Wisconsin Gas 50.50%-55.50% 9.80% Peoples Gas 50.33% 9.05% North Shore Gas 51.58% 9.67% Minnesota Energy Resources 53.00% 9.65% Michigan Gas U

53. Slide 53: Key Rate-Making Components

    53 Key Rate-Making Components Area Illinois– Gas Minnesota– Gas Michigan– Electric and Gas Wisconsin– Gas Wisconsin– Electric Gas Pipeline Replacement Rider PGL1 MGU Bad Debt Rider ✓ Bad Debt Escrow Accounting Residential Residential Decoupling ✓ ✓ Fuel Cost Recovery 1 for 1 recovery of prudent fuel

54. Slide 54: Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP)

    54 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 – – – $

55. Slide 55: Contact Information

    55 Contact Information M. Beth Straka Senior Vice President – Investor Relations and Corporate Communications Beth.Straka@wecenergygroup.com 414-221-4639 Amanda Brockman Investor Relations Analyst Amanda.brockman@wecenergygroup.com 920-433-2966

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