Mge Energy Inc. · NASDAQ:MGEE
Mge Energy — EEI Financial Conference 2021
33 slides from Mge Energy's conference presentation, Nov 5, 2021
Slide 1: EEI Financial Conference
EEI FINANCIAL CONFERENCE NOVEMBER 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 • Total forecasted regulated capex of approx. $76
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) $2,371 $2,254 $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 Q3 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: 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 more than 9x, by investing an estimated $565 million in wind, solar and battery storage. 100% AFUDC- Investment Project Costs Nameplate Capa
Slide 12: Net-Zero Carbon Electricity Goal With Plans to Eliminate Coal-Fired Generation
Net-Zero Carbon Electricity Goal With Plans to Eliminate Coal-Fired Generation from Portfolio by 2035 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 fa
Slide 13: 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 $211 $203 $203 $199 $200 $172 $164 $ Millions $150 $119 $106 $58 Approximately 50% Clean Energy $100 $50 $108 $106 $97 $84 $93 $72 - 2015 2
Slide 14: Capital Expenditures Recon
Capital Expenditures Recon Updated capital expenditures forecast is primarily driven by a shift of clean energy project schedules and routine utility maintenance from 2021 into 2022 ($ 000s) 2021 2022 2023 2024 2020 10-K Total Capital Expenditures $ 202,000 $ 175,200 $ 208,900 N/A Electric (21,500)
Slide 15: Renewables Transition Driving Strong Growth
Renewables Transition Driving Strong Growth MG&E Rate Base as Authorized/Proposed by PSCW* ($ millions) 2015 2017 2019 2020 2021 2022p 2023p Electric Utility 575.9 570.8 842.6 860.5 1,019.1 1,044.4 Limited Reopener Gas Utility 158.1 175.8 233.4 250.7 282.4 299.3 312.3 Total Utility Rate Base $733.9
Slide 16: Electric Vehicles and Deep Decarbonization
Electric Vehicles and Deep Decarbonization: Electrification of MGE fleet • MGE has been advancing alternative fuel vehicles since the launch of its public charging network more than a decade ago. • The company has set a fleet goal of 100% all-electric or plug-in hybrid light-duty vehicles by 2030. M
Slide 17: 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 18: 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 19: 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 • Increas
Slide 20: Proposed Rate Case Settlement: Test Years 2022 and 2023
Proposed Rate Case Settlement: Test Years 2022 and 2023 On September 3, 2021, MG&E and intervening parties submitted a comprehensive rate case settlement agreement, which is subject to approval by the PSCW. The PSCW is expected to issue its decision by year-end 2021, for implementation of 2022 rates
Slide 21: 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. • These objectives are expec
Slide 22: Commitment to Dividends & Shareholder Value
Commitment to Dividends & Shareholder Value • Recent dividend increase was approximately 5% • Increased dividend in August 2021 for the 46th 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
Slide 23: 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 • Total forecasted regulated capex of approx. $76
Slide 24: Appendix
Appendix 24
Slide 25: 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 26: Total Shareholder Return
Total Shareholder Return Period Ending 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 26
Slide 27: MGE Electric Sales
MGE – Electric Sales Three Months Ended September 30th Growth 9.7% 4.5% 2.2% -2.0% -3.9% Residential Electric Commerical Electric Industrial Electric Other Retail/Municipal Total Retail Electric Electric 2021 2020 % Cooling Degree Days (Normal 494) 511 519 (1.5)% 27
Slide 28: MGE Electric and Gas Sales Growth
MGE – Electric YTD Ended September 30th and Gas Sales Growth 8.0% 7.0% 6.0% 5.3% 5.0% 4.0% 3.3% 2.8% 3.0% 2.0% 1.3% 1.5% 1.0% 0.3% 0.0% Residential Electric Commerical Electric Industrial Electric Other Retail/Municipal Total Retail Electric Total Retail Natural Electric Gas 2021 2020 % Cooling Degr
Slide 29: Earnings per Share Segments
Earnings per Share Segments Three Months Ended September 30th 2020 2021 $0.15 $0.05 $0.00 $0.15 $0.05 ($0.00 ) $0.96 $0.88 $0.69 $0.76 29
Slide 30: Earnings per Share Segments
Earnings per Share Segments Nine Months Ended September 30th 2020 2021 $0.15 $0.44 $0.16 $0.44 ($0.01 ) ($0.01 ) $2.56 $2.16 $1.98 $1.57 30
Slide 31: Electric Retail Sales
Electric Retail Sales Nine Months Ended September 30th Mix 2020 2021 11% 12% 5% 5% 31% 29% 54% 55% Residential Commerical Industrial Other Residential Commerical Industrial Other 31
Slide 32: Gas Retail Sales
Gas Retail Sales Nine Months Ended September 30th Mix 2020 2021 48% 48% 52% 52% Residential Commercial / Industrial Residential Commercial / Industrial 32
Slide 33: For more information: Visit mgeenergy.com
For more information: Visit mgeenergy.com Ken Frassetto EEI Financial Conference Director Shareholder Services November 2021 and Treasury Management kfrassetto@mge.com 608-252-4723 PO Box 1231 Madison WI 53701-1231 33