Wec Energy Group, Inc. · NYSE:WEC

Wec Energy — Investor Presentation (April 2022)

55 slides from Wec Energy's investor presentation, Apr 11, 2022

1. Slide 1: Investor Update: April 2022

   Investor Update: April 2022 Our “ESG” Progress Plan Investing in Efficiency, Sustainability and Growth Best in the U.S. in Large Customer Satisfaction ESource We Energies Named #1 Energy Company in America by Business Customers Escalent Best ESG Growth Strategy in the U.S. Capital Finance Internatio

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: Company Profile

   3 Company Profile  $31.5 billion market cap*  4.6 million retail customers  60% ownership of American Transmission Company  $39.0 billion of assets * As of Mar. 31, 2022

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 GAAP Adjusted** 2022 Guidance * Estimated based on 2022 guidance midpoint of $4.31 per share. ** See Appendix for recon

5. Slide 5: Consistent Performance Over Time

   5 Consistent Performance Over Time EPS Guidance 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 Exceede

6. Slide 6: What's New?

   6 What’s New?

7. Slide 7: Recent Project Approvals Advancing Our ESG Progress Plan

   7 Recent Project Approvals Advancing Our ESG Progress Plan Approved Investment Paris Solar-Battery Park $390 million LNG Storage Facilities $370 million Weston RICE units* $170 million Red Barn Wind Park $140 million ERGS Effluent Limit Guideline Compliance $90 million Since we announced our new fiv

8. Slide 8: Strong Dividend Growth Continues

   8 In January, raised the dividend by 7.4% to a new annual rate of $2.91 per share* Strong Dividend Growth Continues *Annualized based on 1st quarter 2022 dividend of 72.75 cents per share Top decile dividend growth in industry** ** Reflects dividends declared in 2021

9. Slide 9: Strong Dividend Growth Continues

   9 $0.80 $1.04 $1.20 $1.445 $1.56 $1.83* $1.98 $2.08 $2.21 $2.36 $2.53 $2.71 $2.91 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022E Strong Dividend Growth Continues Targeting dividend payout of 65%-70% of earnings Projecting dividend growth in line with earnings growth *Annualized ba

10. Slide 10: Exiting Coal

    10  Near-term retirements planned (2023-2024)  Oak Creek - Units 5-8 1,100 MW  Columbia - Units 1-2 300 MW  Enhancing fuel flexibility (gas blending) at Oak Creek Power the Future units, pending environmental and regulatory approvals  By the end of 2030, we expect our use of coal to be immateri

11. Slide 11: Hydrogen Pilot Program

    11  Leading a pilot program to test hydrogen as a fuel source for power generation  Partnering with the Electric Power Research Institute (EPRI)  Co-firing hydrogen with natural gas at one of our RICE units  One of the first hydrogen power pilot programs of its kind in the United States WEC Ener

12. Slide 12: Next Steps in Succession Planning

    12 Scott Lauber promoted to president and CEO effective February 1, 2022 Next Steps in Succession Planning Gale Klappa will continue to serve as executive chairman until May 2024

13. Slide 13: ESG Progress Plan

    13 ESG Progress Plan

14. Slide 14: ESG Progress Plan Supports 6-7% EPS Growth

    14 $3,078 $4,693 $3,150 $3,356 $3,023 $2,811 $3,054 $3,053 $487 $542 $1,120 $1,345 $2,188 $1,900 $16,100 $17,700 2021-2025 2022-2026 Energy Infrastructure ATC MERC/MGU Illinois WI Gas Delivery WI Electric Delivery WI Generation N e w P la n 1 F o rm e r P la n ESG Progress Plan Supports 6-7% EPS Gro

15. Slide 15: Robust Growth in Asset Base

    15 $25 billion $35 billion 2021A 2026E* Robust Growth in Asset Base *Estimated year-end average asset base Expect long-term EPS growth of 6-7% per year. 7% Growth

16. Slide 16: Investing in Efficiency and Sustainability Drives Growth

    16 $2.7 15% $12.2 69% $2.8 16% Sustainability Renewables $5.4 Grid and Fleet Reliability $6.8 Efficiency Technology $1.1 Grid and Fleet Modernization $1.6 Growth Gas Distribution $1.3 Electric (G,T&D) $1.5 2022-2026 Capital Plan ($ in billions) Investing in Efficiency and Sustainability Drives Growt

17. Slide 17: Carbon Reduction Goals – Electric Generation

    17 Our ESG Progress Plan Carbon Reduction Goals – Electric Generation Reduction goals: 60% below 2005 levels by the end of 2025 80% below 2005 levels by the end of 2030 Net carbon neutral by 2050 Goals aligned with the Paris Agreement*Includes projection of potential carbon offsets by 2050 -100 -80

18. Slide 18: More than Doubling Renewable Generation

    18 More than Doubling Renewable Generation 0 1,000 2,000 3,000 4,000 5,000 2021A 2026E Electricity Supply by Renewable Source Hydro Biomass Battery Solar Wind Wind - WECI N a m e p la te c a p a c it y ( M W ) Includes owned electric generation and announced WEC Infrastructure (WECI) projects

19. Slide 19: Investing in Carbon-Free Generation

    19 Solar and Battery Storage  100 MW currently under construction (Badger Hollow II Solar Park)  279 MW received regulatory approval on March 17th (Paris Solar-Battery Park)  Solar:  Filed for approval 495 MW  Planning for additional 700 MW  Qualifies for Investment Tax Credits (ITC)  Battery

20. Slide 20: WEC Infrastructure Portfolio – Green and Growing

    20 SD IL NE Plan to invest $1.9 Billion (2022-2026) WEC Infrastructure Portfolio – Green and Growing In-service Under development Total Project Capacity (MW) Investment (in millions) Upstream 200 $307 Bishop Hill III 132 166 Coyote Ridge 97 145 Blooming Grove 250 389 Tatanka Ridge 155 240 Jayhawk 19

21. Slide 21: Modernizing Our Gas-Fueled Generation Fleet

    21 Modernizing Our Gas-Fueled Generation Fleet Retiring  200 MW of older, less-efficient gas generation expected  Target: 2024 Building Weston RICE units  Received regulatory approval on March 31st  128 MW  Expected investment: $170 million  Target in-service: 2023 * Filed and pending regulato

22. Slide 22: Methane Reduction Goal

    22 Reduction goal: Net zero by the year 2030** Our ESG Progress Plan Methane Reduction Goal *Represents a decrease in the rate of methane emissions, per mile, from the natural gas distribution lines in our network from a 2011 baseline. **This goal applies to emissions from WEC Energy Group natural g

23. Slide 23: Regional Economy

    23 Regional Economy

24. Slide 24: Powering Industry Leaders in our Region

    24 Powering Industry Leaders in our Region

25. Slide 25: Wisconsin Segment Longer-Term Sales Forecast

    25 Wisconsin Segment Broad Ranging Growth Driving Longer-Term Sales Forecast 2024-2026 Electric 0.7%-1.0% Gas 0.7%-1.0% Sales Growth Forecast (weather-normalized) Year-Over-Year

26. Slide 26: Key Takeaways for WEC Energy Group

    26  Track record of top decile performance among regulated utilities  Industry leading earnings quality  ESG Progress Plan drives premium EPS growth of 6-7%  No need to issue equity through forecast period  100% of capital allocated to regulated businesses or contracted renewables  Dividend gr

27. Slide 27: Appendix

    Appendix | VAie VA Energy Group

28. Slide 28: Electric Distribution Electric Transmission 60% ownership Electric Generation Energy Infrastructure Natural Gas Distr…

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

29. Slide 29: Commitment to ESG

    29 Reduce carbon dioxide emissions from electric generation 60% by the end of 2025 and 80% by the 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 2035 Targeting net-zero methane emissions from distributi

30. Slide 30: Electricity Supply by Fuel Type

    30 Electricity Supply by Fuel Type (megawatt-hours delivered to regulated utility customers) 73% 39% 7% 33% 32% 17% 21% 24% 3% 7% 39% 2005 2021 2030E 2035 2050 Coal Natural Gas Nuclear Renewables Exiting Coal <5% Net carbon neutral goal Planned exit from coal

31. Slide 31: Reducing Greenhouse Gas Emissions

    31 Reducing Greenhouse Gas Emissions 0.78 0.45 0.33 0.16 0** 2005 2021 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

32. Slide 32: Investment in Regulated Renewables

    32 Plan to invest $3.5 Billion (2022-2026) Investment in Regulated Renewables Target Project Utility WEC Ownership** Expected WEC Investment ($M) WEC Capacity (MWs) In Service Two Creeks Solar Project WPS 66.7% $130 100 In Service Badger Hollow I Solar Park WPS 130 100 Q1 2023 Badger Hollow II Solar

33. Slide 33: WEC Infrastructure Projects

    33 Project Developer Location Investment Offtake Agreement WEC Commercial Operations Total Project Capacity Bishop Hill III Wind Energy Center Invenergy Henry County, IL $166M for 90% ownership WPPI Energy 22 years 80% on 8/31/18 Incremental 10% on 12/5/18 132MW Upstream Wind Energy Center Invenergy

34. Slide 34: Oak Creek PTF Units Critical to Wisconsin and Region

    34 Oak Creek PTF Units Critical to Wisconsin and Region  Among newest, most efficient units; in a critical location  Top 5% in the country on coal plant efficiency*  One of only two 1,000 MW sites in the top decile heat rate in MISO  Plant equipment capable of co-firing natural gas and coal *Bas

35. Slide 35: Why Our Natural Gas Distribution Networks Matter

    35 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 Post 2030  Potential to blend  Investment potential to convert existing distri

36. Slide 36: New Liquefied Natural Gas (LNG) Storage Facilities

    36 New Liquefied Natural Gas (LNG) Storage Facilities LNG will provide a solution for Southeastern Wisconsin to meet peak customer demand on the coldest days of the year. Taking Steps to Maintain Reliable and Affordable Service for Our Customers  We Energies received approval for two LNG facilities

37. Slide 37: Electric Delivery Redesign / Resilience

    37 Electric delivery redesign / resilience  Addressing aging infrastructure and system hardening  Enhancing efficiencies and reducing operating costs  Expect to spend $3.4 billion (2022-2026) with continued investment over next decade Project Highlights Efficiency, Growth and Sustainability Progr

38. Slide 38: Natural Gas Safety Modernization

    38 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 million-$300 million annual average investment  Illinois law authorizes r

39. Slide 39: Robust Growth in Asset Base

    39 Expect long-term EPS growth of 6-7% per year. 35% 37% 36% 35%12% 9% 12% 12% 5% 7% $25B $35B 2021A 2026E* WECI Transmission We Power Gas Distribution Electric Generation and Distribution Robust Growth in Asset Base *Estimated year-end average asset base 7% Growth

40. Slide 40: Utility Capital Plan Drives EPS Growth

    40 998 987 858 890 960 579 665 685 711 716 649 559 596 494 513 578 591 636 645 603 120 104 107 107 104 333 343 278 208 183 $3,257 $3,249 $3,160 $3,055 $3,079 - 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 2022 2023 2024 2025 2026 ATC Investment MERC/MGU Illinois WI Gas Delivery WI Electric Delivery

41. Slide 41: Capital Plan Projections By Company

    41 2022 2023 2024 Wisconsin Electric $1,204.2 $1,360.2 $1,173.9 Wisconsin Gas $280.5 $233.6 $263.4 Wisconsin Public Service $627.2 $537.3 $621.6 Upper Michigan Energy $19.8 $16.9 $55.2 Wisconsin Segment $2,131.7 $2,148.0 $2,114.1 Peoples Gas $521.1 $538.0 $580.4 North Shore Gas $52.0 $48.8 $54.6 Ill

42. Slide 42: Composition of Asset Base

    42 Composition of Asset Base Total 2021 Average Asset Base of $25.0 Billion Note: We Power value represents investment book value. Company Asset Base - $B % of Total Wisconsin Electric $6.8 27.2% Wisconsin Gas 1.7 6.8 Wisconsin Public Service 4.0 16.0 Upper Michigan Energy Resources 0.4 1.6 Peoples

43. Slide 43: Power the Future Investments

    43 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

44. Slide 44: One of the Top Performers in Operating Efficiency

    44 One of the Top Performers in Operating Efficiency $13.20 $16.20 $18.50 $18.80 $20.80 $21.10 $21.90 $22.00 $23.00 $23.20 $33.40 $10 $15 $20 $25 $30 $35 2020 Non-Fuel O&M per MWh* Source: FERC Form 1 Reports *For all companies, excluded 1) pensions and other employee benefits, 2) costs reported as

45. Slide 45: Focused on Efficiency

    45 Focused on Efficiency $1,342 $1,281 $1,234 $1,143 $1,107 $1,088 2016 2017 2018 2019 2020 2021 2022E 4.5% $ 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 collected in

46. Slide 46: Balance Sheet Remains Strong

    46 Balance Sheet Remains Strong 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 Issuer Credit Ratings WEC Energy Group Target S&P FFO to Debt >15% Moody’s CFO Pre-WC/Debt >16% Holding Company Debt

47. Slide 47: Balanced Sales Mix

    47 34% Large C&I by Segment Paper/Packaging 26% Mining/Minerals 11% Foundry (SIC 33) 9% Metal (SIC 34,35,37) 8% Other Manufacturing 8% Food/Agriculture 7% Medical 7% 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% 2021

48. Slide 48: Diverse Portfolio of Businesses

    48 Diverse Portfolio of Businesses Based on 2021 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 represent

49. Slide 49: Open Regulatory Matters

    49 Open Regulatory Matters Wisconsin (apps.psc.wi.gov) Estimated Key Dates  Decision on Koshkonong Solar and Battery Storage (Docket: 5-BS-258 filed 4/30/2021) 2022  Decision on Weston RICE units (Docket: 5-CE-153 filed 4/16/2021)   Decision on Red Barn Wind Park (Docket: 5-BS-256 filed 3/29/202

50. Slide 50: Regulatory Environment

    50 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

51. Slide 51: Rate-Making Parameters by Company

    51 Rate-Making Parameters by Company Utility Equity Layer1 Authorized ROE Wisconsin Electric 50.0%-55.0% 10.0% Wisconsin Public Service 50.0%-55.0% 10.0% Wisconsin Gas 50.0%-55.0% 10.2% Peoples Gas 50.33% 9.05% North Shore Gas 51.58% 9.67% Minnesota Energy Resources 50.9% 9.7% Michigan Gas Utilities

52. Slide 52: Key Rate Making Components

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

53. Slide 53: Industry Leading Total Shareholder Returns

    53 Industry Leading Total Shareholder Returns* Over the past decade, WEC Energy Group has consistently delivered among the best total returns in the industry * Total return including reinvested dividends for the periods ended December 31, 2021. 0% 50% 100% 150% 200% 250% 300% One-Year Three-Year Fiv

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

    Contact Information M. Beth Straka Senior Vice President – Investor Relations and Corporate Communications Beth.Straka@wecenergygroup.com 414-221-4639

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