Mge Energy Inc. · NASDAQ:MGEE
Mge Energy — Q2 2024 Earnings Presentation
33 slides from Mge Energy's earnings presentation, Aug 7, 2024
Slide 1: 2024 Second Quarter Financial Update
Connected Together <=... 2024 Second Quarter Financial Update ENERGY.
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 — Forward Looking Information
Cautionary Note — 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 uncertainties
Slide 4: Company Mission and Values
Company Mission and Values MGE Energy is the parent company of Madison Gas and Electric Company (MGE). MGE is your community energy company, committed to engaging with our customers in different ways to meet their needs and to providing safe, reliable, affordable and sustainable energy to power our
Slide 5: Company Highlights
Company Highlights DIVERSIFIED CUSTOMER BASE AND REVENUE PROFILE REGULATED, HIGHLY VISIBLE GROWTH Resilient Revenue Stream and Customer Base Historical 5-Year EPS CAGR of 6%, Regulated PPE CAGR of ~7% Electric service to ~ 163,000 customers located in * Forecasted capital investment of ~$1.2B the ci
Slide 6: Earnings and Dividends Growth
Earnings and Dividends Growth Diluted Earnings Per Share Dividends Per Share $3.00 $1.50 $2.50 $1.25 $2.00 $1.00 $1.50 " . $0.75 \ \ $1.00 $0.50 $0.50 $0.25 $- $- 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023
Slide 7: Focused on Sustainability and Reliability
Focused on Sustainability and Reliability Projected Capital Expenditures $300 $257 $243 $250 $225 $232 $214 $200 8 $102 $114 uns $132 101 $100 $50 $113 $123 $118 $111 $111 $0 2024 2025 2026 2027 2028 @ Other Capital Expenditures, including Electric and Gas Distribution ™ Generation Directly Supporti
Slide 8: Expanding Clean Energy Portfolio
Expanding Clean Energy Portfolio In Progress Investment Ownership Nameplate Estimated ($M) Interest (MW) In-Service Date . 20 Solar/ 2024 Solar/ | (a) 9 Paris Solar-Battery $614 10% 11 Battery 2025 Battery Darien Solar) $48@ 10% 25 2024 Koshkonong Solar) $65@) 10% 30 2026 High Noon Solar $65 10% 30
Slide 9: Transition Toward Cleaner Energy
Transition Toward Cleaner Ener Track Record of Accelerating Pace of Decarbonization MGE's clean energy transition has reduced emissions while maintaining top-ranked electric reliability, strengthening key infrastructure, and providing affordable power to customers. * 2015: Energy 2030 framework intr
Slide 10: Plan to Eliminate Coal-Fired Generation
Plan to Eliminate Coal-Fired Gi Retiring the coal-fired Columbia Energy Center In 2022, the target retirement date for both units at the Columbia Energy Center was updated to June 2026. The revised retirement date reflects tight energy supply conditions in the Midwest power market and supply chain i
Slide 11: Transmission Investment Outlook
11 Transmission Investment Outlook v MGE Energy anticipates material transmission investment opportunities later this decade through ATC. + MGE Energy holds 3.6% equity ownership interest in ATC. v_ ATC projects new capital expenditures peaks in 2024 and beyond, with 2024-2028 projected investment o
Slide 12: Natural Gas Distribution — Emissions Reductions Beyond Carbon
12 Natural Gas Distribution — Emissions Reductions Beyond Carbon Building upon our long-standing commitment to providing affordable, sustainable energy, MGE has set a goal to achieve Net-Zero Methane Emissions from its natural gas distribution system by 2035. * MGE is working to reduce overall emiss
Slide 13: 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 renewa
Slide 14: PSCW Regulators
14 PSCW Regulators WISCONSIN COMMISSIONERS PARTY TERM BEGAN Summer Strand (Chair) D Mar 2023 Kristy Nieto* D Feb 2024 Marcus Hawkins* D Apr 2024 TERM ENDS Mar 2029 Mar 2025 Mar 2027 * Pending confirmation COMMISSION: - Gubernatorial appointment, Senate confirmation - Chair: Gubernatorial appointment
Slide 15: 2024/2025 Rate Case Outcomes
15 2024/2025 Rate Case Outcomes TERMS APPROVED APPROVED ($000’s where applicable) 2024 TY 2025 TY Average Electric Rate Base $1,185,550 $1,241,502 Average Gas Rate Base $335,533 $341,369 Average Common Stock Equity $917,952 $945,483 Regulatory Equity Layer 56.13% 56.06% Authorized ROE 9.70% 9.70% In
Slide 16: Customer Affordability
Customer Affordability Average residential electric customer bill as % of Wisconsin median household income 2.25% 2.00% : A MGE residential electric customer bill as a percentage of customer wallet at 1.75% 1.55% is below the Wisconsin utility peer average of 1.75%. LY 1.50% MGE's affordability as p
Slide 17: Inflation Reduction Act of 2022 (IRA)
17 Inflation Reduction Act of 2022 (IRA) The IRA supports MGE’s carbon reduction strategy and increases flexibility toward meeting customer needs for affordable and reliable clean energy resources. v Positioned to deliver material benefits to customers * Long-term extension of tax credits aligns wit
Slide 18: Strong Credit Ratings
18 Strong Credit Ratings S&P (UTILITY RATINGS) Business risk Excellent Outlook Stable MOODY'S (UTILITY RATINGS) Unsecured rit Outlook Stable + Effective management of regulatory risk + Supportive regulatory environment * Focus on regulated vertically integrated electric and natural gas distribution
Slide 19: Electric Vehicles and Deep Carbonization
Electric Vehicles and Deep Carbonization MGE has been supporting the adoption of alternative fuel vehicles since the launch of its public charging network more than a decade ago and anticipates continued electrification of transportation could drive incremental sales growth over the long term. Elect
Slide 20: Our ESG Commitments
20 Our ESG Commitments 80% reduced carbon emissions by 2030 Net-Zero carbon electricity by 2050 Net-Zero methane emissions from our natural gas distribution system by 2035 2/3 coal-fired generation capacity eliminated by the end of 2026 Coal as a backup fuel by end of 2030 Zero ownership of coal by
Slide 21: ESG Highlights - Environment
21 ESG Highlights - Environment Track Record of Increasing Pace of Decarbonization MGE's clean energy transition has reduced emissions while maintaining top-ranked electric reliability, strengthening key infrastructure, and providing affordable power to customers. Foundational Objectives in MGE’s En
Slide 22: ESG Highlights - Social
ESG Highlights - Social Annual Giving Safety MGE Foundation Giving MGE is committed to helping improve + Safety Steering Team — examines safety amount given in the quality of life for all those we serve topics and prioritizes continuous the last five years > $8.7M through: improvement opportunities
Slide 23: ESG Highlights - Governance
23 ESG Highlights - Governance Our Board of Directors has a strong commitment to corporate responsibility and accountability. Community-focused and with a breadth and diversity of experience, board members bring strong effective oversight in their service to MGE and MGE Energy. The company’s commitm
Slide 24: Additional ESG information at the following links:
24 Additional ESG information at the following links: Corporate Responsibility and Sustainability Report e CDP Climate Change Questionnaire EI Qualitative Template e £E/ Quantitative Template e FEO-17 Data Report Statement on Human Rights Code of Ethics Occupational Health and Safety Policy Report o
Slide 25: Appendix
Appendix
Slide 26: Corporate Structure
26 Corporate Structure Over 98% of MGE Energy assets are dedicated to regulated and quasi-regulated utility operations. ENERGY. : Central Wisconsin : Madison Gas and MGE Transco MGE Transco, MGE State Energy [J MGE Services, Electric Company [J Investment LLC LLC Weal scilite [ARES EMS uae Services,
Slide 27: Service Territory Highlights
27 Service Territory Highlights MGE's service territory is a growing and diverse community of urban, suburban and rural communities. The Madison area and Dane County lead the state of Wisconsin in population growth. * Seat of state government + Home to the flagship University of Wisconsin - Madison
Slide 28: Second Quarter - EPS by Segment
28 Second Quarter - EPS by Segment Three Months Ended June 30 2024 Diluted EPS # 2 ° r=) Diluted EPS une $0.60 Electric Utility Gas Utility NonReg Energy Transmission Other MGE Energy Electric Utility Gas Utility NonRea Eneray Transmission ($0.02) Other
Slide 29: Year-to-Date - EPS by Segment
29 Year-to-Date - EPS by Segment Six Months Ended June 30 $0.11 $0.11 $0.33 MN (50.01) $0.31 $0.29 ; || : & & 2 3 3 5 5 a nen $0.96 Electric Utility Gas Utility NonReg Energy Transmission Other MGE Energy Electric Utility Gas Utility NonReg Energy Transmission Other
Slide 30: Strong Record of Regulated Asset Growth
30 Strong Record of Regulated Asset Growth $2,500 $2,000 $1,500 $1,000 Net PP&E + CWIP ($millions) $500 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2Q 2024
Slide 31: Twelve Months Ended December 31, 2023
Twelve Months Ended December 31, 2023 Electric Revenues Electric Volumes Electric Customers 56% 11% = Residential Commercial © Industrial Other 31 Note: Categories may not sum due to rounding
Slide 32: Twelve Months Ended December 31, 2023
Twelve Months Ended December 31, 2023 Gas Revenues Gas Volumes Gas Customers 38% = Residential Commercial/Industrial = Other 32 Note: Categories may not sum due to rounding
Slide 33: For more information,
For more information, visit mgeenergy.com Ken Frassetto Director Shareholder Services and Treasury Management kfrassetto@mge.com 608-252-4723 P.O. Box 1231 Madison WI 53701-1231