MGE Energy Inc. · NASDAQ:MGEE

MGE Energy — Q1 2010 Earnings Presentation

24 slides from MGE Energy's earnings presentation, May 7, 2010

  1. Slide 1: First Quarter 2010 Financial Update

    FIRST QUARTER 2010 FINANCIAL UPDATE May 7, 2010

  2. Slide 2: Disclaimer

    Disclaimer 2  All statements in this presentation other than historical facts are forward-looking statements that involve risks and uncertainties which are subject to change at any time.  Such statements are based upon management’s expectations at the time they are made. Various factors could caus

  3. Slide 3: Highlights

    Highlights 3 Strong Earnings Strong Credit Quality Growing Dividends Renewable Focus Constructive and Supportive Regulation

  4. Slide 4: Organizations and Authorized Returns

    Organizations and Authorized Returns 4 Exchange: NASDAQ Ticker: MGEE MGE MGE Transco Madison Gas Other Power LLC Investment LLC and Electric Co. (Est. 2002) (Est. 2005) (Est. 1896) MGE Construct LLC Current ROE: 12.2% (Est. 2002) Current ROE: 10.4% Investment: $53 mil. Central Wisconsin MGE Power MG

  5. Slide 5: Service Territory & Economic Outlook

    Service Territory & Economic Outlook 5  Madison  Kiplinger’s 2009 Best Cities – Ranked 7th for employment levels and new career opportunities  Forbes Magazine – Best city in US for job growth in 2009  BusinessWeek.com – Among top 10 places to live during a recession  Dane County  Population pr

  6. Slide 6: Recent News

    Recent News 6  MGE Energy  Public Utility Fortnightly ranked MGE Energy, Inc. among the “40 Best Energy Companies”  Madison Gas and Electric  US Dept. of Energy  Selected Madison Gas & Electric Company’s application for federal stimulus money and awarded $5.5 million for its Smart Grid Technolo

  7. Slide 7: MGE Utility Asset Growth

    MGE Utility Asset Growth 7 Total Asset Growth Capital Expenditures (Millions) Dec. 2004 Dec. 2009 $90 $684 M $930 M $80 $70 674 $60 486 $50 $40 256 $30 198 $20 $10 Electric Gas $0 2010 2004 2005 2006 2007 2008 2009 2009 Assets: $930 M Est. 2010 Authorized utility ROE: 10.4% Gas 12 10 10 12 8 14 18 2

  8. Slide 8: Generation Assets

    Generation Assets 8 Net Summer Rated Capacity (MW) at March 31, 2010* (excluding renewable) 50 803 160 130 188 50 225 Columbia Elm Road Blount WCCF Combustion Portable Total Turbines Generators * Elm Road Unit 1 began commercial operations on 2/2/10

  9. Slide 9: Columbia Environmental

    Columbia Environmental 9  Environmental compliance expenditures on Columbia Energy Center near Portage, WI  PSCW approval pending: Expected Q2 2010  Estimated expenditures  Total: $140 million  Expected Compliance Requirements: Pollutant Design Removal Rate Control Technology Sulfur Dioxide (SO

  10. Slide 10: MGE Electric Utility

    3-months ended MGE Electric Utility March 31 10 Revenue ($000’s) Retail Sales (MWh) (increased 2%) (decreased 2%) $80,127 $81,994 790 774 Q1 2009 Q1 2010 Q1 2009 Q1 2010

  11. Slide 11: MGE Gas Utility

    3-months ended MGE Gas Utility March 31 11 Revenue ($000’s) Actual Heating Degree Days* $98,820 (decreased 0.8% from normal; $76,547 decreased 8% from 2009) 3,753 3,455 3,482 Q1 2009 Q1 2010 Retail Therms Delivered (‘000) 2009 2010 Normal (decreased 12%) 92,314 81,086 Gas revenues decreased due to m

  12. Slide 12: MGE Energy Asset Growth

    MGE Energy Asset Growth 12 December 2004 December 2009 $33 M, $52 M, 4% 4% $111 M, $300 M, 13% 23% $684 M, 83% $930 M, 73% Utility Utility Fixed Return Assets Fixed Return Assets Transmission Transmission Total Assets $827 M Total Assets $1,282 M

  13. Slide 13: MGE Power, LLC Fixed Asset Return Growth

    MGE Power, LLC Fixed Asset Return Growth 13 West Campus Cogeneration Facility Elm Road Generating Facility Investment: $109M (MGE share) Investment: Est. $180M (8.33% Owned) Fixed ROE: 12.1% Fixed ROE: 12.7% Fixed Equity: 53% Fixed Equity: 55% Initial Lease Term: 30 years Initial Lease Term: 30 year

  14. Slide 14: MGE Power Elm Road, LLC

    MGE Power Elm Road, LLC 14  Unit 1 in service as of Feb. 2, 2010  Unit 2 expected in-service during the 3rd Quarter of 2010  ERGS Financing  $50 Million for Unit 1  5.04% coupon  Maturity date February 3, 2040 (with 15-year average life)  Possible additional financing for Unit 2

  15. Slide 15: MGE Transco Investment, LLC

    MGE Transco Investment, LLC 15 Asset Growth - Investment in American Transmission Company Plant ($000) MGE Investment: $53 M Projected Current ROE: 12.2% 3,500 MGE Ownership: 3.6% 3,000 Regulator: FERC 2,500 2,000 1,500 1,000 500 0

  16. Slide 16: MGE Energy Earnings Per Share

    MGE Energy 16 Earnings Per Share (12-months ended Dec. 31) $2.38 $2.27 $2.21 $2.06 $1.77 $1.57 2004 2005 2006 2007 2008 2009

  17. Slide 17: MGE Energy Earnings by Segment

    MGE Energy 17 Earnings by Segment – 3 months ended March 31 $0.05 $0.01 $0.65 $0.62 $0.12 $0.06 $0.17 $0.47 $0.39 2009 2010

  18. Slide 18: Credit Quality

    Credit Quality 18 Highest rated investor-owned electric and gas utility S&P (Utility ratings) Moody’s (Utility ratings) Corporate Credit: AA- Secured: Aa2 Com. Paper: A1+ Unsecured: A1 Outlook: Stable Com. Paper: P-1 Outlook: Stable “MG&E’s business profile benefits from a “…The stable outlook refle

  19. Slide 19: MGE Energy Dividends Declared Per Share

    MGE Energy 19 Dividends Declared Per Share $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $- 1909 1919 1929 1939 1949 1959 1969 1979 1989 1999 2009

  20. Slide 20: MGE Renewable Focus

    MGE Renewable Focus 20  One of the highest green pricing participation rate of any investor- owned utility  Total renewable generation capacity approx. 140 MW  Wind (Ownership) 41 MW  Wind (PPA’s) 97 MW  Early compliance with Renewable Portfolio Standards  Solar Electric Power Association (SEP

  21. Slide 21: MGE Renewable Focus: Current Wind Resources

    MGE Renewable Focus 21 Current Wind Resources Owned  Lincoln Red River 11 MW  Top of Iowa III 30 MW PPA  Top of Iowa II 30 MW  The Forward Wind Site 17MW  Endeavor 50 MW Future Projects  Iowa Options Up to 175 MW

  22. Slide 22: Wisconsin Regulation

    Wisconsin Regulation 22 Constructive and Supportive  Rate Case Filing for 2011  Electric rate increase of 9.4%  Gas rate increase of 2.0%  Rate increases to cover:  MGE’s Elm Road Generating PSCW Facts Units costs Commissioners 3  Transmission reliability Elected/Appointed Governor Apptd. enha

  23. Slide 23: Highlights

    Highlights 23 Strong Earnings Strong Credit Quality Growing Dividends Renewable Focus Constructive and Supportive Regulation

  24. Slide 24: Contact Information

    Contact Information 24 For more information, please contact: Ken Frassetto Director – Shareholder Services and Treasury Management P.O. Box 1231 Madison, WI 53701-1231 Phone: 608-252-4723 Fax: 608-252-7098 E-mail: kfrassetto@mge.com

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