Puget Energy — Non-Deal Roadshow (June 2022)
32 slides from Puget Energy's roadshow presentation, June 2022
Slide 1: Puget Energy and Puget Sound Energy NYC Roadshow
Puget Energy Puget Sound Energy NYC Roadshow June 2022
Slide 2: Cautionary Statement
Cautionary Statement Information Current as of March 31, 2022 (except as expressly noted) Except as expressly noted, the information in this presentation is current as of May 4, 2022– the date on which PUGET ENERGY, INC. (“PE”) filed its Quarterly Report on Form 10-Q for the quarter ended March 31,
Slide 3: PSE team members
PSE team members Kazi Hasan – Sr. VP and CFO Cara Peterman – Director, Corporate Treasurer Tsung-Hsing Shen – Debt Capital Markets Manager 3
Slide 4: Table of Contents
Table of Contents 1. Company Highlights 5 2. Regulatory & WA Legislative Updates 7 • 2022 GRC Filing 8 • WA Legislation Updates 11 3. ESG Strategy 13 • PSE Beyond Net Zero Carbon Goal 15 • Clean Energy Implementation Plan (CEIP) 16 • Decarbonization Progress 18 4. Financials & Other Key Items 20 • F
Slide 5: Company Highlights
Company Highlights • Puget Sound Energy (PSE) conducts substantially all of PE’s business operations and is a 100% regulated electric and gas utility based in Fully Regulated Bellevue, WA Utility Operations • Largest independent utility in the Pacific Northwest, with ~2 million customers and $8.5 bi
Slide 6: Puget Sound Energy is transforming to be clean energy leader
Puget Sound Energy is transforming to be clean energy leader Yesterday Today Tomorrow • Energy conservation pioneer • Set ambitious and aspirational targets • More robust ESG disclosures. since 1998 to be beyond net zero carbon by 2045. • Achieve fastest net-zero implementation possible • Carbon emi
Slide 7: Regulatory & Legislative Updates
REGULATORY & LEGISLATIVE UPDATES 7
Slide 8: PSE filed a GRC on January 31, 2022
PSE filed a GRC on January 31, 2022, which includes a three-year multiyear rate plan, in accordance with SB 5295. The first year combined revenue request is $454M, which represents a 13% increase in rates Major themes of the GRC tie achievement of PSE’s overall corporate vision and regulatory requir
Slide 9: Rate request tied to power cost recovery proposals
Rate request is tied closely to PSE power cost recovery proposals and is key to financial performance • Rate base for first rate year includes EOP 2022 plus AMA 2023 (“by or during”) • Rates set to allow flexible spending within broad categories, rather than requiring strict adherence to details wit
Slide 10: Multiyear rate plan filing and proposed increases
Multiyear rate plan filing includes significant initial rate increases with more modest longer-term increases. Rate proposal reduces regulatory lag experienced since 2018 (A) (B) (C) (D) Electric 2023 2024 2025 Estimated GRC Schedule 1 GRC Proposed Revenue Increase ($M) $310.6 $63.1 $31.8 • Filing –
Slide 11: Climate Commitment Act & Clean Fuel Standards rulemaking
Climate Commitment Act & Clean Fuel Standards from the 2021 Washington legislative session are currently in the rulemaking process During the 2021 Washington legislative session, PSE supported two carbon policy bills in alignment with our Beyond Net Zero Carbon pledge: • Climate Commitment Act (CCA)
Slide 12: 2022 Washington legislative session outcome was neutral
2022 Washington legislative session outcome was neutral State session ended March 10, 2022; next session meets January 2023. Legislation that passed: • Expansion of building performance standards (reduces use of natural gas in commercial buildings) • Budget includes $100M for utility customer arrear
Slide 13: ESG Strategy
2 } PUGET SOUND ENERGY ESG STRATEGY
Slide 14: ESG is central to PSE's future success
ESG is central to PSE’s future success Environmental Social Governance and Stewardship Responsibility economics Environment • Good environmental • Safety and security at • Employee benefits and practices work compensation Social • Transparency • Improved health and • Financial viability of • Energy
Slide 15: Beyond Net Zero Carbon company by 2045
Looking to the future, PSE has set an aspirational goal to be a Beyond Net Zero Carbon company by 2045 PSE operations and Natural gas sales Beyond PSE reported electric supply customer end use emissions We will achieve the following Our aspirational objective We will help other sectors reduce carbon
Slide 16: First Clean Energy Implementation Plan (CEIP)
PSE filed its first Clean Energy Implementation Plan (CEIP) in December 2021. Based on the 2021 IRP, the CEIP is a four-year roadmap that will determine PSE’s clean energy investments for the years 2022-2025, and provides guidance to achieve CETA targets 2021 2022 2023 2024 2025 Final CEIP filed 202
Slide 17: Investments in efficiency, demand response and renewables
PSE anticipates significant investments in energy efficiency, demand response, and renewable energy to achieve our clean energy goals Interim clean electricity target Specific targets 63% as of ~36% est. as of 2021 Year-End of Energy Efficiency: 1,073,434 MWh for 2022-2025 2025 Equivalent to electri
Slide 18: Exiting coal, LNG marine fuel and RNG
Exiting coal, providing LNG as a marine fuel, and procuring RNG in the region are key elements in the effort to decarbonize CETA mandates that coal be removed from PSE rates by the end of 2025: • Colstrip Units 1 & 2 were retired effective December 31, 2019 • PSE is working to enable a timely transi
Slide 19: Valued member of the communities we serve
PSE is committed to being a valued member of the communities we serve and where our employees live Clean Energy • PSE has top-notch industry leading programs for home and business customers to support additional clean energy consumption Solution for • Continue to measure and track customer prioritie
Slide 20: Financials & Other Key Items
FINANCIALS & OTHER KEY ITEMS 20
Slide 21: GRC and MYRP outcome critical for mitigating regulatory lag
GRC and MYRP outcome will be critical for mitigating the current regulatory lag inherent in the present regulatory regime PSE - EBITDA PSE - Authorized and Actual ROE $M’s Between 2010 and 2017, PSE reduced regulatory lag by focusing significant resources EBITDA CAGR (‘16-’21): +1.8% on improving it
Slide 22: Debt profile, capital markets access and liquidity
PE/PSE has a manageable debt profile, with robust access to the capital markets and ample liquidity to properly finance the business Debt Maturity Profile Liquidity Profile $M’s $M’s $1,600 $1,496 -$70 -$34 $800 $17 $766 $650 $1,566 $1,496 $500 $450 $400 $300 $800 $730 $162 $100 2023 2024 2025 2026
Slide 23: Macquarie and Ontario Teachers acquired CPPIB's stake in Puget Holdings
Macquarie Asset Management and Ontario Teachers Pension jointly acquired CPPIB’s stake in Puget Holdings February 22, 2022 Ownership % Ontario Municipal Employees Retirement 23.9% System British Columbia Investment 20.9% Management Macquarie Asset 15.8% Management Teachers Ontario 15.8% Pension Plan
Slide 24: Appendix
2 } PUGET SOUND ENERGY APPENDIX 24
Slide 25: Company Overview: PSE Service Territory
Company Overview PSE Service Territory Washington state’s oldest local energy company 100% regulated, engaged in business of electric generation, transmission, distribution and natural gas distribution 6,000 square(1) mile service area in Puget Sound region of Western Washington - 1.2 million
Slide 26: Company Overview: Customer Base
Company Overview Customer Base • PSE primarily serves residential and commercial customers with limited industrial exposure 2021 Electric Retail Revenue by Customer Class(1) 2021 Gas Retail Revenue by Customer Class(1) Total = $2.4B Total = $1.1B Industrial, Industrial, Other, Other, 1.6% 4.6% 2.0%
Slide 27: Company Overview: Diverse Power Generation Portfolio
Company Overview Diverse Power Generation Portfolio 2021 Peak Power Resource Capacity (MW) (1) PSE is committed to providing safe and reliable electric service to Purchased Resources: Wind, customers in its territory while 16.1% Columbia River 14.2% Purchased Other Hydro 2.3% being a steward of cl
Slide 28: Company Overview: Ownership Structure
Company Overview Ownership Structure 13.6% 20.9% 15.8% 15.8% 23.9% 10.0% Alberta British Columbia Ontario Municipal Ontario Investment Investment Macquarie Asset Employees Teachers’ PGGM Management Co. Management Co. Management Retirement Pension Plan (AIMCo) (BCI) System (OMERS) Puget Holdings Puge
Slide 29: Capital investment in strategic projects and reliability
Puget’s capital investment in strategic projects and reliability are the foundation of our transition to a carbon free future Tacoma Liquefied Natural Gas Project • 43% regulated at PSE; 57% unregulated at Puget LNG (50% TOTE, 50% open) • LNG (regulated) business online in Q1 2022 Energize Eastside
Slide 30: ESG drives new regulations and reporting frameworks
ESG is a central issue for many of PSE’s stakeholders which is driving new regulations and reporting frameworks Current External ESG Transparency Drivers: • Customer and employee expectations for overall ESG transparency and third-party ESG ratings have increased dramatically. • Third-party ESG rati
Slide 31: Continual focus on Cyber Security Protections and Awareness
Continual focus on Cyber Security Protections and Awareness Security and Compliance Programs • External Assessment: Engage a 3rd party to conduct a cyber assessment every 12-18 months against National Institute of Standards and Technology Cyber Security Framework (NIST CSF) to measure progress and a
Slide 32: Washington SB 5295 establishes multi-year rate plans
In an historic legislative session, the Washington house and senate overwhelmingly passed SB 5295. This bill will establish multi-year rate plans, performance-based rate making, and reduce regulatory lag • Beginning January 1, 2022, utilities must file a multi-year rate plan (MYRP) between two and f