Wec Energy Group, Inc. · NYSE:WEC
Wec Energy — Investor Presentation (November 2020)
45 slides from Wec Energy's investor presentation, Nov 6, 2020
Slide 1: Investor Update: November 2020
Wa WEC Investor Update: November 2020 Our “ESG” Progress Plan: A Five-Year Road Map for Investment x * x x One of America’s Finalist for the S&P Global Best in the U.S. in We Energies named Most Responsible Energy Award in Corporate Large Customer Most Reliable Utility Companies for 2020 Social Resp
Slide 2: Cautionary Statement Regarding Forward-Looking Information
TT 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 thi
Slide 3: Company Statistics
WEC Energy Group Company Statistics = $31.7 billion market cap” = 1.6 million electric customers = 2.9 million natural gas customers = 60% ownership of American Transmission Company = $35.0 billion of assets = 9t largest publicly traded utility in U.S. measured by market value* MINNESOTA PE@PLES GAS
Slide 4: A History of Quality Earnings Growth
A History of Quality Earnings Growth $4.00 » $3.50 + $3.00 + $2.50 + $2.00 + $1.50 + $1.00 + $0.50 + $0.00 + 04. '05 ‘06 '07 '08 ‘09 10 11 12 13 '14 15 16 17 MEGAAP Mill Adjusted* MiB 2020 Guidance * See Appendix for reconciliation of adjusted amounts to GAAP amounts $3.74 - $3.76 18 ‘19 '20 WEC Ene
Slide 5: Consistent Performance Over Time
Consistent Performance Over Time | QC bs EPS Guidance \ 2019 Exceeded 2018 Exceeded 2017 Exceeded é 2016 Exceeded 2015 Exceeded a 2014 Exceeded | 2013 Exceeded é | 2012 Exceeded t 2011 Exceeded a 2010 Exceeded ‘ 2009 Exceeded 6 2008 Exceeded d 2007 Exceeded g 2006 Exceeded ‘ 2005 Exceeded 6 2004 Exc
Slide 6: Strong Dividend Growth Continues
Strong Dividend Growth Continues Annualized Dividends Per Share In January, raised the $2.53" dividend by 7.2% toa new annual rate of $2.53 per share Targeting dividend payout of 65-70% of earnings Projecting dividend growth in line with earnings growth 2010 2011 2012 2013 2014 2015 2016 2017 2018 2
Slide 7: One of the Top Performers in Operating Efficiency
One of the Top Performers in Operating Efficiency $60 2019 Non-Fuel O&M per MWh* $70 $67.20 $60 . $45.00 $46.10 $40 “° $2930 $30.24 $20.10 $20.80 $21.30 $23.30 $20 $14.00 $15.30 $10 9 S $0 The top 10 vertically integrated electric utilities by market cap Source: FERC Form 1 Reports *For all companie
Slide 8: What's New?
Vhat’s New?
Slide 9: 2021-2025 Capital Plan
2021-2025 Capital Plan Our ESG Progress Plan Investing $16.1 billion for: Efficiency Sustainability Growth WEC Energy Group
Slide 10: 2021-2025 Capital Plan ($ in billions)
2021-2025 Capital Plan (s in billions) Investing in Efficiency and Sustainability Drives Growth Gas distribution $1.6 Sustainability Renewables $4.1 Electric (G,T&D) $1.4 Grid and fleet reliability $16.1 billion Planned Investment Technology $1.0 Grid and fleet modernization $1.7 WEC Energy Group
Slide 11: ESG Progress Plan Continues to Support 5-7% EPS Growth
DS ESG Progress Plan Continues to Support 5-7% EPS Growth Increasing Five-Year Capital Plan by $1.1 Billion $16,100 $15,001 @ Energy Infrastructure = ATC* = MERC/MGU Blllinois = WI Gas Delivery** = WI Electric Delivery** Former Plan = WI Generation** $ In millions 2020-2024 2021-2025 *ATC is account
Slide 12: Robust Growth in Asset Base
Robust Growth in Asset Base 1% Growth 2019A *Estimated year-end average asset base $32.2 billion 2025E*
Slide 13: Allocating $1.9 Billion for Regulated Renewables
Allocating $1.9 Billion for Regulated Renewables Investing in Carbon-Free Generation Build and own 1,800 MW of new solar, wind, and battery storage Currently Under Development or In-Service » 200 MW solar — WPS* » 100 MW solar — We Energies New Planned Clean Energy Additions » 800 MW solar » 100 MW
Slide 14: Reducing 100MW of Capacity
Reducing 100MW of Capacity Modernizing Our Gas-Fueled Generation Fleet Retiring = 400 MW of older, less-efficient gas generation expected Building = 100 MW of RICE generation planned Investing = West Riverside Energy Center (now operational)* = 200 MW - combined cycle . . . ae Reciprocating Internal
Slide 15: Aggressively Reducing Coal-Fueled Generation
Aggressively Reducing Coal-Fueled Generation Plant retirements have lowered costs and reduced CO, emissions Retirements Pleasant Prairie 1,190 MW Expected Future Edgewater Retirements 100 MW _ Oak Creek Pulliam Units 5-8* — 200 MW 1,100MW Presque Isle 300MW to be 350 MW determined in the next year 2
Slide 16: Our ESG Progress Plan: New Carbon Reduction Goals
Our ESG Progress Plan New Carbon Reduction Goals — Electric Generation Achieved and anticipated CO, reductions (net mass)* Baseline Reduction goals: 10% Targeting T 0 of ” — e met 9 -30% reduction below 2005 by 2025 levels by 2030 40% “e Net carbon sia neutral -70% by 2050 -80% -90% Goals aligned wi
Slide 17: Reducing Greenhouse Gas Emissions
Reducing Greenhouse Gas Emissions Greenhouse gas intensity* (metric tons CO,e/MWh) 0.9 08 0.78 0.7 0.6 0.53 0.5 0.4 0.36 0.3 0.25 0.2 0.1 o* 0 2005 2019 2025E 2030E 2050E *Includes owned electric generation, purchased power and WEC Infrastructure ‘Includes projection of potential carbon offsets by 2
Slide 18: Our ESG Progress Plan: Methane Reduction Goal
Our ESG Progress Plan Methane Reduction Goal More than halfway toward our Reduction Goal:* —6 30», goal by the year 2030 from a 2011 baseline *This goal represents a decrease in the rate of methane emissions from the natural gas distribution lines in our network of 30% per mile by the year 2030 from
Slide 19: Allocating $2.2 Billion 2021-2025
Allocating $2.2 Billion 2021-2025 Infrastructure Portfolio Upstream Bishop Hill III Coyote Ridge Total Blooming Grove $389 Tatanka Ridge 155 $235 Thunderhead* 300 $381 Total 705 $1,005 Expect an additional $1.8 billion of investment over the five-year period @ In-service Under development *Investmen
Slide 20: Regional Economy
Regional Economy
Slide 21: Powering Industry Leaders in our Region
Powering Industry Leaders in our Region Foxconn HARIBO qukee ye a amazon "NEXUS » FRESENIUS morsonCoots “ie caring for life HomatTsuy TIC AnTIER!
Slide 22: Wisconsin Segment
Wisconsin Segment Broad Ranging Growth Driving Longer-Term Sales Forecast Year-over-Year 2022 - 2025 Sales Growth Forecast Nena (weather-normalized) 1.0% - 1.3%
Slide 23: Key Takeaways
Key Takeaways for WEC Energy Group = Track record of exceptional performance =» ESG Progress Plan supports 5-7% EPS growth with minimal impact on customer rates = 100% of capital allocated to regulated businesses or contracted renewables = Dividend growth projected to be in line with earnings growth
Slide 24: Appendix
Appendix Va WEC (ag, Energy Group
Slide 25: Natural Gas Distribution
WEC Energy Group Natural Gas Distribution Electric Generation Electric Distribution UPPER 4 MICHIGAN ENERGY d RESOURCES Electric Transmission Energy Infrastructure 60% ownership WEC =e Bluewater Infrastructure... ">" Gas Storage. aa
Slide 26: Office of the Chair
Office of the Chair “Working together as a team, we will leverage the strengths of each individual as we write the next chapter of the company’s growth, development and service to our customers.” - Gale Klappa, Executive Chairman a Scott Lauber Kevin Fletcher Xia Liu Senior Executive Vice President
Slide 27: Environmental, Social & Governance Focus
Environmental, Social & Governance Focus Carbon Goals Methane Reduction Goal 15.7 million metric tons $1.9 billion $2.2 billion $20 million 42% diversity $282.6 million $124.4 million Met and exceeded our 2030 target in 2019. Set new goals to reduce carbon dioxide emissions from electric generation
Slide 28: Wisconsin Utilities
Wisconsin Utilities Carbon-Free Generation Currently Under Development = Solar generation technology has improved in efficiency, become more cost-effective and complements our summer demand curve. = Wisconsin Electric, Wisconsin Public Service and Madison Gas & Electric are partnering on major solar
Slide 29: Since 2010, Lithium-Ion Battery Prices Have Fallen Over 80%
Since 2010, Lithium-lon Battery Prices Have Fallen Over 80% Battery pack price (real 2019 $/kWh) $1,183 $917 $721 $663 $588 " $293 ie $180 c 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: BloombergNEF WEC Energy Group
Slide 30: New Liquefied Natural Gas (LNG) Facilities
New Liquefied Natural Gas (LNG) Facilities Taking steps to maintain reliable and affordable service for our customers LNG provides a solution =» We Energies is seeking approval for two for Southeastern LNG facilities to address the need for Wisconsin to meet peak iti F F : euctomer deiiand an the ad
Slide 31: Project Highlights
Project Highlights Efficiency, Growth and Sustainability Progress Electric Delivery Redesign / Resilience + Addressing aging infrastructure + Enhancing efficiencies and reducing operating costs + Expect to spend $2.9 billion (2021-2025) Natural Gas System Modernization Illinois + Expected replacemen
Slide 32: Wind Infrastructure Investment Summary
Wind Infrastructure Investment Summary [Project | Developer | Location | investment | Offtake Agreement | Closing Date i Bishop Hill II] 80% on 8/31/18 ‘ Henry County, 166M for WPPI Ener: Wind Energy Invenergy ieee ty, 508 ownership oo yeara Incremental ~132MW. Center 10% on 12/5/18 5 Antelope , , U
Slide 33: $16.1 billion projected capital spend from 2021-2025
$16.1 billion projected capital spend from 2021-2025 Low-Risk Capital Plan Drives 5% to 7% EPS Growth $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- $3,351 $3,337 $3,182 $655 Qose 550% $99 Energy Infrastructure “ATC Investment ' = MERC/MGU gilllinois = WI/MI Gas Delivery ?° =WI/MI Electric Delive
Slide 34: By Company
By Company Capital Plan Projections ($ in millions) Wisconsin Electric $678.2 $933.5 $1,032.0 $1,375.3 Wisconsin Gas $169.9 $234.4 $256.2 $234.4 Wisconsin Public Service $534.1 $578.8 $537.6 $443.8 Upper Michigan Energy Corp $17.6 $16.7 $18.8 $16.7 Wisconsin Segment $1,399.8 $1,763.4 $1,844.6 $2,070
Slide 35: Composition of Asset Base
Composition of Asset Base Total 2019 Average Asset Base of $21.4 billion Asset Base -$B| _% of Total Wisconsin Electric $6.3 29.4% Wisconsin Gas WS) 7.0 Wisconsin Public Service 3.4 15.9 Upper Michigan Energy Resources 0.4 1.9 Peoples Gas 3.0 14.0 North Shore Gas 0.3 1.4 Minnesota Energy Resources 0
Slide 36: Power the Future Investments
Power the Future Investments’ po aturatGas | Coal Capacity 1,090 MW 1,030 MW * Investment $664 million $2 billion * ROE 12.7% 12.7% Equity 53% 55% In Service Dates Unit 1 — July 2005 Unit 1 — February 2010 Unit 2 — May 2008 Unit 2 — January 2011 Lease Terms 25 years 30 years Cost Per Unit of Capacit
Slide 37: Balance Sheet Remains Strong
Balance Sheet Remains Strong Funds from Operations/Debt Holding Company Debt to Total Debt 19.0% 18.0% 17.0% 16.0% 15.0% 14.0% 13.0% 12.0% 11.0% 10.0% 2020-2025E Electric and Gas Utilities Credit Ratings Distribution* Utilities ‘ § uy eat 125 Wisconsin Electric A- 100 y 75 Wisconsin Gas A a _ : EH '
Slide 38: Balanced Sales Mix
Balanced Sales Mix 2019 Retail MWh Deliveries Mix* 35% Large C&l by Segment Paper 23% Foundry (SIC 33) 11% Mining/Minerals 11% eta soli Food/Agriculture 2% 35% 35% , Other Manufacturing 8% Metal (SIC 34,35,37) 7% Medical 5% Residential Education 4% plus Farm Chemical 4% 30% Printing 3% Office 2% Oth
Slide 39: Diverse Portfolio of Regulated Businesses
Diverse Portfolio of Regulated Businesses By Business By Jurisdiction MI/MN 5% Distribution 33% FERC Regulated 14% Electric Generation and Distribution 53% Based on 2019 average asset base. Excludes wind investments in our Energy Infrastructure segment WEC Energy Group
Slide 40: Regulatory Environment
Regulatory Environment Wisconsin = Governor Tony Evers (D) = Commission = Gubernatorial appointment, Senate confirmation = Chairman: Gubernatorial appointment = 6-year staggered terms Wisconsin Commissioners Name Party Began Serving Term Ends Rebecca Valen D 01/2019 03/2025 Chair Ellen Nowak R 12/20
Slide 41: Rate-Making Parameters by Company
Rate-Making Parameters by Company 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 50.48% 9.05% Minnesota Energy Resources 50.9% 9.7% Michigan Gas Utilities 52% 9.9% We Power 53%-55% 12.7% America
Slide 42: Key Rate Making Components
Key Rate Making Components Michigan— Minnesota- | Electric & Wisconsin- Gas Gas Electric Gas Pipeline Replacement Rider Bad Debt Rider Vv Bad Debt Escrow Accounting Residential Residential Decoupling Vv Vv Fuel Cost Recovery 1 for 1 recovery of prudent fuel costs +/- 2% band eons Rosey Plant Site v
Slide 43: Industry Leading Total Shareholder Returns
Industry Leading Total Shareholder Returns* Over the past decade, WEC Energy Group has consistently delivered among the best total returns in the industry _, 400% 350% 300% 250% 200% 150% 100% 50% 0% * Total return including reinvested dividends for the periods ended December 31, 2019 ==WEC Energy G
Slide 44: Contact Information
Contact Information M. Beth Straka Senior Vice President — Investor Relations and Corporate Communications Beth.Straka@wecenergygroup.com 414-221-4639 Ashley Knutson Investor Relations Analyst Ashley.Knutson@wecenergygroup.com 414-221-3339 WEC Energy Group
Slide 45: Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP)
Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) | 2014 | 2015 | 2016 | 207 Reported EPS — GAAP basis $2.34 $2.59 $ 2.96 $ 3.79 Acquisition Costs $0.39 $0.06 $ 0.01 - Integrys Earnings $(0.47) Impact of Additional Shares $0.47 Hes ee related to Tax Cuts and Jobs _ _ _ $ (0.65) Adjust
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