MGE Energy Inc. · NASDAQ:MGEE
MGE Energy — Siebert Williams Shank Virtual West Coast Utilities Conference 2021
31 slides from MGE Energy's conference presentation, Mar 17, 2021
Slide 1: Siebert Williams Shank Virtual West Coast Utilities Conference
SIEBERT WILLIAMS SHANK VIRTUAL WEST COAST UTILITIES CONFERENCE MARCH 17,2021 Responsibility Reliability Resiliency
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 regarding forward-looking information
Cautionary note regarding 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 uncer
Slide 4: Company Highlights
Company Highlights Attractive and Growing Dividend Regulated, Highly Visible Growth • Paid dividends for more than 110 years 5‐Year Regulated PPE(1) CAGR of 7.3% – Increased dividends for 45 consecutive years • Total forecasted regulated capex of approx. $590 M from 2021 through 2023(3) • Annual div
Slide 5: Corporate Structure
Corporate Structure Central Wisconsin Madison Gas and MGE Transco MGEE Transco, MGE State Energy MGE Services, MGE Power LLC MAGAEL, LLC Development Electric Company Investment LLC LLC Services, LLC(3) LLC Corporation North Mendota MGE Power MGE Power Elm Energy & State Energy West Campus, LLC Road,
Slide 6: Attractive Service Territory
Attractive Service Territory Major customers include: • University of Wisconsin‐Madison • Hospitals and medical facilities • State of Wisconsin government 6
Slide 7: Earnings and Dividends per Share Growth
Earnings and Dividends per Share Growth Earnings Per Share Dividends Paid Per Share $3.00 $1.60 $1.40 $2.50 $1.20 $2.00 $1.00 $1.50 $0.80 $0.60 $1.00 $0.40 $0.50 $0.20 $‐ $‐ 2015 2016 2017 (1.) 2018 2019 2020 2015 2016 2017 2018 2019 2020 (1.) 2017 Non‐Regulated earnings per share includes one‐time
Slide 8: Stable Asset Growth
Stable Asset Growth Asset and Market Value Growth ($ Millions) $2,532 $2,254 $2,082 $1,989 $1,801 $1,855 $1,690 $1,726 $1,559 $1,574 $1,454 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Assets Market Cap. 8
Slide 9: Focused ESG strategy
Focused ESG strategy Foundational objectives under Energy 2030 Framework • Transition MGE to a more environmentally sustainable energy supply; • Provide customers with options they want today and in the future; • Help customers use energy efficiently and control future costs for all customers; • Pro
Slide 10: Focused ESG Strategy
Focused ESG Strategy Net‐Zero Carbon Electricity by 2050 Strategies for deep decarbonization: • Grow our use of renewable energy; • Further engage customers in energy efficiency, and; • Electrify transportation and other end uses. 10
Slide 11: UW Analysis of MGE's Net-Zero Carbon Goal
UW Analysis of MGE’s Net‐Zero Carbon Goal • Worked with Dr. Tracey Holloway with the University of Wisconsin‐ Madison's Nelson Institute for Environmental Studies, Center for Sustainability and the Global Environment, to evaluate MGE’s goal of net‐zero carbon electricity by 2050. • The study compare
Slide 12: Retirement of Legacy Fossil Fuel Power Plant
Retirement of Legacy Fossil Fuel Power Plant MGE, along with its co‐owners, WP&L (operator and majority owner) and WPSC, announced plans to retire the approximately 1,100‐MW coal‐fired Columbia Energy Center. • MGE currently owns 19% of the facility (216 MW) or nearly 30% of its net summer rated cap
Slide 13: Recent Solar/Battery Filing
Recent Solar/Battery Filing MGE, in partnership with We Energies and Wisconsin Public Service (WPS), subsidiaries of WEC Energy Group, is seeking approval from state regulators to purchase solar energy and battery storage from the Paris Solar‐Battery Park. • If approved, MGE will own 20 megawatts (M
Slide 14: Consistent Capital Expenditure Growth
Consistent Capital Expenditure Growth Focused on clean energy and progress toward net‐zero carbon $250 Actual and Projected Capital Expenditures Forecasted $212 $203 $209 $202 $200 $175 $164 $150 $119 $106 $ Millions $58 $100 Approximately 45% Clean Energy $50 $108 $93 $106 $97 $72 $84 ‐ 2015 2016 2
Slide 15: Transition to Clean Energy Generation
Transition to Clean Energy Generation Since 2018, Madison Gas and Electric has announced these investments in renewable generation as we continue to decarbonize our generation fleet. Investment Capital Expenditures Nameplate Capacity In Service Year Forward Wind $22M 18MW 2018 Saratoga Wind $108M 66
Slide 16: ESG & Sustainability Summary
ESG & Sustainability Summary Leadership Safety Workforce • Environmental and Sustainability • Safety Steering Team – examines safety • Career development and training Policy topics and prioritizes continuous programs to increase job proficiency • Sustainability Executive Team improvement opportuniti
Slide 17: Constructive Regulatory Environment
Constructive Regulatory Environment Both credit agencies 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 rene
Slide 18: Technology Investments
Technology Investments • In 2017, MGE committed to undertake a multiyear project aimed at transforming our foundational customer engagement capabilities to enable flexibility and capability in delivering new products and services as outlined in our Energy 2030 Framework. MGE has forecasted $50M of c
Slide 19: Commitment to Dividends & Shareholder Value
Commitment to Dividends & Shareholder Value • Recent dividend increase was approximately 5% • Increased dividend in July for the 45th consecutive year • Paid dividends for over 110 years • Dividend payout ratio in the 50‐60% range in recent years • No dividend payout range targeted • Dividend flexib
Slide 20: Company Highlights
Company Highlights Attractive and Growing Dividend Regulated, Highly Visible Growth • Paid dividends for more than 110 years 5‐Year Regulated PPE(1) CAGR of 7.3% – Increased dividends for 45 consecutive years • Total forecasted regulated capex of approx. $590 M from 2021 through 2023(3) • Annual div
Slide 21: Appendix
Appendix 21
Slide 22: COVID-19 — Risks
COVID‐19 — Risks Reduced economic activity impacting use of electricity and gas service MGE began to see the impacts of COVID‐19 and the associated governmental regulations in late March and through 2020. • Commercial electric sales decreased by approximately 7% when compared to 2019. • Residential
Slide 23: MGE's Strong Credit Ratings
MGE’s Strong Credit Ratings (1) S&P (UTILITY RATINGS) MOODY’S (UTILITY RATINGS) Corporate credit AA‐ Secured Aa2 Business risk Excellent Unsecured A1 Commercial paper A‐1+ Commercial paper P‐1 Outlook Stable Outlook Stable • Effective management of regulatory risk • Rating reflects a credit supporti
Slide 24: Total Shareholder Return
Total Shareholder Return As of December 31, 2020 15.22% 13.26% 13.26% 12.44% 11.74% 11.23% 10.86% 10.77% MGEE S&P 500 ‐ Electric Russell 2000 S&P 500 5 Year 10 Year 24
Slide 25: MGE – Electric and Gas Sales 2020
MGE – Electric and Gas Sales 2020 5.9% ‐3.5% ‐6.5% ‐7.2% ‐9.5% Residential Electric Commerical Industrial Electric Total Retail Total Retail Electric Electric Natural Gas 2020 2019 % Heating Degree Days (Normal 7,050) 6,799 7,406 (8.2)% Cooling Degree Days (Normal 681) 733 657 11.6% Electric sales d
Slide 26: Earnings per Share Segments
Earnings per Share Segments Three Months Ended December 31st 2019 2020 $0.05 ($0.01) $0.06 ($.04) $0.15 $.015 $0.44 $0.48 $0.31 $0.25 26
Slide 27: Earnings per Share Segments
Earnings per Share Segments Twelve Months Ended December 31st 2019 2020 $0.21 ($0.02) $0.20 (0.02) $0.59 $0.59 $2.60 $2.51 $1.74 $1.82 27
Slide 28: Electric Retail Sales Mix
Electric Retail Sales Mix 2019 2020 11% 11% 5% 26% 5% 29% 58% 55% Residential Commercial Industrial Other Residential Commercial Industrial Other 28
Slide 29: Gas Retail Sales Mix
Gas Retail Sales Mix 2019 2020 49% 48% 51% 52% Residential Commercial / Industrial Residential Commercial / Industrial 29
Slide 30: Thank you
Thank you For more information: Visit mgeenergy.com Ken Frassetto Virtual West Coast Utilities Director Shareholder Services Conference and Treasury Management March 17, 2021 kfrassetto@mge.com 608‐252‐4723 PO Box 1231 Madison WI 53701‐1231 30
Slide 31: Siebert Williams Shank Virtual West Coast Utilities Conference
SIEBERT WILLIAMS SHANK VIRTUAL WEST COAST UTILITIES CONFERENCE MARCH 17, 2021 Building your community energy company for the future
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