WEC Energy Group, Inc. · NYSE:WEC
WEC Energy — Wisconsin Energy — Investor Presentation (November 2010)
18 slides from WEC Energy's investor presentation, November 2010
Slide 1: Wisconsin Energy Corporation, November 2010
Yau Wisconsin Energy (7m Corporation November 2010
Slide 2: Cautionary Statement Regarding Forward-Looking Information
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 things
Slide 3: Key Areas to be Covered
Key Areas to be Covered Overview of Wisconsin Energy Retail Electric and Gas Utilities Power the Future Wholesale Electric Transmission Earnings Outlook 3
Slide 4: Overview of Wisconsin Energy
Overview of Wisconsin Energy Estimated Rate Base and Power the Future Investment at 12/31/10 $9.1 Billion Retail Electric and Gas Utilities Wisconsin, Michigan, and FERC $0.7 jurisdictions 48.5% to 53.5% equity for Wisconsin $2.7 Electric $2.7 10.4% allowed ROE 45% to 50% equity for Wiscon
Slide 5: Retail Electric and Gas Utilities
Retail Electric and Gas Utilities Largest electric and gas company in Wisconsin 1.1 million electric customers 1.0 million natural gas customers 5
Slide 6: Expected Levels of Investment and Depreciation
Retail Electric and Gas Utilities Expected Levels of Investment and Depreciation $983 $1,000 $900 $194 $800 $706 Millions of Dollars $695 $700 $81 $600 $550 $385 $229 $179 $500 $201 $400 $97 $8 $300 $446 $200 $369 $404 $341 310 300 250 260 $100 $0 2009A 2010E 2011E 2012E Base Renewable Environmental
Slide 7: Renewable Energy Opportunity
Renewable Energy Opportunity Renewable Portfolio Standard in Wisconsin Required Percentage for Wisconsin Electric Retail Sales 8.27% * 4.27% * 2.27% 2001-03 2010 2015 Baseline *Requirements at a Wisconsin state level are 5% and 10% in 2010 and 2015 respectively. In terms of energy this is estimated
Slide 8: Renewable Energy Opportunity: Wind Projects
Renewable Energy Opportunity Wind Projects Blue Sky Green Field Completed May 2008 145 MW $295 million investment Glacier Hills Construction began May 2010 160 MW Estimated investment of $367 million Wisconsin Electric has executed 75 MW of Power Purchase Agreements 8
Slide 9: Renewable Energy Opportunity: Biomass and Solar Projects
Renewable Energy Opportunity Biomass and Solar Projects Biomass Filed application for a 50MW project with PSCW on March 15 Estimated investment of $255 million with a target in-service date of 2013 All local permits have been obtained Decision by the PSCW is expected in early 2011 12.5 M
Slide 10: Electric Fuel Cost Recovery
Electric Fuel Cost Recovery Wisconsin Jurisdiction Electric fuel case for 2010 was filed on February 19 Interim relief was granted on March 25 Wisconsin jurisdictional increase of $60.5 million, subject to refund Final decision expected in December Limited reopening of fuel rates for 2011
Slide 11: Power the Future Plan
Power the Future Plan Natural Gas Coal Capacity 1,090 MW 1 1,030 MW 1 Investment $664 million $2.0 billion ROE 12.7% 12.7% Equity 53% 55% Initial Lease Term 25 Years 30 Years Actual & Targeted Unit 1 – July 16, 2005 Unit 1 – February 2, 2010 In-service Dates Unit 2 – May 23, 2008 Unit 2 – 4th Quarte
Slide 12: Power the Future Expected Earnings
Power the Future Expected Earnings Earnings per Share Contribution Key Assumptions Consolidated Basis Oak Creek Unit 2 in service $1.33 November 28, 2010 – one $0.98 month change results in +/- 2 cents per share in 2010 Cost estimate of $2 billion for $0.42 WEC’s ownership of the coal units Fr
Slide 13: Wholesale Electric Transmission
Wholesale Electric Transmission Wisconsin Energy owns 26.2% of American Transmission Company (ATC) ATC is projected to contribute approximately 32 cents to our EPS this year Represents almost 9% of consolidated earnings ATC’s projected capital investment over the next ten years is $3.4 billi
Slide 14: Wholesale Electric Transmission Expected Earnings
Wholesale Electric Transmission Expected Earnings Projected Capital Expenditures Key Assumptions (Millions of Dollars) $273 In its latest 10-year $261 assessment ATC projects a $220 need for $3.4 billion of transmission improvements in its footprint from 2010 to 2019 Implies average $30 million
Slide 15: Projected Earnings Base for 2010 - 2012
Projected Earnings Base for 2010 - 2012 2010 2011 2012 Electric and Gas Utilities $2.58 to $2.63 $2.71 to $2.81 $7 billion rate base Power the Future (1) $0.98 $1.33 $1.33 Wholesale Electric Transmission (2) $0.32 $0.33 $0.34 Unallocated holding company debt ($0.13) ($0.27) ($0.17) $3.75 to $3.80 $4
Slide 16: Financing and Dividend Policy
Financing and Dividend Policy Capital Structure Goals Reach and maintain 55% debt to capital by the end of 2013 Assumes half of hybrid securities are treated as common equity Current Dividend Policy Target a dividend payout ratio of 40-45 percent of earnings this year as well as 2011 Tar
Slide 17: Projected Growth in Earnings and Dividends
Projected Growth in Earnings and Dividends Earnings per Share Dividends per Share $4.10 to $1.64 to $4.20 $1.60 $1.89* $3.75 to $3.80 $1.35 $3.20 2009 2010 2011 2009 2010 2011 *Projected dividend is based on 40% payout on $4.10 of earnings at low end and 45% payout on $4.20 of earnings at high end.
Slide 18: Key Takeaways on Wisconsin Energy
Key Takeaways on Wisconsin Energy Power the Future program almost complete Highly visible earnings and strong cash flow Solid utility franchises with rate base growth Driven by environmental upgrades, renewable energy projects and network improvements Investment in American Transmission Co
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