Wec Energy Group, Inc. · NYSE:WEC

Wec Energy — Investor Presentation (September 2023)

54 slides from Wec Energy's investor presentation, Sep 1, 2023

1. Slide 1: Investor Update: September 2023

   Investor Update: September 2023 Our “ESG” Progress Plan Update Investing in Efficiency, Sustainability and Growth Best in the U.S. in Large Customer Satisfaction ESource We Energies Named #1 Energy Company in America by Business Customers Escalent Finalist for the S&P Global Energy Award in Corporat

2. Slide 2: Cautionary Statement Regarding Forward-Looking Information

   2 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 thin

3. Slide 3: The Premier Energy Company in America's Heartland

   3 The Premier Energy Company in America’s Heartland  $26.5 billion market cap*  4.6 million retail customers  60% ownership of American Transmission Company  $43.0 billion of assets * As of August 31, 2023

4. Slide 4: A History of Quality Earnings Growth

   4 A History of Quality Earnings Growth $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 GAAP Adjusted** 2023 Guidance * Estimated based on 2023 guidance midpoint of $4.60 per share. ** See Appendix for r

5. Slide 5: Consistent Performance Over Time

   5 Consistent Performance Over Time EPS Guidance 2022 Exceeded  2021 Exceeded  2020 Exceeded  2019 Exceeded  2018 Exceeded  2017 Exceeded  2016 Exceeded  2015 Exceeded  2014 Exceeded  2013 Exceeded  2012 Exceeded  2011 Exceeded  2010 Exceeded  2009 Exceeded  2008 Exceeded  2007 Exceede

6. Slide 6: Strong Dividend Growth Continues

   6  In January, raised the dividend by 7.2% to a new annual rate of $3.12 per share*  Top decile dividend growth in industry**  Marks the 20th consecutive year of rewarding shareholders with higher dividends Strong Dividend Growth Continues ** Reflects current and expected dividends declared in 20

7. Slide 7: What's New?

   7 What’s New?

8. Slide 8: Second Quarter Update

   8  Second quarter earnings of 92 cents  8 cents higher than consensus  Reaffirmed EPS growth of 6.5% to 7.0%  Major Microsoft investment in region moving full speed ahead  Developing updated 5-year capital plan  If growth in demand for capacity and energy drives next capital plan significantly

9. Slide 9: Wisconsin Utilities - Rate Review Scope for 2024

   9 Wisconsin Utilities - Rate Review Scope for 2024 Limited Re-Opener  Addresses the recovery of new renewable facilities, RICE generation and LNG reliability investments that achieve commercial operation in 2023 and 2024  Addresses projected O&M savings from the planned retirement of two older coa

10. Slide 10: Advancing our renewable/reliability goals

    10 Project Approved Investment1 Darien Solar-Battery Park $400 million West Riverside Energy Center First Option $102 million Koshkonong Solar-Battery Park $585 million 1 Reflects amounts approved by the Wisconsin Commission. Project estimates and final costs may vary. The Wisconsin Commission has a

11. Slide 11: Illinois Rate Reviews

    11  Peoples Gas will not seek an extension of the automatic bill adjustment rider QIP.  With natural gas prices expected to decline this year and next year, we project customer bills to stay largely flat as new rates take effect in 2024.  Chicago home heating bills are below other major U.S. citi

12. Slide 12: Organic Flow Battery Storage Pilot Project

    12  Leading a pilot project to test a new form of long-duration energy storage  Partnering with EPRI and CMBlu Energy  This system uses a proprietary technology that incorporates environmentally friendly materials - ‘a green battery.’  The project will test battery system performance, including

13. Slide 13: 2023-2027 Capital Plan

    13 $6.4 $3.6 $2.7 $3.0 $0.5 $2.0 $1.9 $20.1 2023-2027 Energy Infrastructure ATC* MERC/MGU Illinois WI Gas Delivery** WI Electric Delivery** WI Generation** 2023-2027 Capital Plan ($ in billions) ESG Progress Plan Supports 6.5% to 7.0% EPS Growth *ATC is accounted for using the equity method; this re

14. Slide 14: Robust Growth in Asset Base

    14 $26.5 billion $38.4 billion 2022A 2027E* Robust Growth in Asset Base *Estimated year-end average asset base Expect long-term EPS growth of 6.5% to 7.0% per year. 7.7% Growth

15. Slide 15: Investing $5.4 Billion in Regulated Renewables

    15 Solar  505 MW under construction  270 MW received regulatory approval  Planning for additional 1,135 MW  Qualifies for Production Tax Credits Battery  316 MW received regulatory approval  Planning for additional 400 MW  Qualifies for Investment Tax Credits Wind  82 MW in-service Apr. 4, 2

16. Slide 16: WEC Infrastructure Portfolio – Green and Growing

    16 SD IL NE Plan to invest $1.9 Billion (2023-2027) WEC Infrastructure Portfolio – Green and Growing In-service Under development Total Project Capacity (MW) Investment (in millions) Wind ● Upstream 200 $307 ● Bishop Hill III 132 166 ● Coyote Ridge 97 145 ● Blooming Grove 250 389 ● Tatanka Ridge 155

17. Slide 17: Modernizing Our Gas-Fueled Generation Fleet

    17 Modernizing Our Gas-Fueled Generation Fleet Retiring  Weston 2  74 MW  Retired: Feb. 2023  Weston 31 and 32  69 MW  Retired: Jul. 2023  Additional 74 MW of older, less-efficient gas generation expected to retire in 2024 Building Weston RICE units  128 MW  Investment: $170 million  In-se

18. Slide 18: Exiting Coal

    18  Near-term retirements planned:  Oak Creek Units 5-6: 528 MW (May 2024)  Oak Creek Units 7-8: 611 MW (late in 2025)  Columbia Units 1-2: 300 MW (by June 1, 2026)  Enhancing fuel flexibility (gas blending) at Oak Creek Power the Future units  By the end of 2030, we expect to use coal only as

19. Slide 19: American Transmission Company

    19 $532 $707 $712 $661 $643 $319 $424 $427 $397 $386 2023 2024 2025 2026 2027 ATC WEC portion 60% American Transmission Company 5-year (2023-2027) WEC projected capital investment:  Ongoing ATC: $1.7 billion  Includes $0.3B from Tranche 1 Future ATC Opportunity  ATC’s estimated investment in Tran

20. Slide 20: Carbon Reduction Goals – Electric Generation

    20 *Includes projection of potential carbon offsets by 2050 Carbon Reduction Goals – Electric Generation We have established aggressive carbon reduction goals for our electric generating fleet, aligned with or surpassing global emissions pathways aimed at limiting warming to 1.5°C. Reduction goals:

21. Slide 21: Methane Reduction

    21 Goal: Net zero by the end of 2030** * Represents a decrease in the rate of methane emissions across our system from a 2011 baseline. ** This goal applies to emissions from WEC Energy Group natural gas distribution companies calculated in accordance with EPA’s 40 Code of Federal Regulations Part 9

22. Slide 22: Regional Economy

    22 Regional Economy

23. Slide 23: Powering Industry Leaders in our Region

    23 Powering Industry Leaders in our Region

24. Slide 24: Wisconsin Segment Longer-Term Sales Forecast 2025-2027

    24 Wisconsin Segment Longer-Term Sales Forecast 2025-2027 Electric 0.7%-1.0% Gas 0.7%-1.0% Sales Growth Forecast (weather-normalized) Year-Over-Year

25. Slide 25: Key Takeaways for WEC Energy Group

    25  Track record of top decile performance among regulated utilities  Industry leading earnings quality  ESG Progress Plan drives premium EPS growth of 6.5% to 7.0%  No need to issue equity for the $20.1 billion capital plan  100% of capital allocated to regulated businesses or contracted renew

26. Slide 26: Appendix

    Appendix | VAie VA Energy Group

27. Slide 27: Electric Distribution Electric Transmission 60% ownership Electric Generation Energy Infrastructure Natural Gas Distr…

    27 Electric Distribution Electric Transmission 60% ownership Electric Generation Energy Infrastructure Natural Gas Distribution

28. Slide 28: Inflation Reduction Act Customer Benefit and Investment Opportunity

    28  Extension of Production Tax Credits (PTC) and Investment Tax Credits (ITC)  PTC option for solar projects  Potential opportunities at WEC infrastructure segment  ITC for stand-alone electric storage projects  Tax Credit “transferability” likely to provide additional options for monetization

29. Slide 29: Commitment to ESG

    29 Reduce carbon dioxide emissions from electric generation 60% by the end of 2025 and 80% by the end of 2030 – both from a 2005 baseline. Long-term goal of net-zero carbon emissions from our generating fleet by 2050 Planned exit from coal by the end of 2035 Targeting net-zero methane emissions from

30. Slide 30: Electricity Supply by Fuel Type

    30 Electricity Supply by Fuel Type (megawatt-hours delivered to regulated utility customers) 73% 32% 7% 38% 32% 17% 22% 24% 3% 8% 39% 2005 2022 2030E 2035 2050 Coal Natural Gas Nuclear Renewables Exiting Coal <5% Net carbon neutral goal Planned exit from coal

31. Slide 31: Reducing Greenhouse Gas Emissions

    31 Reducing Greenhouse Gas Emissions 0.78 0.43 0.33 0.16 0** 2005 2022 2025E 2030E 2050E Greenhouse gas intensity* (metric tons CO2/MWh) *Includes owned electric generation, purchased power and WEC Infrastructure (WECI). The environmental attributes of the WECI renewable facilities are or may be the

32. Slide 32: Investment in Regulated Renewables

    32 Plan to invest $5.4 Billion (2023-2027) Investment in Regulated Renewables Target Project Utility WEC Ownership1 WEC Investment ($M) WEC Capacity (MWs) In-Service Two Creeks Solar Project WPS 66.7% $130 100 Badger Hollow I Solar Park 130 100 2023 / Early 2024 Badger Hollow II Solar Park WEPCO 172

33. Slide 33: WEC Infrastructure Projects and Offtake Agreements

    33 Project Developer Investment Offtake Agreement WEC Commercial Operations Total Project Capacity Bishop Hill III Wind Energy Center Invenergy $166M for 90% ownership WPPI Energy 22 years 8/31/18 132 MW Upstream Wind Energy Center Invenergy $307M for 90% ownership Affiliate of Allianz 10 years 1/10

34. Slide 34: Hydrogen Pilot Program

    34  Led a pilot program – first of its kind in the world - to test hydrogen as a fuel source for power generation  Partnered with the Electric Power Research Institute (EPRI)  Blended hydrogen with natural gas at one of our RICE units  Initial findings indicate that all project measures met or e

35. Slide 35: Why Our Natural Gas Distribution Networks Matter

    35 Today and Tomorrow Why Our Natural Gas Distribution Networks Matter Our Service Area  65-78% of homes use natural gas for heating  Growth continues as customers convert to natural gas Hydrogen and RNG Opportunities  Potential to blend  Investment potential to convert existing distribution net

36. Slide 36: New Liquefied Natural Gas (LNG) Storage Facilities

    36 New Liquefied Natural Gas (LNG) Storage Facilities LNG will provide a solution for Southeastern Wisconsin to meet peak customer demand on the coldest days of the year.  We Energies received approval for two LNG facilities to address the need for additional natural gas supply in Wisconsin  Total

37. Slide 37: Electric Delivery Redesign/Resilience

    37 Electric delivery redesign/resilience  Addressing aging infrastructure and system hardening  Enhancing efficiencies and reducing operating costs  Expect to spend $3.6 billion (2023- 2027) with continued investment over next decade Project Highlights Efficiency, Growth and Sustainability Progre

38. Slide 38: Natural Gas Safety Modernization

    38 Natural Gas Safety Modernization  Increasing capacity and reliability of natural gas service in our territories Illinois  Expected replacement of 2,000 miles of piping for safety and reliability in Chicago  Project $280 million-$300 million annual average investment  Illinois law authorizes r

39. Slide 39: Utility Capital Plan Drives EPS Growth

    39 1,340 1,207 1,236 1,418 1,239 655 716 727 727 731 605 563 506 525 474 563 663 614 590 591 113 116 105 101 94 319 424 427 397 386 $3,595 $3,689 $3,615 $3,758 $3,515 - 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2023 2024 2025 2026 2027 ATC Investment MERC/MGU Illinois WI/MI Gas Delivery**

40. Slide 40: Capital Plan Projections by Company

    40 2023 2024 2025 Wisconsin Electric $1,504.1 $1,478.2 $1,274.6 Wisconsin Gas $251.4 $246.0 $230.9 Wisconsin Public Service $754.8 $679.9 $858.7 Upper Michigan Energy $20.4 $28.7 $81.3 Wisconsin Segment $2,530.7 $2,432.8 $2,445.5 Peoples Gas $506.3 $599.0 $540.5 North Shore Gas $50.8 $60.5 $73.5 Ill

41. Slide 41: Composition of Asset Base

    41 Composition of Asset Base Total 2022 Average Asset Base of $26.5 Billion Note: We Power value represents investment book value. Company Asset Base - $B % of Total Wisconsin Electric $7.3 27.5% Wisconsin Gas 1.9 7.2 Wisconsin Public Service 4.2 15.9 Upper Michigan Energy Resources 0.4 1.5 Peoples

42. Slide 42: National Leader in Operating Efficiency and Financial Discipline

    42 National Leader in Operating Efficiency and Financial Discipline $27.60 $12.60 $15.60 $16.80 $21.00 $21.60 $21.80 $23.00 $24.80 $39.20 $79.30 $0 $10 $20 $30 $40 $50 $60 $70 $80 2021 Non-Fuel O&M per MWh* Source: FERC Form 1 Reports *For all companies, excluded 1) pensions and other employee benef

43. Slide 43: Focused on Efficiency

    43 Focused on Efficiency $1,342 $1,281 $1,234 $1,143 $1,107 $1,088 $1,082 2016 2017 2018 2019 2020 2021 2022 2023E $ I n m ill io n s *Excludes costs that have a revenue offset such as operation and maintenance costs associated with the We Power generation units, transmission expenses that are colle

44. Slide 44: Credit Metrics – Healthy Balance Sheet

    44 Credit Metrics – Healthy Balance Sheet Entity S&P Rating Moody’s Rating WEC Energy Group A- Baa1 Wisconsin Electric A- A2 Wisconsin Gas A A3 Wisconsin Public Service A- A2 Peoples Gas A- A2 Issuer Credit Ratings 11.9% 14.2% 2022 Actual* 2022 Adjusted** Funds from Operations/Debt Holding Company D

45. Slide 45: Projected Financing Plans for 2023

    45 Projected Financing Plans for 2023 1 $1,450 $600-$800 $600- $1,000 $0 $500 $1,000 $1,500 $2,000 $2,500 Holding Company Utilities & Energy Infrastructure (i n m ill io n s ) YTD Financing Planned Financing Existing Facilities $1.9B net liquidity (as of Aug. 31, 2023) $3.1B Sept. 2026 2 1. Amounts

46. Slide 46: Balanced Sales Mix

    46 34% Large C&I by Segment Paper/Packaging 26% Foundry (SIC 33) 11% Mining/Minerals 10% Metal (SIC 34,35,37) 8% Other Manufacturing 8% Food/Agriculture 7% Medical 6% Education 4% Printing 3% Chemical 2% Office 2% Other 13% Balanced Sales Mix Large C&I 34% Residential and Farm 31% Small C&I 35% 2022

47. Slide 47: Diverse Portfolio of Businesses

    47 Diverse Portfolio of Businesses Based on 2022 average asset base. WI 63% IL 17% MI/MN 5% WECI 5% ATC* 10% By Jurisdiction By Business Electric generation and distribution 49%Natural gas distribution 36% WECI 5% Electric transmission* 10% *ATC is accounted for using the equity method; this represe

48. Slide 48: Regulatory Matters

    48 Estimated Decision Date Wisconsin (apps.psc.wi.gov)  Commission decision on limited re-opener for new base rates effective 1/1/24 (Dockets: WE and WG: 5-UR-110 and WPS 6690-UR-127) Q4 2023 Illinois (icc.illinois.gov)  Decision on general rate review for new base rates effective 1/1/24 (Dockets:

49. Slide 49: Regulatory Environment

    49 Regulatory Environment Wisconsin  Governor Tony Evers (D)  Commission  Gubernatorial appointment, Senate confirmation  Chairman: Gubernatorial appointment  6-year staggered terms Illinois  Governor J.B. Pritzker (D)  Commission  Gubernatorial appointment, Senate confirmation  Chairman: G

50. Slide 50: Rate-Making Parameters by Company

    50 Rate-Making Parameters by Company Utility Equity Layer1 Authorized ROE Wisconsin Electric 50.50%-55.50% 9.80% Wisconsin Public Service 50.50%-55.50% 9.80% Wisconsin Gas 50.50%-55.50% 9.80% Peoples Gas 50.33% 9.05% North Shore Gas 51.58% 9.67% Minnesota Energy Resources 50.90% 9.70% Michigan Gas U

51. Slide 51: Key Rate Making Components

    51 Key Rate Making Components Area Illinois– Gas Minnesota– Gas Michigan– Electric and Gas Wisconsin– Gas Wisconsin– Electric Gas Pipeline Replacement Rider PGL MGU Bad Debt Rider ✓ Bad Debt Escrow Accounting Residential Residential Decoupling ✓ ✓ Fuel Cost Recovery 1 for 1 recovery of prudent fuel

52. Slide 52: Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP)

    52 Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) 2014 2015 2016 2017 Reported EPS – GAAP basis $2.59 $2.34 $ 2.96 $ 3.79 Acquisition Costs $0.06 $0.39 $ 0.01 – Integrys Earnings $(0.47) Impact of Additional Shares $0.47 Tax Benefit Related to Tax Cuts and Jobs Act of 2017 – – – $

53. Slide 53: Ratio of FFO to Debt

    53 Ratio of FFO to Debt (in millions, except percent) Ratio of FFO to Debt 2022 Net cash provided by operating activities $2,060.7 Total debt $17,294.5 Ratio of FFO to debt 11.9% Ratio of FFO to Debt – Adjusted* 2022 Net cash provided by operating activities $2,060.7 Add: Working Capital 340.8 Net c

54. Slide 54: Contact Information

    Contact Information M. Beth Straka Senior Vice President – Investor Relations and Corporate Communications Beth.Straka@wecenergygroup.com 414-221-4639

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