Mge Energy Inc. · NASDAQ:MGEE
Mge Energy — Bank of America 2022 Power, Utilities and Clean Energy Leaders Conference
30 slides from Mge Energy's conference presentation, Mar 3, 2022
Slide 1: Bank of America Utilities Conference
BANK OF AMERICA UTILITIES CONFERENCE MARCH 2022 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 Diversified Customer Base and Revenue Profile Regulated, Highly Visible Growth Resilient Revenue Stream and Customer Base Historical 5-Year Regulated PPE(1) CAGR of 8.0% • Electric service to ~159,000 customers located in the city of Madison and • Forecasted capital investment of
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 $3.50 $1.60 $3.00 $1.40 $1.20 $2.50 $1.00 $2.00 $0.80 $1.50 $0.60 $1.00 $0.40 $0.50 $0.20 $- $- 2016 2017 (1.) 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 (1.) 2017 Non-Regulated earnings per share includes one
Slide 8: Strong Track Record of Regulated Asset Growth
Strong Track Record of Regulated Asset Growth 8
Slide 9: ESG Summary
ESG Summary Leadership Safety Workforce • Environmental and Sustainability Policy • Safety Steering Team – examines safety • Career development and training topics and prioritizes continuous programs to increase job proficiency and • Sustainability Executive Team improvement opportunities to improve
Slide 10: Focused Sustainability Strategy
Focused Sustainability Strategy Foundational objectives: • 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 • Provide a dynamic elec
Slide 11: Accelerating Transition Toward Cleaner Energy
Accelerating Transition Toward Cleaner Energy Net-Zero Strategies for Deep Decarbonization • Grow MGE’s use of renewable energy and eliminate coal generation • Further engage customers in energy efficiency • Electrify transportation and other end uses Advancing deep decarbonization strategies as qui
Slide 12: Electric Vehicles and Deep Decarbonization
Electric Vehicles and Deep Decarbonization: Transportation accounts for more than 25% of U.S. greenhouse gas emissions MGE is pursuing a multi-pronged strategy to electrify transportation to reduce carbon dioxide emissions and to enable future market growth Electrification of MGE fleet • MGE has bee
Slide 13: Plan to Eliminate Coal-Fired Generation from Portfolio by 2035
Plan to Eliminate Coal-Fired Generation from Portfolio by 2035 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), which accounts for ~26
Slide 14: Rapidly Expanding Clean Energy Portfolio
Rapidly Expanding Clean Energy Portfolio Planned wind, solar and battery storage resources comprise nearly 50% of planned capital investment (2022-2024) Current and proposed clean energy projects will grow MGE’s renewables capacity by over 9x since 2015 In Progress - Regulatory Approval Granted Inve
Slide 15: Consistent Capital Expenditure Growth
Consistent Capital Expenditure Growth Focused on clean energy and progress toward net-zero carbon Actual and Projected Capital Expenditures Forecasted $250 $238 $212 $218 $203 $205 $200 $164 $114 $96 $ Millions $153 $150 $119 $106 $102 $58 $50 $100 $124 $122 $50 $108 $106 $97 $103 $103 $84 $93 $72 -
Slide 16: Renewables Transition Driving Strong Growth
Renewables Transition Driving Strong Growth * MG&E Rate Base as Authorized/Proposed by PSCW ($ millions) 2015 2017 2019 2020 2021 2022p 2023p Electric Utility 575.9 570.8 842.6 860.5 1,019.1 1,044.4 Limited Reopener Gas Utility 158.1 175.8 233.4 250.7 282.4 299.3 312.3 Total Utility Rate Base $733.9
Slide 17: Constructive Regulatory Environment
Constructive Regulatory Environment Both S&P and Moody’s 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: PSCW Approved 2022-2023 Rate Case
PSCW Approved 2022-2023 Rate Case Approved Settlement Terms Test Year 2022 Test Year 2023 ($000’s where applicable) Average Electric Rate Base $1,044,362 Limited Reopener Average Gas Rate Base $299,319 $312,270 Regulatory Equity Layer 55.63% 55.63% Authorized ROE 9.80% 9.80% In December 2021, the PS
Slide 19: Commitment to Dividends & Shareholder Value
Commitment to Dividends & Shareholder Value • Recent dividend increase was approximately 5% • Increased dividend in August 2021 for the 46th 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
Slide 20: Company Highlights
Company Highlights Diversified Customer Base and Revenue Profile Regulated, Highly Visible Growth Resilient Revenue Stream and Customer Base Historical 5-Year Regulated PPE(1) CAGR of 8.0% • Electric service to ~159,000 customers located in the city of Madison and • Forecasted capital investment of
Slide 21: Appendix
Appendix 21
Slide 22: Strong Credit Ratings
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 supportive reg
Slide 23: Total Shareholder Return
Total Shareholder Return Period Ending December 31, 2021 28.7% 19.9% 18.5% 17.1% 16.6% 14.8% 12.9% 13.2% 11.0% 11.0% 12.0% 6.9% MGEE EEI Index Russell 2000 S&P 500 1 Year 5 Year 10 Year 23
Slide 24: MGE Quarterly Sales
MGE – Quarterly Three Months Ended December 31 Sales Growth 2021 2020 % Heating Degree Days (Normal 2,491) 2,215 2,484 (10.8)% 24
Slide 25: MGE Annual Sales
MGE – Annual Sales Twelve Months Ended December 31 Growth 2021 2020 % Cooling Degree Days (Normal 685) 846 733 +15.4% Heating Degree Days (Normal 6,988) 6,619 6,799 -2.6% 25
Slide 26: Diluted EPS by Segment
Diluted EPS by Segment Three Months Ended December 31 26
Slide 27: Diluted EPS by Segment
Diluted EPS by Segment Twelve Months Ended December 31 27
Slide 28: Electric Utility Mix
Electric Utility Mix Twelve Months Ended December 31 28
Slide 29: Gas Utility Mix
Gas Utility Mix Twelve Months Ended December 31 29
Slide 30: For more information: Visit mgeenergy.com
For more information: Visit mgeenergy.com Ken Frassetto Director Shareholder Services and Treasury Management kfrassetto@mge.com 608-252-4723 PO Box 1231 Madison WI 53701-1231 30
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