MGE Energy Inc. · NASDAQ:MGEE
MGE Energy — EEI Financial Forum Virtual Conference 2020
26 slides from MGE Energy's conference presentation, November 2020
Slide 1: EEI Financial Forum
EEI FINANCIAL FORUM Virtual Conference: November 2020
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 t
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 unc
Slide 4: Company Highlights
Company Highlights Attractive and Growing Dividend Regulated, Highly Visible Growth 5-Year Dividend CAGR of 4.6% 5-Year Regulated PPE(1) CAGR of 6.8% • Paid dividends for more than 110 years • Total forecasted regulated capex of approx. $570M – Increased dividends for 45 consecutive years from 2020
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 LLC Corporation North Mendota MGE Power MGE Power Elm Energy & State Energy West Campus, Road, LLC Te
Slide 6: Consistent Earnings Per Share Growth
Consistent Earnings Per Share Growth $2.82 $2.43 $2.51 $2.32 $2.18 $2.23 $2.16 $2.06 $1.76 $1.86 $1.66 $1.47 2009 2010 2011 2012 2013 2014 2015 2016 2017 (1) 2018 2019 Regulated Utility Non-Regulated Transmission Tax Reform Total • Regulated Utility – segment related to PSCW-regulated electric and g
Slide 7: Stable Asset Growth
Stable Asset Growth ($ Millions) $2,196 $2,082 $1,989 $1,801 $1,855 $1,726 $1,690 $1,559 $1,574 $1,454 $1,313 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q3 2020 Assets 7
Slide 8: Focused on Clean Energy and Technology
Significant Growth in Capital Expenditures Focused on Clean Energy and Technology $250 Shift of Badger Hollow I and O’Brien Solar to 2021 Shift of Badger Hollow II Solar to 2022 $200 $150 $ Millions $100 $50 - 2015 2016 2017 2018 2019 2020P 2021P 2022P Capital Expenditures Forecasted Capital Expendi
Slide 9: Focused ESG Strategy
Focused ESG Strategy Energy 2030 and Net-Zero Carbon Electricity by 2050 • Reduction in CO2 emissions – 40% from 2005 levels by 2030 o Based on Paris Agreement and U.S. Mid-Century Strategy – Net-Zero Carbon Electricity by 2050 o Strategy for deep decarbonization o Goal aligns with IPCC Special Repo
Slide 10: Transition from Coal to Clean Energy Generation
Transition from Coal to Clean Energy Generation • In June 2020, MGE completed the reduction of its ownership interest in Columbia from 22% to 19% as a result of the partial sale of plant assets to WPL. • MGE reduced its obligation to pay certain capital expenditures (other than SCR-related expenditu
Slide 11: Focused ESG Strategy
Focused ESG Strategy (1) Carbon Reduction Goals Align With Range of Scenarios Likely to Achieve 2 Degree Limit Percent Reduction 20% - 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 (20%) (40%) (60%) (80%) (100%) IPCC Scenarios with Max 2 Degree Warming MGE CO2 Reduction Projection (1.) Informati
Slide 12: Utility-Scale Solar
Utility-Scale Solar Two Creeks • PSCW approved including 100% AFUDC • Located in Manitowoc & Kewaunee Counties, Wisconsin • MGE owns 50 MW, with an approximate cost of $65 million • Project developed by NextEra Energy Resources • Achieved commercial operation in November 2020 Badger Hollow I & II •
Slide 13: Local Solar Programs
Local Solar Programs Renewable Energy Rider (RER) Program • MGE partners with large energy users on customized renewable energy solutions to meet their specific energy needs – MGE-owned solar facility – Tariffed rate with customer for capital and operations cost recovery • MGE has received PSCW appr
Slide 14: ESG & Sustainability Summary
ESG & Sustainability Summary Leadership Policies & Goals Performance • Sustainability Executive Team • Second Investor-Owned utility to declare a • MGE’s EEI Quantitative & Qualitative carbon neutral goal by 2050 ESG Templates • Operations-wide Environmental Management System • UW-Madison to verify
Slide 15: Constructive Regulatory Environment
Constructive Regulatory Environment • Supportive regulatory framework including: – Forward-looking test years – Approval of various expense deferrals(1) – Fuel Rules and Gas Cost Recovery Mechanism – Current Return on 50% of CWIP and 100% CWIP or AFUDC on major construction projects • 2021 Rate Sett
Slide 16: Commitment to Dividends & Shareholder Value
Commitment to Dividends & Shareholder Value Recent Dividend increase was approximately 5% • Increased dividend in July 2020 for the 45th consecutive year $1.60 Dividends Per Share ($) • Paid dividends for over 110 years • Dividend payout ratio in the 50-60% range in recent years $1.20 Dividend Consi
Slide 17: Company Highlights
Company Highlights Attractive and Growing Dividend Regulated, Highly Visible Growth 5-Year Dividend CAGR of 4.6% 5-Year Regulated PPE(1) CAGR of 6.8% • Paid dividends for more than 110 years • Total forecasted regulated capex of approx. $570M – Increased dividends for 45 consecutive years from 2020
Slide 18: Appendix
APPENDIX
Slide 19: Technology Investments
Technology Investments • In 2017, MGE committed to undertake a multi-year project aimed at transforming our foundational customer engagement capabilities and enabling it to be flexible in delivering new products and services as outlined in our energy 2030 framework. • MGE has forecasted $61M of capi
Slide 20: COVID-19 Impacts
COVID-19 Impacts Following guidance of state and federal agencies MGE Operations Continuing to serve new and existing customers by completing work necessary for critical and essential business operations No material disruptions in utility service or employment to date On March 24, 2020, the
Slide 21: Electric Retail Sales Mix – YTD Comparison
Electric Retail Sales Mix – YTD Comparison 2019 YTD 2020 YTD 5% 11% 5% 11% 26% 29% 58% 55% Residential Commercial Industrial Other Residential Commercial Industrial Other 21
Slide 22: MGE – Electric Retail Sales Q3 2020
MGE – Electric Retail Sales Q3 2020 8.7% -2.5% -5.5% -7.9% Residential Commercial Industrial Total Retail Electric 2020 2019 % Cooling Degree Days (Normal 493) 519 535 (3.0)% 22
Slide 23: MGE – Electric and Gas Sales YTD 2020
MGE – Electric and Gas Sales YTD 2020 7.2% -3.2% -7.2% -6.9% -9.7% Residential Commerical Industrial Total Retail Total Retail Electric Electric Electric Electric Natural Gas 2020 2019 % Heating Degree Days (Normal 4,530) 4,315 4,777 (9.7)% 23 Cooling Degree Days (Normal 674) 732 653 12.1%
Slide 24: Earnings per Share Segments
Earnings per Share Segments Three Months Ended September 30 th $0.05 ($0.01) $0.05 $0.15 $0.15 2019 $0.88 $0.88 $0.68 $0.69 2020 24
Slide 25: Earnings per Share Segments
Earnings per Share Segments YTD Ended September 30 th $0.16 ($0.01) $0.14 $0.02 $0.44 $0.44 $2.16 2019 $2.03 $1.57 2020 $1.43 25
Slide 26: Ken Frassetto contact details
EEI FINANCIAL FORUM November 2020 KEN FRASSETTO kfrassetto@mge.com 608-252-4723 PO Box 1231 Madison WI 53701-1231
MGE Energy — EEI Financial Forum Virtual Conference 2020 on 6ix