Mge Energy Inc. · NASDAQ:MGEE
Mge Energy — EEI Financial Conference 2023
32 slides from Mge Energy's conference presentation, Nov 8, 2023
Slide 1: EEI Financial Conference November 2023
EEI FINANCIAL CONFERENCE NOVEMBER 2023
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 – Forward Looking Information
CAUTIONARY NOTE – 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 uncertainties
Slide 4: Company Mission and Values
COMPANY MISSION AND VALUES MGE Energy is the parent company of Madison Gas and Electric Company (MGE). MGE is your community energy company, committed to engaging with our customers in different ways to meet their needs and to providing safe, reliable, affordable and sustainable energy to power our
Slide 5: 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 ~7% • Electric service to ~161,000 customers located in the city of Madison and • Forecasted capital investment of ~
Slide 6: Earnings and Dividends Growth
EARNINGS AND DIVIDENDS GROWTH Earnings Per Share Dividends Per Share $3.50 $1.75 $3.00 $1.50 $2.50 $1.25 $2.00 $1.00 $1.50 $0.75 $1.00 $0.50 $0.50 $0.25 $- $- 2017(1) 2018 2019 2020 2021 2022 2017(1) 2018 2019 2020 2021 2022 (1) 2017 Non-Regulated earnings per share includes one-time tax benefit of
Slide 7: Transition Toward Cleaner Energy
TRANSITION TOWARD CLEANER ENERGY Track Record of Increasing Pace of Decarbonization • MGE’s clean energy transition has reduced emissions while maintaining top-ranked electric reliability, strengthening key infrastructure, and providing affordable power to customers. • 2015: Energy 2030 framework in
Slide 8: Environmental Initiatives - Natural Gas Distribution
ENVIRONMENTAL INITIATIVES - NATURAL GAS DISTRIBUTION Building upon our long-standing commitment to providing affordable, sustainable energy, MGE has set a goal to achieve Net-Zero Methane Emissions from its natural gas distribution system by 2035. • If MGE can accelerate plans to achieve net-zero me
Slide 9: Plan to Eliminate Coal-Fired Generation
PLAN TO ELIMINATE COAL-FIRED GENERATION Retiring the coal-fired Columbia Energy Center In 2022, the target retirement date for both units at the Columbia Energy Center was updated to June 2026. The revised retirement date reflects tight energy supply conditions in the Midwest power market and supply
Slide 10: Expanding Clean Energy Portfolio
EXPANDING CLEAN ENERGY PORTFOLIO Planned wind, solar and battery storage resources comprise nearly 50% of planned capital investment between 2023 and 2028. In Progress - Regulatory Approval Granted Investment Ownership Nameplate Estimated Project ($M) Interest (MW) In-Service Date 30% Late 2023 / Ba
Slide 11: Focus on Clean Energy Investments
FOCUS ON CLEAN ENERGY INVESTMENTS Actual and Projected Capital Expenditures $300 $257 $250 $243 $225 $232 $212 $214 $203 $ Millions $200 $175 $164 $76 $114 $146 $132 $153 $80 $102 $150 $100 $132 $138 $123 $118 $50 $111 $111 - 2019 2020 2021 2022 2023P 2024P 2025P 2026P 2027P 2028P Renewables and Cle
Slide 12: Transmission Investment Outlook
TRANSMISSION INVESTMENT OUTLOOK MGE Energy anticipates material transmission investment opportunities later this decade through ATC. • MGE Energy holds 3.6% equity ownership interest in ATC. MISO Long-Range Transmission Plan (LRTP) Tranche 1 Portfolio proposal addresses needs across the entirety
Slide 13: 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 renewa
Slide 14: PSCW Regulators
PSCW REGULATORS WISCONSIN PARTY TERM BEGAN TERM ENDS COMMISSIONERS Rebecca Valcq (Chair) D Jan 2019 Mar 2025 Tyler Huebner * D Mar 2020 Mar 2027 Summer Strand * D Mar 2023 Mar 2029 * Not confirmed COMMISSION: - Gubernatorial appointment, Senate confirmation - Chair: Gubernatorial appointed - 6-year
Slide 15: MGE Rate Case Update – 2024 / 2025 Test Year
MGE RATE CASE UPDATE – 2024 / 2025 TEST YEAR TERMS APPROVED APPROVED ($000’s where applicable) 2024 TY 2025 TY Average Electric Rate Base $1,185,550 $1,241,503 Average Gas Rate Base $335,533 $341,370 Average Common Stock Equity $917,952 $945,483 Regulatory Equity Layer 56.13% 56.06% Authorized ROE 9
Slide 16: Customer Affordability
CUSTOMER AFFORDABILITY Average residential electric customer bill as % of Wisconsin median household income 2.25% 2.01% 2.00% 2.00% MGE residential customer bill as a percentage of customer wallet at 1.75% 1.75% 1.55% is below the Wisconsin utility peer average of 1.75%. 1.55% 1.50% MGE’s affordabil
Slide 17: Inflation Reduction Act of 2022 (IRA)
INFLATION REDUCTION ACT OF 2022 (IRA) Inflation Reduction Act supports MGE’s carbon reduction strategy and increases flexibility toward meeting customer needs for affordable and reliable clean energy resources. Positioned to deliver material benefits to customers • Long-term extension of tax credi
Slide 18: Electric Vehicles and Deep Decarbonization
ELECTRIC VEHICLES AND DEEP DECARBONIZATION MGE has been supporting the adoption of alternative fuel vehicles since the launch of its public charging network more than a decade ago and anticipates continued electrification of transportation could drive incremental sales growth over the long term. Ele
Slide 19: ESG – Highlights - Environment
ESG – HIGHLIGHTS - Environment Track Record of Increasing Pace of Decarbonization • MGE’s clean energy transition has reduced emissions while maintaining top-ranked electric reliability, strengthening key infrastructure, and providing affordable power to customers. Foundational Objectives in MGE’s E
Slide 20: ESG – Highlights - Social
ESG – HIGHLIGHTS - Social Annual Giving Safety MGE is committed to helping • Safety Steering Team – examines safety topics and improve the quality of life for all prioritizes continuous improvement opportunities those we serve through: • Corporate Safety Commitment – safety vision statement, "We Pow
Slide 21: ESG – Highlights - Governance
ESG – HIGHLIGHTS - Governance Our Board of Directors has a strong commitment to corporate responsibility and accountability. Community-focused and with a breadth and diversity of experience, board members bring strong effective oversight in their service to MGE and MGE Energy. The company’s commitme
Slide 22: ESG - Disclosures
ESG - DISCLOSURES Below are links to where you can find ESG information: Corporate Responsibility and Sustainability Report CDP Climate Change Questionnaire EEI Qualitative Template EEI Quantitative Template EEO-1 Data Report Statement on Human Rights Occupational Health and Safety Policy Re
Slide 23: Appendix
APPENDIX 23 OQOOOOQOOO
Slide 24: Service Territory Highlights
Service Territory Highlights MGE’s service territory is a growing and diverse community of urban, suburban and rural communities. The Madison area and Dane County lead the state of Wisconsin in population growth. • Seat of state government • Home to the flagship University of Wisconsin – Madison • R
Slide 25: Corporate Structure
CORPORATE STRUCTURE Over 98% of MGE Energy assets are dedicated to regulated and quasi-regulated utility operations. (1) Owns and operates electric transmission lines in Wisconsin (2) Transmission development company. Separate from American Transmission Company, LLC (3) Presently inactive 25
Slide 26: 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 27: EPS by Segment – Third Quarter
EPS BY SEGMENT – Third Quarter Three Months Ended September 30 2023 2022 $1.10 $0.05 $1.10 $0.16 $1.00 ($0.00) $1.00 $0.03 $0.15 $0.90 $0.90 ($0.00) $0.80 $0.80 ($0.02) $0.70 $0.70 ($0.01) Diluted EPS Diluted EPS $0.60 $0.60 $0.50 $1.05 $0.50 $0.93 $0.40 $0.86 $0.40 $0.76 $0.30 $0.30 $0.20 $0.20 $0.
Slide 28: EPS by Segment – YTD
EPS BY SEGMENT – YTD Nine Months Ended September 30 2023 2022 $0.16 $2.90 $2.90 $2.80 $2.80 $2.70 $0.46 $2.70 $2.60 ($0.04) $2.60 $0.13 $0.02 $0.45 $2.50 $2.50 $2.40 $2.40 $2.30 $0.29 $2.30 $2.20 $2.20 $2.10 $2.10 $2.00 $2.00 $0.35 $1.90 $1.90 $1.80 $1.80 Diluted EPS Diluted EPS $1.70 $1.70 $1.60 $1
Slide 29: Strong Track Record of Regulated Asset Growth
STRONG TRACK RECORD OF REGULATED ASSET GROWTH $2,000 $1,500 Net PP&E + CWIP ($millions) $1,000 $500 $- 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q3 2023 29
Slide 30: Electric Utility Mix
ELECTRIC UTILITY MIX Nine Months Ended September 30, 2023 Electric Revenues Electric Volumes Electric Customers 56% 53% 87% 13% Residential 36% 28% Commercial 5% 8% 11% Industrial 3% Other Notes: Categories may not sum due to rounding Electric customers are as of 12/31/2022 30
Slide 31: Gas Utility Mix
GAS UTILITY MIX Nine Months Ended September 30, 2023 Gas Revenues Gas Volumes Gas Customers 36% 90% 38% 58% 36% 10% 28% Residential Commercial/Industrial 4% Other Notes: Categories may not sum due to rounding Gas customers are as of 12/31/2022 31
Slide 32: For more information, visit mgeenergy.com
For4more th Quarter 2022 Financial Update February 2023 information, visit mgeenergy.com Ken Frassetto Director Shareholder Services and Treasury Management kfrassetto@mge.com 608-252-4723 P.O. Box 1231 Madison WI 53701-1231