Mge Energy Inc. · NASDAQ:MGEE
Mge Energy — Investor Presentation (February 2024)
33 slides from Mge Energy's investor presentation, Feb 21, 2024
Slide 1: PEOPLE
PEOPLE mGe anf ENERGY.
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 EPS CAGR of 6%, Regulated PPE") CAGR of ~7% ¢ Electric service to ~163,000 customers located in the city of Madison and + Forecasted capital
Slide 6: Earnings and Dividends Growth
EARNINGS AND DIVIDENDS GROWTH Diluted Earnings Per Share Dividends Per Share $3.00 $1.50 $2.50 $1.20 $2.00 $0.90 $1.50 $0.60 $1.00 $0.50 #990 s- S- 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023 6 OQOOQOOOOO
Slide 7: Transition Toward Cleaner Energy
TRANSITION TOWARD CLEANER ENERGY Track Record of Increasing Pace of Decarbonization + MGE’s clean energy transition has reduced emissions while maintaining top-ranked . electric reliability, strengthening key infrastructure, and providing affordable power to customers. CARBON ELECTRICITY BY 2050 * 2
Slide 8: Environmental Initiatives - Natural Gas Distribution
ENVIRONMENTAL INITIATIVES - NATURAL GAS DISTRIBUTION Building upon our long-standing commitment to providing affordable, sustainable energy, MGE has set a goal to achieve Net-Zero Methane Emissions from its natural gas distribution system by 2035. * If MGE can accelerate plans to achieve net-zero me
Slide 9: Plan to Eliminate Coal-Fired Generation
PLAN TO ELIMINATE COAL-FIRED GENERATION Retiring the coal-fired Columbia Energy Center In 2022, the target retirement date for both units at the Columbia Energy Center was updated to June 2026. The revised retirement date reflects tight energy supply conditions in the Midwest power market and supply
Slide 10: Expanding Clean Energy Portfolio
EXPANDING CLEAN ENERGY PORTFOLIO In Progress Project Investment Ownership Nameplate Estimated r royec) ($M) Interest (Mw) In-Service Date y ™N 2024 solar/ 30% i | (a) 9, solar, I~ Paris Solar-Battery $61 10% 20/11 2025 battery ' 25% Darien Solar ©) $46 @) 10% 25 2024 Koshkonong Solar ©) $54 @) 10% 3
Slide 11: Investments - Focused on Sustainability and Reliability
INVESTMENTS - Focused on Sustainability and Reliability Actual and Projected Capital Expenditures $300 $257 $243 $250 $222 gygq 82258282 2 $203 £ $200 = $175 * $164 $153 $76 $102 $114 Sie $132 $150 $100 $138 $50 $123 $118 $111 $111 : 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 m Renewables and
Slide 12: Transmission Investment Outlook
TRANSMISSION INVESTMENT OUTLOOK v MGE Energy anticipates material transmission investment opportunities later this decade through ee ATC. * MGE Energy holds 3.6% equity ownership interest in ATC. v MISO Long-Range Transmission Plan (LRTP) Tranche ‘rao ever 1 Portfolio proposal addresses needs across
Slide 13: Constructive Regulation
CONSTRUCTIVE REGU 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 renewable investments an
Slide 14: PSCW Regulation
PSCW REGU WISCONSIN COMMISSIONERS PARTY TERM BEGAN Summer Strand (Chair) D Mar 2023 Mar 2029 Kristy Nieto* D Feb 2024 Mar 2025 Vacant ° 2 Mar 2027 * Not confirmed COMMISSION: - Gubernatorial appointment, Senate confirmation - Chair: Gubernatorial appointed - 6-year staggered terms Governor Tony Ever
Slide 15: Test Year
TEST YEAR APPROVED APPROVED where applicable) 2024 TY 2025 TY Average Electric Rate Base $1,185,550 $1,241,502 Average Gas Rate Base $335,533 $341,369 Average Common Stock Equity $917,952 $945,483 Regulatory Equity Layer 56.13% 56.06% Authorized ROE 9.70% 9.70% 1.54% Elec 4.17% Elec Increases in Bas
Slide 16: 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. Y Positioned to deliver material benefits to customers * Long-term extension of tax credi
Slide 17: Customer Affordability
CUSTOMER AFFORDABILITY Average residential electric customer bill as % of Wisconsin median household income 2.25% 2.00% MGE residential electric customer bill as a percentage of customer wallet at 1.55% is below the Wisconsin utility peer average of 1.75%. 1.75% 1.50% MGE’s affordability as percenta
Slide 18: Electric Vehicles and Electrification
ELECTRIC 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. Electrification of fleet vehicles MGE
Slide 19: Our ESG - Commitments
OUR ESG - COMMITMENTS 80% reduced carbon emissions by 2030 ~~ Net-Zero carbon electricity by 2050 Net-Zero methane emissions from our natural gas distribution system by 2035 by the end of 2026 Coal as a backup fuel by end of Zero ownership of coal by end of 2032 ¥ ro 2/3 coal-fired generation capaci
Slide 20: 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 21: ESG - Highlights - Social
ESG - HIGHLIGHTS - Social Annual Giving MGE is committed to helping improve the quality of life for all those we serve through: Corporate giving, partnerships and collaborations Charitable giving: In the last five years, the MGE Foundation has given more than $8.7M to more than 400 community organiz
Slide 22: 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. Diverse and Engaged Bo
Slide 23: ESG - Disclosures
ESG - DISCLOSURES Below are links to where you can find ESG information: Corporate Responsibility and Sustainability Report e CDP Climate Change Questionnaire e FEI Qualitative Template e EE! Quantitative Template e EEO-1 Data Report Statement on Human Rights Occupational Health and Safety Policy Re
Slide 24: Appendix
APPENDIX 24 OOOQOOOOO
Slide 25: 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 26: Corporate Structure
CORPORATE STRUCTURE Over 98% of MGE Energy assets are dedicated to regulated and quasi-regulated u Madison Gas and MGE Transco Electric Company Investment LLC Holds a 3.6% interest in American Transmission Company LLC®) MGEE Transco, LLC Holds a 4.4% interest in ATC Holdco LLC®) (1) Owns and operate
Slide 27: Strong Credit Ratings
STRONG CREDIT RATINGS , S&P (UTILITY RATINGS) MOODY'S (UTILITY RATINGS) Corporate credit AA- Secured Aa2 Business risk Excellent Unsecured Al Commercial paper A-1+ Commercial paper P= Outlook Stable Outlook Stable * Effective management of regulatory risk ¢ Supportive regulatory environment * Focus
Slide 28: Q4 Quarter Diluted EPS by Segment
4'4 QUARTER DILUTED EPS BY SEGMENT Three Months Ended December 31 $0.05 so.16 ($0.05) ($0.03) o $0.15 ai 2 4 $0.10 im oO no] = o 6 |] 2 0.58 = $0.27 Electric Utility Gas Utility | NonReg Energy Transmission Other MGE Energy Electric Utility Gas Utility | NonReg Energy Transmission Other MGE Energy N
Slide 29: Full-Year Diluted EPS by Segment
FULL-YEAR DILUTED EPS BY SEGMENT Twelve Months Ended December 31 2023 2022 $0.21 $0.50 $0.62 ($0.07) $3.25 $3.07 Diluted EPS Diluted EPS $1.80 Electric Utility Gas Utility NonReg Energy Transmission Other MGE Energy Electric Utiity Gas Utility NonReg Energy Transmission Other MGE Energy Note: Sum of
Slide 30: Strong Track Record of Regulated Asset Growth
STRONG TRACK RECORD OF REGULATED ASSET GROWTH 30 OQOOQOOOOO
Slide 31: Electric Utility Mix
ELECTRIC UTILITY MIX Twelve Months Ended December 31, 2023 Electric Revenues Electric Volumes Electric Customers 56% = Residential Commercial = Industrial Other Notes: Categories may not sum due to rounding OQOOQOOOOO
Slide 32: Gas Utility Mix
GAS UTILITY MIX Twelve Months Ended December 31, 2023 Gas Revenues Gas Volumes Gas Customers 32 OQOOQOOOOO
Slide 33: For more information, visit mgeenergy.com
For more information, visit mgeenergy.com Director Shareholder Services ENERGY and Treasury Management kfrassetto@mge.com a 608-252-4723 [ . 4 P.O. Box 1231 iD j Madison WI 53701-1231 : 7