Wec Energy Group, Inc. · NYSE:WEC
Wec Energy — Q3 2024 Earnings Presentation
51 slides from Wec Energy's earnings presentation, Oct 31, 2024
Slide 1: Energizing the Future
Energizing the Future Investor Update: November 2024 1
Slide 2: Cautionary Statement Regarding Forward-Looking Information
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 things
Slide 3: The Premier Energy Company in America's Heartland
$30.2 billion market cap* 4.7 million retail customers 60% ownership of American Transmission Company $45.2 billion of assets The Premier Energy Company in America’s Heartland * As of Oct. 31, 2024 3
Slide 4: A History of Strong Earnings Growth
A History of Strong Earnings Growth $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 GAAP Adjusted** 2024 Guidance 2024 Adjusted Guidance** * 2024 Guidance (GAAP) is $4.74 – $4.84. 2024 Adjusted Guidance is $4.80 – $4.90. _
Slide 5: Consistent Performance Over Time
EPS Guidance Consistent Performance 2023 Exceeded* Over Time 2022 Exceeded 2021 Exceeded 2020 Exceeded 2019 Exceeded 2018 Exceeded 2017 Exceeded 2016 Exceeded 2015 Exceeded The only utility to beat guidance 2014 Exceeded every year for 20 years running. 2013 Exceeded 2012 Excee
Slide 6: Strong Dividend Growth Continues
Strong Dividend Growth Continues In January, raised the dividend by 7.0% to a new annual rate of $3.34 per share* 21st consecutive year of rewarding shareholders with higher dividends Top-decile dividend growth in industry** Included in S&P's High Yield Dividend Aristocrats Index * Annualize
Slide 7: What's New?
What’s New? 7
Slide 8: Wisconsin Rate Review Outcome
Wisconsin Rate Review Outcome Authorized return on equity maintained at 9.80 percent Equity ratio maintained at 53.0 percent Updated earnings sharing mechanism at Wisconsin Electric: WE WG and WPS Treatment 9.80% - 9.95% 9.80% - 9.95% No sharing >9.95% - 10.075% >9.95% - 10.55% 50/50 sharing >
Slide 9: Wisconsin Rate Review Outcome
Wisconsin Rate Review Outcome1 Wisconsin Wisconsin Public Wisconsin Electric Gas Service Electric Natural Gas Natural Gas Electric Natural Gas Authorized ROE 9.80% 9.80% 9.80% 9.80% 9.80% Authorized Equity Ratio 53.00% 53.00% 53.00% 53.00% 53.00% 2025 Rate Increase % 4.1%2 7.0% 4.3% 3.7%2 3.7% 2025
Slide 10: Powering Industry Leaders in Our Region
Powering Industry Leaders in Our Region 10
Slide 11: 1,800 MW of Additional Demand through 2029
Strong Regional Growth 1,800 MW of Additional Demand through 2029 Robust demand along I-94 Milwaukee to Chicago corridor: Microsoft announced $3.3 billion investment (2024-2026) in Wisconsin to spur artificial intelligence innovation and economic growth 2,300 construction jobs 2,000 permanent
Slide 12: Longer-Term Sales and Load Growth Remain Strong
Wisconsin Segment Longer-Term Sales and Load Growth Remain Strong Sales Growth Forecast (weather-normalized) Year-Over-Year 2025-2029 2027-2029 adding 1,800 MWs (~20%) Electric 4.5%-5.0% of electric demand Gas 0.7%-1.0% 12
Slide 13: Capital Plan – Key Drivers
2025-2029 Capital Plan Capital Plan – Key Drivers Identified $4.3 billion of additional investments compared to previous five-year plan: Regulated renewables – $2.1 billion increase Natural gas generation – $0.9 billion increase LNG capacity – $400 million increase Electric distribution – $7
Slide 14: Increasing Five-Year Capital Plan by $4.3 Billion
2025-2029 Capital Plan Increasing Five-Year Capital Plan by $4.3 Billion $28.0 $0.4 $3.2 $23.7 $1.2 $5.3 $3.0 WEC Infrastructure (WECI) Former plan New plan $5.2 $4.5 Electric Transmision (ATC)* Gas Distribution** $1.4 Electric Distribution $3.8 WI LNG Capacity $1.0 Electric Generation $13.2 $9.5 $
Slide 15: Robust Growth in Asset Base
Robust Growth in Expect compound Asset Base annual EPS growth of 6.5% to 7.0% 8.8% Growth $48.8 billion $29.4 billion 2023A 2029E* *Estimated year-end average asset base. 15
Slide 16: Diverse Portfolio of Businesses
Diverse Portfolio of Businesses By Business By Jurisdiction 10% 10% 7% 2% 7% 5% 2023A 48% 62% 16% 33% Electric generation and distribution WI IL MI/MN WECI ATC* Natural gas distribution LNG (distribution and generation) WECI Electric transmission* 5% 10% 10% 4% 5% 4% 2029E 10% 24% 57% 71% Based on a
Slide 17: Exiting Coal
Exiting Coal We plan to eliminate coal as an energy source by end of 2032. Since 2018, we have retired nearly 2,500 MW of fossil fuel generation, including Oak Creek Units 5-6 (May 2024). Retirements planned: Oak Creek Units 7-8: 611 MW (late in 2025) Columbia Units 1-2: 300 MW Weston Unit
Slide 18: Investing $9.1 Billion in Regulated Renewables
Investing $9.1 Billion in Regulated Renewables Plan to build and own 4,300 MW – more than quadrupling our carbon-free generation. 2025-2029 Plan includes: Solar Total Battery Storage Total Wind Total 2,900 MW 565 MW 900 MW $5.5 billion $0.9 billion $2.7 billion Grand Total 4,365 MW $9.1 billion 18
Slide 19: Modernizing Our Gas-Fueled Generation Fleet
2025-2029 Capital Plan Modernizing Our Gas-Fueled Generation Fleet Combustion Turbines Filed: Oak Creek * Additional planned 1,100 MW planned 675 MW planned Expected investment: Expected Investment: $1.2 billion $960 million Gas lateral Filed: Rochester Lateral* To support generation at th
Slide 20: Investing in Reliability for Our Natural Gas Network
Investing in Reliability for Our Natural Gas Network New proposed LNG storage facilities are needed to ensure gas supply for winter reliability. Oak Creek LNG facility* 2 Bcf Expected investment: $456 million Plans underway for an additional 4 Bcf Bluff Creek LNG Expected investment: $940
Slide 21: Future Transmission Investment
Future Transmission Investment WEC portion of ATC investment expected from 2025-2029: $3.2 billion Projected Capital Expenditures (millions) Capital Drivers: $1,250 $1,250 Economic Growth $1,133 Reliability / Asset Renewal $908 LRTP Tranche 1 in 2024 dollars: $812 $750 $750 ATC: $1.2 billion
Slide 22: Projected Cash Flows and Financing Plan
Projected Cash Flows and Financing Plan ($ in billions) 2025-2029 Common Equity $2.7 - $3.2 (9%) Incremental Debt 2 $9.5 - $10.0 (31%) 1 Capital Plan $24.8 Cash from Operations $18.5 - $19.5 (60%) Dividends $6.8 - $7.0 Cash Uses Cash Sources 1. Excludes ATC’s capital. ATC is accounted for using the
Slide 23: Credit Quality – Maintaining a Healthy Balance Sheet
Credit Quality – Maintaining a Healthy Balance Sheet FFO/Debt Metrics 2025-2029 WEC Energy Group Target GAAP 15-16% FFO to Debt S&P >15% FFO to Debt Moody’s >16% CFO Pre-WC/Debt Current Issuer Credit Ratings Entity S&P Rating Moody’s Rating WEC Energy Group A- Baa1 Wisconsin Electric A- A2 Wisconsin
Slide 24: Carbon Reduction Goals – Electric Generation
Carbon Reduction Goals – Electric Generation Achieved and anticipated CO2 reductions (net mass)* Reduction goals: 0 60% below 2005 -20 levels by end of 2025 80% -40 -60 below 2005 -54% levels by end of 2030 -80 Net carbon -100 neutral 2005 2023 2025 2030 2050 by 2050 We have established aggressive c
Slide 25: Methane Reduction
Methane Reduction Achieved1 and anticipated methane emission reduction from natural gas distribution. Aligns with effort to limit warming to 1.5°C. 0% Goal: -20% -23% Net zero by end of 20302 -40% -60% Use of renewable natural gas (RNG) is expected to -80% contribute to our goal.3 -100% 2011 2023 20
Slide 26: Key Takeaways for WEC Energy Group
Key Takeaways for WEC Energy Group Consistent, industry leading earnings growth. Top-decile dividend growth. Capital plan supported by economic growth Drives premium long-term EPS growth of 6.5% to 7.0%. 98%+ of capital allocated to regulated businesses. Aggressive environmental goals in
Slide 27: Appendix
Appendix WA wecC Vz Energy Group
Slide 28: Electric Generation, Distribution and Energy Infrastructure
Electric Generation Electric Distribution Natural Gas Distribution Energy Infrastructure Electric Transmission 60% ownership 28
Slide 29: Regulated Renewable Generation and Storage Projects
Regulated Renewable Generation and Storage Projects Anticipated WEC Capacity WEC Anticipated Solar Projects Docket Ownership Approval (MW) Investment ($M) In-Service Paris Solar Park 5-BS-254 180 319E 2024 Darien Solar Park 5-BS-255 Approved 225 427E 2025 Koshkonong Solar Park 5-BS-258 270 621E 2026
Slide 30: Regulated Renewable Generation and Storage Projects
Regulated Renewable Generation and Storage Projects Anticipated WEC Capacity WEC Anticipated Battery Projects Docket Ownership Approval (MW) Investment ($M) In-Service Paris Battery Park 5-BS-254 99 223E 2025 Darien Battery Park 5-BS-255 Approved 68 140E 2026 WEPCO/WPS Koshkonong Battery Park 5-BS-2
Slide 31: Commitment to ESG
Commitment to ESG Reduce carbon dioxide emissions from electric generation 60% by end of 2025 and 80% by end of 2030 – both from a 2005 baseline. Long- Carbon Goals term goal of net-zero carbon emissions from our generating fleet by 2050 Exit from Coal Planned exit from coal by end of 2032 Methane T
Slide 32: Exiting Coal
Exiting Coal Electricity Supply by Fuel Type (megawatt-hours delivered to regulated utility customers) 73% 43% 32% 37% 34% Planned exit Net carbon 22% from coal neutral goal 21% 17% 7% 9% 3% <2% 2005 2023 2030E 2032 2050 Coal Natural Gas Nuclear Renewables 32
Slide 33: Investing in Innovation
Clean Energy Pilot Projects Investing in Innovation Organic Flow Battery Storage Columbia Energy Storage Project Leading a pilot project to test a 20 MW carbon dioxide based, long new ‘green battery’ – a form of duration battery project being long-duration energy storage that developed at Columb
Slide 34: WEC Infrastructure Portfolio
WEC Infrastructure Portfolio Total Project Investment Capacity (MW) (in millions) Wind ● Upstream 200 $307 ● Bishop Hill III 132 166 SD ● Coyote Ridge 97 145 ● Blooming Grove 250 389 ● Tatanka Ridge 155 240 NE IL OH ● Jayhawk 190 282 KS ● Thunderhead 300 381 ● Sapphire Sky 250 442 Solar ● Samson I 2
Slide 35: Infrastructure Investment Summary
Infrastructure Investment Summary Offtake WEC Commercial Project Investment Agreement Operations Bishop Hill III Wind Energy Center $166M for 90% ownership WPPI Energy – 22 years 8/31/18 Upstream Wind Energy Center $307M for 90% ownership Affiliate of Allianz – 10 years 1/10/19 $145M for 80% ownersh
Slide 36: Utility Capital Plan Drives EPS Growth
$27.6 Billion Projected Capital Spend From 2025-2029 Utility Capital Plan Drives EPS Growth $6,082 6,000 $5,515 680 $5,546 $5,218 $5,320 545 750 5,000 487 750 1,179 1,118 Electric 998 963 Transmission (ATC)* 4,000 $3,637 1,085 840 Gas Distribution** 410 943 877 940 3,000 529 925 984 299 345 Electric
Slide 37: Capital Plan Projections ($ in millions)
Capital Plan Projections ($ in millions) Company 2024 2025 2026 Wisconsin Electric $1,792.7 $3,047.3 $3,281.2 Wisconsin Gas 216.3 216.0 283.9 Wisconsin Public Service 562.5 801.8 806.4 Upper Michigan Energy 121.1 137.3 39.2 Wisconsin Segment $2,692.6 $4,202.4 $4,410.7 Peoples Gas 314.2 321.6 343.5 N
Slide 38: Composition of Asset Base
Composition of Asset Base Total 2023 Average Asset Base of $29.4 Billion Company Asset Base - $B % of Total Wisconsin Electric $8.2 27.9% Wisconsin Gas 2.1 7.1 Wisconsin Public Service 4.6 15.6 Upper Michigan Energy Resources 0.4 1.4 Peoples Gas 4.4 15.0 North Shore Gas 0.4 1.4 Minnesota Energy Reso
Slide 39: Power the Future Investments
Power the Future Investments 1 Port Washington Oak Creek Expansion (Natural Gas) (Coal/Co-Fire Gas3) Capacity 1,090 MW 1,030 MW 2 Investment $664 million $2 billion 2 ROE 12.7% 12.7% Equity 53% 55% Unit 1 – July 2005 Unit 1 – February 2010 In Service Dates Unit 2 – May 2008 Unit 2 – January 2011 Lea
Slide 40: National Leader in Operating Efficiency and Financial Discipline
National Leader in Operating Efficiency and Financial Discipline 2023 Non-Fuel O&M per MWh* $92.90 $90 $80 $70 $60 $50 $42.70 $40 $29.47 $30 $24.00 $25.40 $21.10 $22.00 AVERAGE $20 $17.50 $18.40 $18.50 $12.20 WEC $10 $0 The top 10 vertically integrated electric utilities by 12/31/2023 market cap Sou
Slide 41: Focused on Efficiency
Focused on Efficiency Day-to-Day O&M Expense* $1,342 $1,281 $1,234 $ In millions $1,143 $1,107 $1,088 $1,082 $1,088 2-3% 2016 2017 2018 2019 2020 2021 2022 2023 2024E *Excludes costs that have a revenue offset such as operation and maintenance costs associated with the We Power generation units, tra
Slide 42: External Financing Plans for 2024
External Financing Plans for 2024 1 YTD Financing Planned Financing 4 $2,500 Existing Facilities $3.0B net liquidity (as of September 30, 2024) $2,000 $800 - $900 $1,500 (in millions) $1,725 $3.1B $1,000 $1,200 $500 $100-$200 $0 $0.2B Holding Company 2 Utilities & Energy Equity Issuances Infrastruct
Slide 43: Projected Financing Plans for 2025
Projected Financing Plans for 2025 1 Planned Financing 4 $3,000 Existing Facilities $3.0B net liquidity $2,500 (as of September 30, 2024) $2,000 (in millions) $1,500 $3.1B $2,300 - $2,700 $1,000 $1,000 - $500 $1,400 $700 - $800 $0 $0.2B Holding Company 2 Utilities & Energy Equity Issuances Infrastru
Slide 44: Balanced and Diverse Sales Mix
Balanced and Diverse Sales Mix 2023 Retail MWh Deliveries Mix* 33% Large C&I by Segment Paper/Packaging 24% Mining/Minerals 11% Foundry (SIC 33) 10% Small C&I Large C&I Other Manufacturing 8% 36% 33% Metal (SIC 34,35,37) 7% Food/Agriculture 6% Medical 6% Residential Education 4% and Farm Printing 2%
Slide 45: Regulatory Matters
Regulatory Matters Estimated Decision Date Wisconsin (apps.psc.wi.gov) Commission decision on general rate review for new base rates effective Jan. 1, 2025 (Dockets: WE and WG: 5-UR-111 and WPS: 6690-UR-128) Decision on Paris RICE generation (Docket: 6630-CE-316 filed 4/5/24) Q3 2025 Decisio
Slide 46: Illinois Proceedings
Illinois Proceedings Safety Modernization Program (SMP) Review The Illinois Commerce Commission (ICC) ordered Peoples Gas to pause all spending on the Safety Modernization Program until it determines ‘the optimal method’ of pipe replacement and investment level. ICC order expected in the first
Slide 47: Regulatory Environment
Regulatory Environment Wisconsin Illinois Governor Tony Evers (D) Governor J.B. Pritzker (D) Term ends January 2027 Term ends January 2027 Commission Commission Gubernatorial appointment, Gubernatorial appointment, Senate confirmation Senate confirmation Chairman: Gubernatorial app
Slide 48: Rate-Making Parameters by Company
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 50.79% 9.38% North Shore Gas 52.58% 9.38% Minnesota Energy Resources 53.00% 9.65% Michigan Gas Util
Slide 49: Key Rate-Making Components
Key Rate-Making Components Illinois– Minnesota– Michigan– Wisconsin– Wisconsin– Area Gas Gas Electric and Gas Gas Electric Gas Pipeline Replacement Rider MGU Bad Debt Rider ✓ Bad Debt Escrow Accounting Residential Residential Decoupling ✓ ✓ Fuel Cost Recovery 1 for 1 recovery of prudent fuel costs +
Slide 50: Reconciliation of EPS (GAAP) to Adjusted EPS (Non-GAAP)
Reconciliation of EPS (GAAP) to Adjusted EPS (Non-GAAP) 2014 2015 2016 2017 2023 2024 Guidance EPS – GAAP basis $2.59 $2.34 $ 2.96 $ 3.79 $4.22 $4.74 - $4.84 Acquisition Costs 0.06 0.39 0.01 – Integrys Earnings (0.47) Impact of Additional Shares 0.47 Tax Benefit Related to Tax (0.65) Cuts and Jobs A
Slide 51: Contact Information
Contact Information M. Beth Straka Senior Vice President – Investor Relations and Corporate Communications Beth.Straka@wecenergygroup.com 414-221-4639 Ashley Pless Investor Relations Analyst Ashley.Pless@wecenergygroup.com 414-221-4088 51