Wec Energy Group, Inc. · NYSE:WEC
Wec Energy — Investor Presentation (September 2024)
50 slides from Wec Energy's investor presentation, Sep 25, 2024
Slide 1: Investing in Efficiency, Sustainability and Growth
1 Investing in Efficiency, Sustainability and Growth Investor Update: October 2024
Slide 2: Cautionary Statement Regarding Forward-Looking Information
2 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 thin
Slide 3: The Premier Energy Company in America's Heartland
3 The Premier Energy Company in America’s Heartland * As of September 24, 2024 $29.9 billion market cap* 4.7 million retail customers 60% ownership of American Transmission Company $44.6 billion of assets
Slide 4: A History of Quality Earnings Growth
4 A History of Quality Earnings Growth $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 * 2024 Guidance (GAAP) is $4.74 – $4.84. 2024 Adjusted Guidance is $4.80 – $4.90. __CAGR is estimated based on 2024 adjusted guidance m
Slide 5: EPS Guidance Exceeded: Consistent Performance Over Time
5 EPS Guidance 2023 Exceeded* 2022 Exceeded 2021 Exceeded 2020 Exceeded 2019 Exceeded 2018 Exceeded 2017 Exceeded 2016 Exceeded 2015 Exceeded 2014 Exceeded 2013 Exceeded 2012 Exceeded 2011 Exceeded 2010 Exceeded 2009 Exceeded 2008 Exceeded 2007 Exceeded 2006 Exceede
Slide 6: Strong Dividend Growth Continues
6 In January, raised the dividend by 7.0% to a new annual rate of $3.34 per share* Marks the 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 Strong Dividend Growth Continues
Slide 7: What's New?
7 What’s New?
Slide 8: Wisconsin Rate Reviews
8 Wisconsin Rate Reviews In April, Wisconsin Electric, Wisconsin Gas and Wisconsin Public Service filed applications with the state Public Service Commission In 2025, we’ll focus our spending and investment on 3 key priorities: Reducing customer outages Building infrastructure needed to support
Slide 9: Rate Review Summary
9 Wisconsin Electric Wisconsin Gas Wisconsin Public Service Electric Natural Gas Natural Gas Electric Natural Gas Current ROE 9.8% 9.8% 9.8% 9.8% 9.8% Current Equity Ratio 53.0% 53.0% 53.0% 53.0% 53.0% Proposed ROE 10.0% 10.0% 10.0% 10.0% 10.0% Proposed Equity Ratio 53.5% 53.5% 53.5% 53.5% 53.5% For
Slide 10: Illinois Proceedings
10 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 quarter of 2025. ICC also opened a new docket to examine th
Slide 11: Largest Five-Year Plan in Company History
11 Largest Five-Year Plan in Company History 2024-2028 Capital Plan $9.5 $1.0 $3.8 $5.2 $3.0 $1.2 $23.7 2024-2028 WEC Infrastructure (WECI) Electric Transmission (ATC)* Gas Distribution** Electric Distribution WI LNG Capacity Electric Generation $ In billions *ATC is accounted for using the equity m
Slide 12: Robust Growth in Asset Base
12 $29.4 billion $43.4 billion 2023A 2028E* Robust Growth in Asset Base *Estimated year-end average asset base. Expect compound annual EPS growth of 6.5% to 7.0% 8.1% Growth
Slide 13: Diverse Portfolio of Businesses
13 Diverse Portfolio of Businesses Based on average asset base. 62% 16% 5% 7% 10% WI IL MI/MN WECI ATC* By Jurisdiction By Business 48% 33% 2% 7% 10% Electric generation and distribution Natural gas distribution LNG (distribution and generation) WECI Electric transmission* *ATC is accounted for usin
Slide 14: Exiting Coal
14 We plan to eliminate coal as an energy source by end of 2032. Retired: Oak Creek Units 5-6: 528 MW (May 31, 2024) Retirements planned: Oak Creek Units 7-8: 611 MW (late in 2025) Columbia Units 1-2: 300 MW (by June 1, 2026) Weston Unit 3: 328 MW (end of 2031) Enhancing fuel flexibility
Slide 15: Investing $7.0 Billion in Regulated Renewables
15 Solar Total 2,700 MW $4.7 billion Battery Storage Total 250 MW $0.4 billion Wind Total 880 MW $1.9 billion Grand Total 3,830 MW $7.0 billion 2024-2028 Plan includes: Plan to build and own 3,800 MW – more than quadrupling our carbon-free generation. Investing $7.0 Billion in Regulated Renewables
Slide 16: Modernizing Our Gas-Fueled Generation Fleet
16 Modern, efficient natural gas generation serves as a critical resource in our energy transformation. Modernizing Our Gas-Fueled Generation Fleet Oak Creek Combustion Turbines* 1,100 MW planned Expected investment: $1.2 billion New gas lateral* To support generation at the Oak Creek campus
Slide 17: Investing in Reliability for Our Natural Gas Network
17 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 being developed for an additional 2 Bcf LNG provides a solution to meet pe
Slide 18: Future Transmission Investment
18 $636 $867 $1,148 $1,187 $1,152 $382 $520 $689 $712 $691 2024 2025 2026 2027 2028 ATC WEC portion 60% Tranche 1 in 2022 dollars: ATC: $900 million WEC portion: $540 million $330 million in this plan MISO Tranche 2 planning underway WEC portion of ATC investment expected from 2024-2028: $
Slide 19: Projected Cash Flows and Financing Plan
19 Projected Cash Flows and Financing Plan ($ in billions) Cash from Operations $16.5 - $17.5 Incremental Debt $7.15 - $8.15 Dividends $6.0 - $6.2 Capital Plan* $20.7 Cash Uses Cash Sources Common Equity $1.95 - $2.35 * Excludes ATC’s capital. ATC is accounted for using the equity method. 2024 - 202
Slide 20: Credit Quality – Maintaining a Healthy Balance Sheet
20 Credit Quality – Maintaining a Healthy Balance Sheet Current Issuer Credit Ratings Entity S&P Rating Moody’s Rating WEC Energy Group A- Baa1 Wisconsin Electric A- A2 Wisconsin Gas A A3 Wisconsin Public Service A- A2 Peoples Gas A- A2 FFO/Debt Metrics 2024-2028 WEC Energy Group Target GAAP FFO to
Slide 21: Carbon Reduction Goals – Electric Generation
21 *Includes projection of potential carbon offsets by 2050. Carbon Reduction Goals – Electric Generation We have established aggressive carbon reduction goals for our electric generating fleet, aligned with or surpassing global emissions pathways aimed at limiting warming to 1.5°C. Reduction goals:
Slide 22: Methane Reduction
22 1. Represents a decrease in the rate of methane emissions across our system from a 2011 baseline. 2. This goal applies to emissions from WEC Energy Group natural gas distribution companies calculated in accordance with EPA’s 40 Code of Federal Regulations Part 98, Subpart W reporting rule. -100%
Slide 23: Regional Economy
e Regional Economy ose
Slide 24: Powering Industry Leaders in Our Region
24 Powering Industry Leaders in Our Region
Slide 25: Strong Regional Growth
25 Strong Regional Growth 1,400 MW of Additional Load through 2028 ‘Mount Pleasant AI data center will be among the world’s most advanced’ –Brad Smith, President of Microsoft Robust demand along the I-94 Milwaukee to Chicago corridor: Microsoft announced a $3.3 billion investment (2024-2026) in Wi
Slide 26: Longer-Term Sales Forecast
26 Longer-Term Sales Forecast Wisconsin Segment Year-Over-Year 2026-2028 Electric 4.5%-5.0% Gas 0.7%-1.0% Sales Growth Forecast (weather-normalized)
Slide 27: Key Takeaways for WEC Energy Group
27 Industry leading earnings quality. Top decile dividend growth. Capital plan drives premium long-term EPS growth of 6.5% to 7.0%. 95%+ of capital allocated to regulated businesses. Aggressive environmental goals in place. By end of 2030, we expect to use coal only as a backup fuel. E
Slide 28: Appendix
Appendix Wa wec VA Energy Group
Slide 29: WEC Energy Group Business Structure
29 Electric Distribution Electric Transmission 60% ownership Electric Generation Energy Infrastructure Natural Gas Distribution
Slide 30: Regulated Renewable Generation and Storage Projects
30 Project Docket Anticipated Approval WEC Capacity (MW) WEC Investment ($M) Ownership Anticipated In-Service WEPCO/WPS: Paris Solar/ Battery Park 5-BS-254 Approved 279 542E 90%1 S: 2024 B: 2025 Darien Solar Park2 5-BS-255 225 427E 2024 Koshkonong Solar Park2 5-BS-258 270 578E 2026 High Noon Solar S
Slide 31: Commitment to ESG
31 Reduce carbon dioxide emissions from electric generation 60% by end of 2025 and 80% by end of 2030 – both from a 2005 baseline. Long- term goal of net-zero carbon emissions from our generating fleet by 2050 Planned exit from coal by end of 2032 Targeting net-zero methane emissions from natural ga
Slide 32: Electricity Supply by Fuel Type
32 Electricity Supply by Fuel Type (megawatt-hours delivered to regulated utility customers) 73% 32% 7% 37% 43% 17% 22% 21% 3% 9% 34% 2005 2023 2030E 2032 2050 Coal Natural Gas Nuclear Renewables Exiting Coal <2% Net carbon neutral goal Planned exit from coal
Slide 33: Organic Flow Battery Storage Pilot Project
33 Leading a pilot project to test a new form of long-duration energy storage. Partnering with EPRI and CMBlu Energy This system uses a proprietary technology that incorporates environmentally friendly materials - ‘a green battery.’ The project will test battery system performance, including
Slide 34: WEC Infrastructure Portfolio
34 SD IL NE In service Under development Total Project Capacity (MW) Investment (in millions) Wind ● Upstream 200 $307 ● Bishop Hill III 132 166 ● Coyote Ridge 97 145 ● Blooming Grove 250 389 ● Tatanka Ridge 155 240 ● Jayhawk 190 282 ● Thunderhead 300 381 ● Sapphire Sky 250 442 Solar ● Samson I 250
Slide 35: WEC Infrastructure Offtake Agreements
35 Project Investment Offtake Agreement WEC Commercial 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 Coyote Ridge Wind Farm $145M for 80% ownership and 9
Slide 36: PGL Safety Modernization Program
36 PGL Safety Modernization Program (SMP) Increasing capacity and reliability of natural gas service in PGL’s territory 38% complete* Program paused while under ICC review ICC order expected in the first quarter of 2025. Systematic Neighborhood Upgrades $160 System Improvement / Reliability
Slide 37: Utility Capital Plan Drives EPS Growth
37 Utility Capital Plan Drives EPS Growth $22.5 Billion Projected Capital Spend From 2024-2028 1,382 1,711 1,905 2,230 2,277 26 110 384 344 100 775 870 824 681 699 1,058 1,005 1,113 1,088 962 382 520 689 712 691 $3,623 $4,216 $4,915 $5,055 $4,729 - 1,000 2,000 3,000 4,000 5,000 2024 2025 2026 2027 2
Slide 38: Capital Plan Projections
38 Company 2024 2025 2026 Wisconsin Electric $1,740.0 $2,035.7 $2,235.5 Wisconsin Gas 228.1 227.7 274.5 Wisconsin Public Service 636.4 799.5 933.4 Upper Michigan Energy 32.1 90.6 140.4 Wisconsin Segment $2,636.6 $3,153.5 $3,583.8 Peoples Gas 379.7 330.8 457.6 North Shore Gas 49.2 61.7 43.7 Illinois
Slide 39: Composition of Asset Base
39 Composition of Asset Base Total 2023 Average Asset Base of $29.4 Billion Note: We Power value represents investment book value. 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
Slide 40: Power the Future Investments
40 Power the Future Investments 1 Port Washington (Natural Gas) Oak Creek Expansion (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% In Service Dates Unit 1 – July 2005 Unit 2 – May 2008 Unit 1 – February 2010 Unit 2 – January 2011
Slide 41: National Leader in Operating Efficiency and Financial Discipline
41 National Leader in Operating Efficiency and Financial Discipline $29.47 $12.20 $17.50 $18.40 $18.50 $21.10 $22.00 $24.00 $25.40 $42.70 $92.90 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 2023 Non-Fuel O&M per MWh* Source: FERC Form 1 Reports *For all companies, excluded 1) pensions and other employee b
Slide 42: Focused on Efficiency
42 Focused on Efficiency $1,342 $1,281 $1,234 $1,143 $1,107 $1,088 $1,082 $1,088 2016 2017 2018 2019 2020 2021 2022 2023 2024E $ I n m ill io n s *Excludes costs that have a revenue offset such as operation and maintenance costs associated with the We Power generation units, transmission expenses th
Slide 43: Projected Financing Plans for 2024
43 Projected Financing Plans for 2024 1 $800 - $900 $100-$200 $0 $500 $1,000 $1,500 $2,000 $2,500 Holding Company Utilities & Energy Infrastructure Equity Issuance (i n m ill io n s ) YTD Financing Planned Financing $1,725 2 1. Amounts and timing are subject to material change based upon numerous fa
Slide 44: Balanced and Diverse Sales Mix
44 33% Large C&I by Segment Paper/Packaging 24% Mining/Minerals 11% Foundry (SIC 33) 10% Other Manufacturing 8% Metal (SIC 34,35,37) 7% Food/Agriculture 6% Medical 6% Education 4% Printing 2% Chemical 2% Office 2% Other 17% Balanced and Diverse Sales Mix Large C&I 33% Residential and Farm 31% Small
Slide 45: Estimated Regulatory Decision Dates
45 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) Q4 2024 Decision on Paris RICE generation (Docket: 6630-CE-316 filed 4/5/24) Q2 2025 Decision on Oak C
Slide 46: Regulatory Environment
46 Regulatory Environment Wisconsin Governor Tony Evers (D) Term ends January 2027 Commission Gubernatorial appointment, Senate confirmation Chairman: Gubernatorial appointment 6-year staggered terms Illinois Governor J.B. Pritzker (D) Term ends January 2027 Commission Gubernator
Slide 47: Rate-Making Parameters by Company
47 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 U
Slide 48: Key Rate-Making Components
48 Key Rate-Making Components Area Illinois– Gas Minnesota– Gas Michigan– Electric and Gas Wisconsin– Gas Wisconsin– 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 cost
Slide 49: Reconciliation of EPS (GAAP) to Adjusted EPS (Non-GAAP)
49 Reconciliation of EPS (GAAP) to Adjusted EPS (Non-GAAP) 2014 2015 2016 2017 2023 Q3 2024 Guidance 2024 Guidance EPS – GAAP basis $2.59 $2.34 $ 2.96 $ 3.79 $4.22 $0.62 - $0.64 $4.74 - $4.84 Acquisition Costs 0.06 0.39 0.01 – Integrys Earnings (0.47) Impact of Additional Shares 0.47 Tax Benefit Rel
Slide 50: Contact Information
50 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
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