MGE Energy Inc. · NASDAQ:MGEE
MGE Energy — Fireside Chat with BofA (June 2020)
26 slides from MGE Energy's conference presentation, Jun 16, 2020
Slide 1: Fireside Chat with BofA
Fireside Chat with BofA June 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: Building Long-Term Value in an Evolving Energy Landscape
Building Long-Term Value in an Evolving Energy Landscape “Technology is opening new opportunities to invest in cleaner energy. We are tapping new technology to create products for our customers. We are using technology to inspire new community partnerships to advance sustainability in the world arou
Slide 5: Focused ESG Strategy
Focused ESG Strategy(1) Carbon Reduction Goals Align With Range of Scenarios Likely to Achieve 2°C 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.) Information on
Slide 6: Company Highlights
Company Highlights Attractive and Growing Dividend Regulated, Highly Visible Growth 5-Year Dividend CAGR of 4.5% 5-Year Regulated PPE(1) CAGR of 6.8% • Paid dividends for more than 110 years • Total forecasted regulated capex of approx. $570M from 2020 through 2022(3) – Increased dividends for 44 co
Slide 7: 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 8: Service Territory
Service Territory Economic Outlook: Madison • 8th best city for STEM jobs – Wallet Hub, 2020 • 10th nationally for economic strength – Policom, 2020 • Unemployment: 2.4% – Bureau of Labor Statistics, March 2020 Dane County • Population growth through 2035 expected to be the highest of any county in
Slide 9: Constructive Regulatory Environment
Constructive Regulatory Environment • Regulatory approvals of utility-scale renewable investments and other innovative solar programs – Saratoga Wind and Forward Wind – Badger Hollow I Solar (in progress) & Badger Hollow II Solar (to be constructed) and Two Creeks Solar (in progress) – Approval of R
Slide 10: Investing in Cleaner Energy Generation
Investing in Cleaner Energy Generation 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 Based on IPCC Sp
Slide 11: Significant Growth in Capital Expenditures
Significant Growth in Capital Expenditures $250 $200 $150 $ Millions $100 $50 - 2015 2016 2017 2018 2019 2020P 2021P 2022P Capital Expenditures Depreciation Forecasted Capital Expenditures (2) (3) Significant growth in capital expenditures driven by renewable investments in solar and wind generation
Slide 12: 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 13: Investment and Research – EVs
Investment and Research – EVs Public Charging Network • Wide network of electric vehicle charging stations • Powered on 100% renewable energy produced by wind farms in Wisconsin and Iowa Workplace Charging • MGE works with local employers to facilitate onsite charging stations and to implement workp
Slide 14: Electric Buses
Electric Buses • Collaborating with City of Madison’s Metro Transit department to electrify 50% of its bus fleet in MGE’s service territory by 2035 • MGE providing technical expertise for charging infrastructure and local matching funds in City’s successful grant application for electric buses • Par
Slide 15: Technology Investments
Technology Investments • In 2017, MGE committed to undertake a multiyear project to transform our foundational customer engagement capabilities and to enable increased flexibility and capability in delivering new products and services that advance our Energy 2030 framework and help MGE become a util
Slide 16: Digital Integrated Utility
Digital Integrated Utility Automation Employer of Choice Eliminate manual work and drive Attract and retain the next generation of consistent repeatable processes talent and leadership required to move MGE forward Digital Optimized Costs Integrated 360 View of Customer Utility Standardize and drive
Slide 17: Transmission Assets
Transmission Assets ATC • Approximately 6.5% of MGE Energy’s net income for the three months ended March 31, 2020, comes from its $71 million transmission investment in ATC • ATC forecasted CapEx of $2.9 to $3.6 billion over the next 10 years, this (1) excludes potential transmission investments out
Slide 18: Commitment to Dividends & Shareholder Value
Commitment to Dividends & Shareholder Value Recent Dividend increase has been approximately 4% • Increased dividend 44 consecutive years $1.60 Dividends Issued ($) • Paid dividends for over 110 years • Dividend payout ratio in the 50-60% range in recent years $1.20 • No dividend payout range targete
Slide 19: Total Stock Return
Total Shareholder Return (1) MGEE: $1,932 EEI Index (2) $1,644 Russell 2000 TOTAL STOCK $1,485 RETURN (1.) Based on $1,000 investment in 2014 (2.) The EEI Index measures total shareholder return for the 40 publicly traded U.S. investor-owned electric utilities. The EEI Index is market cap-weighted a
Slide 20: MGE's Strong Credit Ratings
MGE’s 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 supportiv
Slide 21: COVID-19 Update
COVID-19 Update On March 24, 2020, Wisconsin’s governor Tony Evers issued the "Safer at Home" order. On April 20, 2020, Evers released the "Badger Bounce Back" plan to reopen the Wisconsin economy in phases. • Following guidance of state and federal agencies MGE • Continuing to serve new and existin
Slide 22: Appendix
Appendix 22
Slide 23: Liquidity
$150.0 100.0% 95.0% $125.0 $108.0 90.0% $100.0 $94.3 $96.0 $83.0 85.0% $ (Millions) $75.0 $68.8 80.0% 75.0% $50.0 70.0% $23.5 $25.0 $13.0 $17.5 65.0% $7.0 $4.0 $3.0 $0.0 $0.0 60.0% 2014 2015 2016 2017 2018 2019 Q1 2020 Lines of Credit Outstanding Short-Term Debt Cash and cash equivalents Percentage
Slide 24: Stable Asset Growth
Asset and Market Value Growth ($ Millions) $2,270 $2,082 $1,801 $1,855 $2,073 $1,690 $1,726 $1,989 $1,559 $1,574 $1,454 2012 2013 2014 2015 2016 2017 2018 2019 2019 Q1 2020 Assets Market Cap. STABLE ASSET GROWTH 24
Slide 25: Earnings per Share Segments
Earnings per Share Segments Three Months Ended March 31st $0.15 $0.05 $0.75 $0.05 $0.01 $0.69 $0.14 ($0.01) $0.49 $0.56 2019 2020 25
Slide 26: Ken Frassetto contact details
KEN FRASSETTO kfrassetto@mge.com 608-252-4723 PO Box 1231 Madison WI 53701-1231