Interim Report: September 2019

September 2019 Interim Report [1.1 MB PDF]

Second Quarter Financial Tables [435 kB PDF]

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From transitioning to greater use of cleaner energy to advancing new technologies to elevating the customer experience, your community energy company is embracing the opportunities in an evolving energy world.

Comments from the Chairman and CEO

MGE breaks ground on massive solar project

Two Creeks Solar Project Groundbreaking

Wisconsin Gov. Tony Evers (center) joined MGE Chairman Jeff Keebler (second from right) and leadership from WEC Energy Group, WPS and NextEra Energy Resources to break ground at the 150-megawatt solar project.

Madison Gas and Electric (MGE) Chairman, President and CEO Jeff Keebler and Tom Metcalfe, President of Wisconsin Public Service (WPS), were joined by Wisconsin Governor Tony Evers in late August for a ceremonial groundbreaking of the Two Creeks Solar project in northeastern Wisconsin. MGE and WEC Energy Group (WEC), through its WPS subsidiary, announced in 2018 plans to partner on the large solar project.

"The energy produced here will help us manage energy costs to our customers over time and help us as we continue our transition to a more environmentally sustainable energy supply," Keebler said at the groundbreaking event.

The Two Creeks Solar project is in the town of Two Creeks and the city of Two Rivers near the Point Beach Nuclear Power Plant. MGE will own 50 megawatts (MW) of Two Creeks Solar. Commercial operation is expected by the end of next year.

MGE seeking to expand investment in Badger Hollow Solar Farm

In August, MGE and WEC, through its We Energies subsidiary, announced a new, expanded partnership to acquire the remaining portion of the Badger Hollow Solar Farm. MGE and We Energies filed for regulatory approval to add 50 MW and 100 MW, respectively. If regulators approve this acquisition, this phase of the Iowa County solar project would begin generating electricity in 2021.

In April, MGE and WPS received regulatory approval to own a combined total of 150 MW at Badger Hollow. MGE will own 50 MW and WPS will own 100 MW of this first phase of the project. Commercial operation of this phase is expected by the end of 2020.

MGE to build large solar array in Middleton

Another major renewable energy project is advancing the company's goal of net-zero carbon electricity by 2050. In June, MGE received approval from state regulators to expand its popular Shared Solar program with a second, large-scale solar installation in the city of Middleton.

MGE's Morey Field Shared Solar Project

MGE's new Shared Solar project will be next to Morey Field in Middleton, Wis.

The 5-MW array will be built at Middleton's Morey Field airport. Seventy percent of the array will serve the Shared Solar program. The City of Middleton and the Middleton-Cross Plains Area School District will use the remaining 30 percent under a separate renewable energy program for large energy users.

Shared Solar participants pay an up-front fee and a per-kilowatt-hour rate to purchase up to half of their annual electricity use through the voluntary program. MGE's first Shared Solar project, a 500-kilowatt array on the roof of Middleton's Municipal Operations Center, sold out quickly before it began serving customers in January 2017.

MGE Energy marks 44 years of consecutive dividend increases

MGEE Annual Dividend Rate

In August, the MGE Energy board of directors increased the regular quarterly dividend rate over 4% to $0.3525 per share on the outstanding shares of the company's common stock. This raises the annualized dividend rate by 6 cents from $1.35 per share to $1.41 per share. The dividend is payable Sept. 15, 2019, to shareholders of record Sept. 1, 2019.

Also in August, MGE Energy reported second-quarter earnings of $15.5 million, or 45 cents per share, compared to $18.3 million, or 53 cents per share, for the same period last year.

Electric net income decreased compared to the same period last year because of lower residential sales resulting from cooler weather in June 2019. Gas net income also decreased during the quarter, largely attributable to lower gas retail sales from warmer weather in April 2019.

Climate science partnership moves forward

This spring, MGE began working with scientists from the University of Wisconsin-Madison's Nelson Institute for Environmental Studies and the Department of Atmospheric and Oceanic Sciences to evaluate the company's strategies for meeting its goal of net-zero carbon electricity by 2050.

In May, the company announced the climate science partnership will provide expert input and perspective to ensure MGE's goal is consistent with the assessment of the Intergovernmental Panel on Climate Change (IPCC), the international body responsible for assessing the potential impacts and risks of global temperature increases.

MGE has been advancing three key strategies for deep decarbonization. Those strategies include reducing the carbon intensity in electricity generation, working to help customers with energy efficiency and electrifying transportation.

Chairman, President and CEO Jeff Keebler said MGE's net-zero by 2050 goal is based on the latest climate science and the company's strategies are consistent with those identified by the IPCC. He added that achieving net-zero carbon electricity will require the use of emerging technologies not yet commercially available or cost-effective, such as utility-scale battery storage, but the goal reflects the company's vision for the future.

Partnering to advance biotech innovation

MGE and its philanthropic arm, the MGE Foundation, continue to help advance the next generation of innovation by supporting Forward BIOLABS located at University Research Park. The life sciences incubator provides fully equipped and supported lab space, eliminating the need for emerging companies to lease, equip and operate their own labs.

Forward Biolabs

The MGE Foundation supports Forward BIOLABS located at University Research Park.

University Research Park in Madison has been a hotspot for innovation in engineering as well as computational and life sciences for more than 30 years. MGE partnered in 1989 with the UW-Madison affiliate to establish the MGE Innovation Center to help early-stage companies grow. The center is a hub for Wisconsin's thriving biohealth industry, which is responsible for an estimated $48 billion in economic output and for creating more than 100,000 jobs statewide.

Jeffrey M. Keebler, Chairman, President and CEO

Jeffrey M. Keebler, Chairman, President and CEO