Comments from the Chairman and the CEO
Strong Total Return
Annual total return provides a snapshot of your investment’s performance. Total return is the combination of stock price appreciation and reinvested dividends.
If you invested $1,000 in MGE Energy five years ago and consistently reinvested your dividends, your investment would have grown to $2,414 by the close of 2016.
Over the last five years, MGE Energy’s total return has outpaced the national indices of the S&P 500, EEI Investor-Owned Electric Utilities and the Russell 2000.
MGE Energy reported earnings of $2.18 per share in 2016, compared to $2.06 per share in 2015. The higher earning resulted from increased electric consumption due to a warmer summer in 2016 versus 2015 and due to an increase in the number of electric and gas residential customers.
For the fourth quarter of 2016, MGE Energy reported earnings of 42 cents per share, compared to 32 cents per share for the same period in the prior year. The higher earnings are due to increased electric consumption and colder weather, which led to higher sales of natural gas.
Moving Forward with Sustainable Measures Under our Energy 2030 Framework
Our regulated utility, Madison Gas and Electric (MGE), is moving toward a more sustainable future under its Energy 2030 framework. Energy 2030 sets goals for increasing investments in renewable energy and for reducing carbon emissions by 40% from 2005 levels by 2030. As technologies evolve, we are adding value for our stakeholders—investors, customers and communities.
New Wind Farm Proposed
MGE is proposing to construct, own and operate its largest wind farm to date. This 66-megawatt wind farm would be located about 200 miles west of Madison near Saratoga, Iowa. MGE secured the rights to the construction-ready site last year from the site’s initial developer. The site is well situated due to its strong winds and proximity to transmission infrastructure.
If the Saratoga Wind Farm receives regulatory approval, construction of the approximately $107 million project could begin in 2018. For more details, visit mge.com/Saratoga.
Solar Project Completed
Our new Shared Solar installation recently came online. This 500-kilowatt solar array extends over an area larger than a football field on the roof of the City of Middleton’s new operations center.
Our innovative model for community-sourced solar is one example of how we’re partnering to grow investments in renewable energy.
The array delivers power to the electric grid, which enables participants to purchase locally generated solar energy without having solar panels on their roofs. Participants paid an up-front fee and pay a kilowatt-hour charge for the solar power. The clean, renewable solar electricity helps the environment by reducing greenhouse gas emissions.
Under MGE’s Energy 2030 framework, we have set the goal of supplying 30% of our retail electric sales with renewable energy by 2030. Working together with our customers, we can reach our shared goal of a cleaner energy future. For more details, visit mge.com/SharedSolar
MGE is working to grow the electric vehicle market through a number of initiatives-from a workplace charging program for employers to partnerships with electric car manufacturers.
Recently, we introduced a new pilot program for home charging. Through Charge@Home, MGE is enrolling participants in a study to learn more about charging sessions and how technology can best work for our customers.
MGE is installing chargers at participants’ homes. In return, participants pay a monthly fee plus the cost of their electricity usage. Participants can control and track the chargers remotely via Wi-Fi from a smartphone. For more details, visit mge.com/chargeathome
Vote Your Proxy Shares
This spring, you will receive your MGE Energy proxy. We encourage all shareholders to exercise their right and responsibility to vote their shares. Whether you own your shares through a brokerage firm or are directly registered with MGE Energy, we want your vote.
We make voting easy. You can return your vote form through the mail, or you can vote by phone or a designated proxy voting website. Watch for your proxy and vote.
Annual Meeting to be held May 16
Shareholders are invited to attend the 2017 MGE Energy Annual Meeting on Tuesday, May 16.
Doors open at 9 a.m., and the meeting begins at 11 a.m. Lunch will follow.
The meeting will be held at the Marriott Madison West, 1313 John Q. Hammons Drive, Middleton, Wis. Shareholders of record on March 10, 2017, will receive an invitation in their proxy mailing this spring.
As of March 1, 2017, Gary Wolter retired as President and CEO of MGE Energy and MGE. Wolter continues as Chairman of the boards of both companies. Jeffrey Keebler assumed the roles of President and CEO and was appointed to the boards of both companies. Keebler started with MGE in 1995. He most recently served as Senior Vice President - Energy Supply and Planning.
This transition in executive leadership reflects the company’s thoughtful succession planning. The company remains committed to its mission as a community energy company.
Gary J. Wolter, Chairman
Jeffrey M. Keebler, President and CEO