UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K |
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 27, 2015
PORTLAND GENERAL ELECTRIC COMPANY | ||
(Exact name of registrant as specified in its charter) | ||
Oregon | 001-5532-99 | 93-0256820 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
121 SW Salmon Street, Portland, Oregon 97204
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (503) 464-8000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
The following information is furnished pursuant to Item 2.02.
On October 27, 2015, Portland General Electric Company (the “Company”) issued a press release announcing its financial results for the three and nine month periods ended September 30, 2015. The press release is furnished herewith as Exhibit 99.1 to this Report.
Item 7.01 Regulation FD Disclosure.
The following information is furnished pursuant to Item 7.01.
At 11:00 a.m. ET on Tuesday, October 27, 2015, the Company will hold its quarterly earnings call and web cast, and will utilize a slide presentation in conjunction with the earnings call. A copy of the slide presentation is furnished herewith as Exhibit 99.2.
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. | |
99.1 | Press Release issued by Portland General Electric Company dated October 27, 2015. | |
99.2 | Portland General Electric Company Third Quarter 2015 Slides dated October 27, 2015. | |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PORTLAND GENERAL ELECTRIC COMPANY | ||||
(Registrant) | ||||
Date: | October 26, 2015 | By: | /s/ James F. Lobdell | |
James F. Lobdell | ||||
Senior Vice President of Finance, Chief Financial Officer and Treasurer | ||||
3
Exhibit 99.1
 | Portland General Electric One World Trade Center 121 S.W. Salmon Street Portland, Oregon 97204 News Release | ||
FOR IMMEDIATE RELEASE | |||
October 27, 2015 | |||
Media Contact: | Investor Contact: | ||
Melanie Moir | Bill Valach | ||
Corporate Communications | Investor Relations | ||
Phone: 503-464-8790 | Phone: 503-464-7395 | ||
Portland General Electric announces third quarter 2015 results
• | Financial and operating performance on track for 2015 and earnings guidance reaffirmed at $2.05 - $2.20 per share |
• | Carty Generating Station on budget and scheduled to be in-service in the second quarter of 2016 |
• | Settlement reached on all issues in the 2016 general rate case |
PORTLAND, Ore. — Portland General Electric Company (NYSE: POR) today reported net income of $36 million, or 40 cents per diluted share, for the third quarter of 2015. This compares with net income of $39 million, or 47 cents per diluted share, for the third quarter of 2014.
“Although our financial results were lower quarter over quarter, we are on track to meet our revised 2015 financial targets, and I’m pleased with our solid operations and strong load growth supported by continued positive economic trends in Oregon,” said Jim Piro, president and chief executive officer. “We are reaffirming our full year earnings guidance of $2.05 - $2.20 per share.”
When compared to the prior year, earnings in the third quarter of 2015 were positively impacted by new generating resources (approx. $0.04 EPS), which were offset by increases in several miscellaneous operating and maintenance and other expenses (approx. $0.06 EPS). In addition, the company issued new shares of common stock in June 2015 and the timing of this issuance impacted quarter over quarter earnings per share by approximately $0.05. Average diluted shares increased from 80.2 million for the third quarter 2014 to 88.8 million for the third quarter 2015. The Company is increasing its full year weather adjusted load forecast from 1.5 percent to 2 percent due to continued strong load growth in the industrial sector.
Company Updates
Generation Project: Construction is proceeding on the Carty Generating Station, a 440 megawatt natural gas-fired baseload power plant near Boardman, Ore. The plant is scheduled to be placed into service during the second quarter of 2016 at an estimated cost of $450 million, excluding allowance for funds used during construction (AFDC). The 500 KV Grassland switchyard serving the site has been completed and construction on the plant is now approximately 70 percent complete.
1
Exhibit 99.1
2016 General Rate Case: During the third quarter of 2015, PGE, Oregon Public Utility Commission (OPUC) Staff and interveners reached an agreement that resolved all remaining matters in the general rate case, subject to OPUC approval. Parties have agreed to:
• | A capital structure of 50% debt and 50% equity; |
• | A return on equity of 9.6%, down from the current authorized rate of 9.68%; |
• | A cost of capital of 7.52%; and |
• | An average rate base of $4.4 billion. |
On October 1, 2015, PGE filed its latest power cost and retail load forecast updates. The net increase in annual revenue requirement as proposed in the Company’s initial filing and as revised consists of the following (in millions):
As Filed February 12, 2015 | Stipulations and Updates through July 15, 2015 | Additional Stipulations and Updates through October 1, 2015 | As Revised October 1, 2015 | |
Carty | $83 | $2 | $(1) | $84 |
Base business cost* | $39 | $(21) | $(33) | $(15) |
Supplemental tariff updates | $(56) | $(6) | $6 | $(56) |
Annual revenue requirement, net | $66 | $(25) | $(28) | $13 |
* The July reduction in base business revenue requirement includes various Operating and Maintenance and other cost adjustments ($11 million), lower net variable power costs (NVPC) ($7 million), and the Grassland switchyard moved from base business to Carty ($3 million). The additional stipulations and updates through October 1, 2015, include the August reduction in base business revenue requirement, which consists primarily of a lower return on equity than requested ($10 million), lower NVPC ($10 million), miscellaneous reductions ($4 million), and settlement on cost of capital and all other issues in the filing ($4 million), as well as reductions for the load forecast update ($3 million) and the power cost update ($2 million).
The net annual revenue requirement increase of $13 million, or 0.7%, will be effective in two phases. A $43 million decrease, representing a 2.4% decrease in customer prices effective January 1, 2016, will consist of a reduction in base business costs of $15 million and a decrease of $28 million related to the amortization of certain customer credits through supplemental tariffs. A $56 million annualized increase, representing a customer price increase of 3.1%, will be effective when Carty becomes operational, provided that occurs by July 31, 2016. The increase will consist of an $84 million annualized increase related to the cost recovery of Carty and a $28 million annualized decrease related to the amortization of certain customer credits through supplemental tariffs.
Updates to power costs and actual cost of debt, to be finalized in November 2015, may further change the amounts shown in the table above. Regulatory review of the 2016 GRC will continue, with a final order expected to be issued by the OPUC by December 2015.
2
Exhibit 99.1
Third quarter operating results
Earnings Reconciliation of Q3 2014 to Q3 2015 | |||||||||
($ in millions, except EPS) | Pre-Tax Income | Net Income* | Diluted EPS | ||||||
Reported Q3 2014 | $ | 54 | $ | 39 | $ | 0.47 | |||
Adjustment for change in share count | (0.05 | ) | |||||||
EPS After share count adjustment | 0.42 | ||||||||
Revenue Adjustments | |||||||||
Electric retail price and volume | 12 | 7 | 0.08 | ||||||
Supplemental tariffs | (7 | ) | (4 | ) | (0.05 | ) | |||
Electric wholesale price and volume | (10 | ) | (6 | ) | (0.07 | ) | |||
Other revenue adjustments | (3 | ) | (2 | ) | (0.01 | ) | |||
Change in Revenue | (8 | ) | (5 | ) | (0.05 | ) | |||
Power Cost Adjustments | |||||||||
Average power cost | 18 | 11 | 0.13 | ||||||
Purchased power and generating volume | 3 | 2 | 0.02 | ||||||
Change in Power Costs | 21 | 13 | 0.15 | ||||||
O&M Adjustments | |||||||||
Generation, transmission, distribution | (4 | ) | (3 | ) | (0.03 | ) | |||
Administrative and general | (5 | ) | (3 | ) | (0.03 | ) | |||
Change in O&M | (9 | ) | (6 | ) | (0.06 | ) | |||
Other Item Adjustments | |||||||||
Depreciation & amortization | — | — | — | ||||||
Interest | (5 | ) | (3 | ) | (0.03 | ) | |||
AFDC equity** | (5 | ) | (5 | ) | (0.06 | ) | |||
Other Items | (4 | ) | (2 | ) | (0.03 | ) | |||
Adjustment for effective vs statutory tax rate | 5 | 0.06 | |||||||
Change in Other Items | (14 | ) | (5 | ) | (0.06 | ) | |||
Reported Q3 2015 | $ | 44 | $ | 36 | $ | 0.40 | |||
* After tax adjustments based on PGE’s statutory tax rate of 39.5% | |||||||||
** Statutory tax rate applied only to AFDC debt | |||||||||
Retail revenues increased $5 million, or 1 percent, to $439 million for the third quarter of 2015 from $434 million for the third quarter of 2014. The increase consisted of:
• | A $10 million increase related to a 2.3 percent increase in average customer prices largely resulting from the 2015 general rate case; and |
• | A $2 million increase related to a 0.6 percent higher volume of retail energy delivered in the third quarter of 2015 compared with the third quarter of 2014, with an increase in residential and industrial deliveries of 0.2 percent and 4.0 percent, respectively and a decrease in commercial deliveries of 0.9 percent; partially offset by |
• | A $7 million decrease related to various supplemental tariff changes, including the return of $5 million to customers in the third quarter of 2015 of proceeds received in connection with the settlement of a legal matter related to the operation of the Independent Spent Fuel Storage Installation (ISFSI) at the Trojan nuclear power plant, which was closed in 1993 (offset in depreciation and amortization). |
Net variable power costs (purchased power and fuel expense, net of wholesale revenues) decreased $11 million for the third quarter of 2015 compared with the third quarter of 2014, and consisted of the following:
• | An $18 million decrease related to a 9 percent decline in the average variable power cost per MWh; and |
• | A $3 million decrease related to a 2 percent decline in total system load which included both retail and wholesale loads; partially offset by |
• | A $10 million decrease in wholesale revenue, related to a 16 percent decrease in wholesale sales volume and a 12 percent decrease in wholesale prices. |
3
Exhibit 99.1
For the third quarter of 2015, actual NVPC were $6 million above baseline NVPC included in the annual power cost update tariff (AUT), while NVPC for the third quarter of 2014 were above baseline NVPC included in the AUT by $5 million. Forecasted NVPC for 2015 are expected to be within the deadband of the power cost adjustment mechanism; accordingly, no estimated collection from, or refund to customers, has been recorded pursuant to the Power Cost Adjustment Mechanism.
Generation, transmission and distribution expense increased $4 million, or 7 percent, in the third quarter of 2015 compared with the third quarter of 2014 driven by $2 million higher operating and maintenance expenses in 2015, driven by the addition of Port Westward Unit 2 and Tucannon River, a $1 million write-off of inventory related to the Boardman biomass project and $1 million in unexpected repairs and maintenance in the third quarter of 2015, compared with the third quarter of 2014.
Administrative and other expense in the third quarter of 2015 was $5 million, or 9 percent, higher than in the third quarter of 2014 due to a combination of higher expenses for legal and environmental services, pension, information technology and other items.
Depreciation and amortization expense in the third quarter of 2015 was comparable to the third quarter of 2014. A $7 million increase resulting from capital additions were largely offset by $6 million in amortization of deferred regulatory liabilities for the Trojan spent fuel settlement and ISFSI tax credits. The reduction in expenses resulting from the amortization of the regulatory liabilities is offset by corresponding reductions in revenues.
Interest expense in the third quarter of 2015 was $5 million, or 22 percent, higher than in the third quarter of 2014, primarily due to $3 million lower allowance for borrowed funds used during construction. In December 2014, Port Westward Unit 2 and Tucannon River were placed into service resulting in a lower average construction work in process (CWIP) balance during 2015. Interest on long-term debt increased $2 million due to issuance of First Mortgage Bonds in the fourth quarter of 2014.
Other income, net in the third quarter of 2015 was $8 million lower than in the third quarter of 2014 driven by a $5 million decrease in the allowance for equity funds used during construction resulting from the lower average CWIP balance due to new plants being placed into service, $1 million lower earnings on the non-qualified benefit plan trust assets and other decreases of $2 million.
Income tax expense was $8 million in the third quarter of 2015 compared with $16 million in the third quarter of 2014. The decrease was largely due to lower pre-tax income and an increase in production tax credits for 2015 compared to 2014.
2015 earnings guidance
PGE is reaffirming its full-year 2015 earnings guidance of $2.05 - $2.20 per share, based on the following assumptions:
• | Annual weather adjusted load growth of approximately 2 percent; |
• | Below average hydro conditions for the year; |
• | Normal thermal plant and wind generation for the remainder of the year; |
• | Depreciation and amortization expense between $300 and $310 million; and, |
• | Capital expenditures of $580 million. |
Third Quarter 2015 earnings call and web cast — October 27
PGE will host a conference call with financial analysts and investors on Tuesday, October 27, at 11 a.m. ET. The conference call will be webcast live on the PGE website at portlandgeneral.com. A replay of the call will be available beginning at 2 p.m. ET on Tuesday, October 27 through Tuesday, November 4.
4
Exhibit 99.1
Jim Piro, president and CEO; Jim Lobdell, senior vice president of finance, CFO, and treasurer; and Bill Valach, director, investor relations, will participate in the call. Management will respond to questions following formal comments.
The attached unaudited condensed consolidated statements of income, condensed consolidated balance sheets, and condensed consolidated statements of cash flows, as well as the supplemental operating statistics, are an integral part of this earnings release.
# # # # #
About Portland General Electric Company
Portland General Electric Company is a vertically integrated electric utility that serves approximately 852,000 residential, commercial and industrial customers in the Portland/Salem metropolitan area of Oregon. The company’s headquarters are located at 121 S.W. Salmon Street, Portland, Oregon 97204. Visit PGE’s website at portlandgeneral.com.
Safe Harbor Statement
Statements in this news release that relate to future plans, objectives, expectations, performance, events and the like may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding earnings guidance; statements regarding future load, hydro conditions and operating and maintenance costs; statements concerning implementation of the company’s integrated resource plan; statements concerning future compliance with regulations limiting emissions from generation facilities and the costs to achieve such compliance; as well as other statements containing words such as “anticipates,” “believes,” “intends,” “estimates,” “promises,” “expects,” “should,” “conditioned upon,” and similar expressions. Investors are cautioned that any such forward-looking statements are subject to risks and uncertainties, including reductions in demand for electricity; the sale of excess energy during periods of low demand or low wholesale market prices; operational risks relating to the company’s generation facilities, including hydro conditions, wind conditions, disruption of fuel supply, and unscheduled plant outages, which may result in unanticipated operating, maintenance and repair costs, as well as replacement power costs; failure to complete capital projects on schedule or within budget, or the abandonment of capital projects, which could result in the company’s inability to recover project costs; the costs of compliance with environmental laws and regulations, including those that govern emissions from thermal power plants; changes in weather, hydroelectric and energy markets conditions, which could affect the availability and cost of purchased power and fuel; changes in capital market conditions, which could affect the availability and cost of capital and result in delay or cancellation of capital projects; the outcome of various legal and regulatory proceedings; and general economic and financial market conditions. As a result, actual results may differ materially from those projected in the forward-looking statements. All forward-looking statements included in this news release are based on information available to the company on the date hereof and such statements speak only as of the date hereof. The company assumes no obligation to update any such forward-looking statement. Prospective investors should also review the risks and uncertainties listed in the company’s most recent annual report on form 10-K and the company’s reports on forms 8-K and 10-Q filed with the United States Securities and Exchange Commission, including management’s discussion and analysis of financial condition and results of operations and the risks described therein from time to time.
POR-F
Source: Portland General Electric Company
5
Exhibit 99.1
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues, net | $ | 476 | $ | 484 | $ | 1,399 | $ | 1,400 | |||||||
Operating expenses: | |||||||||||||||
Purchased power and fuel | 181 | 202 | 490 | 528 | |||||||||||
Generation, transmission and distribution | 64 | 60 | 192 | 181 | |||||||||||
Administrative and other | 59 | 54 | 179 | 164 | |||||||||||
Depreciation and amortization | 76 | 76 | 227 | 224 | |||||||||||
Taxes other than income taxes | 28 | 27 | 86 | 82 | |||||||||||
Total operating expenses | 408 | 419 | 1,174 | 1,179 | |||||||||||
Income from operations | 68 | 65 | 225 | 221 | |||||||||||
Interest expense (1) | 28 | 23 | 86 | 71 | |||||||||||
Other income: | |||||||||||||||
Allowance for equity funds used during construction | 6 | 11 | 15 | 26 | |||||||||||
Miscellaneous income, net | (2 | ) | 1 | — | 1 | ||||||||||
Other income, net | 4 | 12 | 15 | 27 | |||||||||||
Income before income tax expense | 44 | 54 | 154 | 177 | |||||||||||
Income tax expense | 8 | 16 | 33 | 46 | |||||||||||
Net income | 36 | 38 | $ | 121 | $ | 131 | |||||||||
Less: net loss attributable to noncontrolling interests | — | (1 | ) | — | (1 | ) | |||||||||
Net income attributable to Portland General Electric Company | $ | 36 | $ | 39 | $ | 121 | $ | 132 | |||||||
Weighted-average shares outstanding (in thousands): | |||||||||||||||
Basic | 88,766 | 78,203 | 82,633 | 78,170 | |||||||||||
Diluted | 88,766 | 80,225 | 82,633 | 79,977 | |||||||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.40 | $ | 0.48 | $ | 1.47 | $ | 1.67 | |||||||
Diluted | $ | 0.40 | $ | 0.47 | $ | 1.47 | $ | 1.63 | |||||||
Dividends declared per common share | $ | 0.300 | $ | 0.280 | $ | 0.880 | $ | 0.835 | |||||||
(1) Net of an allowance for borrowed funds used during construction of $3 million and $7 million in the three months ended September 30, 2015 and 2014, respectively, and $9 million and $15 million in the nine months ended September 30, 2015 and 2014, respectively. | |||||||||||||||
6
Exhibit 99.1
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
September 30, | December 31, | ||||||
2015 | 2014 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 92 | $ | 127 | |||
Accounts receivable, net | 133 | 149 | |||||
Unbilled revenues | 72 | 93 | |||||
Inventories | 94 | 82 | |||||
Regulatory assets—current | 122 | 133 | |||||
Other current assets | 92 | 115 | |||||
Total current assets | 605 | 699 | |||||
Electric utility plant, net | 5,920 | 5,679 | |||||
Regulatory assets—noncurrent | 547 | 494 | |||||
Nuclear decommissioning trust | 40 | 90 | |||||
Non-qualified benefit plan trust | 33 | 32 | |||||
Other noncurrent assets | 52 | 48 | |||||
Total assets | $ | 7,197 | $ | 7,042 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 96 | $ | 156 | |||
Liabilities from price risk management activities - current | 115 | 106 | |||||
Current portion of long-term debt | — | 375 | |||||
Accrued expenses and other current liabilities | 254 | 236 | |||||
Total current liabilities | 465 | 873 | |||||
Long-term debt, net of current portion | 2,204 | 2,126 | |||||
Regulatory liabilities—noncurrent | 939 | 906 | |||||
Deferred income taxes | 664 | 625 | |||||
Unfunded status of pension and postretirement plans | 246 | 237 | |||||
Liabilities from price risk management activities—noncurrent | 184 | 122 | |||||
Asset retirement obligations | 137 | 116 | |||||
Non-qualified benefit plan liabilities | 105 | 105 | |||||
Other noncurrent liabilities | 21 | 21 | |||||
Total liabilities | 4,965 | 5,131 | |||||
Total equity | 2,232 | 1,911 | |||||
Total liabilities and equity | $ | 7,197 | $ | 7,042 | |||
7
Exhibit 99.1
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 121 | $ | 131 | |||
Depreciation and amortization | 227 | 224 | |||||
Other non-cash income and expenses, net included in Net income | 70 | 61 | |||||
Changes in working capital | 41 | 65 | |||||
Proceeds received from legal settlement | — | 6 | |||||
Other, net | (20 | ) | (14 | ) | |||
Net cash provided by operating activities | 439 | 473 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (452 | ) | (824 | ) | |||
Distribution from Nuclear decommissioning trust | 50 | (6 | ) | ||||
Sales tax refund received related to Tucannon River Wind Farm | 23 | — | |||||
Other, net | 2 | 9 | |||||
Net cash used in investing activities | (377 | ) | (821 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of common stock, net of issuance costs | 271 | — | |||||
Repayment of long-term debt, net of issuances | (298 | ) | 404 | ||||
Dividends paid | (70 | ) | (66 | ) | |||
Net cash (used in) provided by financing activities | (97 | ) | 338 | ||||
Decrease in cash and cash equivalents | (35 | ) | (10 | ) | |||
Cash and cash equivalents, beginning of period | 127 | 107 | |||||
Cash and cash equivalents, end of period | $ | 92 | $ | 97 | |||
8
Exhibit 99.1
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues (dollars in millions): | |||||||||||||||
Retail: | |||||||||||||||
Residential | $ | 213 | $ | 208 | $ | 647 | $ | 653 | |||||||
Commercial | 176 | 176 | 498 | 493 | |||||||||||
Industrial | 59 | 59 | 172 | 164 | |||||||||||
Subtotal | 448 | 443 | 1,317 | 1,310 | |||||||||||
Other retail revenues, net | (9 | ) | (9 | ) | (11 | ) | (11 | ) | |||||||
Total retail revenues | 439 | 434 | 1,306 | 1,299 | |||||||||||
Wholesale revenues | 29 | 39 | 66 | 73 | |||||||||||
Other operating revenues | 8 | 11 | 27 | 28 | |||||||||||
Total revenues | $ | 476 | $ | 484 | $ | 1,399 | $ | 1,400 | |||||||
Energy sold and delivered (MWh in thousands): | |||||||||||||||
Retail energy sales: | |||||||||||||||
Residential | 1,749 | 1,746 | 5,308 | 5,472 | |||||||||||
Commercial | 1,862 | 1,872 | 5,246 | 5,198 | |||||||||||
Industrial | 870 | 848 | 2,563 | 2,373 | |||||||||||
Total retail energy sales | 4,481 | 4,466 | 13,117 | 13,043 | |||||||||||
Retail energy deliveries: | |||||||||||||||
Commercial | 145 | 154 | 401 | 423 | |||||||||||
Industrial | 313 | 290 | 875 | 823 | |||||||||||
Total retail energy deliveries | 458 | 444 | 1,276 | 1,246 | |||||||||||
Total retail energy sales and deliveries | 4,939 | 4,910 | 14,393 | 14,289 | |||||||||||
Wholesale energy deliveries | 836 | 999 | 1,954 | 1,892 | |||||||||||
Total energy sold and delivered | 5,775 | 5,909 | 16,347 | 16,181 | |||||||||||
Number of retail customers at end of period: | |||||||||||||||
Residential | 744,172 | 736,289 | |||||||||||||
Commercial | 106,892 | 106,188 | |||||||||||||
Industrial | 197 | 203 | |||||||||||||
Direct access | 389 | 430 | |||||||||||||
Total retail customers | 851,650 | 843,110 | |||||||||||||
9
Exhibit 99.1
Heating Degree-days | Cooling Degree-days | ||||||||||||
2015 | 2014 | Average | 2015 | 2014 | Average | ||||||||
First quarter | 1,481 | 1,891 | 1,864 | — | — | — | |||||||
Second quarter | 513 | 530 | 713 | 207 | 57 | 70 | |||||||
Third quarter | 76 | 18 | 85 | 573 | 579 | 383 | |||||||
Year-to-date | 2,070 | 2,439 | 2,662 | 780 | 636 | 453 | |||||||
* — “Average” amounts represent the 15-year rolling averages provided by the National Weather Service (Portland Airport).
10
Exhibit 99.1
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||
September 30, | September 30, | ||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||
Sources of energy (MWh in thousands): | |||||||||||
Generation: | |||||||||||
Thermal: | |||||||||||
Coal | 1,445 | 1,479 | 2,656 | 3,079 | |||||||
Natural gas | 1,702 | 1,282 | 3,356 | 2,273 | |||||||
Total thermal | 3,147 | 2,761 | 6,012 | 5,352 | |||||||
Hydro | 267 | 311 | 1,063 | 1,292 | |||||||
Wind | 568 | 332 | 1,371 | 953 | |||||||
Total generation | 3,982 | 3,404 | 8,446 | 7,597 | |||||||
Purchased power: | |||||||||||
Term | 527 | 916 | 3,403 | 4,698 | |||||||
Hydro | 326 | 352 | 1,239 | 1,219 | |||||||
Wind | 88 | 102 | 241 | 267 | |||||||
Spot | 733 | 977 | 2,594 | 2,018 | |||||||
Total purchased power | 1,674 | 2,347 | 7,477 | 8,202 | |||||||
Total system load | 5,656 | 5,751 | 15,923 | 15,799 | |||||||
Less: wholesale sales | (836 | ) | (999 | ) | (1,954 | ) | (1,892 | ) | |||
Retail load requirement | 4,820 | 4,752 | 13,969 | 13,907 | |||||||
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Earnings Conference Call Third Quarter 2015 Exhibit 99.2
Cautionary Statement Information Current as of October 27, 2015 Except as expressly noted, the information in this presentation is current as of October 27, 2015 — the date on which PGE filed its Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 — and should not be relied upon as being current as of any subsequent date. PGE undertakes no duty to update the presentation, except as may be required by law. Forward-Looking Statements Statements in this news release that relate to future plans, objectives, expectations, performance, events and the like may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding earnings guidance; statements regarding future load, hydro conditions and operating and maintenance costs; statements concerning implementation of the company’s integrated resource plan; statements concerning future compliance with regulations limiting emissions from generation facilities and the costs to achieve such compliance; as well as other statements containing words such as “anticipates,” “believes,” “intends,” “estimates,” “promises,” “expects,” “should,” “conditioned upon,” and similar expressions. Investors are cautioned that any such forward-looking statements are subject to risks and uncertainties, including reductions in demand for electricity; the sale of excess energy during periods of low demand or low wholesale market prices; operational risks relating to the company’s generation facilities, including hydro conditions, wind conditions, disruption of fuel supply, and unscheduled plant outages, which may result in unanticipated operating, maintenance and repair costs, as well as replacement power costs; failure to complete capital projects on schedule or within budget, or the abandonment of capital projects, which could result in the company’s inability to recover project costs; the costs of compliance with environmental laws and regulations, including those that govern emissions from thermal power plants; changes in weather, hydroelectric and energy markets conditions, which could affect the availability and cost of purchased power and fuel; changes in capital market conditions, which could affect the availability and cost of capital and result in delay or cancellation of capital projects; the outcome of various legal and regulatory proceedings; and general economic and financial market conditions. As a result, actual results may differ materially from those projected in the forward-looking statements. All forward-looking statements included in this news release are based on information available to the company on the date hereof and such statements speak only as of the date hereof. The company assumes no obligation to update any such forward-looking statement. Prospective investors should also review the risks and uncertainties listed in the company’s most recent annual report on form 10-K and the company’s reports on forms 8- K and 10-Q filed with the United States Securities and Exchange Commission, including management’s discussion and analysis of financial condition and results of operations and the risks described therein from time to time. 2
Leadership Presenting Today Jim Lobdell Senior VP of Finance, CFO & Treasurer Jim Piro President & CEO On Today’s Call ▪ Financial Performance ▪ Operational Update ▪ Economy and Customers ▪ Strategic Initiatives ▪ Financial Update ▪ Regulatory Update 3
NI in millions Q3 2014 Q3 2015 Net Income $39 $36 Diluted EPS $0.47 $0.40 2014 EPS $2.18 2015E EPS $2.05 - $2.20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4: $0.59 - $0.74 Third Quarter 2015 Earnings Results 4
Accomplishments and Operational Update 5
Economic Update (1) State of Oregon Employment Department (2) Net of approximately 1.5% of energy efficiency Economic Update ▪ Oregon's annual job growth reached a 10-year high in August, expanding by more than 60,000 jobs over past 12 months(1). ▪ Unemployment of 5.4 percent in our operating area, below Oregon and slightly above U.S. ▪ Energy deliveries, weather adjusted, were down 1.1 percent for the third quarter and up 2.8 percent year-to-date 2015 vs. 2014. ▪ Average customer count increased approximately 1 percent over past year. ▪ Weather-adjusted 2015 load growth of approximately 2 percent(2). 6
New Generation: Baseload Resource Carty CapEx: $450M Carty Generating Station Project Location Boardman, OR Capacity / Fuel 440 MW / Natural Gas Technology Mitsubishi Turbine EPC Contractor Abener/Abengoa Estimated In-Service Date Q2 2016 Customer Price Impact 3.1 percent* Project Update Overall construction ~70% complete; including assembly of Heat Recovery Steam Generator and hydrostatic testing. 2013 2014 2015 2016 7 * This includes the cost of Carty net of certain customer credits.
Estimated Capital Expenditures (1) Consists of ongoing CapEx and hydro relicensing per the Quarterly Form 10-Q filed on October 27, 2015, amounts exclude AFDC ▪ New customer information and meter data management replacement project has been launched. ▪ Management continues to evaluate incremental reliability and efficiency investments in our operations and fuel supply management that provide value to customers. 1 8 $580 $431 $366 $296 $281 Current Capital Outlook
2016 Integrated Resource Plan IRP Process Timeline 2015 Develop IRP / Public Process 2016 File IRP 2017 Acknowledgement from OPUC expected and RFP process commences Areas of Focus ▪ Energy efficiency and demand side actions ▪ Evaluation of carbon emissions and the Clean Power Plan ▪ Energy and capacity needs ▪ Boardman replacement ▪ 2020 Renewable Portfolio Standard requirement of 20% ▪ Other topics 9
Third Quarter 2015 Financial Results NI in millions Q3 2014 Q3 2015 Net Income $39 $36 Diluted EPS $0.47 $0.40 Key Quarter over Quarter EPS Drivers Additions of Tucannon River, Port Westward 2 in customer prices and Carty AFDC Miscellaneous expenses not included in prices Increase in common share count due to timing of forward equity sale 10
Q3 2015 Sources of Power Total Revenues and Net Variable Power Costs in millions Q3 2014 Q3 2015 Total Revenues $484 $476 Purchased Power & Fuel $202 $181 Less: Wholesale Sales $(39) $(29) Net Variable Power Costs $163 $152 33% 22% 8% 11% 26% 22% 26% 10% 30% Coal Natural Gas Hydro Wind Purchased Power Q3 2014 Sources of Power 12% 11
Operating Expenses In Millions Q3 2014 Q3 2015 Generation, Transmission & Distribution $60 $64 Administrative & Other $54 $59 Total O&M $114 $123 Depreciation & Amortization $76 $76 Interest Expense, Net $23 $28 Other Income, Net $12 $4 Income Taxes $16 $8 12
General Rate Case - 2016 Test Year Rate Case Settlement Revenue increase: $13 Million Projected average price increase: 0.7% Return on Equity (ROE): 9.6% Cost of Capital: 7.52% Capital Structure: 50% debt, 50% equity Rate Base: $4.4 Billion Annual Revenue Increase As Filed 2/12/2015 Stipulation and Updates through 7/15/2015 Additional Stipulations and Updates through 10/1/2015 As Revised 10/1/2015 Carty (annualized) $83 $2 $(1) $84 Base Business Needs $39 $(21) $(33) $(15) Supplemental Tariff Updates $(56) $(6) $6 $(56) Annual Revenue Net Increase (annualized) $66 $(25) $(28) $13 13 Updates to power costs and cost of debt will be finalized in November 2015 and may further change the amounts shown in the table above. Regulatory review of the 2016 GRC will continue, with a final order expected to be issued by the OPUC by December 2015.
Liquidity and Financing Senior Secured Senior Unsecured Outlook S&P A- BBB Stable Moody’s A1 A3 Stable Total Liquidity as of 9/30/2015(in millions) Credit Facilities $ 635 Commercial Paper -- Letters of Credit $ (96 ) Cash $ 92 Available $ 631 2015 Financing Activity Q1 2015 Q2 2015 Q3 2015 Bank Loan $305 million repaid in full First Mortgage Bonds $75 million issued $70 million issued $70 million matured $67 million redeemed Settle Equity Forward $271 million received 14
Guidance 2015 EPS Guidance: $2.05-$2.20 ▪ Annual weather adjusted load growth of approximately 2% over 2014, excluding one large paper customer; ▪ Below average hydro conditions for the year; ▪ Normal thermal plant and wind operations for the remainder of the year; ▪ Depreciation and amortization expense between $300 and $310 million; and, ▪ Capital expenditures of $580 million. 15