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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): February 17, 2017

 
 
 
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 February 17, 2017, Portland General Electric Company (the “Company”) issued a press release announcing its financial results for the quarter and year ended December 31, 2016. 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 Friday, February 17, 2017, the Company will hold its annual earnings call and webcast, 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 February 17, 2017.
99.2
 
Portland General Electric Company Fourth Quarter 2016 Slides dated February 17, 2017.


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:
February 16, 2017
 
By:
/s/ James F. Lobdell
 
 
 
 
James F. Lobdell
 
                                                                             
 
 
Senior Vice President of Finance,
Chief Financial Officer and Treasurer


3
Exhibit


Exhibit 99.1
https://cdn.kscope.io/93bf864f7e95cfe51b102b09869e248a-logo2a02a02a02.jpg
Portland General Electric
One World Trade Center
121 S.W. Salmon Street
Portland, Oregon 97204

News Release
 
 
 
FOR IMMEDIATE RELEASE
 
 
Feb. 17, 2017
 
 
 
 
 
Media Contact:
 
Investor Contact:
Melanie Moir
 
Chris Liddle
Corporate Communications
 
Investor Relations
Phone: 503-464-8790
 
Phone: 503-464-7458

Portland General Electric reports 2016 financial results and initiates 2017 earnings guidance

•
Full-year 2016 financial results in line with revised guidance
•
Initiating 2017 earnings guidance of $2.20 to $2.35 per diluted share
•
Plans to file a 2018 General Rate Case with the Oregon Public Utility Commission by the end of February

PORTLAND, Ore. — Portland General Electric Company (NYSE: POR) today reported net income of $193 million, or $2.16 per diluted share, for the year ended Dec. 31, 2016. This compares with $172 million, or $2.04 per diluted share, for 2015. Net income was $61 million, or 68 cents per diluted share, for the fourth quarter of 2016 compared with $51 million, or 57 cents per diluted share, for the comparable period of 2015. Looking forward, the company is initiating full-year 2017 earnings guidance of $2.20 to $2.35 per diluted share.

“I’m very proud of our operational and financial performance, despite the impact of lower retail loads associated with warmer than normal temperatures and wind generation below our forecast that resulted in a return on equity lower than our currently allowed return,” said Jim Piro, president and CEO. “We brought Carty Generating Station into service, and since then it has achieved an exceptional availability for a newly commissioned plant. We also filed our 2016 Integrated Resource plan, which reflects our plans for a more renewable, reliable and affordable energy future for our customers.”

2016 earnings compared to 2015 earnings

Annual earnings per diluted share increased year over year due to incremental earnings from the additional investment in Carty, strong power supply operations including more favorable wind and hydro conditions, and higher production tax credits. These factors were partially offset by higher operating and maintenance expense in 2016 over 2015, depreciation expense and carrying costs related to incremental construction costs for Carty of approximately $120 million as of year-end not included in customer prices and an increase in the average common share count in 2016 over 2015. Solid economic conditions and strong load growth in the fourth quarter in the high-tech manufacturing sector contributed to weather-adjusted load growth of approximately one percent for the year, excluding one large paper customer which ceased operations in late 2015.





Page 1



Company Updates

2018 General Rate Case

By the end of February, PGE plans to file a 2018 General Rate Case (GRC) with the Oregon Public Utility Commission (OPUC). This filing will be based on a 2018 test year and include investments related to keeping PGE’s system safe, reliable and secure.

“We realize the impact price increases can have on our customers, and do not make this request lightly,” said Piro. “We continue to invest in our system to ensure its safety, reliability, and security in delivering power to our customers. Our efforts include replacing assets at the end of their useful life, strengthening our system to better prepare for storms, earthquakes, cyber-attacks and other potential threats as well as investments in operational changes that will integrate more renewable resources and enhance system reliability.”

Regulatory review of the 2018 GRC will occur throughout 2017, with a final order expected to be issued by the OPUC by the end of December 2017.

Integrated Resource Planning

On November, 15, 2016, PGE filed its 2016 IRP with the Oregon Public Utility Commission, including a four-year Action Plan that calls for a minimum of 135 MWa of cost-effective energy efficiency, 77 MW of demand response, and the addition of approximately 175 MWa of qualifying renewable resources. The plan also identifies a need for up to 850 MW of capacity resources, including 375-550 MW of long-term dispatchable resources and up to 400 MW of annual (or seasonal equivalent) capacity resources, to meet reliability needs.

As part of OPUC’s public review process, PGE is preparing responses to comments provided by OPUC staff, consumer advocates, environmental groups and other stakeholders. Additional rounds of comments, responses and workshops will follow as PGE works to address stakeholder questions and identify the best strategy for achieving a renewable, reliable, affordable energy future for its customers. The company continues to target mid-2017 for acknowledgement of the plan.

Upon acknowledgment, PGE will request approval from the OPUC to issue one or more request for proposals (RFPs) to acquire capacity and renewable resources. “We will be seeking the best combination of resources, consistent with the acknowledged IRP Action Plan, to meet our customers’ future energy and capacity needs,” said Piro. “We have no predetermined outcome in the RFP process and will, along with the independent evaluator, analyze a variety of resource proposals to determine the portfolios with the best overall balance of cost and risk.” Resource options could include hydro, wind, solar, geothermal, biomass, efficient combined-cycle natural gas fired facilities, and generic capacity facilities such as seasonal contracts, power purchase agreements, energy storage, and combustion turbines. The RFP process will include oversight by an independent evaluator and review by the OPUC.















Page 2


2016 Annual Operating Results

Earnings Reconciliation of 2015 to 2016
($ in millions, except EPS)
Pre-Tax Income
Net Income(1)
Diluted EPS
Reported 2015
$
217

$
172

$
2.04

Adjustment for change in share count(2)
 
 
(0.11
)
EPS After share count adjustment
 
 
1.93

Revenue Adjustments
 
 
 
Electric retail price increase
49

30

0.33

Electric volume decrease
(38
)
(23
)
(0.26
)
Change in decoupling collection/(refund)
10

6

0.07

Electric wholesale volume and price increase
15

9

0.10

Other revenue adjustments
(11
)
(7
)
(0.07
)
Change in Revenue
25

15

0.17

Power Cost Adjustments
 
 
 
Average power cost decrease
50

31

0.34

Increase in total system load
(8
)
(5
)
(0.05
)
Other
2

1

0.01

Change in Power Costs
44

27

0.30

O&M Adjustments
 
 
 
Generation, transmission, distribution
(20
)
(12
)
(0.13
)
Administrative and general
(6
)
(3
)
(0.04
)
Change in O&M
(26
)
(15
)
(0.17
)
Other Item Adjustments
 
 
 
Depreciation & amortization
(16
)
(10
)
(0.11
)
Other Items
(1
)
(1
)
(0.01
)
Production Tax Credits
 
3

0.03

Change in Other Tax Items
 
2

0.02

Change in Other Items
(17
)
(6
)
(0.07
)
Reported 2016
$
243

$
193

$
2.16

(1) After tax adjustments based on PGE’s statutory tax rate of 39.5%
(2) Diluted share count increased in June 2015 with an equity issuance of 10.4 million additional shares

Revenues increased $25 million, or 1.3%, in 2016 compared with 2015 as a result of the items discussed below.

Total retail revenues increased $8 million, or 0.5%, in 2016 compared with 2015, primarily due to the net effect of the following:
•
A $49 million increase resulting from price changes, as authorized by the OPUC, including Carty going into service and into customer prices in mid-2016, as a result of the Company’s 2016 GRC;
•
A $10 million increase resulting from the Decoupling mechanism, as an estimated $3 million collection was recorded in 2016 compared to a refund in 2015;
•
A $5 million increase due to a lower amount of customer credits related to tax credits in connection with operation of the ISFSI at the former Trojan nuclear power plant site. Such credits are directly offset in depreciation and amortization expense; and
•
A $5 million overall increase due to various other largely offsetting tariff changes and adjustments; partially offset by
•
A $38 million decrease in revenues related to a 2.1% decrease in retail energy deliveries, consisting of 8.4% and 0.7% decreases in industrial and commercial deliveries, respectively, partially offset by a 0.3% increase in residential deliveries; and

Page 3


•
A $23 million decrease related to the collection from customers during 2015 of costs associated with previous capital project deferrals, with no comparable collection in 2016. This decrease in revenues is largely offset by a comparable decrease in depreciation and amortization expense.

Wholesale revenues result from sales of electricity to utilities and power marketers made in the Company’s efforts to secure reasonably priced power for its retail customers, manage risk, and administer its current long-term wholesale contracts. Such sales can vary significantly from year to year as a result of economic conditions, power and fuel prices, hydro and wind availability, and customer demand.

In 2016, the $15 million, or 17%, increase in wholesale revenues from 2015 consisted of a $27 million increase related to 31% greater wholesale sales volume partially offset by a $12 million decrease related to 11% lower average wholesale market prices.
 
Other operating revenues increased $2 million, or 6%, in 2016 from 2015, primarily due to a $2 million increase in resale of unneeded natural gas in combination with several smaller, rather offsetting items including revenues from broadband fiber deployment and steam sales.

Net variable power costs decreased $59 million for 2016 compared with 2015. The decrease attributable to changes in Purchased power and fuel expense was the result of an 8% decline in the average variable power cost per MWh, offset slightly by a 1% increase in total system load. The decrease in actual NVPC was also driven by a 31% increase in the volume of wholesale energy deliveries as the Company’s retail load requirement decreased in 2016, largely due to the effects of weather, which resulted in a greater portion of its system load being sold into the wholesale market. The increase was partially offset by an 11% decrease in the average price per MWh of wholesale power sales. The 2016 GRC had anticipated a decrease of approximately $31 million in NVPC from the 2015 baseline, with customer prices set accordingly.

For 2016, actual NVPC, as calculated for regulatory purposes under the PCAM, was $10 million below the 2016 baseline NVPC. In 2015, NVPC was $3 million below the anticipated baseline.

Generation, transmission, and distribution expense increased $20 million, or 8%, in 2016 compared with 2015. The increase was driven by the combination of $7 million in higher costs due to the addition of Carty, $5 million higher service restoration and storm costs, $4 million higher information technology expenses, $4 million higher inspection and testing costs for the distribution system, $2 million higher plant maintenance expenses, and $2 million higher labor expense. Partially offsetting the increases was a reduction in expenses of $6 million due to the repair and maintenance work during the annual planned outage and economic displacement of Boardman in 2015.

Administrative and other expense increased $6 million, or 2%, in 2016 compared with 2015, primarily due to $5 million higher legal costs attributable to Carty. The Company experienced slightly higher overall labor and employee benefit expenses although a $3 million reduction in pension expenses and a $2 million reduction in injuries and damages expense offset a large portion of those increases.

Depreciation and amortization expense in 2016 increased $16 million, or 5%, compared with 2015. The increase was primarily driven by $20 million higher expense resulting from capital additions, a $7 million expense increase resulting from the amortization credits in 2015 from gains recorded on the sale of assets, and a $5 million expense increase from lower amortization credits in 2016 of the regulatory liability for the ISFSI tax credits, offset by a $19 million expense decrease that resulted from the completion at the end of 2015 of the amortization of the regulatory asset related to the four capital projects deferral as authorized in the Company’s 2011 GRC. The overall impact resulting from the amortization of the regulatory assets and liabilities is directly offset by corresponding reductions in retail revenues.


Page 4


Taxes other than income taxes expense increased $3 million, or 3%, in 2016 compared with 2015, as higher property valuations in the State of Oregon increased taxes by $4 million, which was partially offset by lower property tax rates in both Oregon and Washington.

Interest expense decreased $2 million, or 2%, in 2016 compared with 2015 with $4 million lower expense resulting from a 3% decrease in the average balance of debt outstanding, partially offset by $2 million less allowance for borrowed funds used during construction credits.

Other income, net was $22 million in both 2016 and 2015, comprised primarily of $21 million in the allowance for equity funds used during construction each year, driven by the construction of Carty.

Income tax expense increased $5 million, or 11%, in 2016 compared to 2015. Higher pre-tax income accounted for a $10 million increase, which was partially offset by a $3 million increase in production tax credits and a combination of state credits and tax deductions that reduced expense by $2 million.


2017 earnings guidance

PGE is initiating full-year 2017 earnings guidance of $2.20 to $2.35 per diluted share. Guidance is based on the following:

•
A decline in retail deliveries between 0 and 1 percent, weather adjusted;
•
Average hydro conditions;
•
Wind generation based on five years of historical levels or forecast studies when historical data is not available;
•
Normal thermal plant operations;
•
Operating and maintenance costs between $540 and $560 million; and
•
Depreciation and amortization expense between $340 and $350 million.


Fourth Quarter 2016 earnings call and web cast — Feb. 17, 2017

PGE will host a conference call with financial analysts and investors on Friday, Feb. 17, 2017, at 11 a.m. ET. The conference call will be web cast live on the PGE website at PortlandGeneral.com. A replay of the call will be available beginning at 2 p.m. ET on Friday, Feb. 17, 2017 through Friday, Feb. 24, 2017.

Jim Piro, president and CEO; Jim Lobdell, senior vice president of finance, CFO, and treasurer; and Chris Liddle, manager, investor relations and corporate finance, will participate in the call. Management will respond to questions following formal comments.


Page 5


The attached unaudited 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 863,000 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, wind 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 and the sale of excess energy during periods of 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; 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; 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 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

Page 6


PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)

 
Three Months Ended
 
Years Ended
 
December 31,
 
December 31,
 
2016
 
2015
 
2016
 
2015
Revenues, net
$
524

 
$
499

 
$
1,923

 
$
1,898

Operating expenses:
 
 
 
 
 
 
 
Purchased power and fuel
162

 
171

 
617

 
661

Generation, transmission and distribution
87

 
74

 
286

 
266

Administrative and other
62

 
62

 
247

 
241

Depreciation and amortization
77

 
78

 
321

 
305

Taxes other than income taxes
30

 
30

 
119

 
116

Total operating expenses
418

 
415

 
1,590

 
1,589

Income from operations
106

 
84

 
333

 
309

Interest expense, net *
30

 
28

 
112

 
114

Other income:
 
 
 
 
 
 
 
Allowance for equity funds used during construction
2

 
6

 
21

 
21

Miscellaneous income, net
1

 
1

 
1

 
1

Other income, net
3

 
7

 
22

 
22

Income before income taxes
79

 
63

 
243

 
217

Income taxes
18

 
12

 
50

 
45

Net income
61

 
51

 
193

 
172

 
 
 
 
 
 
 
 
Weighted-average shares outstanding (in thousands):
 
 
 
 
 
 
 
Basic
88,927

 
88,773

 
88,896

 
84,180

Diluted
89,085

 
88,933

 
89,054

 
84,341

Earnings per share:
 
 
 
 
 
 
 
Basic
$
0.68

 
$
0.57

 
$
2.17

 
$
2.05

Diluted
$
0.68

 
$
0.57

 
$
2.16

 
$
2.04

 
 
 
 
 
 
 
 
* Includes an allowance for borrowed funds used during construction
$
1

 
$
4

 
$
11

 
$
13



Page 7


PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
 
 
As of December 31,
 
2016
 
2015
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
6

 
4

Accounts receivable, net
155

 
158

Unbilled revenues
107

 
95

Inventories
82

 
83

Regulatory assets—current
36

 
129

Other current assets
77

 
88

Total current assets
463

 
557

Electric utility plant, net
6,434

 
6,012

Regulatory assets—noncurrent
498

 
524

Nuclear decommissioning trust
41

 
40

Non-qualified benefit plan trust
34

 
33

Other noncurrent assets
57

 
44

Total assets
$
7,527

 
$
7,210

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
129

 
98

Liabilities from price risk management activities—current
44

 
130

Short-term debt
—

 
6

Current portion of long-term debt
150

 
133

Accrued expenses and other current liabilities
254

 
259

Total current liabilities
577

 
626

Long-term debt, net of current portion
2,200

 
2,060

Regulatory liabilities—noncurrent
958

 
928

Deferred income taxes
669

 
632

Unfunded status of pension and postretirement plans
281

 
259

Liabilities from price risk management activities—noncurrent
125

 
161

Asset retirement obligations
161

 
151

Non-qualified benefit plan liabilities
105

 
106

Other noncurrent liabilities
107

 
29

Total liabilities
5,183

 
4,952

Total equity
2,344

 
2,258

Total liabilities and equity
$
7,527

 
$
7,210




Page 8


PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)

 
Years Ended December 31,
 
2016
 
2015
Cash flows from operating activities:
 
 
 
Net income
$
193

 
$
172

Depreciation and amortization
321

 
305

Other non-cash income and expenses, net included in Net income
50

 
95

Changes in working capital
27

 
(31
)
Other, net
(38
)
 
(21
)
Net cash provided by operating activities
553

 
520

Cash flows from investing activities:
 
 
 
Capital expenditures
(584
)
 
(598
)
Distribution from (Contribution to) Nuclear decommissioning trust
—

 
50

Other, net
(1
)
 
26

Net cash used in investing activities
(585
)
 
(522
)
Cash flows from financing activities:
 
 
 
Net issuances (payments) of long-term debt, including premiums paid or issuance costs incurred
157

 
(297
)
Proceeds from issuance of common stock, net of issuance costs
—

 
271

(Maturities) issuances of commercial paper, net
(6
)
 
6

Dividends paid
(110
)
 
(97
)
Other, net
(7
)
 
(4
)
Net cash provided by (used in) financing activities
34

 
(121
)
Increase (Decrease) in cash and cash equivalents
2

 
(123
)
Cash and cash equivalents, beginning of year
4

 
127

Cash and cash equivalents, end of year
$
6

 
$
4

 
 
 
 


Page 9


PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)

 
Three Months Ended
 
Years Ended
 
December 31,
 
December 31,
 
2016
 
2015
 
2016
 
2015
Revenues (dollars in millions):
 
 
 
 
 
 
 
Retail:
 
 
 
 
 
 
 
Residential
$
259

 
$
245

 
$
907

 
$
895

Commercial
173

 
166

 
665

 
662

Industrial
55

 
55

 
208

 
228

Subtotal
487

 
466

 
1,780

 
1,785

Other accrued (deferred) revenues, net
(2
)
 
2

 
3

 
(10
)
Total retail revenues
485

 
468

 
1,783

 
1,775

Wholesale revenues
29

 
22

 
103

 
88

Other operating revenues
10

 
9

 
37

 
35

Total revenues
$
524

 
$
499

 
$
1,923

 
$
1,898

 
 
 
 
 
 
 
 
Energy sold and delivered (MWh in thousands):
 
 
 
 
 
 
 
Retail energy sales:
 
 
 
 
 
 
 
Residential
2,070

 
2,017

 
7,348

 
7,325

Commercial
1,784

 
1,756

 
6,932

 
7,002

Industrial
800

 
806

 
2,968

 
3,369

Total retail energy sales
4,654

 
4,579

 
17,248

 
17,696

Direct access retail deliveries:
 
 
 
 
 
 
 
Commercial
122

 
108

 
525

 
509

Industrial
290

 
302

 
1,198

 
1,177

Total direct access retail deliveries
412

 
410

 
1,723

 
1,686

Total retail energy sales and direct access deliveries
5,066

 
4,989

 
18,971

 
19,382

Wholesale energy deliveries
731

 
605

 
3,352

 
2,560

Total energy sold and delivered
5,797

 
5,594

 
22,323

 
21,942

 
 
 
 
 
 
 
 
Number of retail customers at end of period:
 
 
 
 
 
 
 
Residential
 
 
 
 
756,675

 
746,969

Commercial
 
 
 
 
105,519

 
104,613

Industrial
 
 
 
 
200

 
195

Direct access
 
 
 
 
370

 
387

Total retail customers
 
 
 
 
862,764

 
852,164


 
Heating Degree-days
 
Cooling Degree-days
 
2016
2015
Average
 
2016
2015
Average
First quarter
1,585

1,481

1,866

 
—

—

—

Second quarter
403

513

689

 
154

207

70

Third quarter
78

76

78

 
394

573

399

Fourth Quarter
1,486

1,391

1,600

 
—

5

2

Year-to-date
3,552

3,461

4,233

 
548

785

471

Note: “Average” amounts represent the 15-year rolling averages provided by the National Weather Service (Portland Airport).


Page 10


PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)

 
Three Months Ended
 
Years Ended
 
December 31,
 
December 31,
 
2016
 
2015
 
2016
 
2015
Sources of energy (MWh in thousands):
 
 
 
 
 
 
 
Generation:
 
 
 
 
 
 
 
Thermal:
 
 
 
 
 
 
 
Coal
957

 
1,472

 
3,492

 
4,128

Natural gas
1,794

 
1,427

 
5,811

 
4,783

Total thermal
2,751

 
2,899

 
9,303

 
8,911

Hydro
415

 
390

 
1,629

 
1,453

Wind
353

 
417

 
1,912

 
1,788

Total generation
3,519

 
3,706

 
12,844

 
12,152

Purchased power:
 
 
 
 
 
 
 
Term
1,606

 
1,367

 
6,961

 
7,364

Hydro
381

 
333

 
1,541

 
1,572

Wind
60

 
62

 
301

 
303

 
 
 
 
 
 
 
 
Total purchased power
2,047

 
1,762

 
8,803

 
9,239

Total system load
5,566

 
5,468

 
21,647

 
21,391

Less: wholesale sales
(731
)
 
(606
)
 
(3,352
)
 
(2,560
)
Retail load requirement
4,835

 
4,862

 
18,295

 
18,831




Page 11
q42016ecslides
Portland General Electric Earnings Conference Call Fourth Quarter and Full Year 2016 Exhibit 99.2

 
Cautionary Statement Information Current as of February 17, 2017 Except as expressly noted, the information in this presentation is current as of February 17, 2017 — the date on which PGE filed its Annual Report on Form 10-K for the year ended December 31, 2016 — 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 the expected capital costs for the Carty Generating Station and the recovery of those costs; 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 • Capital expenditures forecast • 2016 Integrated Resource Plan (IRP) • 2018 General Rate Case • Financial update • Earnings guidance 3

 
2016 Earnings Results NI in millions Q4 2016 Q4 2015 FY 2016 FY 2015 Net Income $61 $51 $193 $172 Diluted EPS $0.68 $0.57 $2.16 $2.04 2015 EPS $2.04 2016 EPS $2.16 4 Q1 Q1 Q2 Q2 Q3 Q4 Q3 Q4

 
Accomplishments and operational update Most Trusted Brand, Customer Champion, & Environmental Champion in 2016 Market Strategies International Top Quartile Customer Satisfaction TQS Research Inc. and Market Strategies International Generating Plant Availability 93% Filed 2016 Integrated Resource Plan Carty Generating Station Online 5

 
• Oregon's economic expansion continued in 2016(1) • PGE's service area unemployment rate of 4.0 percent outperformed Oregon's rate of 4.6 percent and the national rate of 4.7 percent(2) • Residential customer count increased approximately 1.2 percent over the past year • Weather-adjusted 2017 energy deliveries forecast to decrease by 0 to 1 percent, with long-term positive annual growth of ~1 percent based on continued strength of local economy(3) Economic Update (1) Oregon Office of Economic Analysis (2) State of Oregon Employment Department, as of December 2016 (3) Net of approximately 1.5% of energy efficiency 6

 
Capital Planning 7 (1) Consists of board-approved ongoing CapEx and hydro relicensing per the 2016 Form 10-K filed on February 17, 2017 (2) Total estimated cost does not consider any amounts that may be received from sureties under the performance bond Current Capital Outlook • Board approved investments include: • Upgrades and replacement of aging generation, transmission and distribution • Strengthening the power grid for earthquakes, cyberattacks and other potential threats • New customer information systems and technology tools $610 Base Capital Spending(1) Carty(2)

 
Carty Generating Station update Carty Generating Station, our 440 MW natural gas baseload plant near Boardman, Ore. • Achieved 93 percent availability in first five months of operation • Capital costs included in customer prices as of 8/1/2016: $514M • Carty plant in-service, including AFDC, as of 12/31/2016: $634M • Total estimated cost, including AFDC, for completion: ~$640M • Estimated time frame to complete litigation: 2-4 years 8

 
9 2016 Integrated Resource Plan Areas of Focus • Energy efficiency (135 MWa) and demand side actions (77 MW) • Investment / acquisition of renewables (175 MWa) to meet Oregon Clean Electricity Plan: IRP will position PGE to comply with 27% requirement by 2025 • Filling up to 850 MW capacity deficit to ensure reliability ◦ 375-550 MW long-term annual dispatchable resources; Up to 400 MW annual capacity resources OPUC acknowledgement expected RFP bidding process commences Expected to reach decision on RFPs Nov. 2016 Mid-2017 2nd Half 2017 2018 IRP was filed • Reflects PGE's shift to more renewables in keeping with Oregon Clean Electricity Plan • Process includes continuing dialog with OPUC staff and stakeholders • RFPs will be open to a variety of resource options

 
2018 General Rate Case Key drivers: 10 Investments in the system to keep it safe, reliable and secure Includes: • Replacing assets at the end of their useful life • Strengthening the system to better prepare for storms, earthquakes, cyberattacks and other potential threats • Investments in operational changes to integrate more renewable resources and enhance system reliability Timeline: • File with the OPUC by the end of February • Regulatory review to occur throughout 2017 • Final order expected from the commission by end of December

 
2016 Income Statement Bridge 11 2015 2016 Retail Revenue Wholesale & Other Revenues Power Costs O&M D&A Income Taxes Gross Margin Change: $69 Other Taxes $ in millions Interest

 
2016 Drivers Bridge Carty Earnings $ 0.10 Carty Overage $ (0.02 ) Carty Legal $ (0.04 ) 2015 2016 Carty Power Portfolio Other Rate Base Increase '15 to '16 Other Change in Share Count O&M PTCs & Other Tax Credits 12

 
Liquidity and Financing Total Liquidity as of 12/31/2016 (in millions) Credit Facilities $ 660 Commercial Paper — Letters of Credit $ (56 ) Cash $ 6 Available $ 610 Ratings S&P Moody's Senior Secured A- A1 Senior Unsecured BBB A3 Commercial Paper A-2 Prime-2 Outlook Stable Stable ($ in millions) Q1 2017 Q2 2017 Q3 2017 Q4 2017 First Mortgage Bonds Plan to issue ~$450 million Bank Loan $150 million maturing 13

 
Guidance and Assumptions 2017 EPS Guidance: $2.20 - $2.35 • Retail deliveries decline between zero and one percent, weather-adjusted; • Average hydro conditions for the year; • Wind generation for the year based on 5 years of historic levels or forecast studies when historical data is not available; • Normal thermal plant operations; • Operating and maintenance costs between $540 and $560 million; and • Depreciation and amortization expense between $340 and $350 million. 14

 
• Maintain high level of operational excellence • Work collaboratively with stakeholders to obtain acknowledgement of 2016 IRP and associated action plan • Achieve a fair and reasonable result in our 2018 General Rate Case 2017 Key Initiatives 15