Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 26, 2018
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| | |
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PORTLAND GENERAL ELECTRIC COMPANY |
(Exact name of registrant as specified in its charter) |
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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:
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[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02 Results of Operations and Financial Condition.
The following information is furnished pursuant to Item 2.02.
On October 26, 2018, Portland General Electric Company (PGE or the Company) issued a press release announcing its financial results for the three- and nine-month periods ended September 30, 2018. 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, October 26, 2018, the Company will hold its quarterly earnings call and webcast, and will use a slide presentation in conjunction with the earnings call. A copy of the slide presentation is furnished herewith as Exhibit 99.2 to this Report.
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Item 9.01 | Financial Statements and Exhibits. |
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.
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| | | | |
| | | | PORTLAND GENERAL ELECTRIC COMPANY |
| | | | (Registrant) |
| | | | |
Date: | October 25, 2018 | | By: | /s/ James F. Lobdell |
| | | | James F. Lobdell |
| | | | Senior Vice President of Finance, Chief Financial Officer and Treasurer |
Exhibit
Exhibit 99.1
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| | | |
| | Portland General Electric One World Trade Center 121 S.W. Salmon Street Portland, Oregon 97204
News Release |
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| | | |
| October 26, 2018 | | |
| | | |
| Media Contact: | | Investor Contact: |
| Andrea Platt | | Chris Liddle |
| Corporate Communications | | Investor Relations |
| Phone: 503-464-7980 | | Phone: 503-464-7458 |
Portland General Electric announces third quarter 2018 results
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• | Stipulations reached on revenue requirement in 2019 General Rate Case |
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• | Recognized $10 million proceeds from Carty Generating Station settlement |
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• | RFP shortlist submitted to the OPUC to procure 100 MWa of qualifying renewable resources |
PORTLAND, Ore. -- Portland General Electric Company (NYSE: POR) today reported net income of $53 million, or 59 cents per diluted share, for the third quarter of 2018. This compares with net income of $40 million, or 44 cents per diluted share, for the third quarter of 2017.
“With the Carty settlement behind us, we can now focus our full attention on the future,” said Maria Pope, PGE president and CEO. “In addition to achieving solid operational and financial results this quarter, we have made progress toward adding new renewables and advancing several smart grid projects.”
The increase in third quarter earnings was driven by the Carty Generating Station cash settlement. Additionally, increased wholesale revenues and reductions in other expenses were partially offset by less favorable weather conditions.
Company update
Carty Generating Station
In July 2018, PGE finalized the settlement with parties related to the Carty Generating Station. As part of the settlement, PGE was paid $130 million. Of this, $120 million offset the investment on our balance sheet and the remaining $10 million, or 7 cents per share, was booked to administration and general income to reflect the partial recovery of previous expenses. For the third and fourth quarters of 2018, PGE will realize the benefit of avoided litigation and carrying costs.
2019 General Rate Case
As of September 2018, PGE has reached agreement on all revenue requirement issues in the 2019 General Rate Case. The agreements support rate base of $4.75 billion, a 9.5 percent return on equity, a 7.3 percent cost of capital and a 50 percent debt and 50 percent equity capital structure. Remaining unresolved issues involve full volumetric decoupling that would include the effects of weather, the storm restoration balancing account and application of weather trends in the load forecasting models. Review by the Public Utility Commission of Oregon (OPUC) will
continue until the final order is issued, which is expected by the end of the year. New customer prices will go into effect January 1, 2019.
Renewable Request for Proposal (RFP)
In October 2018, PGE completed the review process of the Renewable Request for Proposal with oversight from an independent evaluator selected by the OPUC. PGE and a developer jointly submitted a project that includes 36 MWa of company-owned wind resources that would qualify for the federal production tax credit, and a power purchase agreement representing up to 83 MWa. The project was selected along with two other projects as part of the Final Shortlist submitted to the OPUC. The Shortlist included various combinations of wind, solar and battery storage as well as PPA and partial ownership options. PGE requested that the OPUC acknowledge the Final Shortlist by early December 2018 to enable the company to execute definitive agreements with the selected parties and allow sufficient time to capture expiring federal production tax credits for the benefit of customers. PGE expects to finalize negotiations by the end of 2018.
Third quarter operating results
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| | | | | | | | | |
Earnings Reconciliation of Q3 2017 to Q3 2018 |
(in $ millions, except EPS) | Pre-Tax Income | Net Income* | Diluted EPS ** |
Reported Q3 2017 | $ | 53 |
| $ | 40 |
| $ | 0.44 |
|
Revenue | | | |
Electric retail price change | 1 |
| 1 |
| 0.01 |
|
Electric retail volume change | (2 | ) | (2 | ) | (0.02 | ) |
Change in decoupling deferral | 2 |
| 1 |
| 0.01 |
|
Electric wholesale price and volume change | 16 |
| 12 |
| 0.13 |
|
Other Items | (7 | ) | (5 | ) | (0.06 | ) |
Change in Revenue | 10 |
| 7 |
| 0.07 |
|
| | | |
Power Cost | | | |
Change in average power cost | 6 |
| 4 |
| 0.05 |
|
Change in purchased power and generation | (8 | ) | (6 | ) | (0.06 | ) |
Change in Power Costs | (2 | ) | (2 | ) | (0.01 | ) |
| | | |
O&M | | | |
Administrative and general | 14 |
| 10 |
| 0.11 |
|
Change in O&M | 14 |
| 10 |
| 0.11 |
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| | | |
Other Items | | | |
Depreciation and amortization | (9 | ) | (7 | ) | (0.07 | ) |
Other Items | (4 | ) | (3 | ) | (0.03 | ) |
Adjustment for effective vs statutory tax rate | | 8 |
| 0.08 |
|
Change in Other Items | (13 | ) | (2 | ) | (0.02 | ) |
Reported Q3 2018 | $ | 62 |
| $ | 53 |
| $ | 0.59 |
|
* After tax adjustments based on PGE’s statutory tax rate of 27.5%
** Some values may not foot due to rounding
The following table indicates the number of heating and cooling degree-days for the three months ended September 30, 2018 and 2017, along with 15-year averages based on weather data provided by the National Weather Service, as measured at Portland International Airport:
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| | | | | | | | | | | | | | | |
| Heating Degree-days | | Cooling Degree-days |
| 2018 | | 2017 | | Avg. | | 2018 | | 2017 | | Avg. |
July | 2 |
| | 1 |
| | 7 | | 289 |
| | 164 |
| | 179 |
August | 6 |
| | 1 |
| | 7 | | 238 |
| | 275 |
| | 182 |
September | 61 |
| | 76 |
| | 62 | | 48 |
| | 132 |
| | 66 |
Totals | 69 |
| | 78 |
| | 76 | | 575 |
| | 571 |
| | 427 |
(Decrease)/increase from the 15-year average | (9 | )% | | 3 | % | | | | 35 | % | | 34 | % | | |
2018 earnings guidance
PGE is affirming its 2018 guidance of $2.25 to $2.40 per diluted share. The guidance is based on the following assumptions:
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• | Flat weather-adjusted retail deliveries |
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• | Normal hydro conditions for the remainder of the year, based on the current hydro forecast |
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• | Wind generation based on five years of historical levels, or forecast studies when historical data is not available |
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• | Normal thermal plant operations |
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• | Depreciation and amortization expense between $370 and $380 million |
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• | Operating and maintenance costs between $550 and $570 million |
Third Quarter 2018 earnings call and webcast — October 26, 2018
PGE will host a conference call with financial analysts and investors on Friday, October 26, 2018, at 11 a.m. ET. The conference call will be webcast live on the PGE website at investors.portlandgeneral.com. A replay of the call will be available beginning at 2 p.m. ET on Friday, October 26, 2018, through 2 p.m. ET on Friday, November 2, 2018.
Maria Pope, president and CEO; Jim Lobdell, senior vice president of Finance, CFO, and treasurer; and Chris Liddle, director, Investor Relations and Treasury, will participate in the call. Management will respond to questions following formal comments.
The attached unaudited condensed consolidated statements of income and comprehensive 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 (NYSE: POR) is a fully integrated energy company based in Portland, Oregon, serving more than 885,000 customers in 51 cities. For more than 125 years, PGE has been delivering safe, affordable and reliable energy to Oregonians. Together with its customers, PGE has the No. 1 voluntary renewable energy program in the U.S. With approximately 2,900 employees across the state, PGE is committed to helping its customers and the communities it serves build a clean energy future. For more information, visit PortlandGeneral.com/CleanVision.
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
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Dollars in millions, except per share amounts)
(Unaudited)
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| | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2018 | | 2017 | | 2018 | | 2017 |
Revenues: | | | | | | | | |
Revenues, net | | $ | 525 |
| | $ | 515 |
| | $ | 1,469 |
| | $ | 1,494 |
|
Alternative revenue programs, net of amortization | | — |
| | — |
| | (2 | ) | | — |
|
Total revenues | | 525 |
| | 515 |
| | 1,467 |
| | 1,494 |
|
Operating expenses: | |
| | | | | | |
Purchased power and fuel | | 186 |
| | 184 |
| | 420 |
| | 443 |
|
Generation, transmission and distribution | | 72 |
| | 73 |
| | 212 |
| | 235 |
|
Administrative and other | | 49 |
| | 63 |
| | 188 |
| | 194 |
|
Depreciation and amortization | | 96 |
| | 87 |
| | 281 |
| | 257 |
|
Taxes other than income taxes | | 31 |
| | 30 |
| | 95 |
| | 94 |
|
Total operating expenses | | 434 |
| | 437 |
| | 1,196 |
| | 1,223 |
|
Income from operations | | 91 |
| | 78 |
| | 271 |
| | 271 |
|
Interest expense, net | | 31 |
| | 30 |
| | 93 |
| | 90 |
|
Other income: | | | | | | | | |
Allowance for equity funds used during construction | | 2 |
| | 4 |
| | 8 |
| | 9 |
|
Miscellaneous income (expense), net | | — |
| | 1 |
| | — |
| | 1 |
|
Other income, net | | 2 |
| | 5 |
| | 8 |
| | 10 |
|
Income before income tax expense | | 62 |
| | 53 |
| | 186 |
| | 191 |
|
Income tax expense | | 9 |
| | 13 |
| | 23 |
| | 46 |
|
Net income and Comprehensive income | | $ | 53 |
| | $ | 40 |
| | $ | 163 |
| | $ | 145 |
|
| | | | | | | | |
Weighted-average common shares outstanding—basic and diluted (in thousands) | | 89,239 |
| | 89,065 |
| | 89,205 |
| | 89,044 |
|
| | | | | | | | |
Earnings per share—basic and diluted | | $ | 0.59 |
| | $ | 0.44 |
| | $ | 1.82 |
| | $ | 1.62 |
|
| | | | | | | | |
Dividends declared per common share | | $ | 0.3625 |
| | $ | 0.3400 |
| | $ | 1.0650 |
| | $ | 1.0000 |
|
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(Unaudited)
|
| | | | | | | |
| September 30, 2018 |
| December 31, 2017 |
Current assets: |
|
|
|
Cash and cash equivalents | $ | 200 |
|
| $ | 39 |
|
Accounts receivable, net | 189 |
|
| 168 |
|
Unbilled revenues | 73 |
|
| 106 |
|
Inventories | 76 |
|
| 78 |
|
Regulatory assets—current | 42 |
|
| 62 |
|
Other current assets | 51 |
|
| 73 |
|
Total current assets | 631 |
|
| 526 |
|
Electric utility plant, net | 6,782 |
|
| 6,741 |
|
Regulatory assets—noncurrent | 426 |
|
| 438 |
|
Nuclear decommissioning trust | 42 |
|
| 42 |
|
Non-qualified benefit plan trust | 39 |
|
| 37 |
|
Other noncurrent assets | 55 |
|
| 54 |
|
Total assets | $ | 7,975 |
|
| $ | 7,838 |
|
|
| | | | | | | |
Current liabilities: | | | |
Accounts payable | $ | 110 |
| | 132 |
|
Liabilities from price risk management activities—current | 42 |
| | 59 |
|
Current Portion of long-term debt | 300 |
| | — |
|
Accrued expenses and other current liabilities | 251 |
| | 241 |
|
Total current liabilities | 703 |
| | 432 |
|
Long-term debt, net of current portion | 2,127 |
| | 2,426 |
|
Regulatory liabilities—noncurrent | 1,379 |
| | 1,288 |
|
Deferred income taxes | 372 |
| | 376 |
|
Unfunded status of pension and postretirement plans | 283 |
| | 284 |
|
Liabilities from price risk management activities—noncurrent | 124 |
| | 151 |
|
Asset retirement obligations | 196 |
| | 167 |
|
Non-qualified benefit plan liabilities | 106 |
| | 106 |
|
Other noncurrent liabilities | 199 |
| | 192 |
|
Total liabilities | 5,489 |
| | 5,422 |
|
| | | |
Equity: | | | |
Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding as of September 30, 2018 and December 31, 2017 | — |
| | — |
|
Common stock, no par value, 160,000,000 shares authorized; 89,244,659 and 89,114,265 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 1,209 |
| | 1,207 |
|
Accumulated other comprehensive loss | (8 | ) | | (8 | ) |
Retained earnings | 1,285 |
| | 1,217 |
|
Total equity | 2,486 |
| | 2,416 |
|
Total liabilities and equity | $ | 7,975 |
| | $ | 7,838 |
|
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
|
| | | | | | | |
| Nine Months Ended September 30, |
| 2018 |
| 2017 |
Cash flows from operating activities: |
|
|
|
Net income | $ | 163 |
|
| $ | 145 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
Depreciation and amortization | 281 |
|
| 257 |
|
Deferred income taxes | 2 |
|
| 35 |
|
Pension and other postretirement benefits | 19 |
|
| 19 |
|
Allowance for equity funds used during construction | (8 | ) |
| (9 | ) |
Decoupling mechanism deferrals, net of amortization | 2 |
|
| (15 | ) |
Deferral of net benefits due to Tax Reform | 37 |
|
| — |
|
Other non-cash income and expenses, net | 8 |
| | 18 |
|
Changes in working capital: |
|
|
|
Decrease in accounts receivable and unbilled revenues | 12 |
|
| 40 |
|
Decrease in inventories | 2 |
|
| 12 |
|
Decrease in margin deposits, net | 6 |
|
| 4 |
|
Increase in accounts payable and accrued liabilities | 17 |
|
| 14 |
|
Other working capital items, net | 19 |
|
| 20 |
|
Other, net | (24 | ) |
| (21 | ) |
Net cash provided by operating activities | 536 |
|
| 519 |
|
Cash flows from investing activities: |
|
|
|
Capital expenditures | (401 | ) |
| (369 | ) |
Sales of Nuclear decommissioning trust securities | 11 |
|
| 14 |
|
Proceeds received from Carty Settlement | 120 |
| | — |
|
Purchases of Nuclear decommissioning trust securities | (9 | ) |
| (12 | ) |
Other, net | 1 |
|
| (2 | ) |
Net cash used in investing activities | (278 | ) |
| (369 | ) |
Cash flows from financing activities: |
|
|
|
Proceeds from issuance of long-term debt | — |
| | 75 |
|
Payments on long-term debt | — |
| | (50 | ) |
Dividends paid | (93 | ) |
| (87 | ) |
Other | (4 | ) |
| (5 | ) |
Net cash used in financing activities | (97 | ) |
| (67 | ) |
Increase in cash and cash equivalents | 161 |
|
| 83 |
|
Cash and cash equivalents, beginning of period | 39 |
|
| 6 |
|
Cash and cash equivalents, end of period | $ | 200 |
|
| $ | 89 |
|
| | | |
Supplemental cash flow information is as follows: | | | |
Cash paid for interest, net of amounts capitalized | $ | 72 |
| | $ | 68 |
|
Cash paid for income taxes | 20 |
| | 16 |
|
Non-cash investing and financing activities | | | |
Assets obtained under leasing arrangements | 18 |
| | 73 |
|
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)
|
| | | | | | | | | | | | | |
| Three Months Ended September 30, |
| 2018 | | 2017 |
Revenues (dollars in millions): | | | | | | | |
Retail: | | | | | | | |
Residential | $ | 224 |
| | 43 | % | | $ | 224 |
| | 43 | % |
Commercial | 171 |
| | 32 |
| | 173 |
| | 34 |
|
Industrial | 55 |
| | 10 |
| | 50 |
| | 10 |
|
Direct Access | 9 |
| | 2 |
| | 10 |
| | 2 |
|
Subtotal | 459 |
| | 87 |
| | 457 |
| | 89 |
|
Alternative revenue programs, net of amortization | — |
| | — |
| | — |
| | — |
|
Other accrued (deferred) revenues, net | (11 | ) | | (2 | ) | | (2 | ) | | (1 | ) |
Total retail revenues | 448 |
| | 85 |
| | 455 |
| | 89 |
|
Wholesale revenues | 67 |
| | 13 |
| | 50 |
| | 10 |
|
Other operating revenues | 10 |
| | 2 |
| | 10 |
| | 2 |
|
Total revenues | $ | 525 |
| | 100 | % | | $ | 515 |
| | 100 | % |
| | | | | | | |
Energy deliveries (MWh in thousands): | | | | | | | |
Retail: | | | | | | | |
Residential | 1,712 |
| | 27 | % | | 1,817 |
| | 29 | % |
Commercial | 1,837 |
| | 28 |
| | 1,851 |
| | 30 |
|
Industrial | 844 |
| | 13 |
| | 752 |
| | 12 |
|
Subtotal | 4,393 |
| | 68 |
| | 4,420 |
| | 71 |
|
Direct access: | | | | | | | |
Commercial | 170 |
| | 2 |
| | 169 |
| | 3 |
|
Industrial | 368 |
| | 6 |
| | 366 |
| | 6 |
|
Subtotal | 538 |
| | 8 |
| | 535 |
| | 9 |
|
Total retail energy deliveries | 4,931 |
| | 76 |
| | 4,955 |
| | 80 |
|
Wholesale energy deliveries | 1,529 |
| | 24 |
| | 1,224 |
| | 20 |
|
Total energy deliveries | 6,460 |
| | 100 | % | | 6,179 |
| | 100 | % |
| | | | | | | |
Average number of retail customers: | | | | | | | |
Residential | 773,514 |
| | 88 | % | | 763,553 |
| | 88 | % |
Commercial | 110,028 |
| | 12 |
| | 108,705 |
| | 12 |
|
Industrial | 200 |
| | — |
| | 200 |
| | — |
|
Direct access | 604 |
| | — |
| | 588 |
| | — |
|
Total | 884,346 |
| | 100 | % | | 873,046 |
| | 100 | % |
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)
|
| | | | | | | | | | | |
| Three Months Ended September 30, |
| 2018 | | 2017 |
Sources of energy (MWh in thousands): | | | | | | | |
Generation: | | | | | | | |
Thermal: | | | | | | | |
Natural gas | 2,777 |
| | 45 | % | | 2,442 |
| | 41 | % |
Coal | 1,054 |
| | 17 |
| | 1,404 |
| | 24 |
|
Total thermal | 3,831 |
| | 62 |
| | 3,846 |
| | 65 |
|
Hydro | 258 |
| | 4 |
| | 277 |
| | 5 |
|
Wind | 475 |
| | 8 |
| | 480 |
| | 8 |
|
Total generation | 4,564 |
| | 74 |
| | 4,603 |
| | 78 |
|
Purchased power: | | | | |
|
| | |
Term | 1,208 |
| | 20 |
| | 908 |
| | 15 |
|
Hydro | 325 |
| | 5 |
| | 332 |
| | 6 |
|
Wind | 85 |
| | 1 |
| | 83 |
| | 1 |
|
Total purchased power | 1,618 |
| | 26 |
| | 1,323 |
| | 22 |
|
Total system load | 6,182 |
| | 100 | % | | 5,926 |
| | 100 | % |
Less: wholesale sales | (1,529 | ) | | | | (1,224 | ) | | |
Retail load requirement | 4,653 |
| | | | 4,702 |
| | |
q32018ecslidesfinal
Exhibit 99.2 Portland General Electric Earnings Conference Call Third Quarter 2018
Cautionary Statement Information Current as of October 26, 2018 Except as expressly noted, the information in this presentation is current as of October 26, 2018 — the date on which PGE filed its quarterly report on Form 10-Q for the quarter ended September 30, 2018 — and should not be relied upon as being current as of any subsequent date. PGE undertakes no duty to update this 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 Maria Pope Presenting President and Today CEO On today's call • Third quarter earnings results • Economic highlights • Renewable RFP Jim Lobdell • Earnings guidance Senior VP of Finance, • 2019 General Rate Case CFO and Treasurer • Capital planning • Financial update 3
Third Quarter 2018 Earnings Results Q3 2018 Q3 2017 Net Income (millions) $53 $40 Diluted EPS $0.59 $0.44 $0.43 $0.51 - $0.58 Q1 Q1 Q2 Q3 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2018 Diluted EPS 2017 Diluted EPS $2.25 - $2.40 $2.10 4
Economic Highlights • Stable, strong service area: ◦ 3.3% unemployment ◦ 1.6% population growth¹ • 3rd highest number of cranes in the sky among major metro cities² • 30 commercial projects currently underway including mixed-use and multi-residential • Lower costs, proximity to Asian markets make PGE's service area attractive to apparel, technology and data center customers (1) Northwest Economic Research Center (2) Rider Levett Bucknall 5
Renewable RFP1 May 2018 June 2018 October 2018 End of 2018 Final RFP issued Proposals received Short list Final contract submitted to OPUC execution expected • PGE submitted Final Shortlist to the OPUC for approval ◦ Six bids from three bidders with combinations of wind, solar and battery storage ◦ Included PGE benchmark bid with 36 MWa of company-owned wind resources and up to 83 MWa of PPA resources • PGE commenced negotiations with all bidders ◦ To be finalized by end of 2018 to allow time to capture PTCs for the benefit of customers (1) See docket UM 1892 on the OPUC website for details 6
Guidance and Assumptions • Flat weather-adjusted retail deliveries Affirming • Normal hydro conditions for the remainder of the year, based 2018 EPS on the current hydro forecast • Wind generation for the remainder of the year based on Guidance: 5 years of historical levels, or forecast studies when historical data is not available $2.25 • Normal thermal plant operations to • Depreciation and amortization expense between $370 and $380 million $2.40 • Operating and maintenance expense between $550 and $570 million • Assumes OPUC approval of the customer information and meter data management systems deferral application 7
Third Quarter Earnings Comparison Earnings per diluted share Wholesale $0.06 Weather $(0.02) 8
2019 General Rate Case Settlement: All revenue requirement issues are settled: • A return on equity of 9.5% • A capital structure of 50% debt and 50% equity • A rate base of $4.75 billion • An average customer price increase of less than 1% net of tax reform, effective Jan. 1, 2019 Timeline: • Regulatory review continues through 2018 ◦ November: Power Cost Update (NVPC) ◦ December: the Commission's final order and approval are expected 9
Capital Planning Current capital outlook $ Millions • Support for continued customer growth • Upgrades and replacement of aging generation, transmission and distribution equipment • Strengthening the grid for natural disasters, cyber and physical security • New customer information systems and technology tools 10
Liquidity and Financing As of 09/30/2018 Ratings S&P Moody's Total Liquidity (in millions) Credit Facilities $ 720 Senior Secured A A1 Commercial Paper $ 0 Senior Unsecured BBB+ A3 Letters of Credit $ (59) Commercial Paper A-2 Prime-2 Cash $ 200 Outlook Positive Stable Available $ 861 Q1 2018 Q2 2018 Q3 2018 Q4 2018 First Mortgage Bonds $0 $0 $0 $75 million 11