Portland General Electric Company
PORTLAND GENERAL ELECTRIC CO /OR/ (Form: 8-K, Received: 04/28/2017 08:46:48)


 
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): April 28, 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))

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 April 28, 2017 , Portland General Electric Company (the “Company”) issued a press release announcing its financial results for the three month period ended March 31, 2017 . 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 , April 28, 2017 , the Company will hold its quarterly earnings call and web cast, 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.

Item 9.01
Financial Statements and Exhibits.

(d)
 
Exhibits.
99.1
 
Press Release issued by Portland General Electric Company dated April 28, 2017.
99.2
 
Portland General Electric Company First Quarter 2017 Slides dated April 28, 2017.


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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:
April 27, 2017
 
By:
/s/ James F. Lobdell
 
 
 
 
James F. Lobdell
 
                                                                             
 
 
Senior Vice President of Finance,
Chief Financial Officer and Treasurer


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Exhibit 99.1
 
IMAGE0A01A02A02.JPG
Portland General Electric
One World Trade Center
121 S.W. Salmon Street
Portland, Oregon 97204

News Release
 
 
FOR IMMEDIATE RELEASE
 
 
 
April 28, 2017
 
 
 
 
 
 
 
Media Contact:
 
Investor Contact:
 
Melanie Moir
 
Chris Liddle
 
Corporate Communications
 
Investor Relations
 
Phone: 503-464-8790
 
Phone: 503-464-7458

Portland General Electric announces first quarter 2017 results

Favorable Q1 results driven by increased sales volumes due to historic cold temperatures and continued strength in the high tech sector, offset by higher distribution costs related to storm restoration efforts
2018 General Rate Case filed with the Oregon Public Utility Commission
Reaffirming 2017 earnings guidance of $2.20 - $2.35 per share

PORTLAND, Ore. -- Portland General Electric Company (NYSE: POR) today reported net income of $ 73 million , or 82 cents per diluted share, for the first quarter of 2017. This compares with net income of $ 61 million , or
68 cents per diluted share, for the first quarter of 2016 . The company is reaffirming 2017 earnings guidance of $2.20-$2.35 per share.

“The company’s strong operational performance during a quarter of historic snow, ice and rain demonstrated our employees’ commitment to deliver safe and reliable service to our customers, regardless of the elements,” said Jim Piro, CEO and president of Portland General Electric. “The severe weather also underscores the importance of continued investments in our system to keep it safe, reliable and secure.”

Q1 2017 earnings compared to Q1 2016 earnings

The increase in the first quarter earnings per diluted share for 2017 in comparison to the first quarter of 2016 was due to an increase in sales volume to residential customers related to an exceptionally cold winter, an increase in deliveries to industrial customers due to continued strength in the high tech sector, and lower power prices in the region. This was partially offset by lower commercial deliveries resulting, in part, from the impact to commercial activity of snow events in the first quarter of 2017; incremental distribution costs primarily driven by storm restoration efforts; as well as a reduction in production tax credits due to lower wind generation. Additional offsets include Carty litigation costs and depreciation expense and carrying costs for Carty related to incremental construction costs of $122 million not included in customer prices.









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Company Updates

2018 General Rate Case
On Feb. 28, 2017, PGE filed a general rate case with the Public Utility Commission of Oregon (OPUC) based on a 2018 test year.

As part of its commitment to provide safe, reliable, sustainable and affordable energy to customers, the company filed a request for a $100 million increase in the annual revenue requirement related to increased base business costs. These costs are related primarily to necessary upgrades to the transmission and distribution system, investments in strengthening and safeguarding the grid, and investments in operational changes that will integrate more renewable resources and enhance system reliability. PGE’s request would result in an average overall increase of 5.6 percent.

The net increase in annual revenue requirement is based upon:
A return on equity of 9.75%;
A capital structure of 50% debt and 50% equity;
Rate base of $4.6 billion.

Regulatory review of the 2018 General Rate Case will continue throughout 2017, with a final order from the OPUC targeted for the end of 2017. New customer prices are expected to become effective January 1, 2018. The filing can be found at http://apps.puc.state.or.us/edockets/search.asp under docket number UE 319.

Integrated Resource Plan
On Nov. 15, 2016, PGE filed its 2016 Integrated Resource Plan (IRP) with the OPUC, including a four-year Action Plan that called 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 initial submission also identified the need for PGE to acquire up to 850 MW of capacity, which included 375-550 MW of long-term dispatchable resources, and up to 400 MW of annual capacity resources.

Since filing, the 2021 capacity need in the IRP has been reduced from 819 MW to 561 MW. This is due to three key developments:

The December 2016 load forecast update, which reduced the capacity need by 71 MW.
A 10-year power purchase agreement (PPA) with Douglas County Public Utility District that PGE executed on March 29, 2017, renewing PGE’s contract for the output of the Wells Hydroelectric Project beginning Sept. 1, 2018. This contract reduces PGE’s capacity need by 135 MW.
Additional contracts that were executed with PURPA qualifying facilities between June 1, 2016 and
Dec. 31, 2016 for approximately 143 MW of nameplate capacity, reducing PGE’s capacity shortfall by
52 MW.

PGE continues to explore opportunities to acquire additional reliable and cost-effective flexible capacity for customers through bilateral negotiations, including exploration of potential dispatchable generation from Northwest facilities for additional capacity. If the company is able to secure capacity through bilateral negotiations, it will submit such agreements to the commission for approval along with a waiver request of the commission’s competitive bidding guidelines as necessary.

As part of OPUC’s public review process, PGE filed reply comments on March 31, 2017. An additional round of comments 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 is expecting the OPUC to issue a decision or acknowledgment of its IRP on or before Aug. 31, 2017.

Following acknowledgment of the IRP and the outcomes of bilateral negotiations for flexible capacity, PGE will request approval from the OPUC to issue one or more request for proposals (RFPs) for remaining capacity and

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renewable resource needs. PGE has no predetermined outcome in the RFPs and is open to a variety of options. The company will be seeking the best combination of resources, consistent with the acknowledged IRP Action Plan, to meet its customers’ future energy and capacity needs. Resource options could include hydro, wind, solar, geothermal, biomass, efficient natural gas-fired facilities, and energy storage. The RFP process will include oversight by an independent evaluator, who reports to the OPUC, and overall review by the OPUC itself.

Since issuing the IRP, PGE has identified a potential benchmark wind resource that could have a nameplate capacity of up to approximately 500 MW, and which would qualify for the production tax credit. The submission of this resource into an RFP as a benchmark bid is subject to additional due diligence by PGE and the negotiation and execution of definitive agreements.

First quarter operating results
Earnings Reconciliation of Q1 2016 to Q1 2017
($ in millions, except EPS)
Pre-Tax Income
Net Income*
Diluted EPS**
Reported Q1 2016
$
78

$
61

$
0.68

Revenue
 
 
 
Retail average price increase
10

6

0.07

Retail volume increase
29

17

0.20

Change in decoupling deferral
3

2

0.02

Wholesale price increase and volume decrease
1

1

0.01

Change in Revenue
43

26

0.30

Power Cost
 
 
 
Average power cost decrease
16

10

0.11

Increase in purchased power and generation
(8
)
(5
)
(0.06
)
Change in Power Costs
8

5

0.05

O&M
 
 
 
Generation, transmission, distribution
(15
)
(9
)
(0.10
)
Administrative and general
(7
)
(4
)
(0.05
)
Change in O&M
(22
)
(13
)
(0.15
)
Other Items
 
 
 
Depreciation & amortization
(2
)
(1
)
(0.01
)
AFDC Equity***
(5
)
(5
)
(0.06
)
Other Items
(4
)
(3
)
(0.03
)
Adjustments for effective vs statutory tax rate
N/A

3

0.04

Change in Other Items
(11
)
(6
)
(0.06
)
Reported Q1 2017
$
96

$
73

$
0.82

* After tax adjustments based on PGE’s statutory tax rate of 39.5%
** Some values may not foot due to rounding
*** Statutory tax rate does not apply to AFDC equity











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Total revenues for the three months ended March 31, 2017 increased $43 million compared to the three months ended March 31, 2016 , comprised primarily of a $40 million increase in Retail revenues.

The change in Retail revenues resulted from the following:

A $29 million increase from a 6.2% increase in retail energy deliveries due largely to considerably cooler temperatures than experienced in the first quarter of 2016;

A $10 million net increase from an average price increase of 2.0% over 2016 levels. Price changes, as authorized by the OPUC, include Carty going into service in mid-2016 and reflect a reduction as a result of lower net variable power costs as filed in the 2017 AUT. Higher delivery volumes also pushed average prices higher as the increased volumes are, at times, subject to higher tariff prices;

A $4 million increase resulted from other tariffs including a $3 million increase in estimated collections under the decoupling mechanism; partially offset by

A $5 million decrease from supplemental tariffs, due to the timing of the Trojan spent fuel refund to customers, as the refund -- offset in Depreciation and amortization -- temporarily suspended in early 2016, has resumed.

Total heating degree-days for the three months ended March 31, 2017 were 37% above the three months ended March 31, 2016 and 16% above average.

The following table indicates the number of heating degree-days for the three months ended March 31, 2017 and 2016 , along with 15-year averages based on weather data provided by the National Weather Service, as measured at Portland International Airport:
 
Heating Degree-days
 
2017
 
2016
 
Avg.
January
969

 
688

 
734

February
672

 
448

 
599

March
530

 
449

 
533

Totals for the quarter
2,171

 
1,585

 
1,866


Wholesale revenues for the three months ended March 31, 2017 increased $1 million , or 8% , from the three months ended March 31, 2016 and with the change consisting of a $2 million increase related to a 24% increase in average wholesale price partially offset by a $1 million decrease related to a 10% decrease in wholesale sales volume.

Actual NVPC for the three months ended March 31, 2017 decreased $9 million when compared with the three months ended March 31, 2016 . The decrease was driven by a 10% decline in the average variable power cost per MWh, partially offset by a 6% increase in total system load. The increase in wholesale revenues was driven primarily by a 24% increase in the average wholesale sales price, offset slightly with a 10% decrease in wholesale sales volume. For the three months ended March 31, 2017 , actual NVPC was $2 million below the baseline, while the three months ended March 31, 2016 actual NVPC was $1 million above baseline NVPC.

Generation, transmission and distribution expense increased $15 million , or 23% , in the three months ended March 31, 2017 compared with the three months ended March 31, 2016 driven primarily by $7 million of storm restoration costs and $5 million of operating expense for Carty, which was placed in service in July 2016.

Administrative and other expense increased $7 million , or 11% , in the three months ended March 31, 2017 compared with the three months ended March 31, 2016 . The increase was primarily due to a $2 million increase in legal costs related to Carty litigation and a $2 million increase in employee benefit expense.

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Depreciation and amortization expense increased $2 million in the three months ended March 31, 2017 compared with the three months ended March 31, 2016 . The increase was primarily driven by higher depreciation expense as a result of the Carty plant going into service in July 2016, partially offset by an amortization credit in the first quarter of 2017 related to the Trojan spent fuel refund to customers, which is also reflected in reduced revenues.

Taxes other than income taxes increased $3 million, or 10%, in the three months ended March 31, 2017 compared to the three months ended March 31, 2016 due to $2 million higher property taxes.

Interest expense increased $3 million, or 10%, in the three months ended March 31, 2017 compared with the three months ended March 31, 2016, due to $3 million lower allowance for borrowed funds used during construction credits, primarily as a result of Carty going into service in July 2016.

Other income, net decreased $3 million for the three months ended March 31, 2017 compared with the three months ended March 31, 2016 . This was due to a decrease in the allowance for equity funds used during construction, primarily related to the Carty project, offset by gains on the non-qualified benefit trust.

Income tax expense was $23 million in the three months ended March 31, 2017 compared with $17 million in the three months ended March 31, 2016 , with effective tax rates of 24.0% and 21.8% , respectively. The increase in income tax expense and effective tax rate was primarily due to higher pre-tax income, partially offset by production tax credits.

First Quarter 2017 earnings call and web cast - April 28th

PGE will host a conference call with financial analysts and investors on Friday, April 28, 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, April 28, through Friday, May 5.

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.

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 fully integrated energy company based in Portland, Ore., serving approximately 865,000 residential, commercial and industrial customers in 51 cities. For more than 125 years, PGE has been delivering safe, reliable energy to Oregonians. With 2,700 employees across the state, PGE is committed to building a cleaner, more efficient energy future. Together with its customers, PGE has the number one voluntary renewable energy program in the U.S. For more information, visit PGE’s website at investors.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

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regarding the recovery of capital costs for the Carty Generating Station; 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


6


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

 
Three Months Ended
March 31,
 
2017
 
2016
Revenues, net
$
530

 
$
487

Operating expenses:
 
 
 
Purchased power and fuel
141

 
149

Generation, transmission and distribution
81

 
66

Administrative and other
68

 
61

Depreciation and amortization
84

 
82

Taxes other than income taxes
33

 
30

Total operating expenses
407

 
388

Income from operations
123

 
99

Interest expense, net
30

 
27

Other income:
 
 
 
Allowance for equity funds used during construction
2

 
7

Miscellaneous income (expense), net
1

 
(1
)
Other income, net
3

 
6

Income before income tax expense
96

 
78

Income tax expense
23

 
17

Net income
$
73

 
$
61

Other comprehensive loss
(1
)
 

Comprehensive income
$
72

 
$
61

 
 
 
 
 
 
 
 
Weighted-average shares outstanding—basic and diluted (in thousands)
89,003

 
88,833

 
 
 
 
Earnings per share—basic and diluted
$
0.82

 
$
0.68

 
 
 
 
Dividends declared per common share
$
0.32

 
$
0.30



7


PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(Unaudited)
 
 
March 31,
2017
 
December 31,
2016
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
31

 
$
6

Accounts receivable, net
162

 
155

Unbilled revenues
71

 
107

Inventories
77

 
82

Regulatory assets—current
57

 
36

Other current assets
87

 
77

Total current assets
485

 
463

Electric utility plant, net
6,466

 
6,434

Regulatory assets—noncurrent
532

 
498

Nuclear decommissioning trust
41

 
41

Non-qualified benefit plan trust
34

 
34

Other noncurrent assets
54

 
57

Total assets
$
7,612

 
$
7,527


































8


PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, continued
(Dollars in millions)
(Unaudited)

 
March 31,
2017
 
December 31,
2016
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
92

 
$
129

Liabilities from price risk management activities—current
59

 
44

Current portion of long-term debt
150

 
150

Accrued expenses and other current liabilities
247

 
254

Total current liabilities
548

 
577

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

 
2,200

Regulatory liabilities—noncurrent
973

 
958

Deferred income taxes
682

 
669

Unfunded status of pension and postretirement plans
283

 
281

Liabilities from price risk management activities—noncurrent
156

 
125

Asset retirement obligations
164

 
161

Non-qualified benefit plan liabilities
106

 
105

Other noncurrent liabilities
113

 
107

Total liabilities
5,225

 
5,183

Equity:
 
 
 
Portland General Electric Company shareholders’ equity:
 
 
 
Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding as of March 31, 2017 and December 31, 2016

 

Common stock, no par value, 160,000,000 shares authorized; 89,067,858 and 88,946,704 shares issued and outstanding as of
March 31, 2017 and December 31, 2016, respectively
1,200

 
1,201

Accumulated other comprehensive loss
(8
)
 
(7
)
Retained earnings
1,195

 
1,150

Total equity
2,387

 
2,344

Total liabilities and equity
$
7,612

 
$
7,527



9


PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)     
 
Three Months Ended March 31,
 
2017
 
2016
Cash flows from operating activities:
 
 
 
Net income
$
73

 
$
61

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
84

 
82

Deferred income taxes
17

 
14

Pension and other postretirement benefits
6

 
7

Allowance for equity funds used during construction
(2
)
 
(7
)
Decoupling mechanism deferrals, net of amortization
(9
)
 
(4
)
Other non-cash income and expenses, net
7

 
8

Changes in working capital:
 
 
 
Decrease in accounts receivable and unbilled revenues
29

 
46

Decrease in inventories
5

 
1

(Increase) in margin deposits, net
(12
)
 
(7
)
(Decrease) in accounts payable and accrued liabilities
(10
)
 
(11
)
Other working capital items, net
(13
)
 
(16
)
Other, net
(5
)
 
(13
)
Net cash provided by operating activities
170

 
161

Cash flows from investing activities:
 
 
 
Capital expenditures
(114
)
 
(131
)
Sales of Nuclear decommissioning trust securities
7

 
6

Purchases of Nuclear decommissioning trust securities
(5
)
 
(6
)
Other, net
(1
)
 
(2
)
Net cash used in investing activities
(113
)
 
(133
)
Cash flows from financing activities:
 
 
 
Proceeds from issuance of long-term debt

 
140

Payments on long-term debt

 
(133
)
Change in short-term debt

 
(6
)
Dividends paid
(28
)
 
(27
)
Other
(4
)
 
(2
)
Net cash used in financing activities
(32
)
 
(28
)
Increase in cash and cash equivalents
25

 

Cash and cash equivalents, beginning of period
6

 
4

Cash and cash equivalents, end of period
$
31

 
$
4


10


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

 
Three Months Ended
 
March 31,
 
2017
 
2016
Revenues  (dollars in millions):
 
 
 
Retail:
 
 
 
Residential
$
288

 
$
254

Commercial
161

 
160

Industrial
49

 
49

Subtotal
498

 
463

Other retail revenues, net
8

 
3

Total retail revenues
506

 
466

Wholesale revenues
13

 
12

Other operating revenues
11

 
9

Total revenues
$
530

 
$
487

 
 
 
 
Energy sold and delivered (MWh in thousands):
 
 
 
Retail energy sales:
 
 
 
Residential
2,383

 
2,103

Commercial
1,687

 
1,702

Industrial
686

 
697

Total retail energy sales
4,756

 
4,502

Direct access retail deliveries:
 
 
 
Commercial
143

 
129

Industrial
321

 
283

Total direct access retail deliveries
464

 
412

Total retail energy sales and direct access deliveries
5,220

 
4,914

Wholesale energy deliveries
439

 
488

Total energy sold and delivered
5,659

 
5,402

 
 
 
 
Number of retail customers at end of period:
 
 
 
Residential
758,996

 
750,027

Commercial
105,521

 
104,986

Industrial
196

 
186

Direct access
560

 
374

Total retail customers
865,273

 
855,573



11


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

 
Three Months Ended March 31,
 
2017
 
2016
Sources of energy (MWh in thousands):
 
 
 
 
 
 
 
Generation:
 
 
 
 
 
 
 
Thermal:
 
 
 
 
 
 
 
Coal
911

 
16
%
 
757

 
14
%
Natural gas
1,303

 
24

 
1,002

 
19

Total thermal
2,214

 
40

 
1,759

 
33

Hydro
548

 
10

 
568

 
11

Wind
299

 
5

 
361

 
7

Total generation
3,061

 
55

 
2,688

 
51

Purchased power:
 
 
 
 
 
 
 
Term
1,982

 
35

 
2,088

 
39

Hydro
497

 
9

 
445

 
9

Wind
39

 
1

 
59

 
1

Total purchased power
2,518

 
45

 
2,592

 
49

Total system load
5,579

 
100
%
 
5,280

 
100
%
Less: wholesale sales
(439
)
 
 
 
(488
)
 
 
Retail load requirement
5,140

 
 
 
4,792

 
 






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Portland General Electric Earnings Conference Call First Quarter 2017 Exhibit 99.2


 
Cautionary Statement Information Current as of April 27, 2017 Except as expressly noted, the information in this presentation is current as of April 27, 2017 — the date on which PGE filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 — 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 • Guidance 3


 
First Quarter 2017 Earnings Results NI in millions Q1 2016 Q1 2017 Net Income $61 $73 Diluted EPS $0.68 $0.82 2016 Diluted EPS $2.16 2017E Diluted EPS $2.20 - $2.35 4 Q1 Q1 Q2 Q3 Q4 Q2-Q4 $1.38 - $1.53


 
Accomplishments and operational update Generating Plant Availability 95% 5 Top Quartile Customer Satisfaction TQS Research, Inc. and Market Strategies International Successful companywide effort to deliver safe and reliable service to customers in the face of historic winter storms Environmental Champion Market Strategies International


 
• Positive economic trends in our service area, including: unemployment at record-low, rising wages and continued increases in building permits1 • Unemployment rate in our service area at 3.3 percent -- beating Oregon's rate of 3.8 percent and the national rate of 4.5 percent2 • Average residential customer count increased approximately 1.1 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 economy3 Economic Update (1) Oregon Office of Economic Analysis (2) State of Oregon Employment Department (3) Net of approximately 1.5% of energy efficiency 6


 
Capital Planning Current Capital Outlook 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 (1) Includes approximately $300 million of ongoing capital plus Board approved investments in resiliency for 2017 and 2018. PGE continues to evaluate its need for additional resiliency investments and will update this forecast as appropriate. $585 $446 7 (1)


 
Carty Generation Station update 8 Carty Generating Station, our 440 MW natural gas baseload plant near Boardman, Ore. • Carty plant in-service, including AFDC, as of 3/31/2017: $636M • Total estimated cost, including AFDC, for completion: ~$640M • Estimated time frame to complete litigation: 2-4 years • Oral argument on the Sureties' appeal to the 9th Circuit scheduled for May 8


 
2016 Integrated Resource Plan • 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 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% RPS requirements by 2025 • Filling up to approximately 561 MW capacity deficit to ensure reliability 9 IRP filed with commission OPUC acknowledgement expected RFP bidding process commences Expected to reach decision on RFPs Nov. 2016 Q3 2017 2nd Half 2017 2018


 
2018 General Rate Case filed Feb. 28 Key drivers: 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: • Early May: PGE to host stakeholder workshop • Early June: Staff and intervenor reply testimony filed; start settlement discussions • End of December: Final order expected from the commission • Jan. 1, 2018: New prices anticipated to go into effect 10


 
First Quarter Financial Results Q1 2016 Q1 2017 Retail Revenue Power Costs Generation, Transmission and Distribution Administrative and General $ in millions Other Misc Items AFDC Equity $ (5) D & A $ (1) Property, Payroll and Other Taxes $ (2) Miscellaneous Other $ 2 11


 
First Quarter Earnings Bridge Q1 2016 Q1 2017 Gross Margin Carty PTCs Distribution Costs Weather Impact on Load $ 0.27 Power Cost Adjustment $ 0.03 Weather Adjusted Load, net $ (0.08 ) 12


 
Liquidity and Financing Total Liquidity as of 03/31/2017 (in millions) Credit Facilities $ 660 Commercial Paper — Letters of Credit $ (56 ) Cash $ 31 Available $ 635 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; • Above average hydro conditions based on the current year hydro forecast; • Wind generation for the remainder of the year based on 5 years of historic levels or forecast studies when historical data is not available; • Normal thermal plant operations for the remainder of the year; • Revised operating and maintenance costs between $550 to $570 million driven by major storm restorations costs through April • Depreciation and amortization expense between $340 and $350 million 14


 
Dividend 15 •Eleventh consecutive dividend increase •Anticipated annual dividend increase of 5% - 7% •Target payout ratio of approximately 50% - 70% 3.6% CAGR


 
Maintain high level of operational excellence Work collaboratively with all our stakeholders to obtain acknowledgement of our 2016 Integrated Resource Plan and associated action plan Achieve a fair and reasonable result on our 2018 General Rate Case 2017 Key Initiatives 16