Portland General Electric announces second quarter 2019 results

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Portland General Electric announces second quarter 2019 results

- Filed 2019 Integrated Resource Plan; identified need for 150 MWa renewable resources, energy efficiency, demand response and actions to add more capacity
- Plans to construct an Integrated Operations Center centralizing key resilience and reliability functions
- Maintaining full year 2019 earnings guidance of $2.35-$2.50 per share

PORTLAND, Ore., Aug. 2, 2019 /PRNewswire/ -- Portland General Electric Company (NYSE: POR) today reported net income of $25 million, or 28 cents per diluted share, for the second quarter of 2019. This compares with net income of $46 million, or 51 cents per diluted share, for the second quarter of 2018.

"This quarter, we navigated challenging regional power markets with significantly lower hydro production and are maintaining full year guidance," said Maria Pope, PGE president and CEO, "We are also pleased to have filed our Integrated Resource Plan and to announce the construction of an Integrated Operations Center, which will enhance grid safety, resilience and security."

Q2 2019 earnings compared to Q2 2018 earnings

Net variable power costs were less favorable than the prior year, primarily due to lower wholesale revenues and significantly lower than average hydro production. Higher operating expenses and lower production tax credits were partially offset by an increase in revenue as a result of the 2019 general rate case.

Company Updates

Integrated Resource Plan (IRP)

On July 19, 2019, PGE filed with the Public Utility Commission of Oregon its 2019 IRP, including an Action Plan proposing resource actions to undertake through 2025. The Action Plan calls for adding more renewable resources, increased energy efficiency, demand-response, and actions to address capacity needs. A request for proposal (RFP) will be conducted to add new renewable resources by 2023. PGE anticipates a staged process that pursues cost competitive agreements for existing capacity in the region and will address remaining capacity needs with an RFP for non-emitting resources. PGE is considering submission of a benchmark resource for both RFPs and will communicate its decision to submit a benchmark before doing so. PGE expects an Order acknowledging the IRP and Action Plan in early 2020.

Integrated Operations Center (IOC)

PGE will construct an IOC that centralizes key operations and functions in a facility designed for enhanced resilience against seismic, cyber and physical security risks. It is expected to be in service by the end of 2021. Technology within the IOC will enable PGE to better monitor, control, optimize and safely operate the company's distribution system. It will also maximize the use of carbon-free energy in PGE's system and enhance overall system reliability.

2019 earnings guidance

PGE is affirming its 2019 guidance of $2.35 to $2.50 per diluted share. This guidance is based on the following assumptions:

  • Increase in retail deliveries of 0.5%
  • Normal hydro conditions for the remainder of the year based on the current hydro forecast
  • Wind generation based on five years of historical levels or forecast studies when historical data is not available
  • Normal thermal plant operations
  • Depreciation and amortization expense between $400 million and $420 million
  • Revised operating and maintenance costs between $600 million and $620 million driven by an increase in distribution costs

Second Quarter 2019 earnings call and webcast — August 2, 2019

PGE will host a conference call with financial analysts and investors on Friday, August 2, 2019, 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, August 2, 2019, through 2 p.m. ET on Friday, August 9, 2019.

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 888,000 customers in 51 cities. For 130 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 3,000 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 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; general economic and financial market conditions; severe weather conditions, wildfires, and other natural phenomena and natural disasters that could result in operational disruptions, unanticipated restoration costs, or liability for third party property damage; and cyber security breaches of the company's customer information system or operating systems, which may affect customer bills or other aspects of our operations. 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 expressly disclaims any current intention to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise. Prospective investors should also review the risks, assumptions and uncertainties listed in the company's most recent annual report on form 10-K and in other documents that we file 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

Source: Portland General Company

Media Contact:


Investor Contact:

Andrea Platt


Chris Liddle

Corporate Communications


Investor Relations

Phone: 503-464-7980


Phone: 503-464-7458


 

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
June 30,


Six Months Ended
June 30,


2019


2018


2019


2018

Revenues:








Revenues, net

$

462



$

449



$

1,032



$

944


Alternative revenue programs, net of amortization

(2)





1



(2)


Total revenues

460



449



1,033



942


Operating expenses:








Purchased power and fuel

105



104



284



234


Generation, transmission and distribution

86



71



163



140


Administrative and other

78



70



149



139


Depreciation and amortization

101



93



202



185


Taxes other than income taxes

33



31



67



64


Total operating expenses

403



369



865



762


Income from operations

57



80



168



180


Interest expense, net

31



31



63



62


Other income:








Allowance for equity funds used during construction

2



2



5



6


Miscellaneous income, net



1



2




Other income, net

2



3



7



6


Income before income tax expense

28



52



112



124


Income tax expense

3



6



14



14


Net income

25



46



98



110


Other comprehensive income

1





2




Comprehensive income

$

26



$

46



$

100



$

110










Weighted-average common shares outstanding (in thousands):








Basic

89,357



89,215



89,333



89,188


Diluted

89,561



89,215



89,537



89,188










Earnings per share:








Basic

$

0.28



$

0.51



$

1.10



$

1.23


Diluted

$

0.28



$

0.51



$

1.09



$

1.23










 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

(Unaudited)



June 30,
 2019


December 31,
 2018

ASSETS




Current assets:




Cash and cash equivalents

$

11



$

119


Accounts receivable, net

150



193


Unbilled revenues

72



96


Inventories

101



84


Regulatory assets—current

37



61


Other current assets

69



90


Total current assets

440



643


Electric utility plant, net

6,952



6,887


Regulatory assets—noncurrent

380



401


Nuclear decommissioning trust

46



42


Non-qualified benefit plan trust

37



36


Other noncurrent assets

142



101


Total assets

$

7,997



$

8,110






 


June 30,
 2019


December 31,
2018

LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

119



$

168


Liabilities from price risk management activities—current

40



55


Short-term debt

17




Current portion of long-term debt



300


Current portion of finance lease obligation

17




Accrued expenses and other current liabilities

247



268


Total current liabilities

440



791


Long-term debt, net of current portion

2,377



2,178


Regulatory liabilities—noncurrent

1,365



1,355


Deferred income taxes

379



369


Unfunded status of pension and postretirement plans

312



307


Liabilities from price risk management activities—noncurrent

76



101


Asset retirement obligations

199



197


Non-qualified benefit plan liabilities

101



103


Finance lease obligations, net of current portion

137




Other noncurrent liabilities

69



203


Total liabilities

5,455



5,604


Commitments and contingencies




Shareholders' Equity:




Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding as of June 30, 2019 and December 31, 2018




Common stock, no par value, 160,000,000 shares authorized; 89,371,560 and 89,267,959 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively

1,215



1,212


Accumulated other comprehensive loss

(7)



(7)


Retained earnings

1,334



1,301


Total shareholders' equity

2,542



2,506


Total liabilities and shareholders' equity

$

7,997



$

8,110



 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)



Six Months Ended June 30,


2019


2018

Cash flows from operating activities:




Net income

$

98



$

110


Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation and amortization

202



185


Deferred income taxes

6



6


Pension and other postretirement benefits

12



13


Allowance for equity funds used during construction

(5)



(6)


Decoupling mechanism deferrals, net of amortization

(1)



2


(Amortization) Deferral of net benefits due to Tax Reform

(11)



25


Other non-cash income and expenses, net

21



4


Changes in working capital:




Decrease in accounts receivable and unbilled revenues

63



26


(Increase) in inventories

(17)



(7)


Decrease in margin deposits, net

11



4


(Decrease) in accounts payable and accrued liabilities

(65)



(20)


Other working capital items, net

16



13


Other, net

(16)



(17)


Net cash provided by operating activities

314



338


Cash flows from investing activities:




Capital expenditures

(271)



(266)


Sales of Nuclear decommissioning trust securities

7



6


Purchases of Nuclear decommissioning trust securities

(5)



(5)


Other, net

(2)




Net cash used in investing activities

(271)



(265)


Cash flows from financing activities:




Proceeds from issuance of long-term debt

$

200



$


Payments on long-term debt

(300)




Issuance of commercial paper, net

17




Dividends paid

(65)



(61)


Other

(3)



(3)


Net cash used in financing activities

(151)



(64)


(Decrease) increase in cash and cash equivalents

(108)



9


Cash and cash equivalents, beginning of period

119



39


Cash and cash equivalents, end of period

$

11



$

48






Supplemental cash flow information is as follows:




Cash paid for interest, net of amounts capitalized

$

60



$

58


Cash paid for income taxes

20



10



 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

SUPPLEMENTAL OPERATING STATISTICS

(Unaudited)



Three Months Ended June 30,


2019


2018

Revenues (dollars in millions):








Retail:








Residential

$

205



45

%


$

207



46

%

Commercial

158



34



162



36


Industrial

50



11



39



9


Direct access

10



2



13



3


Subtotal

423



92



421



94


Alternative revenue programs, net of amortization

(2)








Other accrued (deferred) revenues, net

6



1



(10)



(2)


Total retail revenues

427



93



411



92


Wholesale revenues

16



3



24



5


Other operating revenues

17



4



14



3


Total revenues

$

460



100

%


$

449



100

%









Energy deliveries (MWh in thousands):








Retail:








Residential

1,526



29

%


1,612



29

%

Commercial

1,630



31



1,654



30


Industrial

802



15



717



13


Subtotal

3,958



75



3,983



72


Direct access:








Commercial

177



3



159



3


Industrial

360



7



342



6


Subtotal

537



10



501



9


Total retail energy deliveries

4,495



85



4,484



81


Wholesale energy deliveries

785



15



1,041



19


Total energy deliveries

5,280



100

%


5,525



100

%









Average number of retail customers:








Residential

777,564


88

%


771,608


88

%

Commercial

109,190


12



108,939


12


Industrial

192




205



Direct access

634




596



Total

887,580



100

%


881,348



100

%

 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

SUPPLEMENTAL OPERATING STATISTICS, continued

(Unaudited)



Three Months Ended June 30,


2019


2018

Sources of energy (MWh in thousands):








Generation:








Thermal:








Natural gas

1,150



23

%


828



16

%

Coal

378



8



421



8


Total thermal

1,528



31



1,249



24


Hydro

460



9



395



8


Wind

608



13



613



11


Total generation

2,596



53



2,257



43


Purchased power:








Term

1,919



39



2,384



45


Hydro

319



6



500



10


Wind

82



2



94



2


Total purchased power

2,320



47



2,978



57


Total system load

4,916



100

%


5,235



100

%

Less: wholesale sales

(785)





(1,041)




Retail load requirement

4,131





4,194




The following table indicates the number of heating and cooling degree-days for the three months ended June 30, 2019 and 2018, along with 15-year averages based on weather data provided by the National Weather Service, as measured at Portland International Airport:


Heating Degree-days


Cooling Degree-days


2019


2018


Avg.


2019


2018


Avg.

April

312



338



376





9



2


May

109



89



198



28



34



21


June

46



44



79



74



73



65


Totals for the quarter

467



471



653



102



116



88


(Decrease)/increase from the 15-year average

(28)

%


(28)

%




16

%


32

%



 

Cision View original content:http://www.prnewswire.com/news-releases/portland-general-electric-announces-second-quarter-2019-results-300895541.html

SOURCE Portland General Company