UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
| FORM | |||||
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 30, 2021
| (Exact name of registrant as specified in its charter) | ||||||||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(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:
Securities registered pursuant to Section 12(b) of the Act:
| (Title of class) | (Trading Symbol) | (Name of exchange on which registered) | ||||||
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 30, 2021, Portland General Electric Company (PGE or the Company) issued a press release announcing its financial results for the three months ended March 31, 2021. 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 30, 2021, 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.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits. | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | Cover page information from Portland General Electric Company’s Current Report on Form 8-K filed April 30, 2021, formatted in iXBRL (Inline Extensible Business Reporting Language). | |||||||
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 30, 2021 | By: | /s/ James A. Ajello | |||||||||||
| James A. Ajello | ||||||||||||||
| Senior Vice President of Finance, Chief Financial Officer and Treasurer | ||||||||||||||
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Exhibit 99.1
 | Portland General Electric One World Trade Center 121 S.W. Salmon Street Portland, Oregon 97204 News Release | |||||||
| April 30, 2021 | ||||||||
| Media Contact: | Investor Contact: | |||||||
| Brianne Hyder | Jardon Jaramillo | |||||||
| Corporate Communications | Investor Relations | |||||||
| Phone: 503-464-8596 | Phone: 503-464-7051 | |||||||
Portland General Electric Announces First Quarter 2021 Results
•Strong first quarter financial results of $1.07 per diluted share
•Restored power to nearly half of customer base during historic February ice storm
•Capital plan remains on track, supporting decarbonization and electrification goals
•Reaffirming 2021 earnings guidance of $2.55 to $2.70 per diluted share
PORTLAND, Ore. -- Portland General Electric Company (NYSE: POR) today reported net income of $96 million, or $1.07 per diluted share, for the first quarter of 2021. This compares with net income of $81 million, or 91 cents per diluted share, for the first quarter of 2020.
“While the first quarter presented challenges, the team remains focused on supporting customers,” said Maria Pope, PGE president and CEO. “I am proud of the way we came together to restore power quickly, and safely, during a once in 40-year ice event. These events demonstrate the importance of continued investment in a safe, reliable and resilient grid.”
First Quarter 2021 Compared to First Quarter 2020
Total revenues increased as a result of higher retail energy deliveries, driven by strong residential demand and growth in the high-tech and digital service sectors, as well as revenues from the recently completed Wheatridge Renewable Energy Facility. Purchased power and fuel expense increased due to lower hydro and wind production and higher than expected market prices. Operating expenses increased, primarily driven by higher storm restoration expense, legal fees and increased employee benefit expenses. Depreciation and amortization expense decreased, partially offset by utility capital additions. Tax expense decreased primarily due to a one-time recognition of a local tax flow-through adjustment.
Company Updates
Strong Energy Delivery Growth
Retail energy deliveries for the three months ended March 31, 2021 increased 1.2%, weather-adjusted, compared to the same period of 2020. This was driven by an increase of 8% in industrial deliveries, powered by the expansion in the high-tech and digital sectors, and 3% growth in residential deliveries as the average number of residential customers increased by 1.3%. These increases were partially offset by a decrease in commercial deliveries of 5%.
February 2021 Ice Storms and Damage
Beginning on February 11, 2021, an historic set of storms involving heavy snow, winds and ice impacted the United
States, including PGE’s service territory. Oregon Governor Kate Brown declared a state of emergency in response to these severe storms. Through March 31, 2021, PGE has incurred an estimated $87 million in incremental costs
1
due to the storms, of which $33 million were capital and recorded to electric utility plant, net and $54 million were operating expenses associated with transmission and distribution. Beginning in 2019, the OPUC authorized the Company to collect $4 million annually from retail customers to cover incremental expenses related to major storm damages, and to defer any amount not utilized in the current year. In response to the February storms, PGE exhausted its storm collection balance for 2021 of $9 million, which was used to offset operating expenses. After accounting for storm deferral tracking mechanisms already in place, the cumulative incurred costs from the February storm damage are estimated to be $45 million as of March 31, 2021.
On February 15, 2021, PGE filed an application for authorization to defer emergency restoration costs for the February storms (Docket UM 2156). PGE expects to incur and defer additional costs subsequent to the storm.
The Climate Pledge
On April 21, 2021, PGE continued its commitment to advancing a sustainable future by joining The Climate Pledge, aiming to be net-zero carbon by 2040 — a decade ahead of the Paris Agreement’s goal of 2050. As a signatory to The Climate Pledge, led by Amazon and Global Optimism, PGE agrees to measure and report greenhouse gas emissions on a regular basis; implement decarbonization strategies in line with the Paris Agreement through real business changes and innovations, including efficiency improvements, renewable energy, materials reductions, and other carbon emission elimination strategies; and neutralize any remaining emissions with additional, quantifiable, real, permanent, and socially-beneficial offsets.
Quarterly Dividend
As previously announced, on April 28, 2021, the board of directors of Portland General Electric Company approved an increase in the annual dividend of 5.5%, or $0.09 per share, declaring a quarterly common stock dividend of $0.43 per share.
2021 Earnings Guidance
PGE is reaffirming its full-year 2021 earnings guidance of $2.55 to $2.70 per diluted share based on the following assumptions:
•An increase in annual energy deliveries between 1% and 1.5%, weather adjusted, which reflects year over year:
◦Commercial growth, as economic recovery takes hold; and
◦Strong growth in industrial reflecting customer expansions.
◦These increases are partially offset by a decrease in residential as customers spend less time at home.
•Normal temperatures in its utility service territory, for the remainder of the year;
•Average hydro conditions for the remainder of year;
•Wind generation based on five years of historical levels or forecast studies when historical data is not available;
•Normal thermal plant operations, for the remainder of the year;
•Revised capital expenditures of $700 million;
◦This represents a $45 million increase from prior guidance of $655 million, primarily due to capital expenditures related to the February storm;
•Average construction work in progress balance of $340 million;
•Revised operating and maintenance expense between $595 million and $615 million;
◦This represents a $20 million increase to original guidance of $575 million to $595 million, of which $12 million is associated with February storm response expense that is offset in revenue;
•Depreciation and amortization expense between $410 million and $430 million;
•Revised effective tax rate of 10% to 15%;
•Cash from operations of $600 million to $650 million;
•No new common equity to be issued for investment or operations; and
2
•Continuation of existing regulatory mechanisms during 2021, including decoupling, the PCAM, the COVID-19 deferral, the wildfire deferral, and the new storm deferral.
First Quarter 2021 Earnings Call and Webcast — April 30, 2021
PGE will host a conference call with financial analysts and investors on Friday, April 30, 2021, 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 30, 2021, through 2 p.m. ET on Friday, May 7, 2021.
Maria Pope, president and CEO; Jim Ajello, senior vice president of Finance, CFO, and treasurer; and Jardon Jaramillo, senior director, Investor Relations, Treasury, and Risk Management, 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, with operations across the state. The company serves approximately 900,000 customers with a service area population of 2 million Oregonians in 51 cities. PGE owns 16 generation plants across Oregon and other Northwestern states and maintains and operates 14 public parks and recreation areas. For over 130 years, PGE has delivered safe, affordable and reliable energy to Oregonians. Together with its customers, PGE has the No. 1 voluntary renewable energy program in the U.S. PGE and its 3,000 employees are working with customers to build a clean energy future. In 2020, PGE, employees, retirees and the PGE Foundation donated $5.6 million and volunteered 18,200 hours with more than 400 nonprofits across Oregon. For more information visit www.PortlandGeneral.com/news.
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Safe Harbor Statement
Statements in this press 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 the Company's full-year earnings guidance (including expectations regarding annual retail deliveries, average hydro conditions, wind generation, normal thermal plant operations, operating and maintenance expense and depreciation and amortization expense) 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, without limitation: 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 market conditions, which could affect the availability and cost of purchased power and fuel; the development of alternative technologies; changes in capital and credit market conditions, which could affect the access to and availability of cost of capital and result in delay or cancellation of capital projects or execution of the Company’s strategic plan as currently envisioned; the outcome of various legal and regulatory actions; 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; cyber security breaches of the Company's customer information system or operating systems, data security breaches, or acts of terrorism, which could disrupt operations, require significant expenditures, or result in claims against the Company; PGE business activities are concentrated in one region and future performance may be affected by events and factors unique to Oregon; the impact of the recommendations on the Company and its operations based on the review conducted by the Special Committee of the Board of Directors relating to energy trading losses, the time and expense incurred in implementing the recommendations of the Special Committee, and any reputational damage to the Company relating to the matters underlying the Special Committee’s review; and widespread health emergencies or outbreaks of infectious diseases such as the novel coronavirus disease (COVID-19), which may affect our financial position, results of operations and cash flows. As a result, actual results may differ materially from those projected in the forward-looking statements.
POR
Source: Portland General Company
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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, | |||||||||||
| 2021 | 2020 | ||||||||||
| Revenues: | |||||||||||
| Revenues, net | $ | 612 | $ | 564 | |||||||
| Alternative revenue programs, net of amortization | (3) | 9 | |||||||||
| Total revenues | 609 | 573 | |||||||||
| Operating expenses: | |||||||||||
| Purchased power and fuel | 169 | 153 | |||||||||
| Generation, transmission and distribution | 80 | 73 | |||||||||
| Administrative and other | 86 | 71 | |||||||||
| Depreciation and amortization | 103 | 108 | |||||||||
| Taxes other than income taxes | 38 | 35 | |||||||||
| Total operating expenses | 476 | 440 | |||||||||
| Income from operations | 133 | 133 | |||||||||
| Interest expense, net | 34 | 33 | |||||||||
| Other income (expense): | |||||||||||
| Allowance for equity funds used during construction | 4 | 3 | |||||||||
| Miscellaneous income (expense), net | 2 | (4) | |||||||||
| Other income (expense), net | 6 | (1) | |||||||||
| Income before income tax expense | 105 | 99 | |||||||||
| Income tax expense | 9 | 18 | |||||||||
| Net income | 96 | 81 | |||||||||
| Other comprehensive income | — | 1 | |||||||||
| Comprehensive income | $ | 96 | $ | 82 | |||||||
| Weighted-average common shares outstanding (in thousands): | |||||||||||
| Basic | 89,556 | 89,429 | |||||||||
| Diluted | 89,703 | 89,579 | |||||||||
| Earnings per share: | |||||||||||
| Basic | $ | 1.07 | $ | 0.91 | |||||||
| Diluted | $ | 1.07 | $ | 0.91 | |||||||
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(Unaudited)
| March 31, 2021 | December 31, 2020 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 135 | $ | 257 | |||||||
| Accounts receivable, net | 268 | 271 | |||||||||
| Inventories | 67 | 72 | |||||||||
| Regulatory assets—current | 25 | 23 | |||||||||
| Other current assets | 127 | 98 | |||||||||
| Total current assets | 622 | 721 | |||||||||
| Electric utility plant, net | 7,616 | 7,539 | |||||||||
| Regulatory assets—noncurrent | 591 | 569 | |||||||||
| Nuclear decommissioning trust | 44 | 45 | |||||||||
| Non-qualified benefit plan trust | 43 | 42 | |||||||||
| Other noncurrent assets | 153 | 153 | |||||||||
| Total assets | $ | 9,069 | $ | 9,069 | |||||||
6
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, continued
(Dollars in millions)
(Unaudited)
| March 31, 2021 | December 31, 2020 | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 199 | $ | 153 | |||||||
| Liabilities from price risk management activities—current | 20 | 14 | |||||||||
| Short-term debt | 200 | 150 | |||||||||
| Current portion of long-term debt | 20 | 160 | |||||||||
| Current portion of finance lease obligation | 16 | 16 | |||||||||
| Accrued expenses and other current liabilities | 319 | 322 | |||||||||
| Total current liabilities | 774 | 815 | |||||||||
| Long-term debt, net of current portion | 2,886 | 2,886 | |||||||||
| Regulatory liabilities—noncurrent | 1,353 | 1,369 | |||||||||
| Deferred income taxes | 391 | 374 | |||||||||
| Unfunded status of pension and postretirement plans | 299 | 299 | |||||||||
| Liabilities from price risk management activities—noncurrent | 118 | 136 | |||||||||
| Asset retirement obligations | 270 | 270 | |||||||||
| Non-qualified benefit plan liabilities | 101 | 101 | |||||||||
| Finance lease obligations, net of current portion | 128 | 129 | |||||||||
| Other noncurrent liabilities | 74 | 77 | |||||||||
| Total liabilities | 6,394 | 6,456 | |||||||||
| Shareholders’ Equity: | |||||||||||
| Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding as of March 31, 2021 and December 31, 2020 | — | — | |||||||||
| Common stock, no par value, 160,000,000 shares authorized; 89,576,748 and 89,537,331 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively | 1,233 | 1,231 | |||||||||
| Accumulated other comprehensive loss | (11) | (11) | |||||||||
| Retained earnings | 1,453 | 1,393 | |||||||||
| Total shareholders’ equity | 2,675 | 2,613 | |||||||||
| Total liabilities and shareholders’ equity | $ | 9,069 | $ | 9,069 | |||||||
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 96 | $ | 81 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 103 | 108 | |||||||||
| Deferred income taxes | (1) | 7 | |||||||||
| Pension and other postretirement benefits | 6 | 6 | |||||||||
| Allowance for equity funds used during construction | (4) | (3) | |||||||||
| Decoupling mechanism deferrals, net of amortization | 3 | (9) | |||||||||
| Amortization of net benefits due to Tax Reform | — | (6) | |||||||||
| Deferral of incremental storm costs | (41) | — | |||||||||
| Other non-cash income and expenses, net | 13 | 19 | |||||||||
| Changes in working capital: | |||||||||||
| (Increase)/decrease in accounts receivable, net | (2) | 19 | |||||||||
| Decrease/(increase) in inventories | 4 | (1) | |||||||||
| (Increase)/decrease in margin deposits | (1) | (19) | |||||||||
| Increase/(decrease) in accounts payable and accrued liabilities | 26 | (22) | |||||||||
| Other working capital items, net | (14) | (9) | |||||||||
| Other, net | (20) | (16) | |||||||||
| Net cash provided by operating activities | 168 | 155 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | (153) | (162) | |||||||||
| Sales of Nuclear decommissioning trust securities | 3 | 3 | |||||||||
| Purchases of Nuclear decommissioning trust securities | (3) | (2) | |||||||||
| Other, net | (9) | 4 | |||||||||
| Net cash used in investing activities | (162) | (157) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from issuance of long-term debt | — | 119 | |||||||||
| Payments on long-term debt | (140) | (98) | |||||||||
| Borrowings on short-term debt | 200 | 20 | |||||||||
| Repayments of short-term debt | (150) | (20) | |||||||||
| Issuance of commercial paper, net | — | 20 | |||||||||
| Dividends paid | (36) | (34) | |||||||||
| Other | (2) | (5) | |||||||||
| Net cash provided by (used in) financing activities | (128) | 2 | |||||||||
| Increase (Decrease) in cash and cash equivalents | (122) | — | |||||||||
| Cash and cash equivalents, beginning of period | 257 | 30 | |||||||||
| Cash and cash equivalents, end of period | $ | 135 | $ | 30 | |||||||
| Supplemental cash flow information is as follows: | |||||||||||
| Cash paid for interest, net of amounts capitalized | $ | 16 | $ | 12 | |||||||
8
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||
| Revenues (dollars in millions): | |||||||||||||||||||||||
| Retail: | |||||||||||||||||||||||
| Residential | $ | 310 | 51 | % | $ | 279 | 48 | % | |||||||||||||||
| Commercial | 162 | 26 | 159 | 28 | |||||||||||||||||||
| Industrial | 60 | 10 | 51 | 9 | |||||||||||||||||||
| Direct Access | 11 | 2 | 11 | 2 | |||||||||||||||||||
| Subtotal | 543 | 89 | 500 | 87 | |||||||||||||||||||
| Alternative revenue programs, net of amortization | (3) | — | 9 | 2 | |||||||||||||||||||
| Other accrued revenues, net | 13 | 2 | 5 | 1 | |||||||||||||||||||
| Total retail revenues | 553 | 91 | 514 | 90 | |||||||||||||||||||
| Wholesale revenues | 33 | 5 | 47 | 8 | |||||||||||||||||||
| Other operating revenues | 23 | 4 | 12 | 2 | |||||||||||||||||||
| Total revenues | $ | 609 | 100 | % | $ | 573 | 100 | % | |||||||||||||||
| Energy deliveries (MWhs in thousands): | |||||||||||||||||||||||
| Retail: | |||||||||||||||||||||||
| Residential | 2,239 | 35 | % | 2,131 | 31 | % | |||||||||||||||||
| Commercial | 1,564 | 24 | 1,626 | 24 | |||||||||||||||||||
| Industrial | 897 | 14 | 810 | 12 | |||||||||||||||||||
| Subtotal | 4,700 | 73 | 4,567 | 67 | |||||||||||||||||||
| Direct access: | |||||||||||||||||||||||
| Commercial | 150 | 2 | 170 | 3 | |||||||||||||||||||
| Industrial | 359 | 6 | 355 | 5 | |||||||||||||||||||
| Subtotal | 509 | 8 | 525 | 8 | |||||||||||||||||||
| Total retail energy deliveries | 5,209 | 81 | 5,092 | 75 | |||||||||||||||||||
| Wholesale energy deliveries | 1,245 | 19 | 1,693 | 25 | |||||||||||||||||||
| Total energy deliveries | 6,454 | 100 | % | 6,785 | 100 | % | |||||||||||||||||
| Average number of retail customers: | |||||||||||||||||||||||
| Residential | 797,602 | 88 | % | 787,095 | 88 | % | |||||||||||||||||
| Commercial | 110,703 | 12 | 110,073 | 12 | |||||||||||||||||||
| Industrial | 193 | — | 194 | — | |||||||||||||||||||
| Direct access | 601 | — | 627 | — | |||||||||||||||||||
| Total | 909,099 | 100 | % | 897,989 | 100 | % | |||||||||||||||||
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||
| Sources of energy (MWhs in thousands): | |||||||||||||||||||||||
| Generation: | |||||||||||||||||||||||
| Thermal: | |||||||||||||||||||||||
| Natural gas | 2,383 | 38 | % | 2,433 | 37 | % | |||||||||||||||||
| Coal | 582 | 9 | 1,186 | 18 | |||||||||||||||||||
| Total thermal | 2,965 | 47 | 3,619 | 55 | |||||||||||||||||||
| Hydro | 317 | 5 | 369 | 6 | |||||||||||||||||||
| Wind | 532 | 9 | 585 | 9 | |||||||||||||||||||
| Total generation | 3,814 | 61 | 4,573 | 70 | |||||||||||||||||||
| Purchased power: | |||||||||||||||||||||||
| Term | 1,844 | 30 | 1,604 | 24 | |||||||||||||||||||
| Hydro | 340 | 5 | 345 | 5 | |||||||||||||||||||
| Wind | 239 | 4 | 64 | 1 | |||||||||||||||||||
| Total purchased power | 2,423 | 39 | 2,013 | 30 | |||||||||||||||||||
| Total system load | 6,237 | 100 | % | 6,586 | 100 | % | |||||||||||||||||
| Less: wholesale sales | (1,245) | (1,693) | |||||||||||||||||||||
| Retail load requirement | 4,992 | 4,893 | |||||||||||||||||||||
The following table indicates the number of heating and cooling degree-days for the three months ended March 31, 2021 and 2020, along with 15-year averages based on weather data provided by the National Weather Service, as measured at Portland International Airport:
| Heating Degree-days | |||||||||||||||||
| 2021 | 2020 | Avg. | |||||||||||||||
| January | 620 | 588 | 719 | ||||||||||||||
| February | 641 | 605 | 598 | ||||||||||||||
| March | 544 | 568 | 530 | ||||||||||||||
| Year-to-date | 1,805 | 1,761 | 1,847 | ||||||||||||||
| Decrease from the 15-year average | (2.3) | % | (4.7) | % | |||||||||||||
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Portland General Electric EARNINGS CONFERENCE CALL FIRST QUARTER 2021 Exhibit 99.2
Cautionary statement 2 Information Current as of April 30, 2021 Except as expressly noted, the information in this presentation is current as of April 30, 2021 — the date on which PGE filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 — 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 presentation 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 the Company's full-year earnings guidance (including expectations regarding annual retail deliveries, average hydro conditions, wind generation, normal thermal plant operations, operating and maintenance expense and depreciation and amortization expense) 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, without limitation: 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 market conditions, which could affect the availability and cost of purchased power and fuel; the development of alternative technologies; changes in capital and credit market conditions, which could affect the access to and availability of cost of capital and result in delay or cancellation of capital projects or execution of the Company’s strategic plan as currently envisioned; the outcome of various legal and regulatory actions; 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; cyber security breaches of the Company's customer information system or operating systems, data security breaches, or acts of terrorism, which could disrupt operations, require significant expenditures, or result in claims against the Company; PGE business activities are concentrated in one region and future performance may be affected by events and factors unique to Oregon; the impact of the recommendations on the Company and its operations based on the review conducted by the Special Committee of the Board of Directors relating to energy trading losses, the time and expense incurred in implementing the recommendations of the Special Committee, and any reputational damage to the Company relating to the matters underlying the Special Committee’s review; and widespread health emergencies or outbreaks of infectious diseases such as the novel coronavirus disease (COVID-19), which may affect our financial position, results of operations and cash flows. As a result, actual results may differ materially from those projected in the forward-looking statements.
Topics for today’s call 3 Business Update Maria Pope, President and CEO • Financial results • Storm update • Business growth • ESG commitments Financial Update Jim Ajello, Senior VP of Finance, CFO and Treasurer • Economic recovery • First quarter 2021 earnings drivers • Regulatory update • Capital investments • Liquidity and financing
$1.07 Q1 Q2 Q3 Q4 Quarterly Diluted EPS $0.91 $0.43 $(0.19) $0.57 Q1 Q2 Q4 Quarterly Diluted EPS (1) After adjusting for the net effects of the previously disclosed energy trading loss ($1.03), PGE’s non-GAAP diluted EPS was $0.84 and $2.75 for the three- month quarter ended September 30, 2020 and full-year ended December 31, 2020, respectively. See the Appendix for additional detail on non-GAAP financial measures (2) Estimates based on 2021 earnings guidance First quarter 2021 financial results 4 2021 Earnings Guidance $2.55 - $2.70 Q1 2021 Q1 2020 Net income (in millions) $96 $81 Diluted earnings per share (EPS) $1.07 $0.91 Reaffirming • 2021 earnings guidance of $2.55 to $2.70 per diluted share • 4% to 6% long-term EPS growth, 2019 base year • 5% to 7% long-term dividend growth • 2021 load growth of 1% to 1.5%, long-term load growth of 1% $0.84(1) GAAP 2020 Diluted EPS $1.72 Non-GAAP 2020 Diluted EPS(1) $2.75 $1.48 - $1.63(2) Q3 GAAP EPS Non-GAAP EPS
5 Retail Revenues Net variable power costs Operating and administrative expense Depreciation and amortization expense Tax expense Q1 2021 EPS Non- qualified benefit trust Q1 2020 EPS First quarter 2021 earnings bridge
February 2021 storms Historic storms • In February a historic set of storms involving heavy snow, winds and ice impacted PGE’s service territory • Restored power to nearly half of customer base • Oregon Governor Kate Brown declared a state of emergency on February 13 Financial impact and regulatory recovery • Through March 31, PGE incurred an estimated $87 million in incremental costs due to the storms, of which $33 million were capital, and $54 million were operating expenses associated with transmission and distribution • PGE is authorized to collect $4 million annually from retail customers to cover incremental expenses related to major storm damages and can defer any amount not used. In response to these storms, PGE exhausted its $9 million balance in this account • After accounting for storm deferral tracking mechanisms already in place, the cumulative incurred operating and maintenance expenses from the February storm damage are $45 million as of March 31 • PGE expects to incur and defer additional costs subsequent to the storm • PGE does not expect an OPUC decision on the February storm deferral until sometime during 2022 6
Capital Planning $100 $80 $80 $80 $80 $400 $385 $385 $385 $385 $100 $85 $85 $85 $85 $100 2021 2022 2023 2024 2025 Generation Transmission and Distribution General Business and Technlogy Integrated Operations Center $700 $550 $550 $550 7 $550 Note: Capital expenditures exclude allowance for funds used under construction. Dollar values in millions. These are projections based on assumptions of future investment.
8 Ratings S&P Moody’s Senior Secured A A1 Senior Unsecured BBB+ A3 Commercial Paper A-2 P-2 Outlook Stable Stable Actual and Expected 2021 financings (dollars in millions) Q1 Q2 Q3 Q4 Long-term debt - - - $350 Short-term debt $200 - - - Credit Facilities $500 Letters of Credit $145 Cash $135 Total Liquidity: $780 million as of March 31, 2021 (dollars in millions) Liquidity and financing
Appendix
(1) Tax effects were determined based on the Company’s full-year blended federal and state statutory tax rate Management believes that excluding the effects of the previously disclosed energy trading losses provides a meaningful representation of the Company’s comparative dilutive earnings per share. The Company has adjusted diluted EPS to maintain comparability between periods. The net effect of the energy trading losses was $1.03 per diluted share for the three-month quarter ended September 30, 2020 and for the year ended December 31, 2020, respectively. PGE’s reconciliation of non-GAAP diluted EPS in 2020 is below: 10 Non-GAAP Diluted EPS Reconciliation Three months ended September 30, 2020 Year ended December 31, 2020 GAAP $(0.19) $1.72 Exclusion of certain trading losses 1.42 1.42 Tax effect (1) (0.39) (0.39) Non-GAAP $0.84 $2.75 Non-GAAP Financial Measures