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 28, 2022
| (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 28, 2022, Portland General Electric Company (the Company) issued a press release announcing its financial results for the three months ended March 31, 2022. 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 Thursday, April 28, 2022, 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 28, 2022, 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 28, 2022 | 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 28, 2022 | ||||||||
| Media Contact: | Investor Contact: | |||||||
| Mike Houlihan | Jardon Jaramillo | |||||||
| Corporate Communications | Investor Relations | |||||||
| Phone: 503-504-9706 | Phone: 503-464-7051 | |||||||
Portland General Electric Announces First Quarter 2022 Results
•Continued strong energy deliveries and customer growth amid challenging cost pressures
•Issued RFP shortlist results for renewable and non-emitting capacity resources with project selection targeted by the end of 2022
•Revising 2022 earnings guidance from $2.75 to $2.90 to $2.50 to $2.65 per diluted share, to reflect reductions to 2020 regulatory deferrals
PORTLAND, Ore. -- Portland General Electric Company (NYSE: POR) today reported net income of $60 million, or $0.67 per diluted share, for the first quarter of 2022. This compares with a net income of $96 million, or $1.07 per diluted share, for the first quarter of 2021.
“We continued to see strong load growth and remain focused on serving customers with increasing amounts of clean energy and a smarter, more resilient grid.” said Maria Pope, PGE president and CEO. “As a result of this week’s rate case order from the Oregon Public Utility Commission, we recorded a reduction to our 2020 deferrals for wildfire restoration and COVID in the first quarter of 2022. While this adjustment is significant, the overall order provides regulatory clarity as we continue to advance system reliability and move forward on decarbonization goals. We are also pleased that a highly competitive process has resulted in some PGE investment opportunities being included on the RFP shortlist.”
First Quarter 2022 Compared to First Quarter 2021
Total revenues were driven by higher retail energy deliveries, due to continued growth in commercial and industrial demand, including high-tech and digital customers, partially offset by milder weather. Purchased power and fuel expense increased to serve higher customer load. Operating expenses increased, driven by grid maintenance, vegetation management and reductions to deferral amounts recorded in 2020 related to COVID and Wildfire expenses as a result of the 2022 GRC stipulation. Administrative expenses increased due to wages and benefits driven by a strong labor market, as well as the cost of materials. Tax expense increased primarily due to a local tax flow-through adjustment that did not recur in 2022.
Company Updates
Renewable and Non-Emitting Capacity Request for Proposal Update
In October 2021, PGE (the Company) submitted to the Public Utility Commission of Oregon (OPUC) a request for the issuance of a Renewable Request for Proposals (RFP). In December 2021, the OPUC acknowledged the request and, as a result, later in December 2021, PGE issued the RFP seeking to procure at least 375 to 500 MW of qualifying renewable resources and approximately 375 MW of non-emitting dispatchable capacity resources and up to 100 MW of renewable resources in support of the Green Future Impact program’s PGE supply option.
1
Following the robust and competitive process of receiving and evaluating initial bids, PGE plans to submit a request for acknowledgement of a shortlist to the OPUC on May 5, 2022 that includes seven distinct projects submitted by five bidders for renewable resources and six distinct projects submitted by four bidders for non-emitting dispatchable capacity resources. This shortlist is included in Appendix A.
The proposals for renewable resources provide various combinations of wind, solar, and battery storage options that include power purchase agreements (PPA) along with Company-owned resources, as shown in Appendix A. The proposals for non-emitting dispatchable capacity resources provide battery storage and pumped storage options that include PPAs along with Company-owned resources. The ultimate outcome of the RFP process may involve the selection of multiple projects for both renewable and non-emitting dispatchable capacity resources.
PGE will request that the OPUC acknowledge the RFP shortlist by July 15, 2022 to enable the Company to execute definitive agreements. RFP shortlist projects were evaluated and selected based on conditions as of the shortlist date and are subject to risks and uncertainties, including, but not limited to, regulatory processes, inflationary impacts, supply chain constraints, supply cost increases (including application of tariffs impacting solar module imports), and legislative uncertainty. PGE intends to commence negotiations with one or more bidders and finalize negotiations prior to the end of 2022 to allow sufficient time to capture expiring federal production tax credits for the benefit of customers.
2022 General Rate Case Conclusion
On April 25, 2022, the OPUC issued Order 22-129, which adopted all stipulations agreed to by the parties to the proceeding, including the annual revenue requirement, cost of capital, capitalization ratio, and the elimination of the decoupling mechanism. Key elements of the OPUC’s Order also included:
•establishment of a balancing account for the Company’s major storm damage recovery mechanism;
•denial of PGE’s proposal for a secondary phase of the 2022 GRC regarding the Faraday capital improvement project. PGE can pursue recovery in the Company’s next GRC;
•establishment of a deferral that would require PGE to defer and refund, subject to an earnings test, the revenue requirement associated with Boardman included in customer prices following plant closure in 2020; and
•creation of an earnings test for the deferrals for the 2020 Wildfire Emergency and the February 2021 Ice Storm and Damage that is to be applied on a year-by-year basis.
As a result of the earnings tests outlined in the OPUC’s Order, the Company has released deferrals associated with the year ended 2020, resulting in a pre-tax, non-cash charge to earnings for the three months ended March 31, 2022 in the estimated amount of $17 million. PGE does not expect to exceed its regulated return on equity under the earnings tests for 2021 and 2022.
2021 Environmental, Social and Governance (ESG) Report
In March, PGE released its annual ESG report that highlights PGE's programs leading the clean energy future, which includes its commitment to sustainability. The 2021 report showcases key strategic projects that support the company's progress toward a sustainable future and advancing equity for customers, employees, and communities. For more information visit www.portlandgeneral.com/about/who-we-are/sustainability.
Quarterly Dividend
As previously announced, on April 22, 2022, the board of directors of Portland General Electric Company approved an increase in the annual dividend of 5.2%, or $0.09 per share, declaring a quarterly common stock dividend of $0.4525 per share. The quarterly dividend is payable on or before July 15, 2022 to shareholders of record at the close of business on June 27, 2022.
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2022 Earnings Guidance
PGE is revising its estimate for full-year 2022 earnings guidance from $2.75 to $2.90 to $2.50 to $2.65 per diluted share, based on the following assumptions:
•An increase in energy deliveries between 2% and 2.5%, weather adjusted;
•Normal temperatures in its utility service territory;
•Average hydro conditions;
•Wind generation based on five years of historical levels or forecast studies when historical data is not available;
•Normal thermal plant operations;
•Capital expenditures of $685 million in 2022 and $650 million in 2023 through 2026;
•Average construction work in progress balance of $270 million;
•Revised operating and maintenance expense from between $590 million and $610 million to $620 million and $640 million, which includes the $17 million deferral reduction recorded in Q1 2022;
•Depreciation and amortization expense between $420 million and $440 million;
•Effective tax rate of 15% to 20%;
•Cash from operations of $575 to $625 million; and
•No new common equity to be issued for investment or operations.
First Quarter 2022 Earnings Call and Webcast — April 28, 2022
PGE will host a conference call with financial analysts and investors on Thursday, April 28, 2022, 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 Thursday, April 28, 2022, through 2 p.m. ET on Thursday, May 5, 2022.
Maria Pope, President and CEO; Jim Ajello, Senior Vice President of Finance, CFO, and Treasurer; and Jardon Jaramillo, Senior Director, Investor Relations, Finance, and Risk, 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. 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 more than 130 years, PGE has powered the advancement of society, delivering safe, affordable, and reliable energy to Oregonians. PGE and its approximately 3,000 employees are working with customers to build a clean energy future. Together with its customers, PGE has the No. 1 voluntary renewable energy program in the U.S. PGE is committed to achieving at least an 80% reduction in greenhouse gas emissions from power served to customers by 2030 and 100% reduction by 2040. In 2021, PGE became the first U.S. utility to join The Climate Pledge. For the eighth year in a row PGE achieved a perfect score on the 2021 Human Rights Campaign Foundation's Corporate Equality Index, a national benchmarking survey and report on corporate policies and practices related to LGBTQ workplace equality. In 2021, PGE, employees, retirees, and the PGE Foundation donated $4.8 million and volunteered 15,760 hours with more than 300 nonprofits across Oregon. For more information visit www.PortlandGeneral.com/news.
SOURCE: Portland General Company
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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. These forward-looking statements represent our estimates and assumptions as of the date of this report. The Company assumes no obligation to update or revise any forward-looking statement as a result of new
information, future events or other factors.
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," “based on,” "believes," "conditioned upon," “considers,” "estimates," "expects," "intends," “needs,” “plans,” “promises," “seeks,” "should," “subject to,” “targets,” and similar expressions.
Investors are cautioned that any such forward-looking statements are subject to risks and uncertainties, including, without limitation: the outcome of various legal and regulatory actions; 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 and battery storage facilities, including hydro conditions, wind conditions, disruption of transmission and distribution, disruption of fuel supply, and unscheduled plant outages, which may result in unanticipated operating, maintenance and repair costs, as well as replacement power costs; delays in the supply chain and increased supply costs (including application of tariffs impacting solar module imports), failure to complete capital projects on schedule or within budget, failure of counterparties to perform under agreement, or the abandonment of capital projects, which could result in the Company's inability to recover project costs; default or nonperformance of counterparties from whom PGE purchases capacity or energy, which require the purchase of replacement power and renewable attributes at increased costs; complications arising from PGE’s jointly-owned plant, including ownership changes, regulatory outcomes or operational failures; 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, including interest rates, which could affect the access to and availability or cost of capital and result in delay or cancellation of capital projects or execution of the Company’s strategic plan as currently envisioned; general economic and financial market conditions, including inflation; severe weather conditions, wildfires, and other natural phenomena and natural disasters that could result in operational disruptions, unanticipated restoration costs, or third party liability; 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; employee workforce factors, including potential strikes, work stoppages, transitions in senior management, and the ability to recruit and retain key employees and other talent due to the novel corona virus disease (COVID-19) mandates and turnover due to macroeconomic trends; PGE business activities are concentrated in one region and future performance may be affected by events and factors unique to Oregon; and widespread health emergencies or outbreaks of infectious diseases such as COVID-19, including potential vaccination mandates, 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.
These risks and uncertainties to which the Company are subject to are further discussed in the reports that the Company has filed with the United States Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC’s website, www.sec.gov and on the Company’s website, investors.portlandgeneral.com. Investors should not rely unduly on any forward-looking statements.
POR
Source: Portland General Company
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Appendix A - RFP Final Shortlist
| Renewable Resources | ||||||||||||||||||||||||||||||||||||||
| Bidder | Project | Proposal (1) | Technology | Structure | MW (2) | Company-owned Wind MW | ||||||||||||||||||||||||||||||||
A (3) | 1 | a) | Solar, Battery | PPA | 120 | — | ||||||||||||||||||||||||||||||||
| b) | Solar | PPA | 120 | — | ||||||||||||||||||||||||||||||||||
| 2 | a) | Solar, Battery | PPA | 200 | — | |||||||||||||||||||||||||||||||||
| b) | Solar | PPA | 200 | — | ||||||||||||||||||||||||||||||||||
| B | 3 | a) | Solar, Battery | PPA | 41 | — | ||||||||||||||||||||||||||||||||
| b) | Solar | PPA | 41 | — | ||||||||||||||||||||||||||||||||||
| c) | Solar, Battery | PPA | 41 | — | ||||||||||||||||||||||||||||||||||
| d) | Solar | PPA | 41 | — | ||||||||||||||||||||||||||||||||||
| C | 4 | a) | Solar, Battery | PPA | 150 | — | ||||||||||||||||||||||||||||||||
| b) | Solar, Battery | PPA | 150 | — | ||||||||||||||||||||||||||||||||||
| 5 | a) | Solar, Battery | PPA | 76 | — | |||||||||||||||||||||||||||||||||
| D | 6 | a) | Wind | Hybrid (4) | 312 | 209 | ||||||||||||||||||||||||||||||||
| E | 7 | a) | Wind, Solar, Battery | Hybrid (4) | 1,050 | 350 | ||||||||||||||||||||||||||||||||
| b) | Wind, Solar, Battery | Hybrid (4) | 450 | 230 | ||||||||||||||||||||||||||||||||||
| c) | Wind, Solar, Battery | Hybrid (4) | 710 | 350 | ||||||||||||||||||||||||||||||||||
| d) | Wind | Hybrid (4) | 690 | 350 | ||||||||||||||||||||||||||||||||||
| e) | Wind | Hybrid (4) | 350 | 120 | ||||||||||||||||||||||||||||||||||
| f) | Wind, Solar, Battery | Hybrid (4) | 610 | 350 | ||||||||||||||||||||||||||||||||||
| Non-emitting Dispatchable Capacity Resources | ||||||||||||||||||||||||||||||||
| Bidder | Project | Proposal (1) | Technology | Structure | MW | |||||||||||||||||||||||||||
A (3) | 8 | a) | Battery | PPA | 100 | |||||||||||||||||||||||||||
| F | 9 | a) | Battery | PPA | 100 | |||||||||||||||||||||||||||
| G | 10 | a) | Pumped Storage | PPA | 196 | |||||||||||||||||||||||||||
| H | 11 | a) | Battery | PPA | 150 | |||||||||||||||||||||||||||
| b) | Battery | PPA | 175 | |||||||||||||||||||||||||||||
| c) | Battery | PPA | 200 | |||||||||||||||||||||||||||||
| 12 | a) | Battery | Company-owned | 75 | ||||||||||||||||||||||||||||
| b) | Battery | Company-owned | 50 | |||||||||||||||||||||||||||||
| 13 | a) | Battery | Company-owned | 100 | ||||||||||||||||||||||||||||
| b) | Battery | Company-owned | 125 | |||||||||||||||||||||||||||||
| c) | Battery | Company-owned | 75 | |||||||||||||||||||||||||||||
(1) While the outcome of the RFP process may involve the selection of multiple projects for both renewable and capacity resources, individual proposals within a given project are considered mutually exclusive
(2) Renewable MW values do not include nameplate capacity of paired energy storage
(3) Selection of projects from Bidder A are limited to two of the three submitted projects. i.e., A.1. and A.2. may be selected, but not A.8., etc.
(4) Hybrid commercial structure includes a PPA portion and a Company-owned portion of project resources
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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, | |||||||||||
| 2022 | 2021 | ||||||||||
| Revenues: | |||||||||||
| Revenues, net | $ | 625 | $ | 612 | |||||||
| Alternative revenue programs, net of amortization | 1 | (3) | |||||||||
| Total revenues | 626 | 609 | |||||||||
| Operating expenses: | |||||||||||
| Purchased power and fuel | 202 | 169 | |||||||||
| Generation, transmission and distribution | 90 | 80 | |||||||||
| Administrative and other | 89 | 86 | |||||||||
| Depreciation and amortization | 99 | 103 | |||||||||
| Taxes other than income taxes | 40 | 38 | |||||||||
| Total operating expenses | 520 | 476 | |||||||||
| Income from operations | 106 | 133 | |||||||||
| Interest expense, net | 38 | 34 | |||||||||
| Other income: | |||||||||||
| Allowance for equity funds used during construction | 3 | 4 | |||||||||
| Miscellaneous income, net | — | 2 | |||||||||
| Other income, net | 3 | 6 | |||||||||
| Income before income tax expense | 71 | 105 | |||||||||
| Income tax expense | 11 | 9 | |||||||||
| Net income | 60 | 96 | |||||||||
| Weighted-average common shares outstanding (in thousands): | |||||||||||
| Basic | 89,396 | 89,556 | |||||||||
| Diluted | 89,527 | 89,703 | |||||||||
| Earnings per share: | |||||||||||
Earnings per share—Basic and diluted | $ | 0.67 | $ | 1.07 | |||||||
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(Unaudited)
| March 31, 2022 | December 31, 2021 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 110 | $ | 52 | |||||||
| Accounts receivable, net | 303 | 329 | |||||||||
| Inventories | 72 | 78 | |||||||||
| Regulatory assets—current | 20 | 24 | |||||||||
| Other current assets | 371 | 205 | |||||||||
| Total current assets | 876 | 688 | |||||||||
| Electric utility plant, net | 8,062 | 8,005 | |||||||||
| Regulatory assets—noncurrent | 491 | 533 | |||||||||
| Nuclear decommissioning trust | 44 | 47 | |||||||||
| Non-qualified benefit plan trust | 42 | 45 | |||||||||
| Other noncurrent assets | 208 | 176 | |||||||||
| Total assets | $ | 9,723 | $ | 9,494 | |||||||
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, continued
(Dollars in millions)
(Unaudited)
| March 31, 2022 | December 31, 2021 | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 169 | $ | 244 | |||||||
| Liabilities from price risk management activities—current | 60 | 47 | |||||||||
| Current portion of finance lease obligation | 22 | 20 | |||||||||
| Accrued expenses and other current liabilities | 680 | 457 | |||||||||
| Total current liabilities | 931 | 768 | |||||||||
| Long-term debt, net of current portion | 3,286 | 3,285 | |||||||||
| Regulatory liabilities—noncurrent | 1,379 | 1,360 | |||||||||
| Deferred income taxes | 422 | 413 | |||||||||
| Unfunded status of pension and postretirement plans | 206 | 206 | |||||||||
| Liabilities from price risk management activities—noncurrent | 72 | 90 | |||||||||
| Asset retirement obligations | 243 | 238 | |||||||||
| Non-qualified benefit plan liabilities | 93 | 95 | |||||||||
| Finance lease obligations, net of current portion | 299 | 273 | |||||||||
| Other noncurrent liabilities | 83 | 59 | |||||||||
| Total liabilities | 7,014 | 6,787 | |||||||||
| Shareholders’ Equity: | |||||||||||
| Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding as of March 31, 2022 and December 31, 2021 | — | — | |||||||||
| Common stock, no par value, 160,000,000 shares authorized; 89,223,903 and 89,410,612 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 1,236 | 1,241 | |||||||||
| Accumulated other comprehensive loss | (10) | (10) | |||||||||
| Retained earnings | 1,483 | 1,476 | |||||||||
| Total shareholders’ equity | 2,709 | 2,707 | |||||||||
| Total liabilities and shareholders’ equity | $ | 9,723 | $ | 9,494 | |||||||
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 60 | $ | 96 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 99 | 103 | |||||||||
| Deferred income taxes | 4 | (1) | |||||||||
| Pension and other postretirement benefits | 3 | 6 | |||||||||
| Allowance for equity funds used during construction | (3) | (4) | |||||||||
| Decoupling mechanism deferrals, net of amortization | (1) | 3 | |||||||||
| Deferral of incremental storm costs | (2) | (41) | |||||||||
| Deferral of incremental wildfire costs | (7) | (7) | |||||||||
| Other non-cash income and expenses, net | 39 | 20 | |||||||||
| Changes in working capital: | |||||||||||
| (Increase)/decrease in accounts receivable, net | 21 | (2) | |||||||||
| Decrease in inventories | 6 | 4 | |||||||||
| (Increase)/decrease in margin deposits | 23 | (1) | |||||||||
| Increase/(decrease) in accounts payable and accrued liabilities | (44) | 26 | |||||||||
| Increase in margin deposits from wholesale counterparties | 99 | — | |||||||||
| Other working capital items, net | (27) | (14) | |||||||||
| Other, net | (21) | (20) | |||||||||
| Net cash provided by operating activities | 249 | 168 | |||||||||
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
(In millions)
(Unaudited)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | (167) | (153) | |||||||||
| Sales of Nuclear decommissioning trust securities | 2 | 3 | |||||||||
| Purchases of Nuclear decommissioning trust securities | (2) | (3) | |||||||||
| Proceeds from sale of properties | 12 | — | |||||||||
| Other, net | 1 | (9) | |||||||||
| Net cash used in investing activities | (154) | (162) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Payments on long-term debt | — | (140) | |||||||||
| Borrowings on short-term debt | — | 200 | |||||||||
| Repayments of short-term debt | — | (150) | |||||||||
| Proceeds from failed sale-leaseback transactions | 25 | — | |||||||||
| Dividends paid | (38) | (36) | |||||||||
| Repurchase of common stock | (18) | — | |||||||||
| Other | (6) | (2) | |||||||||
| Net cash used in financing activities | (37) | (128) | |||||||||
| Increase (Decrease) in cash and cash equivalents | 58 | (122) | |||||||||
| Cash and cash equivalents, beginning of period | 52 | 257 | |||||||||
| Cash and cash equivalents, end of period | $ | 110 | $ | 135 | |||||||
| Supplemental cash flow information is as follows: | |||||||||||
| Cash paid for interest, net of amounts capitalized | $ | 18 | $ | 16 | |||||||
| Cash paid for income taxes | 2 | — | |||||||||
| Non-cash investing and financing activities: | |||||||||||
| Assets obtained under leasing arrangements | 29 | — | |||||||||
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| Revenues (dollars in millions): | |||||||||||||||||||||||
| Retail: | |||||||||||||||||||||||
| Residential | $ | 308 | 49 | % | $ | 310 | 51 | % | |||||||||||||||
| Commercial | 178 | 29 | 162 | 26 | |||||||||||||||||||
| Industrial | 69 | 11 | 60 | 10 | |||||||||||||||||||
| Direct Access* | 8 | 1 | 11 | 2 | |||||||||||||||||||
| Subtotal | 563 | 90 | 543 | 89 | |||||||||||||||||||
| Alternative revenue programs, net of amortization | 1 | — | (3) | — | |||||||||||||||||||
| Other accrued revenues, net | — | — | 13 | 2 | |||||||||||||||||||
| Total retail revenues | 564 | 90 | 553 | 91 | |||||||||||||||||||
| Wholesale revenues | 56 | 9 | 33 | 5 | |||||||||||||||||||
| Other operating revenues | 6 | 1 | 23 | 4 | |||||||||||||||||||
| Total revenues | $ | 626 | 100 | % | $ | 609 | 100 | % | |||||||||||||||
| Energy deliveries (MWhs in thousands): | |||||||||||||||||||||||
| Retail: | |||||||||||||||||||||||
| Residential | 2,216 | 32 | % | 2,239 | 35 | ||||||||||||||||||
| Commercial | 1,634 | 24 | 1,564 | 24 | |||||||||||||||||||
| Industrial | 974 | 14 | 897 | 14 | |||||||||||||||||||
| Subtotal | 4,824 | 70 | 4,700 | 73 | |||||||||||||||||||
| Direct access: | |||||||||||||||||||||||
| Commercial | 131 | 2 | 150 | 2 | |||||||||||||||||||
| Industrial | 413 | 7 | 359 | 6 | |||||||||||||||||||
| Subtotal | 544 | 9 | 509 | 8 | |||||||||||||||||||
| Total retail energy deliveries | 5,368 | 79 | 5,209 | 81 | |||||||||||||||||||
| Wholesale energy deliveries | 1,507 | 21 | 1,245 | 19 | |||||||||||||||||||
| Total energy deliveries | 6,875 | 100 | % | 6,454 | 100 | % | |||||||||||||||||
| Average number of retail customers: | |||||||||||||||||||||||
| Residential | 806,553 | 88 | % | 797,602 | 88 | % | |||||||||||||||||
| Commercial | 111,668 | 12 | 110,703 | 12 | |||||||||||||||||||
| Industrial | 192 | — | 193 | — | |||||||||||||||||||
| Direct access | 550 | — | 601 | — | |||||||||||||||||||
| Total | 918,963 | 100 | % | 909,099 | 100 | % | |||||||||||||||||
* Commercial revenues from ESS customers were $3 million for 2022 and $4 million for 2021, respectively. Industrial revenues from ESS customers were $5 million and $7 million for 2022 and 2021, respectively.
11
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| Sources of energy (MWhs in thousands): | |||||||||||||||||||||||
| Generation: | |||||||||||||||||||||||
| Thermal: | |||||||||||||||||||||||
| Natural gas | 2,149 | 32 | % | 2,383 | 38 | % | |||||||||||||||||
| Coal | 610 | 9 | 582 | 9 | |||||||||||||||||||
| Total thermal | 2,759 | 41 | 2,965 | 47 | |||||||||||||||||||
| Hydro | 273 | 4 | 317 | 5 | |||||||||||||||||||
| Wind | 392 | 6 | 532 | 9 | |||||||||||||||||||
| Total generation | 3,424 | 51 | 3,814 | 61 | |||||||||||||||||||
| Purchased power: | |||||||||||||||||||||||
| Hydro* | 1,562 | 23 | 1,129 | 18 | |||||||||||||||||||
| Wind* | 195 | 3 | 238 | 4 | |||||||||||||||||||
| Solar* | 113 | 2 | 92 | 1 | |||||||||||||||||||
| Natural Gas | 2 | — | 4 | — | |||||||||||||||||||
| Waste, Wood and Landfill Gas* | 37 | 1 | 39 | 1 | |||||||||||||||||||
| Source not specified | 1,315 | 20 | 921 | 15 | |||||||||||||||||||
| Total purchased power | 3,224 | 49 | 2,423 | 39 | |||||||||||||||||||
| Total system load | 6,648 | 100 | % | 6,237 | 100 | % | |||||||||||||||||
| Less: wholesale sales | (1,507) | (1,245) | |||||||||||||||||||||
| Retail load requirement | 5,141 | 4,992 | |||||||||||||||||||||
*Includes power received from qualifying facilities under the Public Utility Regulatory Policies Act of 1978 (PURPA) of 6 MWh in 2022 and 2021 from Hydro resources, 6 MWh in 2022 and 2021 from Wind resources, 104 MWh in 2022 and 88 MWh in 2021 from Solar resources, and 20 MWh in 2022 and 19 MWh in 2021 from Waste, Wood and Landfill Gas resources.
The following table indicates the number of heating degree-days for the three months ended March 31, 2022 and 2021, along with 15-year averages based on weather data provided by the National Weather Service, as measured at Portland International Airport:
| Heating Degree-days | |||||||||||||||||
| 2022 | 2021 | Avg. | |||||||||||||||
| January | 710 | 620 | 721 | ||||||||||||||
| February | 591 | 641 | 598 | ||||||||||||||
| March | 460 | 544 | 527 | ||||||||||||||
| Year-to-date | 1,761 | 1,805 | 1,846 | ||||||||||||||
| (Decrease) from the 15-year average | (5) | % | (2) | % | |||||||||||||
12
Portland General Electric EARNINGS CONFERENCE CALL FIRST QUARTER 2022 Exhibit 99.2
Cautionary statement Information Current as of April 28, 2022 Except as expressly noted, the information in this presentation is current as of April 28, 2022 — the date on which PGE filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 — 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. These forward-looking statements represent our estimates and assumptions as of the date of this report. The Company assumes no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors. 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," “based on,” "believes," "conditioned upon," “considers,” "estimates," "expects," "intends," “needs,” “plans,” “promises,“ “seeks,” "should," “subject to,” “targets,” and similar expressions. Investors are cautioned that any such forward-looking statements are subject to risks and uncertainties, including, without limitation: the outcome of various legal and regulatory actions; 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 and battery storage facilities, including hydro conditions, wind conditions, disruption of transmission and distribution, disruption of fuel supply, and unscheduled plant outages, which may result in unanticipated operating, maintenance and repair costs, as well as replacement power costs; delays in the supply chain and increased supply costs (including application of tariffs impacting solar module imports), failure to complete capital projects on schedule or within budget, failure of counterparties to perform under agreement, or the abandonment of capital projects, which could result in the Company's inability to recover project costs; default or nonperformance of counterparties from whom PGE purchases capacity or energy, which require the purchase of replacement power and renewable attributes at increased costs; complications arising from PGE’s jointly-owned plant, including ownership changes, regulatory outcomes or operational failures; 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, including interest rates, which could affect the access to and availability or cost of capital and result in delay or cancellation of capital projects or execution of the Company’s strategic plan as currently envisioned; general economic and financial market conditions, including inflation; severe weather conditions, wildfires, and other natural phenomena and natural disasters that could result in operational disruptions, unanticipated restoration costs, or third party liability; 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; employee workforce factors, including potential strikes, work stoppages, transitions in senior management, and the ability to recruit and retain key employees and other talent due to the novel corona virus disease (COVID-19) mandates and turnover due to macroeconomic trends; PGE business activities are concentrated in one region and future performance may be affected by events and factors unique to Oregon; and widespread health emergencies or outbreaks of infectious diseases such as COVID-19, including potential vaccination mandates, 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. These risks and uncertainties to which the Company are subject to are further discussed in the reports that the Company has filed with the United States Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC’s website, www.sec.gov and on the Company’s website, investors.portlandgeneral.com. Investors should not rely unduly on any forward-looking statements. 2
Topics for today’s call 3 Business Update Maria Pope, President and CEO • 2022 General Rate Case • Financial and operational highlights • 2021 RFP update Financial Update Jim Ajello, Senior VP of Finance, CFO and Treasurer • 2022 General Rate Case • Economic update • First quarter 2022 earnings • Capital investments • Liquidity and financing • 2021 RFP shortlist
$0.67 Q1 Q2 Q3 Q4 Quarterly Diluted EPS (1) The amount and timing of dividends payable and the dividend policy are at the sole discretion of the Portland General Electric Board of Directors and, if declared and paid, dividends may be in amounts that are less than projected (2) Q2-Q4 2022 estimate based on 2022 earnings guidance First quarter 2022 financial results 4 Q1 2022 Q1 2021 Net income (in millions) $60 $96 Diluted earnings per share (EPS) $0.67 $1.07 Revising • 2022 earnings guidance from $2.75 to $2.90 to $2.50 to $2.65 per diluted share Reaffirming • 4% to 6% long-term EPS growth, 2019 base year • 5% to 7% long-term dividend growth (1) • 2022 load growth of 2% to 2.5%, weather adjusted • Long-term load growth of 1.5% $1.83 - $1.98(2) Q3 $1.07 $0.36 $0.56 $0.73 Q1 Q2 Q3 Q4 Quarterly Diluted EPS 2021 Diluted EPS $2.72 2022 Earnings Guidance $2.50 - $2.65
2022 General Rate Case conclusion Rate Case Key Terms – Final Order 22-129 – Rates Effective May 9, 2022 Average Rate Base $5.6 Billion Average Rate Base Increase $814 million, 17% ROE 9.5% Capital Structure 50/50 Cost of Debt 4.125% Cost of Capital 6.83% Revenue Requirement Increase $74 million, including $64 million for power costs Other Key Terms • Accelerated depreciation of Colstrip to 2025 and established a separate revenue requirement • Full recovery of Integrated Operations Center • Faraday Repowering project, separate proceeding needed to resolve • Earnings test applied to Boardman, 2020 wildfire restoration and February 2021 storm deferrals • Level III outage mechanism updated to allow negative balance • Elimination of decoupling mechanism 5
First quarter 2022 earnings bridge 6 Q1 2021 EPS Retail revenues Net Variable Power Costs Operating expense Q1 2022 EPS Prior year local tax flow- through adjustment Depreciation and amortization Capital deferral and other Interest expense Non-qualified benefit trust 2020 Wildfire and COVID deferral reversal
$135 $120 $120 $120 $120 $375 $430 $430 $430 $430 $140 $100 $100 $100 $100 $35 2022 2023 2024 2025 2026 Capital expenditures forecast Generation Transmission and Distribution General Business and Technology Integrated Operations Center $650 $685 $650$650 Note: Capital expenditures exclude allowance for funds used under construction. Dollar values in millions. These are projections based on assumptions of future investment. Actual amounts expended will depend on various factors and may differ materially from the amounts reflected in this capital expenditure forecast. Reliability and resiliency investments 7 $650
Ratings S&P Moody’s Senior Secured A A1 Senior Unsecured BBB+ A3 Commercial Paper A-2 P-2 Outlook Stable Stable Credit Facilities $650 Letters of Credit $145 Total Liquidity: $905 million as of March 31, 2022 (dollars in millions) Cash $110 Liquidity and financing Expected 2022 financings (dollars in millions) Q1 Q2 Q3 Q4 Long-term debt - - $250 - Short-term debt - - - - 8
2021 RFP PGE is seeking up to approximately 1,000 MW of renewable and non-emitting resources, consisting of: • 375 to 500 MW of renewables • 375 MW of non-emitting capacity • 100 MW of renewables in support of the Green Future Impact program’s PGE supply option Resource planning and procurement 9 RFP Timeline December 2021 Final RFP issued January 2022 Bids submitted April 2022 Shortlist published May 2022 Submit request for acknowledgement of final shortlist to OPUC July 2022 Target acknowledgement of shortlist by OPUC Q3 2022 Commence negotiations with bidders upon shortlist acknowledgement Q4 2022 Expected execution of final contracts with winning bidders Year-end 2024 Projects expected to be in-service* *Pumped storage projects can come online by December 31, 2027