Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - PORTLAND GENERAL ELECTRIC CO /OR/ | form8-k2016annualpressrele.htm |
| EX-99.1 - PRESS RELEASE - PORTLAND GENERAL ELECTRIC CO /OR/ | a2016annualpressrelease.htm |
Portland
General
Electric
Earnings
Conference Call
Fourth Quarter and
Full Year 2016
Exhibit 99.2
Cautionary Statement
Information Current as of February 17, 2017
Except as expressly noted, the information in this presentation is current as of February 17, 2017 — the date on which PGE filed its
Annual Report on Form 10-K for the year ended December 31, 2016 — and should not be relied upon as being current as of any
subsequent date. PGE undertakes no duty to update the presentation, except as may be required by law.
Forward-Looking Statements
Statements in this news release that relate to future plans, objectives, expectations, performance, events and the like may constitute
“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include
statements regarding earnings guidance; statements regarding the expected capital costs for the Carty Generating Station and the
recovery of those costs; statements regarding future load, hydro conditions and operating and maintenance costs; statements concerning
implementation of the company’s integrated resource plan; statements concerning future compliance with regulations limiting emissions
from generation facilities and the costs to achieve such compliance; as well as other statements containing words such as “anticipates,”
“believes,” “intends,” “estimates,” “promises,” “expects,” “should,” “conditioned upon,” and similar expressions. Investors are cautioned that
any such forward-looking statements are subject to risks and uncertainties, including reductions in demand for electricity; the sale of
excess energy during periods of low demand or low wholesale market prices; operational risks relating to the company’s generation
facilities, including hydro conditions, wind conditions, disruption of fuel supply, and unscheduled plant outages, which may result in
unanticipated operating, maintenance and repair costs, as well as replacement power costs; failure to complete capital projects on
schedule or within budget, or the abandonment of capital projects, which could result in the company’s inability to recover project costs; the
costs of compliance with environmental laws and regulations, including those that govern emissions from thermal power plants; changes in
weather, hydroelectric and energy markets conditions, which could affect the availability and cost of purchased power and fuel; changes in
capital market conditions, which could affect the availability and cost of capital and result in delay or cancellation of capital projects; the
outcome of various legal and regulatory proceedings; and general economic and financial market conditions. As a result, actual results
may differ materially from those projected in the forward-looking statements. All forward-looking statements included in this news release
are based on information available to the company on the date hereof and such statements speak only as of the date hereof. The company
assumes no obligation to update any such forward-looking statement. Prospective investors should also review the risks and uncertainties
listed in the company’s most recent annual report on form 10-K and the company’s reports on forms 8-K and 10-Q filed with the United
States Securities and Exchange Commission, including management’s discussion and analysis of financial condition and results of
operations and the risks described therein from time to time.
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Leadership
Presenting
Today
Jim Lobdell
Senior VP
of Finance,
CFO & Treasurer
Jim Piro
President & CEO
On Today's Call
• Financial performance
• Operational update
• Economy and customers
• Capital expenditures forecast
• 2016 Integrated Resource Plan (IRP)
• 2018 General Rate Case
• Financial update
• Earnings guidance
3
2016 Earnings Results
NI in millions Q4 2016 Q4 2015 FY 2016 FY 2015
Net Income $61 $51 $193 $172
Diluted EPS $0.68 $0.57 $2.16 $2.04
2015 EPS
$2.04
2016 EPS
$2.16
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Q1
Q1
Q2 Q2 Q3
Q4
Q3
Q4
Accomplishments and operational update
Most Trusted Brand,
Customer Champion, &
Environmental Champion in 2016
Market Strategies International
Top Quartile Customer Satisfaction
TQS Research Inc. and Market Strategies International
Generating Plant Availability 93%
Filed 2016 Integrated Resource Plan
Carty Generating Station Online
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• Oregon's economic expansion
continued in 2016(1)
• PGE's service area unemployment
rate of 4.0 percent outperformed
Oregon's rate of 4.6 percent and the
national rate of 4.7 percent(2)
• Residential customer count increased
approximately 1.2 percent over the
past year
• Weather-adjusted 2017 energy
deliveries forecast to decrease by
0 to 1 percent, with long-term positive
annual growth of ~1 percent based on
continued strength of local economy(3)
Economic Update
(1) Oregon Office of Economic Analysis
(2) State of Oregon Employment Department, as of December 2016
(3) Net of approximately 1.5% of energy efficiency
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Capital Planning
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(1) Consists of board-approved ongoing CapEx and hydro relicensing per the 2016 Form 10-K filed on February 17, 2017
(2) Total estimated cost does not consider any amounts that may be received from sureties under the performance bond
Current Capital Outlook
• Board approved
investments include:
• Upgrades and
replacement of aging
generation,
transmission and
distribution
• Strengthening the
power grid for
earthquakes,
cyberattacks and other
potential threats
• New customer
information systems
and technology tools
$610
Base Capital Spending(1) Carty(2)
Carty Generating Station update
Carty Generating Station, our 440 MW natural gas baseload plant near Boardman, Ore.
• Achieved 93 percent availability in first five months of operation
• Capital costs included in customer prices as of 8/1/2016: $514M
• Carty plant in-service, including AFDC, as of 12/31/2016: $634M
• Total estimated cost, including AFDC, for completion: ~$640M
• Estimated time frame to complete litigation: 2-4 years
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2016 Integrated Resource Plan
Areas of Focus
• Energy efficiency (135 MWa) and demand side actions (77 MW)
• Investment / acquisition of renewables (175 MWa) to meet Oregon Clean Electricity Plan:
IRP will position PGE to comply with 27% requirement by 2025
• Filling up to 850 MW capacity deficit to ensure reliability
◦ 375-550 MW long-term annual dispatchable resources; Up to 400 MW annual
capacity resources
OPUC acknowledgement
expected
RFP bidding process
commences
Expected to reach
decision on RFPs
Nov. 2016 Mid-2017 2nd Half 2017 2018
IRP was filed
• Reflects PGE's shift to more renewables in keeping with Oregon Clean Electricity Plan
• Process includes continuing dialog with OPUC staff and stakeholders
• RFPs will be open to a variety of resource options
2018 General Rate Case
Key drivers:
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Investments in the system to keep it safe, reliable and secure
Includes:
• Replacing assets at the end of their useful life
• Strengthening the system to better prepare for storms,
earthquakes, cyberattacks and other potential threats
• Investments in operational changes to integrate more renewable
resources and enhance system reliability
Timeline:
• File with the OPUC by the end of February
• Regulatory review to occur throughout 2017
• Final order expected from the commission by end of December
2016 Income Statement Bridge
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2015 2016
Retail
Revenue
Wholesale
& Other
Revenues
Power
Costs
O&M D&A Income
Taxes
Gross Margin Change: $69
Other
Taxes
$ in millions
Interest
2016 Drivers Bridge
Carty Earnings $ 0.10
Carty Overage $ (0.02 )
Carty Legal $ (0.04 )
2015 2016 Carty
Power
Portfolio
Other Rate
Base
Increase
'15 to '16
Other Change in
Share
Count
O&M
PTCs &
Other Tax
Credits
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Liquidity and Financing
Total Liquidity as of 12/31/2016 (in millions)
Credit Facilities $ 660
Commercial Paper —
Letters of Credit $ (56 )
Cash $ 6
Available $ 610
Ratings S&P Moody's
Senior Secured A- A1
Senior Unsecured BBB A3
Commercial Paper A-2 Prime-2
Outlook Stable Stable
($ in millions) Q1 2017 Q2 2017 Q3 2017 Q4 2017
First Mortgage Bonds Plan to issue ~$450 million
Bank Loan
$150 million
maturing
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Guidance and Assumptions
2017 EPS
Guidance:
$2.20
-
$2.35
• Retail deliveries decline between zero and one percent,
weather-adjusted;
• Average hydro conditions for the year;
• Wind generation for the year based on 5 years of
historic levels or forecast studies when historical data
is not available;
• Normal thermal plant operations;
• Operating and maintenance costs between $540 and
$560 million; and
• Depreciation and amortization expense between $340
and $350 million.
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• Maintain high level of
operational excellence
• Work collaboratively with
stakeholders to obtain
acknowledgement of 2016
IRP and associated action
plan
• Achieve a fair and
reasonable result in our
2018 General Rate Case
2017 Key
Initiatives
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