Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE - PORTLAND GENERAL ELECTRIC CO /OR/ | ex99120170331pressrelease.htm |
| 8-K - FORM 8-K - PORTLAND GENERAL ELECTRIC CO /OR/ | por8-k20170331pressrelease.htm |
Portland
General
Electric
Earnings
Conference Call
First Quarter 2017
Exhibit 99.2
Cautionary Statement
Information Current as of April 27, 2017
Except as expressly noted, the information in this presentation is current as of April 27, 2017 — the date on which PGE filed its Quarterly
Report on Form 10-Q for the quarter ended March 31, 2017 — and should not be relied upon as being current as of any subsequent date.
PGE undertakes no duty to update the presentation, except as may be required by law.
Forward-Looking Statements
Statements in this news release that relate to future plans, objectives, expectations, performance, events and the like may constitute
“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include
statements regarding earnings guidance; statements regarding the expected capital costs for the Carty Generating Station and the
recovery of those costs; statements regarding future load, hydro conditions and operating and maintenance costs; statements concerning
implementation of the company’s integrated resource plan; statements concerning future compliance with regulations limiting emissions
from generation facilities and the costs to achieve such compliance; as well as other statements containing words such as “anticipates,”
“believes,” “intends,” “estimates,” “promises,” “expects,” “should,” “conditioned upon,” and similar expressions. Investors are cautioned that
any such forward-looking statements are subject to risks and uncertainties, including reductions in demand for electricity; the sale of
excess energy during periods of low demand or low wholesale market prices; operational risks relating to the company’s generation
facilities, including hydro conditions, wind conditions, disruption of fuel supply, and unscheduled plant outages, which may result in
unanticipated operating, maintenance and repair costs, as well as replacement power costs; failure to complete capital projects on
schedule or within budget, or the abandonment of capital projects, which could result in the company’s inability to recover project costs; the
costs of compliance with environmental laws and regulations, including those that govern emissions from thermal power plants; changes in
weather, hydroelectric and energy markets conditions, which could affect the availability and cost of purchased power and fuel; changes in
capital market conditions, which could affect the availability and cost of capital and result in delay or cancellation of capital projects; the
outcome of various legal and regulatory proceedings; and general economic and financial market conditions. As a result, actual results
may differ materially from those projected in the forward-looking statements. All forward-looking statements included in this news release
are based on information available to the company on the date hereof and such statements speak only as of the date hereof. The company
assumes no obligation to update any such forward-looking statement. Prospective investors should also review the risks and uncertainties
listed in the company’s most recent annual report on form 10-K and the company’s reports on forms 8-K and 10-Q filed with the United
States Securities and Exchange Commission, including management’s discussion and analysis of financial condition and results of
operations and the risks described therein from time to time.
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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
• Guidance
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First Quarter 2017 Earnings Results
NI in millions Q1 2016 Q1 2017
Net Income $61 $73
Diluted EPS $0.68 $0.82
2016 Diluted EPS
$2.16
2017E Diluted EPS
$2.20 - $2.35
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Q1
Q1
Q2 Q3
Q4
Q2-Q4
$1.38 - $1.53
Accomplishments and operational update
Generating Plant Availability 95%
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Top Quartile Customer Satisfaction
TQS Research, Inc. and Market Strategies International
Successful companywide effort to
deliver safe and reliable service to
customers in the face of historic
winter storms
Environmental Champion
Market Strategies International
• Positive economic trends in our service
area, including: unemployment at
record-low, rising wages and continued
increases in building permits1
• Unemployment rate in our service area
at 3.3 percent -- beating Oregon's rate
of 3.8 percent and the national rate of
4.5 percent2
• Average residential customer count
increased approximately 1.1 percent
over the past year
• Weather-adjusted 2017 energy
deliveries forecast to decrease by 0 to 1
percent, with long-term positive annual
growth of 1 percent based on continued
strength of local economy3
Economic Update
(1) Oregon Office of Economic Analysis
(2) State of Oregon Employment Department
(3) Net of approximately 1.5% of energy efficiency
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Capital Planning
Current Capital Outlook
Investments include:
• Upgrades and
replacement of aging
generation,
transmission and
distribution
• Strengthening the
power grid for
earthquakes,
cyberattacks and other
potential threats
• New customer
information systems
and technology tools
(1) Includes approximately $300 million of ongoing capital plus Board approved investments in resiliency for 2017 and 2018.
PGE continues to evaluate its need for additional resiliency investments and will update this forecast as appropriate.
$585
$446
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(1)
Carty Generation Station update
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Carty Generating Station, our 440 MW natural gas baseload plant near Boardman, Ore.
• Carty plant in-service, including AFDC, as of 3/31/2017: $636M
• Total estimated cost, including AFDC, for completion: ~$640M
• Estimated time frame to complete litigation: 2-4 years
• Oral argument on the Sureties' appeal to the 9th Circuit scheduled for May 8
2016 Integrated Resource Plan
• Reflects PGE's shift to more renewables in keeping with Oregon Clean Electricity
Plan
• Process includes continuing dialog with OPUC staff and stakeholders
• RFPs will be open to a variety of resource options
Areas of Focus
• Energy efficiency (135 MWa) and demand-side actions (77 MW)
• Investment/acquisition of renewables (175 MWa) to meet Oregon Clean Electricity
Plan — IRP will position PGE to comply with 27% RPS requirements by 2025
• Filling up to approximately 561 MW capacity deficit to ensure reliability
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IRP filed with
commission
OPUC acknowledgement
expected
RFP bidding process
commences
Expected to reach
decision on RFPs
Nov. 2016 Q3 2017 2nd Half 2017 2018
2018 General Rate Case filed Feb. 28
Key drivers:
Investments in the system to keep it safe, reliable and secure
Includes:
• Replacing assets at the end of their useful life
• Strengthening the system to better prepare for storms, earthquakes,
cyberattacks and other potential threats
• Investments in operational changes to integrate more renewable resources
and enhance system reliability
Timeline:
• Early May: PGE to host stakeholder workshop
• Early June: Staff and intervenor reply testimony filed; start settlement
discussions
• End of December: Final order expected from the commission
• Jan. 1, 2018: New prices anticipated to go into effect
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First Quarter Financial Results
Q1 2016 Q1 2017
Retail
Revenue
Power
Costs
Generation,
Transmission
and
Distribution
Administrative
and General
$ in millions
Other Misc
Items
AFDC Equity $ (5)
D & A $ (1)
Property, Payroll and
Other Taxes $ (2)
Miscellaneous Other $ 2
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First Quarter Earnings Bridge
Q1 2016 Q1 2017 Gross
Margin
Carty PTCs Distribution
Costs
Weather Impact on Load $ 0.27
Power Cost Adjustment $ 0.03
Weather Adjusted Load, net $ (0.08 )
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Liquidity and Financing
Total Liquidity as of 03/31/2017 (in millions)
Credit Facilities $ 660
Commercial Paper —
Letters of Credit $ (56 )
Cash $ 31
Available $ 635
Ratings S&P Moody's
Senior Secured A- A1
Senior Unsecured BBB A3
Commercial Paper A-2 Prime-2
Outlook Stable Stable
($ in millions) Q1 2017 Q2 2017 Q3 2017 Q4 2017
First Mortgage Bonds Plan to issue ~$450 million
Bank Loan
$150 million
maturing
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Guidance and Assumptions
2017 EPS
Guidance:
$2.20
-
$2.35
• Retail deliveries decline between zero and one percent, weather
-adjusted;
• Above average hydro conditions based on the current year hydro
forecast;
• Wind generation for the remainder of the year based on 5 years
of historic levels or forecast studies when historical data is not
available;
• Normal thermal plant operations for the remainder of the year;
• Revised operating and maintenance costs between $550 to $570
million driven by major storm restorations costs through April
• Depreciation and amortization expense between $340 and $350
million
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Dividend
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•Eleventh consecutive dividend increase
•Anticipated annual dividend increase of 5% - 7%
•Target payout ratio of approximately 50% - 70%
3.6%
CAGR
Maintain high level of
operational excellence
Work collaboratively with all
our stakeholders to obtain
acknowledgement of our
2016 Integrated Resource
Plan and associated action
plan
Achieve a fair and
reasonable result on our
2018 General Rate Case
2017 Key
Initiatives
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