Attached files
| file | filename |
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| EX-99.1 - PRESS RELEASE - PORTLAND GENERAL ELECTRIC CO /OR/ | ex99120170630pressrelease.htm |
| 8-K - FORM 8-K - PORTLAND GENERAL ELECTRIC CO /OR/ | por8-k20170630pressrelease.htm |
Portland
General
Electric
Earnings
Conference Call
Second Quarter 2017
Exhibit 99.2
Cautionary Statement
Information Current as of July 28, 2017
Except as expressly noted, the information in this presentation is current as of July 28, 2017 — the date on which PGE filed its Quarterly
Report on Form 10-Q for the quarter ended June 30, 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 recovery of capital costs for the Carty Generating Station;
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
• 2016 Integrated Resource Plan (IRP)
• 2018 General Rate Case
• Financial Update
• Guidance
3
Second Quarter 2017 Earnings Results
NI in millions Q2 2016 Q2 2017
Net Income $37 $32
Diluted EPS $0.42 $0.36
2016 Diluted EPS
$2.16
2017E Diluted EPS
$2.20 - $2.35
4
Q1
Q1
Q2 Q3
Q4
Q2
Q3-Q4
$1.02 - $1.17
Accomplishments and operational update
Generating Plant Availability of 87%
5
Top Quartile Customer Satisfaction
No. 1 renewable power program:
• Number of customers
• MWh sold
• Participation rate
• Sales rate
9th in the nation for energy-efficiency
TQS Research, Inc. and Market Strategies International
National Renewable Energy Laboratory
American Council for an Energy-Efficient Economy
• Economic fundamentals of our service
area remain strong.
• June unemployment rates in our service
area of 3.2 percent and in Oregon of 3.7
percent were historic lows and beat the
U.S. rate of 4.4 percent.1
• Oregon ranked second in the nation
with 2016 GDP growth of 3.3 percent.2
• Average residential customer count
increased approximately 1.3 percent
over the past year.
• Weather-adjusted 2017 energy
deliveries forecasted to decrease by
0 to 1 percent, with long-term positive
annual growth of 1 percent.3
Economic Update
1. State of Oregon Employment Department
2. U.S. Bureau of Economic Analysis
3. Net of approximately 1.5 percent of energy efficiency
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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 6/30/2017: $635M
• Estimated timeframe to complete litigation: 2-4 years
• Hearing scheduled for Oct. 31 to determine whether the lawsuit is arbitrable in the ICC's
International Court of Arbitration
• Filed for a rehearing with the Ninth Circuit, requesting review by all sitting Ninth Circuit judges
2016 Integrated Resource Plan
• A flexible, balanced plan that reflects our commitment to a low-carbon future and in
keeping with the Oregon Clean Electricity Plan
• Process includes continuing dialog with OPUC staff and stakeholders
• Productive bilateral negotiations have resulted in several options identified to meet
capacity need
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
Decision from OPUC
expected
RFP bidding process
may commence
Expected to reach
decision on RFPs
Nov. 2016 August 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:
• Q2 2017: Several rounds of settlement discussions completed with
agreement reached on some key issues; focus is now on remaining items
• Aug. 3-4: Settlement conference
• End of December: Final order expected from the commission
• Jan. 1, 2018: New prices anticipated to go into effect
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Second Quarter Financial Results
Q2 2016 Q2 2017
Retail
Revenue
Power
Costs
Generation,
Transmission
and
Distribution
Administrative
and General
$ in millions
Other Misc
Items
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AFDC Equity $(5)
D&A $(2)
Other Items $(3)
Second Quarter Earnings Bridge
Q2 2016 Q2 2017
Gross
Margin
Wind Storm
Service
Restoration PTCs
Plant
Maintenance
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Carty A&G
Weather $0.08
Decoupling $0.03
Earnings per diluted share
Capital Planning
Current Capital Outlook
Investments include:
• Upgrades and
replacement of aging
generation,
transmission and
distribution
• Strengthening the
power grid for
earthquakes, cyber
attacks 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.
$550
$453
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(1)
Liquidity and Financing
Total Liquidity as of 06/30/2017 (in millions)
Credit Facilities $ 720
Commercial Paper —
Letters of Credit $ (56 )
Cash $ 33
Available $ 697
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 ~$300
Bank Loan - - - $150 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;
• Normal hydro conditions for the remainder of the year based on
the current 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;
• Depreciation and amortization expense between $340 and $350
million; and
• Revised operating and maintenance costs between $555 to $575
million driven by increased distribution costs
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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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