Portland General Electric Co · NYSE:POR
Portland General Electric — Investor Presentation (December 2019)
30 slides from Portland General Electric's investor presentation, December 2019
Slide 1: Investor Presentation
Investor Presentation Portland General Electric December 2019
Slide 2: Cautionary statements
Cautionary statements Information Current as of November 1, 2019 Except as expressly noted, the information in this presentation is current as of November 1, 2019 — the date on which PGE filed its Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 — and should not be relied upon
Slide 3: PGE values
PGE values Investing in a 100% regulated High-growth reliable and clean utility service area energy future Focusing Delivering Building a on operational exceptional smarter more effectiveness customer resilient grid and efficiency experiences 3
Slide 4: The company
The company
Slide 5: PGE at a glance
PGE at a glance Quick facts 3,800+ MWs of Generation • Vertically integrated electric company encompassing generation, transmission and distribution Beaver Washington Port Westward 1 & 2 Tucannon River • 892,000 customers in 51 Oregon incorporated cities OREGON WASHINGTON Wind Farm • 46 percent of O
Slide 6: Attractive, growing service area
Attractive, growing service area • 1%+ average annual customer count growth(1) (4) 1,000 1.20 • Oregon’s annual GDP Energy Deliveries Growth, 1.15 growth averaged 2.8% over 800 Energy Deliveries, MWa the past two decades(2) 1.10 Indexed 2018=1 • Oregon median household 600 1.05 income growth ranked
Slide 7: Constructive regulatory environment
Constructive regulatory environment Regulatory construct Regulatory body • Forward test year • Public Utility Commission of Oregon • Integrated Resource Planning (IRP) • Governor-appointed three member commission serving four-year terms • Renewable Portfolio Standard (RPS) Term expiration • Proven t
Slide 8: 2019 general rate case
2019 general rate case Key Items • Approved price increase: 0.5% • Return on equity (ROE): 9.5% • Cost of long-term debt: 5.1% • Capital structure: 50% debt, 50% equity • Rate base: $4.75 billion Requests approved by the Commission: • Energy storage projects associated with renewables can be include
Slide 9: Key strengths
Key strengths
Slide 10: Focus on customers
Focus on customers Top quartile Top quartile Most trusted brand No.1 renewable system customer & environmental energy program reliability satisfaction champion in the nation by enrollment and Edison Electric TQS Research, Inc. Market Strategies Institute and Market Strategies International MWh sold
Slide 11: Diverse generation and customer base
Diverse generation and customer base Power sources as a percent of retail load Retail revenues by customer class 2018 general rate case(1) 2018 Industrial 12% Hydro 18% Gas Wind & Solar Residential 48% 13% 52% Commercial 36% Coal 21% Total = 2,105 MWa Total retail revenues = $1.8B 11 1. Hydro and wi
Slide 12: High-quality utility operations
High-quality utility operations Western Energy Imbalance • Highly-dependable generation fleet with Market seven-year average availability of 92%(1) • Strong power supply portfolio management and western EIM integration to enhance reliability and optimize resources • Transitioning away from coal-fire
Slide 13: Strong liquidity position for growth
Strong liquidity position for growth Revolving credit facilities(1) Financial resources ($ in millions) • Investment grade credit ratings • Manageable debt maturities • Target capital structure of 50% debt and 50% equity S&P Moody’s Available Senior Secured A A1 Credit + Total Cash Senior Unsecured
Slide 14: Solid financial performance
Solid financial performance Net income, earnings per share, and ROE $2.50(3) $2.37 $2.29(1) $2.16 EPS $2.35(3) (diluted) $2.04 $2.10 (2) Net income ($ in millions) $212 $193 $187 (2) $172 2015 2016 2017(2) 2018 2019(3) Accounting ROE 8.3% 8.4% 7.9% 8.6% 8.4% - 8.8% Allowed ROE 9.7% 9.6% 9.6% 9.5% 9.
Slide 15: Proven dividend growth
Proven dividend growth Dividends paid per (3) $1.50 common share(4) $1.41 $1.32 $1.24 Payout Ratio Actual Payout $1.16 70% Target Ratio $1.09 $1.11 $1.05 $1.07 $1.03 60% 50%(5) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (3) Future dividend increases expected to be in the 5-7% range(3) 1. Comp
Slide 16: Looking Forward
Looking Forward
Slide 17: Clean and reliable energy future
Clean and reliable energy future Renewable Portfolio Standard 50% 45% Key elements 35% 27% • Transition PGE customers off coal-fired generation by 20% 2030 • Production tax credits included in annual power cost filings since 2017 • Pursue transportation electrification 2020 2025 2030 2035 2040 MWa 2
Slide 18: 2016 Integrated Resource Plan
2016 Integrated Resource Plan A flexible, balanced plan that reflects our commitment to a low-carbon future and pursuant to the Oregon Clean Electricity Plan Renewables • Procured renewables (100 MWa) to help ensure Oregon Clean Electricity Plan • Wheatridge Renewable Energy Facility: • Split owners
Slide 19: 2019 Integrated Resource Plan
2019 Integrated Resource Plan July 2019 Q3-Q4 2019 Q3 – Q4 2019 Q1 2020 July 2019 December 2019 January 2020 IRP filed with Comments filed by Staff memorandum and IRP filed with Commission Comments filed by Staff Memorandum Staff/Stakeholders/PGE Staff/Stakeholders/PGE due final Public order meeting
Slide 20: Integrated Operations Center
Integrated Operations Center A new 24/7 center for key operations: • Advances our integrated grid strategy • Significantly improves seismic resilience, cyber and physical security • Improves monitoring, control and optimization of distributed assets and our distribution system 20
Slide 21: Smart grid strategies
Smart grid strategies Building a smarter more resilient grid: • New communication systems • Distributed automation systems • Data analytics • Integrate customers’ energy resources • Utility-scale battery storage 21
Slide 22: Forecasted capital expenditures
Forecasted capital expenditures $865 $620 $595 $500 $500 2019 2020 2021 2022 2023 Ongoing Capital Expenditures Integrated Operations Center Wheatridge Renewable Energy Facility Outlook • Updating and replacing aging generation, transmission and distribution equipment • Building a smarter, more resil
Slide 23: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) Environmental Social Governance Decarbonize Customers Experienced 80% reduction in GHG emissions Ensuring universal access at Wide range of skills, backgrounds below 1990 levels, Green tariff affordable prices and leadership positions Community Diverse Elec
Slide 24: PGE investor relations team
PGE investor relations team Chris Liddle Online Director, Investor Relations and investors.portlandgeneral.com Treasury (503) 464-7458 Christopher.Liddle@pgn.com Peter Davis Analyst, Investor Relations (503) 464-8586 Peter.Davis@pgn.com Portland General Electric Investors.PortlandGeneral.com 121 SW
Slide 25: Appendices
Portland General Electric Appendices
Slide 26: Recovery of power costs
Recovery of power costs Annual power cost update tariff • Annual reset of prices based on forecast of net variable power costs (NVPC) for the coming year • Subject to OPUC prudency review and approval, new prices go into effect on or around January 1 of the following year Power Cost Adjustment Mecha
Slide 27: Renewable portfolio standard
Renewable portfolio standard Additional renewable resources • As of 2018, PGE had the following qualifying renewable resources: Type of Resource % of Retail Load Wind 9.9% Low-Impact Hydro 2.5% Solar & Other <1% Renewable Portfolio Standard: 2011 2015 2020 2025 2030 2035 2040 5% 15% 20% 27% 35% 45%
Slide 28: Decoupling Mechanism
Decoupling Mechanism The decoupling mechanism is intended to allow recovery of margin lost due to a reduction in sales of electricity resulting from customers’ energy efficiency and conservation efforts This includes a Sales Normalization Adjustment (SNA) mechanism for residential and small nonresid
Slide 29: Average retail price comparison
Average retail price comparison Residential and Commercial - Winter 2019 Residential Electric Service Prices: Commercial Electric Service Prices: 1,000 kWh monthly consumption 40 kW demand and 14,000 kWh monthly consumption (Prices in cents per kWh) (Prices in cents per kWh) PGE - Sch 7 (OR) 12.4 PG
Slide 30: Average retail price comparison
Average retail price comparison Small and Large Industrial - Winter 2019 Industrial Electric Service Prices Large Industrial Electric Service Prices 1,000 kW peak demand and 400,000 kWh monthly consumption 50,000 kW peak demand and 32,500,000 kWh monthly consumption (Prices in cents per kWh) (Prices
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