Portland General Electric Co · NYSE:POR
Portland General Electric — Investor Presentation (January 2019)
31 slides from Portland General Electric's investor presentation, January 2019
Slide 1: Investor Presentation
Investor Presentation Portland General Electric January 2019
Slide 2: Cautionary statement
Cautionary statement Information current as of October 26, 2018 Except as expressly noted, the information in this presentation is current as of October 26, 2018 — the date on which PGE filed its quarterly report on Form 10-Q for the quarter ended September 30, 2018 — and should not be relied upon a
Slide 3: PGE value drivers
PGE value drivers Investing in a Clear focus: 100% High-growth reliable and clean regulated utility service area energy future Focusing on Delivering operational exceptional Building a smarter effectiveness and customer more resilient grid efficiency experiences Portland General Electric 3
Slide 4: The Company
The Company Strong platform for stakeholder value 4
Slide 5: PGE at a glance
PGE at a glance Quick facts(1) 3,800+ MWs of generation • Vertically-integrated energy company Montana encompassing generation, transmission Beaver Colstrip 3 & 4 Port Westward 1 & 2 and distribution OREGON WASHINGTON Washington • 885,000 customers 26 Tucannon River Wind Farm • Serves 46 percent of
Slide 6: Attractive, growing service area
Attractive, growing service area • 1%+ average annual customer count • Industrial segment growth driven by growth high tech and data centers • Above-average population growth due to • Unemployment in our service area remains in-migration stable at 3.3%, lower than the U.S. and • Oregon’s annual GDP
Slide 7: Constructive regulatory environment
Constructive regulatory environment Regulatory construct Regulatory mechanisms • Oregon Public Utility Commission • Net variable power cost recovery • Forward test year • Annual Power Cost Update Tariff (AUT) • Integrated Resource Planning (IRP) • Power Cost Adjustment Mechanism • Renewable Portfoli
Slide 8: General Rate Case – 2019 Test Year
General Rate Case – 2019 Test Year Final Order received December 2018 Key Items: • Approved price increase: 0.47% • 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
Slide 9: Tax Reform & Senate Bill 978
Tax Reform & Senate Bill 978 Tax reform Senate Bill 978 On December 29, 2017 PGE filed a deferral The Oregon Legislative Assembly passed SB 978 application with the OPUC in 2017. The bill required the OPUC to establish a • Defer 2017 and 2018 tax impacts public process to investigate how developing
Slide 10: Key Strengths
Key Strengths Strong platform for stakeholder value 10
Slide 11: Focus on customers
Focus on customers Top Quartile System Reliability Edison Electric Institute Top Quartile Customer Satisfaction Market Strategies International 2018 Environmental Champion Market Strategies International No.1 Renewable Energy Program in the Nation National Renewables Energy Laboratory Portland Gener
Slide 12: Diverse generation and customer base
Diverse generation and customer base Power sources as a Retail revenues percent of retail (1) load by customer class (2018 AUT) (2017) Total = 2,095 MWa Total = $1.9B Industrial Hydro Industrial 12% 20% 12% Gas 44% Wind & Residential Residential Residential Solar Commercial 52% 52% 51% 13% 36% Coal
Slide 13: High-quality utility operations
High-quality utility operations • Highly dependable generation fleet with six- Western EIM year average availability of 92%(1) • Strong power supply portfolio management and western EIM integration to enhance reliability and optimize resources • Progressive approach to reduce coal generation – Board
Slide 14: Solid financial performance
Solid financial performance Net Income, Earnings per Share, and ROE $2.40(5) 2.5 (NI in millions) $2.29 $2.18 $2.16 2.3 $204 $2.25(5) $2.04 2.1 $2.10(4) $1.84 1.9 EPS 1.7 $193 $187 $142 $175 $172 1.5 NI $1.35 (2) 1.3 $105 1.1 (1) (3) (5) 2013 2014 2015 2016 2017 2018E Accounting ROE 7.9% 9.4% 8.3% 8
Slide 15: Consistent dividend growth
Consistent dividend growth $1.41 $1.32 $1.24 $1.16 $1.09 $1.11 70% Target Payout Ratio Actual Payout Ratio $1.05 $1.07 $1.03 $1.00 $0.96 50% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018E Future dividend increases expected to be in the 5-7% range(1) Note: Represents annual dividends paid 1)
Slide 16: Strong liquidity position for growth
Strong liquidity position for growth Revolving credit facilities (1) (in millions) Financial resources • Investment grade credit ratings • Manageable debt maturities • Target capital structure of 50% debt and 50% equity Available Credit + Cash Total Credit $861 Facilities $720 S&P Moody’s Senior Sec
Slide 17: Carty Generating Station update
Carty Generating Station update • On July 16, 2018, PGE entered into a settlement with the bonding companies, the contractor and its parent corporation to resolve all claims relating to Carty construction Carty Generating Station, a 440 MW natural gas baseload plant near Boardman, OR • The settlemen
Slide 18: Looking Forward
Looking Forward Strong platform for stakeholder value 18
Slide 19: Clean and reliable energy future
Clean and reliable energy future Key elements Long-term strategy • Transition Oregon off coal-fired • Layered approach balances near-term generation by 2030 and long-term risks and benefits for • Production Tax Credits included in customers annual power cost filings beginning with • Incremental rene
Slide 20: 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 Renewable procurement • Procurement of renewables (100 MWa) to meet Oregon Clean Electricity Plan • Potential benchmark resource identified •
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 • New customer information system Portland General Electric 21
Slide 22: Forecasted capital expenditures
Forecasted capital expenditures in millions(1) Outlook $640 • Support for continued $569 customer growth • Upgrades and $500 $500 $500 replacement of aging generation, transmission and distribution equipment • Strengthening the grid for natural disasters, cyber and physical security • Building a sma
Slide 23: PGE investor relations team
PGE investor relations team Chris Liddle Director, Investor Relations and 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 S.W. Salmon Street Suite 1WTC0506 Portla
Slide 24: Appendices
Portland General Electric Appendices 24
Slide 25: Changing generation portfolio
Changing generation portfolio PGE’s evolving generation portfolio now enables PGE to meet 100% of its customers’ energy needs Sources of Power(1) 20,000 18,000 16,000 14,000 12,000 MWh 10,000 8,000 6,000 4,000 2,000 0 2013 2014 2015 2016 2017 2018E Wind & Solar Hydro Coal Natural Gas Purchased Power
Slide 26: Generation plant operations
Generation plant operations Track record of high availability 2012 2013 2014 2015 2016 2017 PGE Thermal Plants 92% 84% 89% 89% 92% 88% PGE Hydro Plants 99% 100% 100% 99% 99% 95% PGE Wind Farms 98% 98% 94% 97% 95% 96% PGE Wtd. Average 94% 89% 92% 93% 93% 90% Colstrip Unit 3 & 4 93% 66% 83% 93% 85% 86
Slide 27: 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 28: Renewable portfolio standard
Renewable portfolio standard Additional renewable resources • As of 2017, PGE had the following qualifying renewable resources: Type of Resource % of Retail Load Wind 9.4% Low-Impact Hydro 2.5% Solar & Other 0.7% Renewable Portfolio Standard: 2011 2015 2020 2025 2030 2035 2040 5% 15% 20% 27% 35% 45%
Slide 29: 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 nonresi
Slide 30: Average retail price comparison
Average retail price comparison Residential & Commercial - Winter 2018 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) EEI U.S. Average 13.8 EE
Slide 31: Average retail price comparison
Average retail price comparison Small & Large Industrial – Winter 2018 Industrial Electric Service Prices Large Industrial Electric Service Prices 50,000 kW peak demand and 32,500,000 kWh monthly consumption. 1,000 kW peak demand and 400,000 kWh monthly consumption. (Prices in cents per kWh) (Prices
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