Portland General Electric Co · NYSE:POR
Portland General Electric — Investor Presentation (February 2023)
32 slides from Portland General Electric's investor presentation, Feb 16, 2023
Slide 1: Investor Presentation
Investor Presentation PORTLAND GENERAL ELECTRIC FEBRUARY 16, 2023
Slide 2: Cautionary statement
Cautionary statement Information Current as of February 16, 2023 Except as expressly noted, the information in this presentation is current as of February 16, 2023 — the date on which PGE filed its Annual Report on Form 10-K for the year ended December 31, 2022 — and should not be relied upon as bei
Slide 3: The Company
The Company
Slide 4: PGE at a glance
PGE at a glance 3,300+ MWs of Generation Quick facts Beaver Washington Port Westward 1 & 2 • Vertically integrated electric utility encompassing generation, Tucannon River transmission and distribution OREGON WASHINGTON Wind Farm 26 • Approximately 926,000 retail customers within a service area Colu
Slide 5: Investment thesis
Investment thesis Investing in a reliable and Building a smarter more Focusing on operational clean energy future resilient grid effectiveness and efficiency • Adopting 100% clean energy • Investing in our system to maintain and • 5% to 7% long-term EPS growth from framework mandated by ORS 469A.410
Slide 6: Strategy for a Clean Energy Future
Strategy for a Clean Energy Future Strategic Goals Decarbonize Power Electrify the Advance our Reduce greenhouse gas Economy Performance emissions from power Increase beneficial Improve efficiency, safety served to Oregon retail electricity use to capture and system and customers by at least 80% the
Slide 7: Diverse, growing service area
Diverse, growing service area • Growing core urban service area with strong population growth supporting services (government, education, restaurants, healthcare, and other services) OREGON WASHINGTON • I-5 corridor and port access provide opportunity for transportation and 26 Columbia River warehou
Slide 8: Reliability and resiliency investments
Reliability and resiliency investments $1,210 with Capital expenditures forecast(1) Clearwater $415 $795 $775 $800 $730 $750 $130 $100 $100 $100 $100 $530 $530 $555 $580 $505 $135 $125 $120 $120 $120 2023 2024 2025 2026 2027 Generation Transmission and Distribution General Business and Technology Cl
Slide 9: Clean energy transition
Clean energy transition Advancing toward a clean energy future PGE has taken significant steps to decarbonize its system: • 2021 emissions 24% below HB 2021 baseline levels (average emissions 2010-2012) • 2022 decarbonization data released with the release of PGE’s Environmental, Social and Governan
Slide 10: Investing in a clean energy future
Investing in a clean energy future Charting the course toward a clean, affordable, and reliable energy future 3,100 4,000 Total need of 3,000 to 4,000 MW of non- emitting resources (generation and capacity) to meet 2030 emissions targets ~2,200 to 3,100 MW of new resource additions remain after Mega
Slide 11: Illustrative rate base growth
Illustrative rate base growth • PGE’s five-year base plus Clearwater Wind capital expenditure forecast of $4.3 billion drives 5.8% rate base growth from 2022 base year • Illustrative incremental RFP opportunities(1) potentially increase rate base growth to 8.5%, from 2022 base year • Amounts present
Slide 12: Update on RFP processes
Update on RFP processes Remaining 2021 RFP Milestones 1H 2023 Expected execution of final contracts with additional winning bidders With the execution of the Clearwater Wind project in Q4 2022, PGE is still seeking approximately: • 375 MW of non-emitting dispatchable capacity resources that can be
Slide 13: 2024 General Rate Case
2024 General Rate Case Rate Case Key Terms Rate Base $6.3 billion Rate Base Increase $859 million, 16% ROE 9.8% Capital Structure 50/50 Cost of Debt 4.32% Cost of Capital 7.06% Revenue Requirement Increase $338 million • Modify Power Cost Adjustment Mechanism (PCAM) structure • Remove deadbands with
Slide 14: Key strengths
Key strengths
Slide 15: Focus on customers
Focus on customers #1 #3 Top quartile No.1 renewable Environmental No. 3 utility in system energy program in Champion the U.S. for reliability(1) the nation for 13 Utility Trusted Brand & customer years(2) Customer Engagement™ experience Edison Electric Institute Residential Study Escalent 2021 Nati
Slide 16: Long-term financial performance
Long-term financial performance Net income, earnings per share, and ROE Adjusted EPS $2.75(1) $2.72 $2.74(2) $2.75(3)(6) (diluted) $12 $2.39 $2.60(2) $2.60(3)(6) GAAP net income (dollars in millions) $92 Long-term Non-GAAP net income $1.72(1) 5% to 7%(3) earnings (dollars in millions) growth from $2
Slide 17: Proven dividend growth
Proven dividend growth $1.89(4) Dividends $1.79 declared per $1.70 common share(3) $1.59 $1.52 $1.43 Actual Payout $1.34 Ratio $1.26 $1.18 Target Payout 70% $1.12 Ratio 60% (5) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E Long-term dividend growth guidance of 5-7%(4) (1) Compound Annual Growth
Slide 18: Liquidity and financing
Liquidity and financing Total Liquidity: $938 million Ratings S&P Moody’s as of December 31, 2022 (dollars in millions) Senior Secured A A1 Senior Unsecured BBB+ A3 Commercial Paper A-2 P-2 Cash $165 Outlook Stable Stable Letters of Expected 2023 Q1 Q2 Q3 Q4 Credit (dollars in millions) $123 Credit
Slide 19: Environmental, Social and Governance
Environmental, Social and Governance
Slide 20: ESG highlights
ESG highlights Our strategic goals aim to lead the clean energy future Decarbonize Electrify Perform PGE helped shape groundbreaking legislation in 2021 (HB 2021) that established targets for PGE to • 80% GHG reduction by 2030 Clean Energy and GHG • 90% GHG reduction by 2035 Reduction • 100% GHG red
Slide 21: Diverse and experienced Board
Diverse and experienced Board Director Committee Other Public Name Age Since Industry/Experience Diversity Membership(1) Boards Track record of thoughtful refreshment Rodney Brown • Compensation 66 2007 Law/Environmental/Regulatory White/Male 0 enables us to have a Board with the Independent • Finan
Slide 22: Diversity, equity, and inclusion
Diversity, equity, and inclusion Committed to DEI across our business • Partners and suppliers: Increased our supplier diversity to 14% of total supplier spending in 2022 Workforce by Gender(1) • Awareness, education, and training: Racial equity 0.2% education for our board, leadership and employees
Slide 23: Sustainability reporting
Sustainability reporting • Our 2021 ESG Report shares information about PGE’s commitment to sustainability along with strategic projects that illustrate our commitment to advancing a sustainable future and caring for our community • Sustainability principles are woven into the fabric of who we are a
Slide 24: Appendices
Portland General Electric APPENDICES
Slide 25: Major deferral update
Major deferral update On October 24, 2022, PGE and parties submitted stipulations to the OPUC reflecting an agreement that resolved all matters related to 2021 of the 2020 Labor Day Wildfire, February 2021 Ice Storm and most of the 2021 Power Cost Adjustment Mechanism Balance as of Stipulated Stipul
Slide 26: 2022 GRC order deferral earnings test
2022 GRC order deferral earnings test • OPUC Order 22-129 created earnings tests for certain major deferrals, including the Boardman revenue requirement at a regulated Return on Equity (ROE) threshold of 9.5% and the 2020 labor day wildfire and the 2021 ice storm deferrals using a 9.3% regulated ROE
Slide 27: Constructive regulatory / policy environment
Constructive regulatory / policy environment Oregon Federal • ORS 469A.410/HB 2021 legislation mandates 100% clean energy • The Inflation Reduction Act (IRA), which was signed into law in by 2040 August 2022, is expected to further enhance PGE’s already strong • Oregon Public Utility Commission pros
Slide 28: 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 29: Average retail price comparison
Average retail price comparison 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 13.7 PGE - Sch. 83 10.9 EEI U.S. Average 14.8 EEI U.
Slide 30: 2023 Earnings Sensitivities
2023 Earnings Sensitivities Sensitivity Full-Year Adjusted EPS Impact Load Growth - Residential(1) ± 1% ± $0.06 Load Growth – Commercial(1) ± 1% ± $0.02 Load Growth – Industrial(1) ± 1% ± $0.01 O&M Expense ± $10 million ± $0.08 Interest Rates(2) ± 25 bps ± $0.02 Effective Tax Rate ± 1% ± $0.03 (1) A
Slide 31: Non-GAAP financial measures
Non-GAAP financial measures This press release contains certain non-GAAP measures, such as adjusted earnings, adjusted EPS and adjusted earnings guidance. These non-GAAP financial measures exclude significant items that are generally not related to our ongoing business activities, are infrequent in
Slide 32: Non-GAAP financial measures
Non-GAAP financial measures Non-GAAP Earnings Reconciliation for the year ended December 31, 2020 (Dollars in millions, except EPS) Net Income Diluted EPS GAAP as reported for the year ended December 31, 2020 $155 $1.72 Exclusion of certain trading losses 127 1.42 Tax effect (1) (35) (0.39) Non-GAAP
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