Portland General Electric Co · NYSE:POR
Portland General Electric — EEI Financial Conference 2017
33 slides from Portland General Electric's conference presentation, November 2017
Slide 1: Investor Presentation
Investor Presentation Portland General Electric EEI Financial Conference November 2017
Slide 2: Cautionary Statement
Cautionary Statement Information Current as of October 27, 2017 Except as expressly noted, the information in this presentation is current as of October 27, 2017 — the date on which PGE filed its Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 — and should not be relied upon a
Slide 3: PGE Value Drivers
PGE Value Drivers Investing in a Clear focus: 100% Attractive service reliable and clean regulated utility area energy future Focus on Deliver exceptional operational Building a smarter customer effectiveness and more resilient grid experiences efficiency 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: • Vertically integrated energy company Montana Beaver encompassing generation, transmission Port Westward 1 & 2 Colstrip 3 & 4 and distribution OREGON WASHINGTON Washington 26 Tucannon River • ~873,000 customers(1) Wind Farm Columbia River • Serve 46 percent of Oregonian
Slide 6: Strategic Direction
Strategic Direction Portland General Electric 6
Slide 7: Attractive, Growing Service Area
Attractive, Growing Service Area Long-Term Load Growth(1) 1,000 1.20 1.15 Indexed Growth 2017=1 800 1.10 600 1.05 Average MW 1.00 400 0.95 0.90 200 0.85 - 0.80 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Residential Commercial Industrial Growth Net of EE Cumulative Growth Residential Comm
Slide 8: Constructive Regulatory Environment
Constructive Regulatory Environment Regulatory Construct Governor-appointed three member commission serving 4 year term • Oregon Public Utility Commission Term Expiration • 9.6% allowed return on equity Lisa Hardie [D] (Chair) May 2020 Megan Decker [D] Mar 2021 • 50% debt and 50% equity capital stru
Slide 9: 2018 General Rate Case
2018 General Rate Case Proposed settlement reached – Final order to be issued December 2017 • Filed Feb. 28, 2017 • Return on equity: 9.5% • 2018 forward test year • Rate base: $4.5 billion • Expect Commission order • Capital structure: 50% debt, 50% equity in Dec. 2017 • Cost of capital: 7.46% • Ne
Slide 10: Key Strengths
Key Strengths Strong Platform for Stakeholder Value 10
Slide 11: PGE Key Strengths and Value Proposition
PGE Key Strengths and Value Proposition Focus on customers Diverse generation and customer base Strong platform executing High-quality utility operations sustained long- term growth Solid financial performance Investing in a reliable and clean energy future Building a smarter more resilient grid Por
Slide 12: Focus on customers
Focus on customers Top Quartile System Reliability Edison Electric Institute Top Quartile Customer Satisfaction TQS Research, Inc. and Market Strategies International Most Trusted Brand & No. 1 for Dedication to the Environment Market Strategies International Top Ranked Renewable Energy Program Nati
Slide 13: Diverse Generation & Customer Base
Diverse Generation & Customer Base Power Sources as a Retail Revenues Percent of Retail (1) Load by Customer Class (2017 AUT) (2016) Total = 2,103 MWa Total = $1.8B Purchased Power Hydro Industrial 12% 21% 12% Hydro 21% Gas 43% Gas Natural Wind Wind & Solar 37% 13% & Commercial Residential Solar 51%
Slide 14: High-Quality Utility Operations
High-Quality Utility Operations • Highly dependable generation fleet with five-year average availability of 92 percent(1) • Strong power supply portfolio management to maintain reliability and optimize resources • Progressive approach to reduce coal generation – Boardman 2020 Plan and Colstrip 2035
Slide 15: Solid Financial Performance
Solid Financial Performance Net Income, Earnings per Share, and ROE 2012 – 2017E 2.5 (3) (NI in millions) $2.35 $2.18 $2.16 2.3 $2.20 $2.04 $193 2.1 $1.87 $1.84 $175 $172 1.9 EPS $142 1.7 $141 NI 1.5 $1.35(2) 1.3 $105 1.1 2012 2012 2013(1) 2013 2014 2014 2015 2015 2016 2016 2017 2017E Accounting ROE
Slide 16: Consistent Dividend Growth
Consistent Dividend Growth 1.00 $1.32 3.7% 0.90 CAGR $1.24 0.80 $1.16 $1.11 $1.09 $1.07 0.70 $1.05 70% Target Payout Ratio $1.03 $1.00 0.60 $0.96 $0.92 50% 0.50 Actual Payout Ratio 0.40 0.30 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E Future dividend increases expected to be in the 5-7%
Slide 17: 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 Available Total Credit Credit + Cash Facilities $755 $720 S&P Moody’s Senior Sec
Slide 18: The Direction
The Direction Strong Platform for Stakeholder Value 18
Slide 19: 2016 Integrated Resource Plan
2016 Integrated Resource Plan Nov 2016 August 2017 Q4 2017 2018 IRP filed with OPUC decision; waiver Addendum filed; RFP Expected to reach commission request filed1 process commences decision on RFP • A flexible, balanced plan that reflects our commitment to a low-carbon future and in keeping with t
Slide 20: Oregon Clean Electricity Plan
Oregon Clean Electricity Plan Senate Bill 1547 Key Elements of Plan Long-Term Strategy • Transitions Oregon off coal-fired • Layered approach balances near-term generation by 2035 and long-term risks and benefits for customers • Includes PTCs in annual power cost • Incremental renewable actions by 2
Slide 21: Forecasted Capital Expenditures
Forecasted Capital Expenditures in millions(1) $187 $551 Outlook $533 – $535 $207 Investing in a reliable and $486 clean energy future: $451 $440 $433 • Substation reliability upgrades • PCB Transformer testing & replacement • Underground cable replacement • Customer Information Systems and technolo
Slide 22: Smart Grid Strategies
Smart Grid Strategies Building a smarter more resilient grid: • New communication systems • Distributed automation • Data analytics • Integrate customers energy resources • Utility-scale battery storage Portland General Electric 22
Slide 23: PGE Investor Relations Team
PGE Investor Relations Team Chris Liddle Manager, Investor Relations and Corporate Finance (503) 464-7458 Christopher.Liddle@pgn.com Adrio Odobasic Analyst, Investor Relations (503) 464-8586 Adrio.Odobasic@pgn.com Portland General Electric Investors.PortlandGeneral.com 121 S.W. Salmon Street Suite 1
Slide 24: Appendices
Portland General Electric Appendices 24
Slide 25: Generation: Baseload Resource
Generation: Baseload Resource Carty Generating Station: Placed in-service on July 29, 2016 Carty Generating Station, a 440 MW natural gas baseload plant near Boardman, OR Capital costs, including AFDC, approved in 2016 GRC: $514M Total estimated cost, including AFDC, for completion: $640M(1) Carty p
Slide 26: Diversified Resource Mix
Diversified Resource Mix Resource Capacity as of 12/31/2016 Power Sources as a Capacity % of Total in MW Capacity Percent of Retail Load Hydro(1) (2016 Actuals) Deschutes River Projects 303 6% Clackamas/Willamette River Projects 192 4% Total = 18,295,000 MWh Hydro Contracts 534 11% 1,029 22% Natural
Slide 27: 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 Wind & Solar Hydro Coal Natural Gas Purchased Power Chan
Slide 28: Generation Plant Operations
Generation Plant Operations Track record of high availability 2011 2012 2013 2014 2015 2016 PGE Thermal Plants 90% 92% 84% 89% 89% 92% PGE Hydro Plants 100% 99% 100% 100% 99% 99% PGE Wind Farm 97% 98% 98% 94% 97% 95% PGE Wtd. Average 93% 94% 89% 92% 93% 93% Colstrip Unit 3 & 4 84% 93% 66% 83% 93% 85
Slide 29: 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 30: Renewable Portfolio Standard
Renewable Portfolio Standard Additional Renewable Resources • As of 2016, PGE had the following qualifying renewable resources: Type of Resource % of Retail Load Wind 11.6% Low Impact Hydro 3% Solar & Other 0.3% Renewable Portfolio Standard: 2011 2015 2020 2025 2030 2035 2040 5% 15% 20% 27% 35% 45%
Slide 31: 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 32: Average Retail Price Comparison
Average Retail Price Comparison Residential & Commercial – Winter 2017 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) Pinnacle West (AZ) 12.0
Slide 33: Average Retail Price Comparison
Average Retail Price Comparison Small & Large Industrial – Winter 2017 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) (Price
Portland General Electric — EEI Financial Conference 2017 on 6ix