Portland General Electric Co · NYSE:POR

Portland General Electric — Investor Presentation (May 2016)

38 slides from Portland General Electric's investor presentation, May 2016

  1. Slide 1: Investor Presentation May 2016

    Investor Presentation May 2016

  2. Slide 2: Cautionary Statement

    Cautionary Statement Information Current as of April 29, 2016 Except as expressly noted, the information in this presentation is current as of April 29, 2016 — the date on which PGE filed its Annual Report on Form 10-Q for the quarter ended March 31, 2016 — and should not be relied upon as being cur

  3. Slide 3: PGE Value Drivers

    PGE Value Drivers Progressive Clear focus: 100% Attractive service environmental and regulated utility territory renewable position Focus on Generation and Strong financial operational T&D investment position efficiency opportunities 3

  4. Slide 4: Strong Platform for Stakeholder Value

    STRONG PLATFORM FOR STAKEHOLDER VALUE The Company The Strengths The Execution 4

  5. Slide 5: PGE at a Glance

    PGE at a Glance Quick Facts: Montana  Vertically integrated generation, Beaver Colstrip 3 & 4 Port Westward 1 & 2 transmission and distribution OREGON WASHINGTON Washington (1) 26 Tucannon River  855,573 customers Wind Farm Columbia River 84 Portland Eastern Oregon  46% of Oregonians T.W. Sulliva

  6. Slide 6: Strategic Direction

    Strategic Direction Mission: To be a company our customers and communities can depend upon to provide electric service in a safe, sustainable and reliable manner, with excellent customer service, at a reasonable price. The path forward is guided by:  Strong relationships with customers and communit

  7. Slide 7: Attractive, Growing Service Area

    Attractive, Growing Service Area Load Growth(1) Retail Load(1)  2016E load growth of (Million MWhs Rounded) approximately 1%  Driven by industrial delivery 19.4 growth and strong economic 19.2 conditions 19.0 Industrial Sector Growth 18.6  Growth in high-tech  Intel’s expansion  Data centers En

  8. Slide 8: Constructive Regulatory Environment

    Constructive Regulatory Environment Regulatory Construct  Oregon Public Utility Commission Governor-appointed three-member commission (1) Chair: Susan Ackerman [D] Mar 2016  9.6% allowed return on equity John Savage [D] Mar 2017  50% debt and 50% equity capital structure Stephen Bloom [R] Nov 201

  9. Slide 9: Strong Platform for Stakeholder Value

    STRONG PLATFORM FOR STAKEHOLDER VALUE The Company The Strengths The Execution 9

  10. Slide 10: Key Strengths

    Key Strengths 1 High customer satisfaction 2 Diverse generation and customer base 3 High quality utility operations 4 Solid financial performance 5 Strong financial position 10

  11. Slide 11: 1. High Customer Satisfaction

    1. High Customer Satisfaction Top Quartile System Reliability Edison Electric Institute Top Quartile Customer Satisfaction, Key Customers TQS Research, Inc. Top Quartile Customer Satisfaction, Residential and Business Market Strategies International Top Ranked Renewable Energy Program National Renew

  12. Slide 12: 2. Diverse Generation and Customer Base

    2. Diverse Generation and Customer Base Retail Revenues Power Sources as a by Customer Class Percent of Retail (1) Load (2015) (2016 AUT) Total = $1.78B Total = 2,120 MWa Industrial Purchased 13% Power Hydro 12% 21% Residential Commercial 50% Natural Gas Wind & Solar 37% 37% 13% Coal 17% (1) Hydro a

  13. Slide 13: 3. High Quality Utility Operations

    3. High Quality Utility Operations  Highly dependable PGE generation portfolio with five-year average availability of 92% (1)  Strong power supply operations to stabilize and optimize power costs  Progressive approach to reduce coal High Quality generation – Boardman 2020 Plan Utility Operations

  14. Slide 14: 4. Solid Financial Performance

    4. Solid Financial Performance Net Income, Earnings per Share, and ROE 2011 – 2015 (NI in millions) $2.18 2.3 $2.04 2.1 $1.95 $1.87 EPS $1.84 1.9 $175 $172 1.7 NI $147 $141 $142 1.5 $1.35(2) 1.3 (2) $105 1.1 2011 2011 2012 2012 2013(1) 2013 2014 2014 2015 2015 ROE 9.0% 8.3% 7.9% 9.4% 8.3% Allowed RO

  15. Slide 15: 4. Consistent Dividend Growth

    4. Consistent Dividend Growth $1.24 3% 1.00 CAGR $1.16 0.90 $1.07 $1.09 $1.11 $1.03 $1.05 0.80 $1.00 Target Payout Ratio 0.70 $0.96 70% $0.92 0.60 50% 0.50 0.40 0.30 Actual Payout Ratio Annual dividend increases expected to be in the 5-7% range(1) Note: Represents annual dividends paid (1) Based on

  16. Slide 16: 5. Strong Liquidity Position for Growth

    5. 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 Total Credit Facilities & Cash Net $664 Liquidity S&P Moody’s Letters of $553

  17. Slide 17: Strong Platform for Stakeholder Value

    STRONG PLATFORM FOR STAKEHOLDER VALUE The Company The Strengths The Execution 17

  18. Slide 18: Executing on New Generation

    Executing on New Generation Tucannon River Wind Farm Capacity: 267 MW In-service date: Dec. 2014 Project cost: $525 M On time On budget Port Westward Unit 2 Capacity: 220 MW Fuel: Natural Gas Reciprocating Engines In-service date: Dec. 2014 Project cost: $311 M Note: Final completion costs include A

  19. Slide 19: Under Construction

    Under Construction Carty Generating Station Carty Project update:  March 9, 2016: Sureties denied full liability under the performance bond  March 23, 2016: PGE filed a lawsuit against sureties for breach of contract damages  April 15, 2016: Sureties filed a motion to stay the proceedings, allegi

  20. Slide 20: Load-Resource Forecast

    Load-Resource Forecast Projected Annual Average Energy Load-Resource Balance(1) 3500 3000 2017: 149 MWa Surplus 2500 2030: 793 MWa Deficit 2021: 419 MWa Deficit 2000 MWa 1500 1000 500 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Year Gas Wind+Solar Hydr

  21. Slide 21: Forecasted Capital Expenditures

    Forecasted Capital Expenditures $ millions Additional capital investments are being reviewed by management to improve system safety and reliability, reduce risk exposures and $614 - $649 modernize systems to meet customer expectations. $189-$224 $425 $347 $301 $301 $282 2016 2017 2018 2019 2020 (1)

  22. Slide 22: Clean Electricity Plan and Coal Transition Plan

    Clean Electricity Plan and Coal Transition Plan Key Elements of Plan  Increase the renewable portfolio standard to 50 percent in 2040 50% 45%  Transitions Oregon off coal-fired generation by 2035 35%  Includes PTCs in power costs, beginning with AUT filing for 2017 27%  Reaffirms state’s commitm

  23. Slide 23: Request For Proposal for Renewables

    Request For Proposal for Renewables Accelerated RFP Timeline: Receive and Approval of final RFP approved Q4 Q2 by OPUC and Q3 score bids; short list; Notice 2016 issued 2016 Initiate contract 2016 to proceed (if negotiations necessary) Key Elements of Accelerated RFP for Renewables  Accelerated ren

  24. Slide 24: 2016 Integrated Resource Plan

    2016 Integrated Resource Plan Standard IRP Process Timeline: 2nd 1st Half OPUC 2nd Expected to RFP process Half File IRP 2017 acknowledgement Half 2018 reach decisions expected commences 2016 2017 on RFPs Areas of focus ▪ Energy efficiency and demand side actions ▪ Evaluation of carbon and the Clean

  25. Slide 25: PGE Value Proposition

    PGE Value Proposition  High quality utility operations  Attractive service territory Strong Platform executing Sustained Long  Strong financial position Term Growth  Progressive renewable position  Generation and T&D investment opportunities  New investments drive rate-base growth 25

  26. Slide 26: PGE Investor Relations Team

    PGE Investor Relations Team Director, Investor Relations William J. (503) 464-7395 Valach William.Valach@pgn.com Analyst, Investor Relations Jacquelyn S. (503) 464-8586 Ferchland Jacquelyn.Ferchland@pgn.com Investors.PortlandGeneral.com Portland 121 S.W. Salmon Street General Electric Suite 1WTC0509

  27. Slide 27: Appendices

    Portland General Electric Appendices

  28. Slide 28: Diversified Resource Mix

    Diversified Resource Mix Resource Capacity Power Sources as a as of 12/31/15 Percent of Retail Load (2015 Actuals) % of Capacity in MW Total Total = 18,831,000 MWh Capacity Hydro(1) Deschutes River Projects 303 7% Clackamas/Willamette River Projects 192 4% Hydro Contracts 592 13% Hydro 1,087 24% Pur

  29. Slide 29: Changing Generation Portfolio

    Changing Generation Portfolio 2013 Power Sources as a 2017 Power Sources as a Percent of Retail Load Percent of Retail Load (2013 Actuals) (2017 Estimate)(1) Hydro Hydro 17% 21% Purchased Power Wind & Solar 4 years later 35% 8% Natural Gas 47% Wind & Solar 13% Coal 22% Coal Natural Gas 18% 19% Chang

  30. Slide 30: Financing Activity

    Financing Activity Equity Issuances Date Shares Net Proceeds Equity Forward Sale Agreement June 2013 11.1 million -- Draw pursuant to forward August 2013 0.7 million $20 million Draw pursuant to forward June 2015 10.4 million $271 million Net remaining shares available for issuance: 0 Equity Over-Al

  31. Slide 31: Generation Plant Operations

    Generation Plant Operations  Track record of high availability 2011 2012 2013 2014 2015 PGE Thermal Plants 90% 92% 84% 89% 89% PGE Hydro Plants 100% 99% 100% 100% 99% PGE Wind Farm 97% 98% 98% 94% 97% PGE Wtd. Average 93% 94% 89% 92% 93% Colstrip Unit 3 & 4 84% 93% 66% 83% 93%  Generation Reliabil

  32. Slide 32: 2013 Integrated Resource Plan

    2013 Integrated Resource Plan  2013 IRP was acknowledged by the OPUC on 12/2/14 and PGE received written confirmation on stipulations to incorporate into the 2016 IRP development  PGE filed a 2013 IRP update in December 2015 Action Plan Resource Additions through 2017  No new long-term supply sid

  33. Slide 33: 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

  34. Slide 34: 2016 General Rate Case

    2016 General Rate Case Oregon Public Utility Commission Order ▪ Overall increase in customer prices: 0.7% ▪ Return on Equity: 9.6% ▪ Capital Structure: 50% debt, 50% equity ▪ Cost of Capital: 7.51% (1) ▪ Rate Base: $4.4 billion ▪ Annual revenue requirement increase: $12 million Customer Prices  Bas

  35. Slide 35: Current Renewable Portfolio Standard

    Current Renewable Portfolio Standard Additional Renewable Resources  PGE’s 2009 Integrated Resource Plan addressed procurement of renewable resources to meet the 2015 requirement of Oregon’s Renewable Portfolio Standard. To help meet this standard PGE built Tucannon River Wind Farm, a 267 megawatt,

  36. Slide 36: 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

  37. Slide 37: Average Retail Price Comparison

    Average Retail Price Comparison Residential and Commercial – Summer 2015 Residential Electric Service Costs Commercial Electric Service Prices Northwestern Investor-Owned and Public Northwestern Investor-Owned and Public Utilities Utilities 1,000 kWh per Month 40 kW Demand - 14,000 kWh per Month (ce

  38. Slide 38: Average Retail Price Comparison

    Average Retail Price Comparison Small and Large Industrial – Summer 2015 Small Industrial Electric Service Prices Large Industrial Electric Service Prices Northwestern Investor-Owned and Public Northwestern Investor-Owned and Public Utilities Utilities 1,000 kW Demand - 400,000 kWh per Month, Primar

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