Portland General Electric Co · NYSE:POR

Portland General Electric — Investor Presentation (March 2015)

37 slides from Portland General Electric's investor presentation, March 2015

  1. Slide 1: Investor Presentation

    Investor Presentation March 2015

  2. Slide 2: Cautionary Statement

    Cautionary Statement Information Current as of February 13, 2015 Except as expressly noted, the information in this presentation is current as of February 13, 2015 — the date on which PGE filed its Annual Report on Form 10-K for the year ended December 31, 2014 — and should not be relied upon as bei

  3. Slide 3: PGE Value Drivers

    PGE Value Drivers  Clear focus, 100% regulated utility  Attractive service area  Progressive environmental and renewable position  Focus on operational efficiency  Strong financial position  Investment opportunities in generation and T&D assets drive rate-base growth 3

  4. Slide 4: Strong Platform. Executing our Growth.

    PGE INVESTMENT THESIS Strong Platform. Executing our Growth. The Company The Strengths The Execution 4

  5. Slide 5: PGE At A Glance

    PGE At A Glance  Vertically integrated – generation, transmission Beaver Port Westward 1 & 2 and distribution OREGON Montana WASHINGTON Colstrip 3 & 4  Market cap ~ $2.8B 26 Columbia River Washington 84 Tucannon River Wind  Service area in northwest Portland Sandy Farm Oregon T.W. Sullivan River

  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:  Strengthening our relationship with customers an

  7. Slide 7: Attractive, Growing Service Area

    Attractive, Growing Service Area 2015 Load Growth Retail Load Growth (1)  2015 load growth of approximately 1% (Million MWhs Rounded)  Driven by industrial delivery growth and 19.2 strong economic conditions  Growth is weather adjusted and 19.0 assumes exclusion of one large paper customer Indust

  8. Slide 8: Constructive Regulatory Environment

    Constructive Regulatory Environment Regulatory Construct  Oregon Public Utility Commission – Governor-appointed three-member commission  Chair: Susan Ackerman [D] March 2016  John Savage [D] March 2017  Stephen Bloom [R] November 2015  9.68% allowed return on equity  50% debt and 50% equity ca

  9. Slide 9: Strong Platform. Executing our Growth.

    PGE INVESTMENT THESIS Strong Platform. Executing our Growth. The Company The Strengths The Execution 9

  10. Slide 10: Key Strengths

    Key Strengths 1 High customer satisfaction Diversified customer base and 2 generation portfolio 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 Top Top Quartile Decile Decile residential general business large customer customer key customer satisfaction satisfaction satisfaction Market Strategies Market Strategies TQS Research, International International Inc. All customer satisfaction and reliability measu

  12. Slide 12: 2. Diversified Customer Base and Generation Portfolio

    2. Diversified Customer Base and Generation Portfolio Retail Revenues Power Sources as a by Customer Class Percent of Retail Load (2014) (2015 AUT)(1) Total = $1.76B Total = 2,140 MWa Purchased Industrial Power Hydro 12% 11% 23% Residential Natural Gas Commercial 25% Wind & Solar 51% 37% 13% Coal 28

  13. Slide 13: 3. High Quality Utility Operations

    3. High Quality Utility Operations  Highly dependable PGE generation portfolio with five-year average availability of 93% (1)  Strong power supply operations to stabilize and optimize power costs  Progressive approach to reduce coal Effective generation – Boardman 2020 Plan Utility Operations  T

  14. Slide 14: 4. Financial Performance

    4. Financial Performance Net Income, Earnings per Share, and ROE 2010 – 2014 (NI in millions) 2.3 $2.18 2.1 $1.95 $1.87 1.9 $1.84 EPS $1.66 $142 1.7 1.5 (2) $1.35 1.3 NI $125 $147 $141 $105(2) $175 1.1 2010 2011 2012 2013 2014E ROE 8.0% 9.0% 8.3% 7.9% 9.4% 2010 2011 2012 2013(1) 2014 1) 2013 display

  15. Slide 15: 4. Consistent Dividend Growth

    4. Consistent Dividend Growth 3% $1.11 1 CAGR $1.09 $1.07 0.9 $1.05 $1.03 $1.00 0.8 $0.96 0.7 $0.92 Target Payout Ratio 70% 0.6 50% 0.5 0.4 0.3 2007 2008 2009 2010 2011 2012 2013 2014 Actual Payout Ratio Target Payout Ratio Target Payout Ratio of 50% to 70% Note: Represents annual dividends paid 15

  16. Slide 16: 5. Strong Financial Position

    5. Strong Financial Position Revolving Credit Facilities (1) Financial Resources (in millions)  Investment grade credit ratings S&P Moody’s Senior Secured A- A1 Available Total Credit Senior Unsecured BBB A3 Credit + Cash Facilities Outlook Stable Stable $811 $760  Manageable debt maturities Cash

  17. Slide 17: Strong Platform. Executing our Growth.

    PGE INVESTMENT THESIS Strong Platform. Executing our Growth. The Company The Strengths The Execution 17

  18. Slide 18: Load-Resource Forecast

    Load-Resource Forecast MWa Load-Resource Forecast - Energy (1) 3000 2500 New Generation: RFP Projects 2000 Incremental Energy Efficiency Long-Term Contracts 1500 1000 PGE Generation 500 0 2014 2015 2016 2017 2018 2019 2020 2021 1) Load-resource forecast as included in the 2013 IRP in March 2014; ass

  19. Slide 19: Completed Projects

    Completed Projects Tucannon River Wind Farm Project Location Columbia County, WA Capacity / Fuel 267 MW / Wind 116 2.3 MW Siemens Technology Turbines EPC Contractor RES Americas In-Service Date December 15, 2014 Customer Price Impact ~2.4% Project Cost(1) $530M Port Westward Unit 2 Project Location

  20. Slide 20: Under Construction: Baseload Resource

    Under Construction: Baseload Resource Carty Generating Station Project Location Boardman, OR Capacity / Fuel 440 MW / Natural Gas Technology Mitsubishi Turbine EPC Contractor Abener/Abengoa Estimated In-Service Date Q2 2016 Customer Price Impact ~ 4.7 percent Gas turbine and gas generator have been

  21. Slide 21: Execution of Regulatory Strategy

    Execution of Regulatory Strategy General Rate Case: 2015 General Rate Case: 2016 Approved by OPUC in December of 2014: Filed on February 12, 2015:  2015 Forward Test Year  2016 Forward Test Year  Return on Equity (ROE): 9.68%  Return on Equity (ROE): 9.9%  Cost of Capital: 7.56%  Cost of Capit

  22. Slide 22: Rate Base and Capital Expenditures

    Rate Base and Capital Expenditures $1.4B of expected increase in rate base $4.5B 13% CAGR $3.1B 2013 2016 Capital Expenditures (in millions) 2013 2014 2015E 2016E 2017E 2018E TOTAL Base Capital Spending(1) $335 $342 $408 $363 $341 $301 $2,090 Port Westward Unit 2 $155 $118 $20 $293 Tucannon River Wi

  23. Slide 23: 2016 Integrated Resource Plan

    2016 Integrated Resource Plan IRP Process Timeline 2015 Develop IRP / Public Process 2016 File IRP 2017 Acknowledgement from OPUC expected and RFP process commences Areas of Focus • Energy efficiency and demand side actions • Boardman replacement • 2020 Renewable Portfolio Standard requirement of 20

  24. Slide 24: PGE Value Proposition

    PGE Value Proposition  Strong financial position  High quality utility operations Strong Platform executing Sustained L-T  Attractive service area Growth  New investments drive rate-base growth 24

  25. Slide 25: PGE Investor Relations Team

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

  26. Slide 26: Appendices

    Portland General Electric Appendices

  27. Slide 27: Diversified Resource Mix

    Diversified Resource Mix Resource Capacity (at 12/31/14)(1) Power Sources as a Capacity in MW % of Total Capacity Percent of Retail Load Hydro(1) (2014 Actuals) Deschutes River Projects 303 6% Clackamas/Willamette River Projects 191 4% Total = 18,734 MWh Hydro Contracts 595 12% 1,089 22% Natural Gas

  28. Slide 28: Changing Generation Portfolio

    Changing Generation Portfolio 2015 Power Sources as a 2017 Power Sources as a Percent of Retail Load(1) Percent of Retail Load(2) Purchased Purchased Purchased Power Hydro Power Hydro Hydro 6% Power11% 20% 23% 23% 20% Natural Gas Wind & Solar Natural Gas Wind Wind&&Solar Solar 39% 12% 25% Natural Ga

  29. Slide 29: Financing Activity

    Financing Activity Equity Issuances Description Date Shares Net Proceeds Equity Forward Issuance June 2013 11.1 million -- Draw pursuant to forward August 2013 0.7 million $20 million Net remaining shares available for issuance: 10.4 million Equity Over-Allotment June 2013 1.7 million $46 million Un

  30. Slide 30: Generation Plant Operations

    Generation Plant Operations  Track record of high availability 2010 2011 2012 2013 2014 PGE Thermal Plants 94% 90% 92% 84% 89% PGE Hydro Plants 99% 100% 99% 100% 100% PGE Wind Farm 96% 97% 98% 98% 94% PGE Wtd. Average 95% 93% 94% 89% 92% Colstrip Unit 3 & 4 95% 84% 93% 66% 83%  Generation Reliabil

  31. Slide 31: 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 Action Plan Resource Additions 2014 through 2017 • No new long-term supply side resources proposed in this IRP • Hydro con

  32. Slide 32: GRC Overview – 2015 Test Year

    GRC Overview – 2015 Test Year Annual Revenue Increase ($mm) Other Updates As Revised Additional As Revised Additional OPUC Order As Filed Depreciation and Date 2/13/2014 Stipulation(1) Stipulations(2) 7/16/2014 Stipulations(3) 9/2/2014 Updates 12/4/14 New Generation Plants: Port Westward 2 $51 ($5)

  33. Slide 33: Recovery of Power Costs Return on Equity

    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: Renewable Portfolio Standard

    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, 116 tur

  35. Slide 35: 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

  36. Slide 36: Average Retail Price Comparison

    Average Retail Price Comparison Residential and Commercial – Summer 2014 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

  37. Slide 37: Average Retail Price Comparison

    Average Retail Price Comparison Small and Large Industrial – Summer 2014 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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