Portland General Electric Co · NYSE:POR
Portland General Electric — Investor Presentation (March 2018)
30 slides from Portland General Electric's investor presentation, March 2018
Slide 1: Investor Presentation
Investor Presentation Portland General Electric March 2018
Slide 2: Cautionary Statement
Cautionary Statement Information Current as of February 16, 2018 Except as expressly noted, the information in this presentation is current as of February 16, 2018 — the date on which PGE filed its Annual Report on Form 10-K for the year ended December 31, 2017 — and should not be relied upon as bei
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 3,800+ MWs of generation • Vertically integrated energy company Montana Beaver Port Westward 1 & 2 Colstrip 3 & 4 encompassing generation, transmission OREGON WASHINGTON and distribution Washington 26 Tucannon River • ~875,000 customers(1) Columbia River Wind Farm 84 • Se
Slide 6: Attractive, Growing Service Area
Attractive, Growing Service Area • 1%+ average annual customer growth • Industrial segment growth driven by high- • Above average population growth due to tech and data centers in-migration • Oregon’s job market in 2017 was the • Oregon’s annual GDP growth averaged strongest on record, with full-yea
Slide 7: Constructive Regulatory Environment and 2019 General Rate Case
Constructive Regulatory Environment and 2019 General Rate Case Regulatory Construct • Oregon Public Utility Commission • Governor-appointed three member • Forward test year commission serving 4 year terms • Integrated Resource Planning (IRP) Term Expiration Lisa Hardie [D] (Chair) May 2020 • Renewab
Slide 8: Key Strengths
Key Strengths Strong Platform for Stakeholder Value 8
Slide 9: 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 10: Diverse Generation & Customer Base
Diverse Generation & 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 Hydro Industrial 20% 12% Gas 44% Wind & Residential Residential Solar 52% 51% 13% Commercial 36% Coal 23% 1) Hydro and wind/solar inclu
Slide 11: High-Quality Utility Operations
High-Quality Utility Operations • Highly dependable generation fleet with six-year Western EIM average availability of 92 percent(1) • Strong power supply portfolio management and western EIM integration to enhance reliability and optimize resources • Progressive approach to reduce coal generation –
Slide 12: Solid Financial Performance
Solid Financial Performance Net Income, Earnings per Share, and ROE (NI in millions) 2.5 $2.29 $2.18 $2.16 2.3 $204 $2.04 2.1 (4) $1.87 $1.84 $2.10 EPS 1.9 $142 1.7 $193 $187 NI $175 $172 1.5 $141 $1.35(2) 1.3 $105 1.1 2012 2012 2013(1) 2013 2014 2014 2015 2015 2016 2016 2017(3) 2017 Accounting ROE
Slide 13: Consistent Dividend Growth
Consistent Dividend Growth 1.00 6.0% 3.7% CAGR $1.32 CAGR 0.90 $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 2017 Future dividend increases expected to be in
Slide 14: 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 Total Credit Available Facilities Credit + Cash $720 $692 S&P Moody’s Senior Sec
Slide 15: The Direction
The Direction Strong Platform for Stakeholder Value 15
Slide 16: 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 2030 and long-term risks and benefits for customers • Includes production tax credits in annual • Incremental renewable actio
Slide 17: 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 18: 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 • New customer information system Portland General Electric 18
Slide 19: Forecasted Capital Expenditures
Forecasted Capital Expenditures in millions(1) $551 Outlook $511 $535 Investments include: $462 • Upgrade and $444 $451 $440 $450 replacement of aging generation, transmission and distribution equipment • Strengthening the power grid for earthquakes, cyberattacks and other potential threats • New cu
Slide 20: PGE Investor Relations Team
PGE Investor Relations Team Chris Liddle Director, Investor Relations and Treasury (503) 464-7458 Christopher.Liddle@pgn.com Adrio Odobasic Senior Analyst, Investor Relations (503) 464-8586 Adrio.Odobasic@pgn.com Portland General Electric Investors.PortlandGeneral.com 121 S.W. Salmon Street Suite 1W
Slide 21: Appendices
Portland General Electric Appendices 21
Slide 22: Tax Reform
Tax Reform • Filed a deferral application with the OPUC • Defer regulatory items with a 2017 and 2018 financial impact into future years • Proposed that any refund be subject to an earnings test, tied to ROE • Cash flow and credit metrics remain strong Portland General Electric 22
Slide 23: 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 Carty plant in-service as of 12/31/2017: $637M Estimated time frame to
Slide 24: 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 10,000 8,000 6,000 4,000 2,000 0 2014 2015 2016 2017 2018 Wind & Solar Hydro Coal Natural Gas Purchased Power Changes
Slide 25: 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 26: 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 27: 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 11.5% Low Impact Hydro 3.0% Solar & Other 0.5% Renewable Portfolio Standard: 2011 2015 2020 2025 2030 2035 2040 5% 15% 20% 27% 35% 45
Slide 28: 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 29: 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 30: 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) (Prices
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