Portland General Electric Co · NYSE:POR
Portland General Electric — Investor Presentation (March 2022)
33 slides from Portland General Electric's investor presentation, Mar 8, 2022
Slide 1: Investor Presentation
Investor Presentation PORTLAND GENERAL ELECTRIC MARCH 8, 2022
Slide 2: Cautionary statement
Cautionary statement Information Current as of February 17, 2022 Except as expressly noted, the information in this presentation is current as of February 17, 2022 — the date on which PGE filed its Annual Report on Form 10-K for the year ended December 31, 2021 — 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 900,000 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 the 100% clean energy • Investing in our system to maintain and • 4% to 6% long term EPS growth, off framework as mandated by HB 20
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 Deliver earnings per served to Oregon retail electricity use to capture share growth of 4% to 6% customers by at least 80%
Slide 7: Diverse, growing service area
Diverse, growing service area • Desirable 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 wareh
Slide 8: Reliability and resiliency investments
Reliability and resiliency investments Capital expenditures forecast $660 $650 $650 $650 $650 $35 $100 $100 $100 $100 $110 $430 $430 $430 $430 $405 $110 $120 $120 $120 $120 2022 2023 2024 2025 2026 Generation Transmission and Distribution General Business and Technology Integrated Operations Center
Slide 9: Resource planning and procurement
Resource planning and procurement 2019 IRP ACTION PLAN 2021 RFP Customer Resource Actions • PGE is seeking up to approximately 1,000 • Increased energy efficiency, demand response, storage MW of renewable and non-emitting resources and dispatchable standby generation by initiating this RFP, consisti
Slide 10: Key strengths
Key strengths
Slide 11: Focus on customers
Focus on customers #1 Top quartile No.1 renewable Most Trusted system reliability energy program Utility Brand in the nation for Utility Trusted Brand & Edison Electric Institute over the last Customer Engagement™ decade Residential Study Escalent National Renewables Energy Laboratory 11
Slide 12: High-quality utility operations
High-quality utility operations Improving security, resiliency, and reliability for our Integrated Operations Center customers • A new, $200 million, 24/7 center for key operations • Integrated into the Western Energy Imbalance Market • Significantly improves seismic resilience, cyber and (EIM) to e
Slide 13: Long-term financial performance
Long-term financial performance Net income, earnings per share, and ROE $2.90(2) $2.75(1) $2.72 $2.75(2) $2.37 $2.39 EPS (diluted) Long-term $1.72(1) 4 to 6% Net income $244 earnings growth (dollars in millions) $212 $214 from 2019 base year $155 2018 2019 2020 2021 2022E (2) Accounting ROE(3) 8.6%
Slide 14: Proven dividend growth
Proven dividend growth (4/5) Dividends paid $1.77 per common $1.68 share(3) $1.56 $1.50 $1.41 Actual Payout $1.32 Ratio $1.24 Target Payout 70% $1.11 $1.16 $1.09 Ratio 60% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022E Long-term dividend growth guidance of 5-7%(4/5) (1) Compound Annual Growth Ra
Slide 15: Liquidity and financing
Liquidity and financing Total Liquidity: $843 million as of December 31, 2021 (dollars in millions) Ratings S&P Moody’s Senior Secured A A1 Cash Senior Unsecured BBB+ A3 $52 Letters of Commercial Paper A-2 P-2 Credit $141 Outlook Stable Stable Credit Expected 2022 Facilities financings Q1 Q2 Q3 Q4 $
Slide 16: Environmental, Social and Governance
Environmental, Social and Governance
Slide 17: Decarbonizing our energy supply
Decarbonizing our energy supply In addition to House Bill 2021 requirements, we plan to achieve companywide net zero greenhouse gas emissions by 2040 Reducing emissions associated with the power serving customers • Reducing greenhouse gas emissions associated with the power supplied to Oregon retail
Slide 18: Achieving required decarbonization
Achieving required decarbonization Our near-term power supply emissions standard is to reduce greenhouse gas emissions associated with the power supplied to Oregon retail customers by at least 80% by 2030(1) • We will need approximately 1,500 to 2,000 MW of clean resources, in addition to removing c
Slide 19: Achieving required decarbonization (cont'd)
Achieving required decarbonization(cont’d) Our path to an 80% reduction in 2030 is achievable through a combination of PGE, customer and community solutions 19
Slide 20: Moving toward a carbon neutral future
Moving toward a carbon neutral future Increasing renewables in our portfolio 5,000 Renewable Additions (MW) • Layered approach balances near-term and long-term risks 4,000 and benefits for customers • Incremental renewable actions reduce near-term carbon 3,000 emissions and puts PGE on track to meet
Slide 21: Sustainability and ESG governance framework
Sustainability and ESG governance framework Responsibility for environmental, social and governance (ESG) performance is integrated with the policies and principles that govern our company Board oversight The Board area of strategic responsibility includes oversight over actions to address risks and
Slide 22: 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 65 2007 Law/Environmental White/Male • Compensation 0 enables us to have a Board with the Independent /Regulatory • Fina
Slide 23: Diversity, equity and inclusion
Diversity, equity and inclusion Committed to DEI across our business • Partners and suppliers: Increasing our supplier diversity to 15% of total supplier spending by 2022 Workforce by Gender(1) • Awareness, education, and training: Racial equity 0.2% education for our board, leadership and employees
Slide 24: Sustainability reporting
Sustainability reporting • Our 2021 ESG Report shares information about PGE’s commitment to sustainability along with information about strategic projects that illustrate our commitment to advancing a sustainable future and caring for our community • Sustainability principles are woven into the fabr
Slide 25: Appendices
Portland General Electric APPENDICES
Slide 26: 2022 General Rate Case updates
2022 General Rate Case updates Rate Case Key Terms – Through 4th Settlement Average Rate Base $5.6 Billion Average Rate Base Increase $814 million, 17% ROE 9.5% Capital Structure 50/50 Cost of Debt 4.125% Cost of Capital 6.83%(1) Revenue Requirement Increase $74 million, including $64 million for po
Slide 27: Deferral updates
Deferral updates COVID-19 (Docket UM 2114) • 2022 earnings guidance reflects the ongoing impact of COVID-19 • As of December 31, 2021 PGE has deferred $36 million, primarily related to bad debt expense. Amortization of any deferred costs will remain subject to OPUC review prior to amortization Wildf
Slide 28: Wildfire mitigation and risk management
Wildfire mitigation and risk management Number one priority is protecting the lives and property of customers, coworkers and the communities we serve. • Robust tree trimming and vegetation management program • Ongoing focus on system hardening: • Fire resistant, ductile iron transmission and distrib
Slide 29: Constructive regulatory environment
Constructive regulatory environment Regulatory construct Regulatory body • Forward test year • Public Utility Commission of Oregon • Integrated Resource Planning (IRP) • Governor-appointed three-member • Renewable Portfolio Standard (RPS) commission serving four-year terms • Proven track record of a
Slide 30: Historical distribution system investments
Historical distribution system investments PGE has invested significantly in its distribution system to maintain reliable infrastructure, minimize outages and modernize our grid • In Q4 2021, PGE filed the inaugural Distribution System Plan with the OPUC, laying out plans to build a community- cente
Slide 31: 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 32: 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 Collections under the decoupling mechanism are subject to an annual limitation of 2% of the appli
Slide 33: 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 12.8 PGE - Sch. 83 9.7 EEI U.S. Average 13.7 EEI U.S
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