Portland General Electric Co · NYSE:POR
Portland General Electric — Investor Presentation (August 2018)
30 slides from Portland General Electric's investor presentation, August 2018
Slide 1: Investor Presentation
Investor Presentation Portland General Electric August 2018
Slide 2: Cautionary Statement
Cautionary Statement Information Current as of July 27, 2018 Except as expressly noted, the information in this presentation is current as of July 27, 2018 — the date on which PGE filed its quarterly report on Form 10-Q for the quarter ended June 30, 2018 — and should not be relied upon as being cur
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: Strong Platform for Stakeholder Value
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 encompassing generation, transmission Beaver Colstrip 3 & 4 Port Westward 1 & 2 and distribution OREGON WASHINGTON Washington • 883,000 customers(1) 26 Tucannon River Wind Farm • Serves 46 percent of
Slide 6: Attractive, Growing Service Area
Attractive, Growing Service Area • 1%+ average annual customer growth • Industrial segment growth driven by • Above-average population growth due to high tech and data centers in-migration • Unemployment in our service area • Oregon’s annual GDP growth averaged remains stable at 3.5%, lower than the
Slide 7: Constructive Regulatory Environment and 2019 General Rate Case
Constructive Regulatory Environment and 2019 General Rate Case Regulatory Construct Regulatory Body • Oregon Public Utility Commission • Governor-appointed three member • Forward test year commission serving 4-year terms • Integrated Resource Planning (IRP) Term Expiration Megan Decker [D] (Chair) (
Slide 8: Key Strengths: Strong Platform for Stakeholder Value
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 & Environmental Champion Market Strategies International No.1 Renewable Energy Program in the Nation National Rene
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 Industrial Hydro Industrial 12% 20% 12% Gas44% Residential Wind& Solar Residential Residential 52% Commercial 52% 13% 36% 51% Coal23% 1
Slide 11: High-Quality Utility Operations
High-Quality Utility Operations • Highly dependable generation fleet with six- Western EIM year average availability of 92%(1) • Strong power supply portfolio management and western EIM integration to enhance reliability and optimize resources • Progressive approach to reduce coal generation – Board
Slide 12: Solid Financial Performance
Solid Financial Performance Net Income, Earnings per Share, and ROE $2.40 2.5 (NI in millions) $2.29 $2.18 2.3 $2.16 $204 $2.25 $2.04 2.1 $2.10(4) $1.84 1.9 EPS 1.7 $193 $187 $142 $175 $172 NI 1.5 $1.35(2) 1.3 $105 1.1 (1) (3) 2013 2014 2015 2016 2017 2018E Accounting ROE 7.9% 9.4% 8.3% 8.4% 7.9% 8.
Slide 13: Consistent Dividend Growth
Consistent Dividend Growth 3.9% 6.2% CAGR CAGR $1.41 $1.32 $1.24 $1.16 $1.09 $1.11 70% Target Payout Ratio Actual Payout Ratio $1.05 $1.07 $1.03 $1.00 $0.96 50% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018E Future dividend increases expected to be in the 5-7% range(1) Note: Represents annu
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 $704 S&P Moody’s Senior Sec
Slide 15: Carty Generating Station Update
Carty Generating Station Update • On July 16, 2018, PGE entered into a settlement to resolve all claims relating to Carty construction • Settlement contributes 12 cents per share to 2018 EPS Carty Generating Station, a 440 MW natural gas baseload plant near Boardman, OR Cost to Construct $640M Appro
Slide 16: Looking Forward: Strong Platform for Stakeholder Value
Looking Forward Strong Platform for Stakeholder Value 16
Slide 17: Clean and Reliable Energy Future
Clean and Reliable Energy Future Key Elements Long-Term Strategy • Transition Oregon off coal-fired • Layered approach balances near-term generation by 2030 and long-term risks and benefits for • Production Tax Credits included in customers annual power cost filings beginning with • Incremental rene
Slide 18: 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 19: Smart Grid Strategies
Smart Grid Strategies Building a smarter more resilient grid: • New communication systems • Distributed automation systems • Data analytics • Integrate customers’ energy resources • Utility-scale battery storage • New customer information system Portland General Electric 19
Slide 20: Forecasted Capital Expenditures
Forecasted Capital Expenditures in millions(1) $648 Outlook • Support for continued customer growth $620 • Upgrades and replacement of aging $452 $457 $448 $450 generation, transmission and distribution equipment • Strengthening the grid for natural disasters, cyber and physical security • New custo
Slide 21: PGE Investor Relations Team
PGE Investor Relations Team Chris Liddle Director, Investor Relations and Treasury (503) 464-7458 Christopher.Liddle@pgn.com Katie Trosen Analyst, Investor Relations (503) 464-8586 Katie.Trosen@pgn.com Portland General Electric Investors.PortlandGeneral.com 121 S.W. Salmon Street Suite 1WTC0506 Port
Slide 22: Appendices
Portland General Electric Appendices 22
Slide 23: Tax Reform
Tax Reform On December 29, 2017 PGE 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 regulated ROE • PGE is working with Commission to determine appropriate m
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 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 2018E Wind & Solar Hydro Coal Natural Gas Purchased Power Ch
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 9.4% Low-Impact Hydro 2.5% Solar & Other 0.7% 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 2018 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) EEI U.S. Average 13.8 EE
Slide 30: Average Retail Price Comparison
Average Retail Price Comparison Small & Large Industrial – Winter 2018 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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