Portland General Electric Co · NYSE:POR
Portland General Electric — Investor Presentation (March 2020)
30 slides from Portland General Electric's investor presentation, March 2020
Slide 1: Investor Presentation
Investor Presentation Portland General Electric March 2020
Slide 2: Cautionary statements
Cautionary statements Information Current as of February 14, 2020 Except as expressly noted, the information in this presentation is current as of February 14, 2020 — the date on which PGE filed its Annual Report on Form 10-K for the year ended December 31, 2019 — and should not be relied upon as be
Slide 3: The company
The company
Slide 4: PGE at a glance
PGE at a glance Quick facts 3,800+ MWs of Generation • Vertically integrated electric utility encompassing generation, transmission and distribution Beaver Washington Port Westward 1 & 2 Tucannon River • 895,000 customers in 51 Oregon incorporated cities OREGON WASHINGTON Wind Farm • 46 percent of O
Slide 5: Attractive, growing service area
Attractive, growing service area • 1%+ average annual 2,600 1.20 customer count growth(1) 2,400 1.15 • Oregon’s annual GDP 2,200 Energy Deliveries Growth, growth averaged 2.8% over 2,000 1.10 (4) 1,800 the past two decades(2) Indexed 2019=1 Energy Deliveries, MWa 1,600 1.05 • Oregon ranked 10th in t
Slide 6: 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 7: 2019 general rate case
2019 general rate case Key Items • Approved price increase: 0.5% • Return on equity (ROE): 9.5% • Cost of long-term debt: 5.1% • Capital structure: 50% debt, 50% equity • Rate base: $4.75 billion Requests approved by the Commission • Energy storage projects associated with renewables can be included
Slide 8: Key strengths
Key strengths
Slide 9: Focus on customers
Focus on customers Top quartile Top quartile Trusted business No.1 renewable system customer partner & energy program reliability satisfaction environmental in the nation by among large champion enrollment for Edison Electric Institute electric and last decade Cogent Syndicated Utility Trusted elect
Slide 10: Diverse generation and customer base
Diverse generation and customer base Power sources as a percent of retail load Retail revenues by customer class 2020 AUT(1) 2019(2) Industrial 12% Hydro 18% Gas Wind & Solar Residential 51% 12% 52% Commercial 35% Coal 19% Total = 2,132 MWa Total retail revenues = $1.9B 1. Hydro and wind/solar inclu
Slide 11: High-quality utility operations
High-quality utility operations Western Energy Imbalance • Highly-dependable generation fleet with eight-year Market average availability of 92%(1) • Strong power supply portfolio management and western EIM integration to enhance reliability and optimize resources • Transitioning away from coal-fire
Slide 12: Strong liquidity position for growth
Strong liquidity position for growth Revolving credit facilities(1) Financial resources ($ in millions) • Investment grade credit ratings • Manageable debt maturities • Target capital structure of 50% debt and 50% equity S&P Moody’s Available Senior Secured A A1 Credit + Total Cash Senior Unsecured
Slide 13: Solid financial performance
Solid financial performance Net income, earnings per share, and ROE $2.65(2) $2.39 $2.50(2) EPS $2.37 (diluted) $2.29(1) $2.16 Net income ($ in millions) $2.10(1) $212 $214 $193 $187(1) 2016 2017(1) 2018 2019 2020(2) Accounting ROE 8.4% 7.9% 8.6% 8.4% 8.8% - 9.3% Allowed ROE 9.6% 9.6% 9.5% 9.5% 9.5%
Slide 14: Proven dividend growth
Proven dividend growth Dividends paid per $1.50 common share(3) $1.41 $1.32 $1.24 Payout Ratio Actual Payout $1.16 70% Target Ratio $1.09 $1.11 $1.05 $1.07 $1.03 60% 50%(4) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Future dividend increases expected to be in the 5-7% range(3) 1. Compound Ann
Slide 15: Looking Forward
Looking Forward
Slide 16: Investing in the future
Investing in the future 80% goal Smart Grid Test Beds System upgrades Wheatridge Renewable Accelerating transportation Demand response Energy Facility electrification Meeting growth Green Tariff EV transit partnerships Access to capacity
Slide 17: Clean and reliable energy future
Clean and reliable energy future Renewable Portfolio Standard 50% 45% Key elements 35% • Transition PGE customers off coal-fired generation 27% 20% by 2030 • Production tax credits included in annual power cost filings since 2017 2020 2025 2030 2035 2040 • Pursue transportation electrification MWa 2
Slide 18: 2016 Integrated Resource Plan
2016 Integrated Resource Plan A flexible, balanced plan that reflects our commitment to a low-carbon future and achieves the Oregon Clean Electricity Plan Renewables • Procured renewables (100 MWa) to help ensure Oregon Clean Electricity Plan • Wheatridge Renewable Energy Facility: • Split ownership
Slide 19: 2019 Integrated Resource Plan
2019 Integrated Resource Plan July 2019 Q3-Q4 2019 Q3 – Q4 2019 Q1 2020 July 2019 December 2019 January 2020 IRP filed with Comments filed by Staff memorandum and IRP filed with Commission Comments filed by Staff Memorandum Staff/Stakeholders/PGE Staff/Stakeholders/PGE due final Public order meeting
Slide 20: Integrated Operations Center
Integrated Operations Center A new 24/7 center for key operations: • Advances our integrated grid strategy • Significantly improves seismic resilience, cyber and physical security • Improves monitoring, control and optimization of distributed assets and our distribution system 20
Slide 21: 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 21
Slide 22: Forecasted capital expenditures
Forecasted capital expenditures $890 $595 $500 $500 $500 2020 2021 2022 2023 2024 Ongoing Capital Expenditures Integrated Operations Center Wheatridge Renewable Energy Facility Outlook • Updating and replacing aging generation, transmission and distribution equipment • Building a smarter, more resil
Slide 23: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) Environmental Social Governance Decarbonize Customers Experienced 80% reduction in GHG emissions Ensuring universal access at Wide range of skills, backgrounds below 1990 levels, Green tariff affordable prices and leadership positions Community Diverse Elec
Slide 24: PGE investor relations team
PGE investor relations team Chris Liddle Online Director, Investor Relations and investors.portlandgeneral.com Treasury (503) 464-7458 Christopher.Liddle@pgn.com Peter Davis Analyst, Investor Relations (503) 464-8586 Peter.Davis@pgn.com Portland General Electric Investors.PortlandGeneral.com 121 SW
Slide 25: Appendices
Portland General Electric Appendices
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 2018, PGE had the following qualifying renewable resources: Type of Resource % of Retail Load Wind 9.9% Low-Impact Hydro 2.5% Solar & Other <1% 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 nonresid
Slide 29: Average retail price comparison
Average retail price comparison Residential and Commercial - Summer 2019 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 (OR) 12.4 PG
Slide 30: Average retail price comparison
Average retail price comparison Small and Large Industrial - Summer 2019 Industrial Electric Service Prices Large Industrial Electric Service Prices 1,000 kW peak demand and 400,000 kWh monthly consumption 50,000 kW peak demand and 32,500,000 kWh monthly consumption (Prices in cents per kWh) (Prices
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