Form 8-K PORTLAND GENERAL ELECTRI For: Aug 03
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K |
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 2016
PORTLAND GENERAL ELECTRIC COMPANY | ||
(Exact name of registrant as specified in its charter) | ||
Oregon | 001-5532-99 | 93-0256820 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
121 SW Salmon Street, Portland, Oregon 97204
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (503) 464-8000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
The following information is furnished pursuant to Item 2.02.
On August 3, 2016, Portland General Electric Company (the “Company”) issued a press release announcing its financial results for the three and six month periods ended June 30, 2016. The press release is furnished herewith as Exhibit 99.1 to this Report.
Item 7.01 Regulation FD Disclosure.
The following information is furnished pursuant to Item 7.01.
At 11:00 a.m. ET on Wednesday, August 3, 2016, the Company will hold its quarterly earnings call and web cast, and will utilize a slide presentation in conjunction with the earnings call. A copy of the slide presentation is furnished herewith as Exhibit 99.2.
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. | |
99.1 | Press Release issued by Portland General Electric Company dated August 3, 2016. | |
99.2 | Portland General Electric Company Second Quarter 2016 Slides dated August 3, 2016. | |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PORTLAND GENERAL ELECTRIC COMPANY | ||||
(Registrant) | ||||
Date: | August 2, 2016 | By: | /s/ James F. Lobdell | |
James F. Lobdell | ||||
Senior Vice President of Finance, Chief Financial Officer and Treasurer | ||||
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Exhibit 99.1
 | Portland General Electric One World Trade Center 121 S.W. Salmon Street Portland, Oregon 97204 News Release | ||
FOR IMMEDIATE RELEASE | |||
August 3, 2016 | |||
Media Contact: | Investor Contact: | ||
Melanie Moir | Bill Valach | ||
Corporate Communications | Investor Relations | ||
Phone: 503-464-8790 | Phone: 503-464-7395 | ||
Portland General Electric announces second quarter 2016 results
• | Carty Generating Station placed in-service on July 29, 2016 |
• | Delivered solid second quarter financial and operating performance |
• | Reaffirming guidance of $2.05 - $2.20 per share |
PORTLAND, Ore. — Portland General Electric Company (NYSE: POR) today reported net income of $37 million, or 42 cents per diluted share, for the second quarter of 2016. This compares with net income of $35 million, or 44 cents per diluted share, for the second quarter of 2015. The decrease in second quarter earnings per diluted share was due to lower load from mild weather and an increase in common shares outstanding due to new shares issued in June 2015. This was partially offset by higher allowance for equity funds used during construction and favorable power supply operations. Enhanced power supply operations were the result of increased wind production and better hydro conditions in the second quarter of 2016 in comparison to the second quarter of 2015.
“I’m pleased to report that our highly efficient Carty Generating Station is now in service and providing a safe, reliable, and cost-effective source of energy to our customers,” said Jim Piro, president and CEO. “I want to recognize and thank the many dedicated PGE employees and contractors who worked closely together to deliver this result. In addition to achieving this milestone, we also delivered another solid quarter of financial and operating performance.”
Company Updates
Carty Generating Station
On July 29, 2016, PGE placed into service its new 440 megawatt natural-gas fired baseload generating resource near Boardman, OR. The plant was selected in 2013 after a careful and exhaustive planning and competitive resource selection process that began with PGE’s 2009 integrated resource plan, which the Oregon Public Utility Commission (OPUC) acknowledged in 2010. Following the termination of the construction agreement in December of 2015, PGE assumed control of the project. Working with the help of key contractors on the project PGE’s project team and operating staff have focused their efforts on assuring that the completed facility will safely and reliably meet our customers’ energy needs.
As a result of placing the plant in-service, $514 million of capital costs as well as the plant’s operating costs approved in the 2016 General Rate Case, were included in customer prices beginning August 1, 2016. The company
1
Exhibit 99.1
currently estimates that the total final capital expenditures for Carty, including AFDC, will be approximately $640 million to $660 million. On July 29, 2016, PGE filed a regulatory deferral request with the OPUC for the incremental capital cost from Carty’s in-service date until the additional amounts are approved, if necessary, under a future regulatory filing, which will depend on whether those additional amounts are offset wholly or in part by funds received from two sureties, who had provided a $145.6 million performance bond, or from the original Carty contractor or the contractor’s parent company. PGE required the performance bond as part of financial protections incorporated into the original fixed price, turn-key engineering, procurement and construction contract for construction and delivery of Carty as a completed facility. PGE invoked the performance bond after the contractor defaulted on its construction agreement in December 2015, and is currently pursuing legal action against the sureties, Liberty Mutual and Zurich North America, to enforce satisfaction of the terms of the bond.
As of June 30, 2016, PGE had $587 million, including $59 million of AFDC, included in construction work in progress (CWIP) for the project. Refer to the company’s Form 10-Q for the second quarter of 2016 for additional details on the Carty project.
Accelerated Renewable Request for Proposal
On June 7, 2016 at the regular public hearing of the OPUC, PGE requested approval to issue an accelerated Request for Proposal (RFP) to obtain additional renewable resources of approximately 175 average megawatts. At the public hearing the OPUC decided to take no action on approval of the RFP and extended the public comment period until June 28, 2016. The OPUC also encouraged stakeholders to engage in timely discussions regarding any concerns with the RFP. Following numerous discussions with interested parties, on July 13, 2016 PGE submitted an amended application to the OPUC requesting approval of an updated version of the RFP by no later than July 29, 2016.
At a special public hearing on July 29, 2016 the OPUC took no action on PGE’s request to issue the accelerated RFP. The commission adopted the recommendation made by staff which concluded that the RFP was not aligned with the company’s most recently acknowledged Integrated Resource Plan (IRP), In light of the questions expressed by the OPUC, staff and other parties, the company is suspending the Renewable RFP until such time as we are able to complete further analysis and determine the appropriate timing for seeking approval of a revised RFP schedule.
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Exhibit 99.1
Second quarter operating results
Earnings Reconciliation of Q2 2015 to Q2 2016 | |||||||||
(in $millions, except EPS) | Pre-Tax Income | Net Income* | Diluted EPS | ||||||
Reported Q2 2015 | $ | 50 | $ | 35 | $ | 0.44 | |||
Adjustment for change in share count | (0.04 | ) | |||||||
EPS After share count adjustment | 0.40 | ||||||||
Revenue Adjustments | |||||||||
Electric retail volume decrease | (21 | ) | (13 | ) | (0.14 | ) | |||
Electric wholesale volume and price decrease | (4 | ) | (2 | ) | (0.03 | ) | |||
Other revenue adjustments | 3 | 1 | 0.02 | ||||||
Change in Revenue | (22 | ) | (14 | ) | (0.15 | ) | |||
Power Cost Adjustments | |||||||||
Average power cost decrease | 21 | 13 | 0.14 | ||||||
Decrease in system load | 1 | 1 | 0.01 | ||||||
Change in Power Costs | 22 | 14 | 0.15 | ||||||
O&M Adjustments | |||||||||
Generation, transmission, distribution | 2 | 1 | 0.01 | ||||||
Administrative and general | (1 | ) | (1 | ) | (0.01 | ) | |||
Change in O&M | 1 | — | — | ||||||
Adjustments to Other Items | |||||||||
Depreciation & amortization | (7 | ) | (4 | ) | (0.05 | ) | |||
Interest | 1 | 1 | 0.01 | ||||||
AFDC equity** | 3 | 3 | 0.03 | ||||||
Other Items | (2 | ) | (1 | ) | (0.01 | ) | |||
Adjustment for effective vs statutory tax rate | 3 | 0.04 | |||||||
Change in Other Items | (5 | ) | 2 | 0.02 | |||||
Reported Q2 2016 | $ | 46 | $ | 37 | $ | 0.42 | |||
* After tax adjustments based on PGE’s statutory tax rate of 39.5% | |||||||||
** Statutory tax rate does not apply to AFDC equity | |||||||||
Total revenues for the three months ended June 30, 2016 decreased $22 million compared to the three months ended June 30, 2015, comprised primarily of a $16 million decrease in retail revenues and $4 million decrease in wholesale revenues.
The change in retail revenues resulted from the following:
• | A $21 million decrease related to 5.2% lower retail energy deliveries due to unfavorable weather conditions and a decrease in deliveries to industrial customers. Energy deliveries to residential and commercial customers decreased 4.4% and 2.8%, respectively, due to the effects of more moderate weather, and energy deliveries to industrial customers decreased 10.4%, largely due to the closure of a large paper customer that ceased operations in late 2015. PGE’s 2016 GRC took the loss of this customer into consideration and incorporated its effects into prices and load forecasts resulting in minimal impact on net income. After adjusting for the effects of weather, total retail energy deliveries were down 5.1% for the three months ended June 30, 2016 compared with the three months ended June 30, 2015; and |
• | A $5 million increase related to customer refunds that occurred in the second quarter of 2015 that did not reoccur in the second quarter of 2016 in connection with the receipt of proceeds pursuant to the settlement of a legal matter related to the operation of the ISFSI at the Trojan nuclear power plant, which was closed in 1993 (offset in depreciation and amortization). |
Net variable power costs (purchased power and fuel expense, net of wholesale revenues) for the three months ended June 30, 2016 decreased $18 million when compared with the three months ended June 30, 2015. The decrease was driven by a 14% decline in the average variable power cost per MWh, a 1% decrease in total system
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Exhibit 99.1
load, offset by a 22% decrease in wholesale revenues. The decrease in wholesale revenues was driven primarily by a 45% decrease in the average wholesale sales price, partially offset by a 44% increase in wholesale sales volume. For the three months ended June 30, 2016 actual NVPC was $7 million below the baseline, while the three months ended June 30, 2015 actual NVPC approximated baseline NVPC.
Generation, transmission and distribution expense decreased $2 million, or 3%, in the three months ended June 30, 2016 compared with the three months ended June 30, 2015 driven primarily by a $3 million decrease due to the timing of the annual planned outage at Boardman, offset by a $2 million increase in service restoration expenses.
Administrative and other expense increased $1 million, or 2%, in the three months ended June 30, 2016 compared with the three months ended June 30, 2015. The increase was primarily due to a $2 million reduction in the reserve for customer receivables in 2015.
Depreciation and amortization expense increased $7 million in the three months ended June 30, 2016 compared with the three months ended June 30, 2015. The increase was primarily driven by $4 million additional expense due to capital additions, $4 million due to the temporary discontinuance of amortization of credits for the regulatory liability for the Trojan spent fuel settlement, and $4 million resulting from a combination of gains recorded on the sale of assets and other minor items, offset by a $5 million decrease that resulted from the completion of the amortization of the regulatory asset for four capital project deferrals as authorized in the company’s 2011 GRC. Increases or decreases in expense resulting from amortization of regulatory assets or liabilities are directly offset in revenues.
Interest expense decreased $1 million, or 4%, in the three months ended June 30, 2016 compared with the three months ended June 30, 2015, with $1 million related to a 7% decrease in the average balance of debt outstanding and $1 million related to a higher allowance for borrowed funds used during construction.
Other income, net was $9 million in the three months ended June 30, 2016 compared with $6 million in the three months ended June 30, 2015. The change was due to an increase in the allowance for equity funds used during construction resulting from higher average CWIP balances, primarily related to the Carty project.
Income tax expense was $9 million in the three months ended June 30, 2016 compared with $15 million in the three months ended June 30, 2015, with effective tax rates of 19.6% and 30.0%, respectively. The decrease in income tax expense and effective tax rate was primarily due to lower pre-tax income, an increase in the amount of allowance for equity funds used during construction, and an increase in production tax credits.
2016 earnings guidance
PGE is reaffirming its revised 2016 guidance of $2.05 - $2.20 per diluted share. The guidance is based on the following assumptions:
• | Retail delivery growth of approximately 1%, weather adjusted and excluding one large paper company; |
• | Slightly below average hydro conditions for the remainder of the year; |
• | Wind generation for the remainder of the year based on 5 years of historic levels or forecast studies when historical data is not available; |
• | Normal thermal plant operations; |
• | Operating and maintenance costs between $515 and $535 million; |
• | Depreciation and amortization expense between $315 and $325 million; and |
• | New customer prices effective August 1, 2016 which include only the return on and of the Carty capital costs of $514 million and all operating costs as allowed by the OPUC in the 2016 GRC. |
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Exhibit 99.1
Second Quarter 2016 earnings call and web cast — August 3rd
PGE will host a conference call with financial analysts and investors on Wednesday, August 3rd, at 11 a.m. ET. The conference call will be webcast live on the PGE website at investors.portlandgeneral.com. A replay of the call will be available beginning at 2 p.m. ET on Wednesday, August 3rd, through Wednesday, August 10th.
Jim Piro, president and CEO; Jim Lobdell, senior vice president of finance, CFO, and treasurer; and Bill Valach, director, investor relations, will participate in the call. Management will respond to questions following formal comments.
The attached unaudited condensed consolidated statements of income, condensed consolidated balance sheets, and condensed consolidated statements of cash flows, as well as the supplemental operating statistics, are an integral part of this earnings release.
# # # # #
About Portland General Electric Company
Portland General Electric Company is a vertically integrated electric utility that serves approximately 859,000 residential, commercial and industrial customers in the Portland/Salem metropolitan area of Oregon. The company’s headquarters are located at 121 S.W. Salmon Street, Portland, Oregon 97204. Visit PGE’s website at investors.portlandgeneral.com.
Safe Harbor Statement
Statements in this news release that relate to future plans, objectives, expectations, performance, events and the like may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding earnings guidance; statements regarding the expected capital costs for the Carty Generating Station and the recovery of those costs; statements regarding future load, hydro conditions and operating and maintenance costs; statements concerning implementation of the company’s integrated resource plan; statements concerning future compliance with regulations limiting emissions from generation facilities and the costs to achieve such compliance; as well as other statements containing words such as “anticipates,” “believes,” “intends,” “estimates,” “promises,” “expects,” “should,” “conditioned upon,” and similar expressions. Investors are cautioned that any such forward-looking statements are subject to risks and uncertainties, including reductions in demand for electricity; the sale of excess energy during periods of low demand or low wholesale market prices; operational risks relating to the company’s generation facilities, including hydro conditions, wind conditions, disruption of fuel supply, and unscheduled plant outages, which may result in unanticipated operating, maintenance and repair costs, as well as replacement power costs; failure to complete capital projects on schedule or within budget, or the abandonment of capital projects, which could result in the company’s inability to recover project costs; the costs of compliance with environmental laws and regulations, including those that govern emissions from thermal power plants; changes in weather, hydroelectric and energy markets conditions, which could affect the availability and cost of purchased power and fuel; changes in capital market conditions, which could affect the availability and cost of capital and result in delay or cancellation of capital projects; the outcome of various legal and regulatory proceedings; and general economic and financial market conditions. As a result, actual results may differ materially from those projected in the forward-looking statements. All forward-looking statements included in this news release are based on information available to the company on the date hereof and such statements speak only as of the date hereof. The company assumes no obligation to update any such forward-looking statement. Prospective investors should also review the risks and uncertainties listed in the company’s most recent annual report on form 10-K and the company’s reports on forms 8-K and 10-Q filed with the United States Securities and Exchange Commission, including management’s discussion and analysis of financial condition and results of operations and the risks described therein from time to time.
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Exhibit 99.1
POR-F
Source: Portland General Electric Company
6
Exhibit 99.1
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues, net | $ | 428 | $ | 450 | $ | 915 | $ | 923 | |||||||
Operating expenses: | |||||||||||||||
Purchased power and fuel | 126 | 148 | 275 | 309 | |||||||||||
Generation, transmission and distribution | 64 | 66 | 130 | 128 | |||||||||||
Administrative and other | 61 | 60 | 122 | 120 | |||||||||||
Depreciation and amortization | 83 | 76 | 165 | 151 | |||||||||||
Taxes other than income taxes | 30 | 28 | 60 | 58 | |||||||||||
Total operating expenses | 364 | 378 | 752 | 766 | |||||||||||
Income from operations | 64 | 72 | 163 | 157 | |||||||||||
Interest expense (1) | 27 | 28 | 54 | 58 | |||||||||||
Other income: | |||||||||||||||
Allowance for equity funds used during construction | 8 | 5 | 15 | 9 | |||||||||||
Miscellaneous income, net | 1 | 1 | — | 2 | |||||||||||
Other income, net | 9 | 6 | 15 | 11 | |||||||||||
Income before income tax expense | 46 | 50 | 124 | 110 | |||||||||||
Income tax expense | 9 | 15 | 26 | 25 | |||||||||||
Net income and Comprehensive income | $ | 37 | $ | 35 | $ | 98 | 85 | ||||||||
Weighted-average shares outstanding (in thousands): | |||||||||||||||
Basic | 88,902 | 80,745 | 88,867 | 79,515 | |||||||||||
Diluted | 88,902 | 80,745 | 88,867 | 79,515 | |||||||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.42 | $ | 0.44 | $ | 1.10 | $ | 1.07 | |||||||
Diluted | $ | 0.42 | $ | 0.44 | $ | 1.10 | $ | 1.07 | |||||||
Dividends declared per common share | $ | 0.32 | $ | 0.30 | $ | 0.62 | $ | 0.58 | |||||||
(1) Net of an allowance for borrowed funds used during construction of $4 million and $3 million in the three months ended June 30, 2016 and 2015, respectively. | |||||||||||||||
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Exhibit 99.1
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
June 30, | December 31, | ||||||
2016 | 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 93 | $ | 4 | |||
Accounts receivable, net | 124 | 158 | |||||
Unbilled revenues | 70 | 95 | |||||
Inventories | 87 | 83 | |||||
Regulatory assets—current | 74 | 129 | |||||
Other current assets | 64 | 88 | |||||
Total current assets | 512 | 557 | |||||
Electric utility plant, net | 6,284 | 6,012 | |||||
Regulatory assets—noncurrent | 525 | 524 | |||||
Non-qualified benefit plan trust | 33 | 33 | |||||
Nuclear decommissioning trust | 41 | 40 | |||||
Other noncurrent assets | 51 | 44 | |||||
Total assets | $ | 7,446 | $ | 7,210 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 114 | $ | 98 | |||
Liabilities from price risk management activities - current | 81 | 130 | |||||
Short-term debt | — | 6 | |||||
Current portion of long-term debt | — | 133 | |||||
Accrued expenses and other current liabilities | 247 | 259 | |||||
Total current liabilities | 442 | 626 | |||||
Long-term debt, net of current portion | 2,324 | 2,060 | |||||
Regulatory liabilities—noncurrent | 949 | 928 | |||||
Deferred income taxes | 649 | 632 | |||||
Liabilities from price risk management activities - noncurrent | 171 | 161 | |||||
Unfunded status of pension and postretirement plans | 264 | 259 | |||||
Non-qualified benefit plan liabilities | 106 | 106 | |||||
Asset retirement obligations | 155 | 151 | |||||
Other noncurrent liabilities | 83 | 29 | |||||
Total liabilities | 5,143 | 4,952 | |||||
Total equity | 2,303 | 2,258 | |||||
Total liabilities and equity | $ | 7,446 | $ | 7,210 | |||
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Exhibit 99.1
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 98 | $ | 85 | |||
Depreciation and amortization | 165 | 151 | |||||
Other non-cash income and expenses, net included in Net income | 28 | 45 | |||||
Changes in working capital | 66 | (19 | ) | ||||
Other, net | (19 | ) | (14 | ) | |||
Net cash provided by operating activities | 338 | 248 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (319 | ) | (313 | ) | |||
Distribution from Nuclear decommissioning trust | — | 50 | |||||
Sales tax refund received related to Tucannon River Wind Farm | — | 23 | |||||
Other, net | — | 2 | |||||
Net cash used in investing activities | (319 | ) | (238 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of common stock, net of issuance costs | — | 271 | |||||
Net (payments) issuances of long-term debt | 131 | (242 | ) | ||||
Payments on short-term debt | (6 | ) | — | ||||
Payment on capital lease | (2 | ) | — | ||||
Dividends paid | (53 | ) | (44 | ) | |||
Net cash provided by (used in) financing activities | 70 | (15 | ) | ||||
Increase (Decrease) in cash and cash equivalents | 89 | (5 | ) | ||||
Cash and cash equivalents, beginning of period | 4 | 127 | |||||
Cash and cash equivalents, end of period | $ | 93 | $ | 122 | |||
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Exhibit 99.1
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues (dollars in millions): | |||||||||||||||
Retail: | |||||||||||||||
Residential | $ | 191 | $ | 200 | $ | 445 | $ | 434 | |||||||
Commercial | 162 | 167 | 322 | 322 | |||||||||||
Industrial | 50 | 57 | 99 | 113 | |||||||||||
Subtotal | 403 | 424 | 866 | 869 | |||||||||||
Other retail revenues, net | 1 | (4 | ) | 4 | (2 | ) | |||||||||
Total retail revenues | 404 | 420 | 870 | 867 | |||||||||||
Wholesale revenues | 14 | 18 | 26 | 37 | |||||||||||
Other operating revenues | 10 | 12 | 19 | 19 | |||||||||||
Total revenues | $ | 428 | $ | 450 | $ | 915 | $ | 923 | |||||||
Energy sold and delivered (MWh in thousands): | |||||||||||||||
Retail energy sales: | |||||||||||||||
Residential | 1,557 | 1,628 | 3,660 | 3,559 | |||||||||||
Commercial | 1,695 | 1,753 | 3,397 | 3,384 | |||||||||||
Industrial | 717 | 870 | 1,414 | 1,692 | |||||||||||
Total retail energy sales | 3,969 | 4,251 | 8,471 | 8,635 | |||||||||||
Retail energy deliveries: | |||||||||||||||
Commercial | 133 | 127 | 262 | 256 | |||||||||||
Industrial | 323 | 291 | 606 | 563 | |||||||||||
Total retail energy deliveries | 456 | 418 | 868 | 819 | |||||||||||
Total retail energy sales and deliveries | 4,425 | 4,669 | 9,339 | 9,454 | |||||||||||
Wholesale energy deliveries | 773 | 538 | 1,261 | 1,118 | |||||||||||
Total energy sold and delivered | 5,198 | 5,207 | 10,600 | 10,572 | |||||||||||
Number of retail customers at end of period: | |||||||||||||||
Residential | 751,565 | 741,507 | |||||||||||||
Commercial | 107,370 | 106,503 | |||||||||||||
Industrial | 188 | 201 | |||||||||||||
Direct access | 374 | 389 | |||||||||||||
Total retail customers | 859,497 | 848,600 | |||||||||||||
Heating Degree-days | Cooling Degree-days | ||||||||||||
2016 | 2015 | Average* | 2016 | 2015 | Average* | ||||||||
First quarter | 1,585 | 1,481 | 1,866 | — | — | — | |||||||
April | 227 | 361 | 386 | 18 | 2 | 1 | |||||||
May | 109 | 133 | 216 | 31 | 20 | 18 | |||||||
June | 67 | 19 | 87 | 105 | 185 | 51 | |||||||
Second Quarter | 403 | 513 | 689 | 154 | 207 | 70 | |||||||
Year to Date | 1,988 | 1,994 | 2,555 | 154 | 207 | 70 | |||||||
* — “Average” amounts represent the 15-year rolling average calculated from data provided by the National Weather Service (Portland Airport).
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Exhibit 99.1
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Sources of energy (MWh in thousands): | |||||||||||
Generation: | |||||||||||
Thermal: | |||||||||||
Coal | 360 | 727 | 1,117 | 1,211 | |||||||
Natural gas | 772 | 984 | 1,774 | 1,654 | |||||||
Total thermal | 1,132 | 1,711 | 2,891 | 2,865 | |||||||
Hydro | 379 | 318 | 947 | 796 | |||||||
Wind | 628 | 515 | 989 | 803 | |||||||
Total generation | 2,139 | 2,544 | 4,827 | 4,464 | |||||||
Purchased power: | |||||||||||
Term | 2,090 | 1,376 | 3,576 | 2,876 | |||||||
Hydro | 393 | 383 | 838 | 913 | |||||||
Wind | 91 | 96 | 150 | 153 | |||||||
Spot | 264 | 621 | 866 | 1,861 | |||||||
Total purchased power | 2,838 | 2,476 | 5,430 | 5,803 | |||||||
Total system load | 4,977 | 5,020 | 10,257 | 10,267 | |||||||
Less: wholesale sales | (773 | ) | (538 | ) | (1,261 | ) | (1,118 | ) | |||
Retail load requirement | 4,204 | 4,482 | 8,996 | 9,149 | |||||||
11
Earnings Conference Call
Second Quarter 2016
Exhibit 99.2
Cautionary Statement
Information Current as of August 3, 2016
Except as expressly noted, the information in this presentation is current as of August 3, 2016 — the date on which PGE filed
its Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 — and should not be relied upon as being current as
of any subsequent date. PGE undertakes no duty to update the presentation, except as may be required by law.
Forward-Looking Statements
Statements in this news release that relate to future plans, objectives, expectations, performance, events and the like may
constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include statements regarding earnings guidance; statements regarding the expected capital costs
for the Carty Generating Station and the recovery of those costs; statements regarding future load, hydro conditions and
operating and maintenance costs; statements concerning implementation of the company’s integrated resource plan;
statements concerning future compliance with regulations limiting emissions from generation facilities and the costs to achieve
such compliance; as well as other statements containing words such as “anticipates,” “believes,” “intends,” “estimates,”
“promises,” “expects,” “should,” “conditioned upon,” and similar expressions. Investors are cautioned that any such forward-
looking statements are subject to risks and uncertainties, including reductions in demand for electricity; the sale of excess
energy during periods of low demand or low wholesale market prices; operational risks relating to the company’s generation
facilities, including hydro conditions, wind conditions, disruption of fuel supply, and unscheduled plant outages, which may
result in unanticipated operating, maintenance and repair costs, as well as replacement power costs; failure to complete
capital projects on schedule or within budget, or the abandonment of capital projects, which could result in the company’s
inability to recover project costs; the costs of compliance with environmental laws and regulations, including those that govern
emissions from thermal power plants; changes in weather, hydroelectric and energy markets conditions, which could affect
the availability and cost of purchased power and fuel; changes in capital market conditions, which could affect the availability
and cost of capital and result in delay or cancellation of capital projects; the outcome of various legal and regulatory
proceedings; and general economic and financial market conditions. As a result, actual results may differ materially from those
projected in the forward-looking statements. All forward-looking statements included in this news release are based on
information available to the company on the date hereof and such statements speak only as of the date hereof. The company
assumes no obligation to update any such forward-looking statement. Prospective investors should also review the risks and
uncertainties listed in the company’s most recent annual report on form 10-K and the company’s reports on forms 8-K and 10-
Q filed with the United States Securities and Exchange Commission, including management’s discussion and analysis of
financial condition and results of operations and the risks described therein from time to time.
2
Leadership Presenting Today
Jim Lobdell
Senior VP
of Finance,
CFO & Treasurer
Jim Piro
President & CEO
3
On Today’s Call
▪ Carty update
▪ Financial performance
▪ Operational update
▪ Economy and customers
▪ 2016 Integrated Resource
Plan (IRP)
▪ Accelerated renewable RFP
▪ Capital expenditure
forecast
▪ Financial update
▪ Guidance
New Generation: Baseload Resource
4
Carty Generating Station, a 440 MW natural gas baseload plant near Boardman, OR
Capital costs, including AFDC, approved in 2016 GRC: $514M
Total estimated cost, including AFDC, for completion(1): $640-$660M(1)
Carty CWIP balance as of 6/30/2016: $587M(2)
(1) Total estimated cost does not consider any amounts received from sureties under the performance bond
(2) Includes $59 million of AFDC
Carty Generating Station In Service
NI in millions Q2 2015 Q2 2016
Net Income $35 $37
Diluted EPS $0.44 $0.42
2015 EPS
$2.04
2016E EPS
$2.05 - $2.20
Q2 Q3
Second Quarter 2016 Earnings Results
5
Q3-Q4:
$0.95 - $1.10
Q1
Q2 Q3
Q4 Q1
Accomplishments and Operational Update
6
Economic Update
7
(1) State of Oregon Employment Department
(2) U.S. Bureau of Economic Analysis
(3) Population Research Center at Portland State University
(4) Net of approximately 1.5% of energy efficiency, excluding one large paper customer and adjusting for Leap Year
• PGE's service area unemployment rate of
4.2 percent in June beat Oregon's rate of
4.8 percent and the national rate of 4.9
percent(1)
• Oregon's GDP growth of 4.1 percent in
2015 tied California for top rank in the
nation(2)
• Portland metro population growing at
fastest pace in 8 years(3)
• Average residential customer count
increased approximately 1.4 percent over
the past year
• Weather-adjusted 2016 load growth
forecast of approximately 1 percent(4)
2016 Integrated Resource Plan
Areas of Focus
▪ Energy efficiency and demand side
actions
▪ 2020 Renewable Portfolio Standard
requirement of 20 percent and
impacts of the Oregon Clean
Electricity Plan
▪ Boardman replacement
▪ Capacity needs to meet customers'
winter and summer peaking needs
8
Standard IRP Process Timeline:
Request For Proposal for Renewables
9
Results of OPUC hearing
▪ At a special hearing on July 29, 2016, the OPUC adopted Staff's recommendation
and took no action on PGE's request to issue an accelerated RFP.
▪ PGE is conducting further process and analysis on the accelerated renewables RFP
and will determine appropriate timing for seeking approval of a revised RFP
schedule.
Estimated Capital Expenditures
10
(1) Consists of board-approved ongoing CapEx and hydro relicensing per the Second Quarter Form 10-Q filed on August 3, 2016
Note: Amounts exclude AFDC debt and equity
(2) Total estimated cost does not consider any amounts that may be received from sureties under the performance bond
(3) Amounts related to this investment are not included in ongoing CapEx as they are pending OPUC approval
Current Capital Outlook
▪ In April the board of
directors approved
spending for the Field
Voice Communications
project.
▪ Management identified
an opportunity for
investment in natural
gas project.(3)
$626-$646
Base Capital Spending(1) Carty(2)
$194 -
$214
Second Quarter 2016 Financial Results
NI in millions Q2 2015 Q2 2016
Net Income $35 $37
Diluted EPS $0.44 $0.42
Key Quarter over Quarter EPS Drivers
Lower retail load due to weather in Q2 2016 compared to Q2 2015
More favorable power supply operations in Q2 2016 compared to Q2 2015
Increase in allowance for equity funds used during construction
Increase in common share count due to timing of forward equity sale
11
Purchase Power & Fuel $148 $126
Less: Wholesale Sales $18 $14
Net Variable Power Costs $130 $112
Total Revenues and Net Variable Power Costs
Q2 2015
Sources of Power
Q2 2016
Sources of Power
in millions Q2 2015 Q2 2016
Total Revenues $450 $428
56%
12%
8%
16%
8%
53%
11%
9%
17%
Coal
Natural Gas
Hydro
Wind
Purchased
Power 10%
12
Operating Expenses
in millions Q2 2015 Q2 2016
Generation, Transmission & Distribution $66 $64
Administrative & General $60 $61
Total O&M $126 $125
Depreciation & Amortization $76 $83
Interest Expense, Net $28 $27
Other Income, Net $6 $9
Income Taxes $15 $9
13
Liquidity and Financing
14
2016 Financing Activity
Q1 2016 Q2 2016 Q3 2016 Q4 2016
First Mortgage Bonds
$140 million
issued May borrow $100
million $133 million
redeemed
Unsecured Loan Agreement $125 million borrowed
May borrow
$75 million
Senior
Secured
Senior
Unsecured Outlook
S&P A- BBB Stable
Moody’s A1 A3 Stable
Total Liquidity as of 6/30/2016 (in millions)
Credit Facilities $ 660
Commercial Paper $ —
Letters of Credit $ (92 )
Cash $ 93
Available $ 661
▪ Retail delivery growth of approximately 1%, weather-adjusted
and excluding one large paper company;
▪ Average hydro conditions for the remainder of the year;
▪ Wind generation for the remainder of the year based on 5 years
of historic levels or forecast studies when historical data is not
available;
▪ Normal thermal plant operations;
▪ Operating and maintenance costs between $515 and $535
million;
▪ Depreciation and amortization expense between $315 and $325
million; and
▪ New customer prices effective August 1, 2016 which include only
the return on and of the Carty capital costs of $514 million and
all operating costs as allowed by the OPUC in the 2016 GRC.
Guidance
15
2016 EPS Guidance: $2.05-$2.20
2016 Key Initiatives
1. Maintain high level of operational excellence
2. Complete and file the 2016 Integrated Resource Plan and
determine next steps on possible accelerated renewables RFP
3. Pursue legal actions against the sureties and their obligations
under the performance bond on Carty
16
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