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Form 8-K PORTLAND GENERAL ELECTRI For: Feb 13

February 13, 2015 8:30 AM EST


 
UNITED 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): February 13, 2015

 
 
 
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 February 13, 2015, Portland General Electric Company (the “Company”) issued a press release announcing its financial results for the quarter and year ended December 31, 2014. 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 Friday, February 13, 2015, the Company will hold its annual earnings call and webcast, 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 February 13, 2015.
99.2
 
Portland General Electric Company Fourth Quarter 2014 Slides dated February 13, 2015.


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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:
February 12, 2015
 
By:
/s/ James F. Lobdell
 
 
 
 
James F. Lobdell
 
                                                                             
 
 
Senior Vice President of Finance,
Chief Financial Officer and Treasurer


3


Exhibit 99.1
Portland General Electric
One World Trade Center
121 S.W. Salmon Street
Portland, Oregon 97204

News Release
 
 
 
FOR IMMEDIATE RELEASE
 
 
Feb. 13, 2015
 
 
 
 
 
Media Contact:
 
Investor Contact:
Melanie Moir
 
Bill Valach
Corporate Communications
 
Investor Relations
Phone: 503-464-8790
 
Phone: 503-464-7395

Portland General Electric reports 2014 financial results and initiates 2015 earnings guidance
General rate case filing seeks inclusion of new power plant in customer prices, effective 2016

PORTLAND, Ore. — Portland General Electric Company (NYSE: POR) today reported net income of $175 million, or $2.18 per diluted share, for the year ended Dec. 31, 2014. This compares with $105 million, or $1.35 per diluted share, for 2013. Net income was $43 million, or 55 cents per diluted share, for the fourth quarter of 2014 compared with $47 million, or 59 cents per diluted share, for the comparable period of 2013. In addition, the company is initiating full-year 2015 earnings guidance of $2.20 to $2.35 per diluted share.

“I’m very proud of our employees’ accomplishments in delivering outstanding customer service along with strong operating and financial performance in 2014,” said Jim Piro, president and chief executive officer. “In addition to achieving excellent performance at our generating facilities, we delivered on the significant objective of completing two new major generating plants -- on time and on budget. These plants will play an important role in meeting our customers’ energy needs for years to come in a safe, sustainable and reliable manner.”

2014 Earnings Compared to 2013
The increase in annual net income was largely due to the expense in 2013 of capitalized costs related to termination of the Cascade Crossing Transmission Project and an industrial customer refund recorded in 2013. Results for 2014 reflect an increase in allowance for equity funds used during construction for the company’s three new generating resources, improved generation plant operations and alignment of our revenues with our cost structure with implementation of new retail prices on January 1, 2014. The increase in net income was partially offset by a higher effective tax rate in 2014 over 2013. Excluding the Cascade Crossing expense and the industrial customer refund, PGE’s non-GAAP adjusted earnings per share for 2013 would have been $1.84.

Company Updates

Generation Projects

Tucannon River Wind Farm - PGE’s second fully owned and operated large-scale wind project with total installed capacity of 267 megawatts, was placed into service on December 15, 2014 and will allow PGE to increase the amount of renewable power in its system and meet the requirements of Oregon’s Renewable Portfolio Standard. As of December 31, 2014, $501 million is included in Electric utility plant related to Tucannon River Wind Farm. The Company estimates that final completion of the wind farm will require approximately $29 million of capital expenditures in 2015.


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Port Westward Unit 2 - PGE’s 220 megawatt natural gas-fired power plant was placed into service on December 30, 2014 and is designed for maximum flexibility to help meet real-time fluctuations in customer demand and integrate intermittent renewable resources, such as wind. As of December 31, 2014, $295 million is included in Electric utility plant related to Port Westward Unit 2. The Company estimates that final completion of the plant will require approximately $20 million of capital expenditures in 2015.

Carty Generating Station - Construction is on schedule for the 440 megawatt natural gas-fired baseload power plant located near Boardman, Ore. The plant is expected to be placed into service during the second quarter of 2016 at an estimated cost of $450 million, excluding AFDC. Major foundation work and the cooling tower are complete, the heat recovery steam generator modules and casings have been installed and welding of piping components has commenced.

Updates on General Rate Cases

2015 GRC
On December 4, 2014, the Oregon Public Utility Commission (OPUC) issued an order that, when combined with customer credits, resulted in an overall increase in customer prices of approximately one percent. Embedded in the price change was a decrease related to PGE’s base business and customer credits, and increases related to the addition of the Tucannon River Wind Farm and Port Westward Unit 2. These prices became effective January 1, 2015 and reflect:
Return on equity of 9.68 percent;
Capital structure of 50 percent debt and 50 percent equity;
Cost of capital of 7.56 percent;
Rate base of $3.8 billion;
Annual revenue increase of $15 million.

2016 GRC
Late yesterday, PGE filed a general rate case with a 2016 test year which would result in an overall price increase of 3.7 percent effective in 2016, primarily to recover the costs associated with the Carty Generating Station which is expected to begin serving customers in the second quarter of 2016. PGE has initiated a comprehensive 10-month review and approval process with the OPUC in order to include this resource in prices when the plant goes in service. The requested price increase reflects:

Return on equity of 9.90 percent;
Capital structure of 50 percent debt and 50 percent equity;
Cost of capital of 7.67 percent;
Rate base of $4.5 billion;
Annual revenue increase of $66 million, net of customer credits and supplemental tariff updates.

PGE expects the Commission to issue a final order with approved price changes before the end of 2015, with new customer prices expected to be effective in two stages. A price reduction of approximately 1.0 percent is expected on Jan. 1, 2016 reflecting an increase in base business costs more than offset by the amortization of customer credits and supplemental tariff updates, and a price increase of approximately 4.7 percent for the Carty Generating Station is expected to be effective when the plant is placed into service in the second quarter of 2016.

The specific impact on individual customers’ bills will vary depending on usage and customer class. If the OPUC approves PGE’s request as submitted, typical residential customers using a monthly average of 840 kilowatt-hours of power would see their bill increase by about three dollars per month when Carty goes into service.

Fourth quarter operating results

Retail revenues decreased $2 million in the fourth quarter of 2014 compared with the fourth quarter of 2013, which was driven by an 11 percent decrease in residential energy deliveries resulting from warmer weather. During the

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fourth quarter of 2014, heating degree-days (an indicator of the extent to which customers are likely to have used electricity for heating) were 25 percent lower than in the fourth quarter of 2013. Commercial and industrial deliveries combined were comparable to the fourth quarter of 2013. Adjusting for the effects of weather and one large paper customer, total retail deliveries in the fourth quarter of 2014 were 0.5 percent lower than in the fourth quarter of 2013. Revenue increased approximately $5 million due to storm cost reserves, which were offset in operating and maintenance expenses.

Net variable power costs, which consist of purchased power and fuel expense net of wholesale revenues, decreased $35 million in the fourth quarter of 2014 compared to the fourth quarter of 2013. The decrease is largely due to a 15 percent decrease in the average variable power cost per MWh resulting from increases in energy received from the Company’s generating resources, combined with a 28 percent decline in the cost of natural-gas fired generation. In the fourth quarter of 2013, the Company had unplanned plant outages at two thermal generating facilities and incurred $6 million of incremental replacement power costs related to the outages.

Total operating and maintenance expenses were $139 million in the fourth quarter of 2014 compared with $117 million in the fourth quarter of 2013. The $22 million, or 19 percent, increase was largely due to higher storm-related restoration costs (which were partially offset in revenue by using $5 million of storm cost reserves), increased operating costs for Boardman as a result of the company’s ownership percent increasing to 80 percent from 65 percent in December 2013, and higher plant and distribution maintenance expenses.

Depreciation and amortization expense was $15 million higher in the fourth quarter of 2014 compared with the fourth quarter of 2013, with $8 million related to timing of the deferral and amortization of costs of four capital projects as authorized in the company’s 2011 General Rate Case. In the fourth quarter of 2013, PGE deferred $4 million of costs related to these four projects and in the fourth quarter of 2014, the company recorded $4 million of amortization expense related to the recovery of these costs (offset in retail revenues). Capital additions also increased depreciation and amortization expense by $5 million.

2014 annual operating results

Retail revenues increased $71 million in 2014 compared to 2013 primarily due to the net effect of the following:

$60 million increase related to higher average retail prices effective January 1, 2014;
$20 million increase as a result of the collection of deferred costs related to four capital projects beginning January 1, 2014 (offset in Depreciation and amortization expense); and
$14 million increase as a result of a $9 million industrial customer refund recorded in the second quarter of 2013 and a $5 million increase related to other various items including the use of storm reserves, partially offset by;
$10 million decrease related to the decoupling mechanism; and,
$13 million decrease related to an 0.8 percent decline in retail energy deliveries, with a 3.1 percent decrease in residential loads, partially offset by increases of 0.7 percent and 0.8 percent in commercial and industrial sales, respectively.

Net variable power costs decreased $59 million for 2014 compared with 2013, primarily driven by a $44 million decrease related to a 6 percent decline in the average variable power cost per MWh and $17 million in replacement power costs incurred in 2013 in connection with unplanned outages. In addition, an 11 percent increase in the average price per MWh of wholesale power sales combined with a 7 percent increase in the volume of wholesale power sale contributed to the decrease in NVPC.

Total operating and maintenance expenses were $484 million in 2014 compared with $444 million in 2013. The $40 million, or 9 percent, increase is primarily due to the following:


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$10 million primarily due to storm related and restoration costs as the company's service territory experienced three major wind storms during the fourth quarter, $5 million of which was offset in revenues through our storm recovery mechanism for the three major storms during Q4;
$7 million as a result of the Company’s ownership interest in Boardman increasing from 65% to 80% on December 31, 2013;
$17 million for numerous items including maintenance, generation, transmission and distribution, partially offset by the $3 million expense for the 2013 renewable benchmark bid;
$8 million due to a number of items including higher incentive compensation as a result of improved performance, medical, and technology costs, offset by lower pension, injury and damage expense.

Cascade Crossing transmission project consisted of $52 million of costs charged to expense in the second quarter of 2013 due to the termination of the project.

Depreciation and amortization expense was $301 million in 2014 compared with $248 million in 2013. The $53 million, or 21% increase is primarily due to timing of the deferral and amortization of costs of four capital projects as authorized in the company’s 2011 General Rate Case. In 2013, PGE deferred $17 million of costs related to these four projects and in 2014, the company recorded $16 million of amortization expense related to the recovery of these costs (offset in retail revenues). Capital additions also increased depreciation and amortization expense by $16 million.

Interest expense, net decreased $5 million in 2014 compared with 2013, with a $16 million decrease due to an increase in the allowance for borrowed funds used for construction resulting from a higher average construction work-in-progress (CWIP) balance from the construction of the three new generating plants, partially offset by an increase in the average balance of debt outstanding during 2014 compared with 2013.

Other income, net increased $18 million in 2014 compared with 2013, primarily driven by a $24 million increase in the allowance for equity funds used for construction resulting from the higher average CWIP balance, partially offset by a decrease in earnings from the non-qualified benefit plan trust assets.

Income taxes increased $40 million, in 2014 compared with 2013, largely due to an increase in pre-tax income, which was driven in part by the $52 million charge to expense of capitalized costs related to the Cascade Crossing transmission project and a $9 million customer refund, both of which were recorded in 2013. The company’s effective tax rate increased to 26.0 percent in 2014 compared with 16.8 percent in 2013 due primarily to the increase in pre-tax income and the smaller relative percentage thereof represented by federal and state tax credits, partially offset by the effect of increased AFDC equity.

2013 adjusted operating earnings per share

Excluding the impacts of the Cascade Crossing charge and the customer billing matter, PGE’s adjusted operating
earnings for 2013 would be $1.84 per share, as shown below:

2013 GAAP earnings per share
$1.35
Exclude the Cascade Crossing expense
0.42

Exclude the customer billing matter revenue reduction
.07

2013 Non-GAAP adjusted operating earnings per share
$1.84

PGE believes this non-GAAP adjusted earnings reconciliation is useful to investors, analysts, rating agencies and
other parties, as it facilitates the analysis of our results of operations from one period to another and provides clarity
concerning the impact of certain events on operational results.


2015 earnings guidance

PGE is initiating full-year 2015 earnings guidance of $2.20 to $2.35 per diluted share. Guidance is based on the following assumptions:

Retail deliveries growth of approximately 1%;
Average hydro conditions;

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Wind generation based on five years of historical levels or forecast studies when historical data is not available;
Normal thermal plant operations;
Operating and maintenance costs between $510 and $530 million;
Depreciation and amortization expense between $300 and $310 million; and,
Capital expenditures of approximately $629 million.

Fourth quarter 2014 earnings call and web cast — Feb. 13, 2015

PGE will host a conference call with financial analysts and investors on Friday, Feb. 13, 2015, at 11 a.m. ET. The conference call will be web cast live on the PGE website at PortlandGeneral.com. A replay of the call will be available beginning at 2 p.m. ET on Friday, Feb. 13, 2015 through Friday, Feb. 20, 2015.

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 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 842,000 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 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 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 and the sale of excess energy during periods of 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; 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; 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 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.
POR-F
Source: Portland General Electric Company

Page 5



PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)

 
Three Months Ended
 
Years Ended
 
December 31,
 
December 31,
 
2014
 
2013
 
2014
 
2013
Revenues, net
$
500

 
$
499

 
$
1,900

 
$
1,810

Operating expenses:
 
 
 
 
 
 
 
Purchased power and fuel
185

 
219

 
713

 
757

Generation, transmission and distribution
76

 
56

 
257

 
225

Cascade Crossing transmission project

 

 

 
52

Administrative and other
63

 
61

 
227

 
219

Depreciation and amortization
77

 
62

 
301

 
248

Taxes other than income taxes
27

 
24

 
109

 
103

Total operating expenses
428

 
422

 
1,607

 
1,604

Income from operations
72

 
77

 
293

 
206

Interest expense, net (1)
25

 
26

 
96

 
101

Other income:
 
 
 
 
 
 
 
Allowance for equity funds used during construction
11

 
5

 
37

 
13

Miscellaneous income, net

 
2

 
1

 
7

Other income, net
11

 
7

 
38

 
20

Income before income taxes
58

 
58

 
235

 
125

Income taxes
15

 
11

 
61

 
21

Net income
43

 
47

 
174

 
104

Less: net loss attributable to noncontrolling interests

 

 
(1
)
 
(1
)
Net income attributable to Portland General Electric Company
$
43

 
$
47

 
$
175

 
$
105

 
 
 
 
 
 
 
 
Weighted-average shares outstanding (in thousands):
 
 
 
 
 
 
 
Basic
78,210

 
78,068

 
78,180

 
76,821

Diluted
81,174

 
78,812

 
80,494

 
77,388

Earnings per share:
 
 
 
 
 
 
 
Basic
$
0.57

 
$
0.59

 
$
2.24

 
$
1.36

Diluted
$
0.55

 
$
0.59

 
$
2.18

 
$
1.35

 
 
 
 
 
 
 
 
(1) Includes an allowance for borrowed funds used during construction
$
7

 
$
3

 
$
22

 
$
7



Page 6



PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
 
 
As of December 31,
 
2014
 
2013
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
127

 
$
107

Accounts receivable, net
149

 
146

Unbilled revenues
93

 
104

Inventories
82

 
65

Regulatory assets—current
133

 
66

Other current assets
115

 
103

Total current assets
699

 
591

Electric utility plant, net
5,679

 
4,880

Regulatory assets—noncurrent
494

 
464

Nuclear decommissioning trust
90

 
82

Non-qualified benefit plan trust
32

 
35

Other noncurrent assets
48

 
49

Total assets
$
7,042

 
$
6,101

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
156

 
173

Liabilities from price risk management activities—current
106

 
49

Current portion of long-term debt
375

 

Accrued expenses and other current liabilities
236

 
171

Total current liabilities
873

 
393

Long-term debt, net of current portion
2,126

 
1,916

Regulatory liabilities—noncurrent
906

 
865

Deferred income taxes
625

 
586

Unfunded status of pension and postretirement plans
237

 
154

Liabilities from price risk management activities—noncurrent
122

 
141

Asset retirement obligations
116

 
100

Non-qualified benefit plan liabilities
105

 
101

Other noncurrent liabilities
21

 
25

Total liabilities
5,131

 
4,281

Total equity
1,911

 
1,820

Total liabilities and equity
$
7,042

 
$
6,101




Page 7



PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)

 
Years Ended December 31,
 
2014
 
2013
Cash flows from operating activities:
 
 
 
Net income
$
174

 
$
104

Depreciation and amortization
301

 
248

Capitalized costs expensed related to Cascade Crossing

 
52

Other non-cash income and expenses, net included in Net income
70

 
51

Changes in working capital
(19
)
 
68

Proceeds received from legal settlement
6

 
44

Other, net
(14
)
 
(23
)
Net cash provided by operating activities
518

 
544

Cash flows from investing activities:
 
 
 
Capital expenditures
(1,007
)
 
(656
)
Contribution to Nuclear decommissioning trust
(6
)
 
(44
)
Other, net
19

 
8

Net cash used in investing activities
(994
)
 
(692
)
Cash flows from financing activities:
 
 
 
Net issuance of long-term debt
583

 
277

Proceeds from issuance of common stock, net of issuance costs

 
67

Maturities of commercial paper, net

 
(17
)
Dividends paid
(87
)
 
(84
)
Net cash provided by financing activities
496

 
243

Increase in cash and cash equivalents
20

 
95

Cash and cash equivalents, beginning of year
107

 
12

Cash and cash equivalents, end of year
$
127

 
$
107

 
 
 
 


Page 8



PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)

 
Three Months Ended
 
Years Ended
 
December 31,
 
December 31,
 
2014
 
2013
 
2014
 
2013
Revenues (dollars in millions):
 
 
 
 
 
 
 
Retail:
 
 
 
 
 
 
 
Residential
$
240

 
$
250

 
$
893

 
$
861

Commercial
164

 
159

 
657

 
619

Industrial
57

 
57

 
221

 
217

Subtotal
461

 
466

 
1,771

 
1,697

Other accrued (deferred) revenues, net
3

 

 
(8
)
 
(5
)
Total retail revenues
464

 
466

 
1,763

 
1,692

Wholesale revenues
22

 
21

 
95

 
80

Other operating revenues
14

 
12

 
42

 
38

Total revenues
$
500

 
$
499

 
$
1,900

 
$
1,810

 
 
 
 
 
 
 
 
Energy sold and delivered (MWh in thousands):
 
 
 
 
 
 
 
Retail energy sales:
 
 
 
 
 
 
 
Residential
1,990

 
2,232

 
7,462

 
7,702

Commercial
1,733

 
1,764

 
6,931

 
6,896

Industrial
838

 
832

 
3,211

 
3,210

Total retail energy sales
4,561

 
4,828

 
17,604

 
17,808

Retail energy deliveries:
 
 
 
 
 
 
 
Commercial
140

 
137

 
563

 
545

Industrial
276

 
258

 
1,099

 
1,066

Total retail energy deliveries
416

 
395

 
1,662

 
1,611

Total retail energy sales and deliveries
4,977

 
5,223

 
19,266

 
19,419

Wholesale energy deliveries
628

 
461

 
2,520

 
2,353

Total energy sold and delivered
5,605

 
5,684

 
21,786

 
21,772

 
 
 
 
 
 
 
 
Number of retail customers at end of period:
 
 
 
 
 
 
 
Residential
 
 
 
 
738,008

 
732,341

Commercial
 
 
 
 
103,637

 
103,021

Industrial
 
 
 
 
198

 
204

Direct access
 
 
 
 
430

 
504

Total retail customers
 
 
 
 
842,273

 
836,070




Page 9



PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)

 
Three Months Ended
 
Years Ended
 
December 31,
 
December 31,
 
2014
 
2013
 
2014
 
2013
Sources of energy (MWh in thousands):
 
 
 
 
 
 
 
Generation:
 
 
 
 
 
 
 
Thermal:
 
 
 
 
 
 
 
Coal
1,387

 
1,084

 
4,466

 
4,070

Natural gas
1,156

 
1,076

 
3,429

 
3,375

Total thermal
2,543

 
2,160

 
7,895

 
7,445

Hydro
458

 
415

 
1,750

 
1,646

Wind
219

 
199

 
1,172

 
1,200

Total generation
3,220

 
2,774

 
10,817

 
10,291

Purchased power:
 
 
 
 
 
 
 
Term
1,228

 
1,652

 
5,926

 
6,472

Hydro
349

 
343

 
1,568

 
1,629

Wind
50

 
41

 
317

 
311

Spot
608

 
697

 
2,626

 
2,547

Total purchased power
2,235

 
2,733

 
10,437

 
10,959

Total system load
5,455

 
5,507

 
21,254

 
21,250

Less: wholesale sales
(628
)
 
(461
)
 
(2,520
)
 
(2,353
)
Retail load requirement
4,827

 
5,046

 
18,734

 
18,897


 
Heating Degree-days
 
Cooling Degree-days
 
2014
 
2013
 
2014
 
2013
1st Quarter
1,891

 
1,902

 

 

Average
1,864

 
1,850

 

 

2nd Quarter
530

 
593

 
57

 
82

Average
713

 
721

 
70

 
68

3rd Quarter
18

 
90

 
579

 
457

Average
85

 
82

 
382

 
385

4th Quarter
1,355

 
1,801

 
17

 

Average
1,602

 
1,586

 
1

 
1

Annual total
3,794

 
4,386

 
653

 
539

Annual total average
4,264

 
4,239

 
453

 
454

Note: “Average” amounts represent the 15-year rolling averages provided by the National Weather Service (Portland Airport).


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Earnings Conference Call Fourth Quarter and Full Year 2014 Exhibit 99.1


 
2 Cautionary Statement Information Current as of February 13, 2015 Except as expressly noted, the information in this presentation is current as of February 13, 2015 — the date on which PGE filed its Annual Report on Form 10-K for the year ended December 31, 2014 — 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 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.


 
3 Leadership Presenting Today Jim Lobdell Senior VP of Finance, CFO & Treasurer Jim Piro President & CEO On Today’s Call ▪ Operational Update ▪ Economy and Customers ▪ Strategic Initiatives ▪ Financial Update ▪ Regulatory Update


 
4 $0.73 $0.43 $0.47 $0.55 Q4 and Full-Year 2014 Earnings Results $1.35 NI in millions  Q4 2013 Q4 2014 Net Income $47 $43 Diluted EPS $0.59 $0.55 $0.65 $(0.29) $0.4 $0.59 $2.18 2013 EPS 2014 EPS 2013 Actuals 2014 Actuals $105 $175 $1.35 $2.18 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4


 
5 Accomplishments and Operational Update general business customer satisfaction key customer satisfaction residential customer satisfaction Top Decile Top Decile Top Quartile • Two new generating plants in service, on time and within budget ◦ Tucannon River Wind Farm ◦ Port Westward Unit 2 • Excellent generating plant availability and effective management of power supply operations


 
6 Rate Base and Capital Expenditures (in millions) 2013 2014 2015E 2016E TOTAL Base Capital Spending(1) $335 $342 $408 $363 $1,448 Port Westward Unit 2 $155 $118 $20 $293 Tucannon River Wind Farm $95 $380 $29 $504 Carty Generating Station $135 $108 $172 $35 $450 TOTAL $720 $948 $629 $398 $2,695 (1) Consists of board-approved ongoing CapEx and hydro relicensing per the Annual 2014 Form 10-K filed on February 13, 2015 Note: Amounts exclude AFDC debt and equity Capital Expenditures $3.1B 2013 2016 13% CAGR $4.5B $1.4B of expected increase in rate base


 
7 Economic Update (1) According to United Van Lines' annual study (2) Net of approximately 1.5% of energy efficiency Economic Update ▪ Customer count growth of approximately 1% ▪ Oregon added more than 50,000 new jobs in 2014 and ranked No. 1 for in-migration(1) ▪ Unemployment of 5.9% in our operating area ▪ Weather-adjusted 2015 load growth forecast of approximately 1%(2)


 
8 2015 Key Initiatives 1. Deliver operational excellence 2. Continue with construction of Carty Generating Station on time and on budget 3. Achieve a fair and reasonable outcome in the 2016 General Rate Case 4. Prepare our 2016 Integrated Resource Plan


 
9 New Generation: Baseload Resource Carty CapEx: $450M Carty Generating Station Project Location Boardman, OR Capacity / Fuel 440 MW / Natural Gas Technology Mitsubishi Turbine EPC Contractor Abener/Abengoa Estimated In-Service Date Q2 2016 Customer Price Impact 4.7 percent Next Steps Receive gas turbine on site for installation (mid-late Feb); Steam turbine delivery expected April 2015 $135 $108 $172 $35 2013 2014 2015 2016


 
10 General Rate Case - 2016 Test Year Proposed for 2016 Revenue increase: $66 Million Current projected average price increase: 3.7% Return on Equity (ROE): 9.9% Cost of Capital: 7.67% Capital Structure: 50% debt, 50% equity Rate Base: $4.5 billion Annual Revenue Increase ($mm) As Filed 2/12/2015 Base Business Needs $39 Supplemental Tariff Updates(1) ($56) Carty (annualized) $83 Annual Revenue Net Increase (annualized) $66 (1) Includes $26 million related to capital project deferrals expected to be fully recovered in 2015, $17 million of accelerated customer credits related to the settlement of a legal matter concerning costs associated with the operation of the ISFSI, a $15 million increase in customer credits related to the Residential Exchange Program, and other tariff updates.


 
11 2016 Integrated Resource Plan IRP Process Timeline 2015 Develop IRP / Public Process 2016 File IRP 2017 Acknowledgement from OPUC expected and RFP process commences Areas of Focus • Boardman replacement • 2020 Renewable Portfolio Standard requirement of 20% • Energy efficiency and demand side actions • Evaluate need for additional capacity • Other topics


 
12 Fourth Quarter Financial Results NI in millions  Q4 2013 Q4 2014 Net Income $47 $43 Diluted EPS $0.59 $0.55 Key Quarter over Quarter Drivers Price increase (true up of operating costs) á Improved generation plant operations á Higher AFDC for generation projects - equity á Lower volume (due to weather) â Higher O&M â Higher effective tax rate â


 
13 Full Year Financial Results NI in millions  2013 2014 Net Income $105 $175 Diluted EPS $1.35 $2.18 Key Year over Year Drivers Cascade Crossing write off and customer billing refund in 2013 á Higher AFDC for generation projects - equity á Improved generation plant operations á Price increase (true up of operating costs) á Higher effective tax rate â


 
14 FY 2014 Sources of Power Total Revenues and Power Costs in millions Q4 2013 Q4 2014 FY 2013 FY 2014 Total Revenues $499 $500 $1,810 $1,900 Power Costs $219 $185 $757 $713 52% 19% 8% 16% 5% 49% 21% 8% 16% Coal Natural Gas Hydro Wind Purchased Power FY 2013 Sources of Power 6%


 
15 Operating Expenses In Millions Q4 2013 Q4 2014 FY 2013 FY 2014 Production & Distribution $56 $76 $225 $257 Administrative & General $61 $63 $219 $227 Total O&M $117 $139 $444 $484 Cascade Crossing Expense -- -- $52 -- Depreciation & Amortization $62 $77 $248 $301 Interest Expense, Net $26 $25 $101 $96 Other Income, Net $7 $11 $20 $38 Income Taxes $11 $15 $21 $61


 
16 Liquidity and Financing Senior Secured Senior Unsecured Outlook S&P A- BBB Stable Moody’s A1 A3 Stable Total Liquidity as of 12/31/2014(in millions) Credit Facilities $760 Commercial Paper -- Letters of Credit $(76) Cash $127 Available $811 2014-2015 Financing Plans Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Bank Loan Proceeds $305 million First Mortgage Bonds $280 million $75 million Settle Equity Forward $270 - $275 million (1) (1) $275 million settlement based on terms of the Equity Forward Sales Agreement as of 12/31/2014, $270 million represents the anticipated settlement price at Q2 of 2015.


 
17 2015 General Rate Case Oregon Public Utility Commission Order on 12/4/2014 • Overall increase in customer prices: ~ 1% • Return on Equity (ROE): 9.68% • Capital Structure: 50% debt, 50% equity • Cost of Capital: 7.56% • Rate Base: $3.8 billion • Annual revenue requirement increase: $15 million


 
18 Guidance 2015 EPS Guidance: $2.20-$2.35 ▪ Retail deliveries growth of approximately 1%; ▪ Average hydro conditions; ▪ Wind generation based on historical levels or forecast studies when historical data is not available; ▪ Normal thermal plant operations; ▪ Operating and maintenance costs between $510 and $530 million; ▪ Depreciation and amortization expense between $300 and $310 million; and, ▪ Capital expenditures of approximately $629 million.


 


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