PORTLAND GENERAL ELECTRIC CO
PORTLAND GENERAL ELECTRIC CO
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Portland General Electric Announces Third Quarter 2021 Results

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Portland General Electric Announces Third Quarter 2021 Results
- Continued strong retail deliveries, high customer growth, and challenging power market volatility
- Achieved significant progress on strategic goals, including filing of inaugural distribution system plan, and reached supportive GRC stipulations
- Moving forward with procurement for renewable resources and non-emitting capacity in December
- Reaffirming 2021 earnings guidance of $2.70 to $2.85 per diluted share

PR Newswire

PORTLAND, Ore., Oct. 29, 2021 /PRNewswire/ -- Portland General Electric Company (NYSE: POR) today reported net income of $50 million, or 56 cents per diluted share, for the third quarter of 2021. This compares with a loss of $17 million, or 19 cents per diluted share, for the third quarter of 2020, which reflects the $1.09 loss per diluted share from previously disclosed trading losses.

"While high temperatures and power market volatility significantly impacted our region and results this quarter, our year-to-date performance is on track," said Maria Pope, PGE president and CEO. "We are pleased to be issuing the renewable RFP in December, an important step in meeting our decarbonization goals while also ensuring we have sufficient generating capacity as we transition to a clean energy future."

Third Quarter 2021 Compared to Third Quarter 2020

Total revenues were driven by higher retail energy deliveries, due to strong residential demand, growth in high-tech manufacturing, and the impacts of warmer weather. Purchased power and fuel expense increased in part due to lower hydro and wind production. Operating expenses increased, primarily driven by additional vegetation management for wildfire prevention. Administrative expenses increased primarily due to normalization of incentive expenses compared to the prior year and wage and benefit pressures.  Lower tax expense was associated with asset retirement timing differences.

Company Updates

Advancing Plans to Add Renewables and Non-Emitting Resources

As previously announced, PGE estimates that it will need to nearly triple the amount of clean and renewable energy serving customers, in addition to removing coal from its portfolio. As a result, PGE estimates by 2030 it will need approximately 1,500 to 2,000 MW of clean and renewable resources and approximately 800 MW of non-emitting dispatchable capacity resources. PGE is seeking approximately 1,000 MW of renewable and non-emitting capacity resources by initiating its public request for proposals process in December.

  • Request for Proposals (RFP): PGE expects to bring on at least 375 to 500 MW of renewable resources and 375 MW of non-emitting dispatchable capacity by the end of 2024. If beneficial to customers and in balance with affordability, PGE will work with the Oregon Public Utilities Commission (OPUC) to evaluate the opportunity to procure additional resources through this RFP with a potential target of achieving one-third of the clean resources needed to meet its 2030 emission reduction targets.
  • Green Future Impact: As part of the RFP, PGE will seek to procure an incremental 100 MW for this program.

2022 General Rate Case Update

In October, PGE reached agreement with all interested parties in its 2022 General Rate Case on cost of capital issues. The agreement supports a capital structure of 50% debt and 50% equity, a 9.5% return on equity and a 6.8% cost of capital, which reflects updates for actual and forecasted debt costs. The stipulation remains subject to OPUC approval. PGE will continue to work with parties throughout this proceeding on all other remaining elements of the case. A final order is expected in April 2022. PGE has proposed prices to go into effect on May 9, 2022.

Significant Progress on Strategic Sustainability Goals

  • Distribution System Plan: In October, PGE filed its inaugural Distribution System Plan (DSP) that paves the way for innovative planning to upgrade the grid and accelerate clean energy resources using approaches that align with community priorities.
  • Voluntary Renewable Energy Program: For the twelfth consecutive year, PGE's voluntary renewable energy program was ranked number one in the nation by the National Renewable Energy Laboratory. PGE has more than 200,000 customers voluntarily enrolled in its Green Future Program, making it the largest in the nation.
  • Green Financing Program: In October, PGE announced a series of actions in support of integrating sustainability into its financing plans, establishing a Green Financing Framework, issuing an inaugural green bond, and amending its revolving credit facility to include sustainability-linked provisions.
  • 2020 Environmental, Social and Governance Report: In September, PGE released a comprehensive ESG report which aligns with the Task Force on Climate-Related Financial Disclosures (TCFD) framework and describes how the company plans to move forward on its clean energy goals, environmental stewardship commitments, community engagement programs, and diversity, equity, and inclusion journey. For more information visit www.portlandgeneral.com/about/who-we-are/sustainability.

Quarterly Dividend

As previously announced, on October 26, 2021, the board of directors of Portland General Electric Company declared a quarterly common stock dividend of $0.43 per share. The quarterly dividend is payable on or before January 18, 2022 to shareholders of record at the close of business on December 27, 2021.

2021 Earnings Guidance

PGE is reaffirming its estimate for full-year 2021 earnings guidance of $2.70 to $2.85 per diluted share based on the following assumptions:

  • An increase in annual energy deliveries of 2.5% to 3.0%, weather-adjusted, which reflects year over year:
    • Commercial segment growth, as economic recovery has taken hold earlier and more rapidly than anticipated;
    • Strong growth in the industrial segment reflecting expansions in high tech manufacturing and digital services;
    • These increases are partially offset by a decrease in residential demand as customers spend less time at home;
  • Normal temperatures in its utility service territory for the remainder of the year;
  • Hydro conditions for the remainder of the year that reflect current estimates;
  • Wind generation based on five years of historical levels or forecast studies when historical data is not available;
  • Normal thermal plant operations for the remainder of the year;
  • Capital expenditures of $700 million;
  • Average construction work in progress balance from $340 million to $390 million;
  • Operating and maintenance expense from between $605 million and $625 million;
  • Depreciation and amortization expense between $410 million and $430 million;
  • Effective tax rate of 10% to 15%;
  • Cash from operations from between $575 and $625 million, which represents the cash timing difference of regulatory deferrals;
  • No new common equity to be issued for investment or operations; and
  • Continuation of existing regulatory mechanisms and deferrals during 2021.

Third Quarter 2021 Earnings Call and Webcast — October 29, 2021

PGE will host a conference call with financial analysts and investors on Friday, October 29, 2021, 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 Friday, October 29, 2021, through 2 p.m. ET on Friday, November 5, 2021.

Maria Pope, president and CEO; Jim Ajello, senior vice president of Finance, CFO, and treasurer; and Jardon Jaramillo, senior director, Investor Relations, Treasury, and Risk Management, will participate in the call. Management will respond to questions following formal comments.

Non-GAAP Financial Measures

Management believes that excluding the effects of the energy trading losses provides a meaningful representation of the Company's comparative earnings per share. The Company has adjusted this amount to maintain comparability between periods. The effect of the energy trading losses was $1.09 per diluted share. PGE's reconciliations of non-GAAP earnings for the three and nine months ended September 30, 2020 are below.

Non-GAAP Earnings Reconciliation for the three and nine months ended September 30, 2020

(Dollars in millions, except EPS)

Net Income (Loss)

Diluted EPS

GAAP-based as reported for the three months ended September 30, 2020

$

(17)


$

(0.19)


Exclusion of certain trading losses

127


1.42


Tax effect (1)

(30)


(0.33)


Non-GAAP-based as reported for the three months ended September 30, 2020

$

80


$

0.90





GAAP-based as reported for the nine months ended September 30, 2020

$

103


$

1.15


Exclusion of certain trading losses

127


1.42


Tax effect (1)

(30)


(0.33)


Non-GAAP-based as reported for the nine months ended September 30, 2020

$

200


$

2.24



(1) Tax effects are determined based on the Company's forecasted annual effective tax rate applied to year-to-date ordinary income or loss

The attached unaudited condensed consolidated statements of income and comprehensive 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 (NYSE: POR) is a fully integrated energy company based in Portland, Oregon, with operations across the state. The company serves approximately 900,000 customers with a service area population of 2 million Oregonians in 51 cities. PGE owns 16 generation plants across Oregon and other Northwestern states and maintains and operates 14 public parks and recreation areas. For over 130 years, PGE has delivered safe, affordable and reliable energy to Oregonians. Together with its customers, PGE has the No. 1 voluntary renewable energy program in the U.S. PGE and its 3,000 employees are working with customers to build a clean energy future, with goals of achieving at least an 80% reduction in greenhouse gas (GHG) emissions by 2030 and 100% reduction in GHG emissions by 2040. In 2021, PGE became the first U.S. utility to join The Climate Pledge. In 2020, PGE, employees, retirees and the PGE Foundation donated $5.6 million and volunteered 18,200 hours with more than 400 nonprofits across Oregon. For the eighth year in a row PGE achieved a perfect score on the 2021 Human Rights Campaign Foundation's Corporate Equality Index, a national benchmarking survey and report on corporate policies and practices related to LGBTQ workplace equality. For more information visit www.PortlandGeneral.com/news.

Safe Harbor Statement

Statements in this 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.  These forward-looking statements represent our estimates and assumptions as of October 29, 2021. The Company assumes no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors.

Forward-looking statements include statements regarding the Company's full-year earnings guidance (including expectations regarding annual retail deliveries, average hydro conditions, wind generation, normal thermal plant operations, operating and maintenance expense and depreciation and amortization expense) as well as other statements containing words such as "anticipates," "assumes," "believes," "conditioned upon," "estimates," "expects," "intends," "plans," "projected," "promises," "seeks," "should," and similar expressions. Investors are cautioned that any such forward-looking statements are subject to risks and uncertainties, including, without limitation:  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 and battery storage facilities, including hydro conditions, wind conditions, disruption of transmission and distribution, 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 market conditions, which could affect the availability and cost of purchased power and fuel; the development of alternative technologies; changes in capital and credit market conditions, which could affect the access to and availability of cost of capital and result in delay or cancellation of capital projects or execution of the Company's strategic plan as currently envisioned; the outcome of various legal and regulatory actions; general economic and financial market conditions; severe weather conditions, wildfires, and other natural phenomena and natural disasters that could result in operational disruptions, unanticipated restoration costs, or third party liability; cyber security breaches of the Company's customer information system or operating systems, data security breaches, or acts of terrorism, which could disrupt operations, require significant expenditures, or result in claims against the Company; PGE business activities are concentrated in one region and future performance may be affected by events and factors unique to Oregon; and widespread health emergencies or outbreaks of infectious diseases such as the novel coronavirus disease (COVID-19), which may affect our financial position, results of operations and cash flows. As a result, actual results may differ materially from those projected in the forward-looking statements.   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 (SEC), including management's discussion and analysis of financial condition and results of operations and the risks described therein from time to time. These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov and on the Company's website, investors.portlandgeneral.com. Investors should not rely unduly on any forward-looking statements.

POR

Source: Portland General Company

 

 

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



Three Months Ended September 30,


Nine Months Ended September 30,


2021


2020


2021


2020

Revenues:








Revenues, net

$

654



$

556



$

1,811



$

1,589


Alternative revenue programs, net of amortization

(12)



(9)



(23)




Total revenues

642



547



1,788



1,589


Operating expenses:








Purchased power and fuel

259



292



613



554


Generation, transmission and distribution

80



65



236



215


Administrative and other

82



63



247



208


Depreciation and amortization

101



108



305



320


Taxes other than income taxes

37



35



110



104


Total operating expenses

559



563



1,511



1,401


Income (loss) from operations

83



(16)



277



188


Interest expense, net

33



35



100



102


Other income:








Allowance for equity funds used during construction

4



4



13



11


Miscellaneous income (expense), net

1



3



6



2


Other income, net

5



7



19



13


Income (loss) before income tax expense

55



(44)



196



99


Income tax expense (benefit)

5



(27)



18



(4)


Net income (loss)

50



(17)



178



103


Other comprehensive income

1





1



1


Comprehensive income (loss)

$

51



$

(17)



$

179



$

104










Weighted-average common shares outstanding (in thousands):








Basic

89,407



89,509



89,505



89,476


Diluted

89,566



89,509



89,646



89,629










Earnings (loss) per share:








Basic

$

0.56



$

(0.19)



$

1.99



$

1.16


Diluted

$

0.56



$

(0.19)



$

1.98



$

1.15


 

 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(Unaudited)



September 30, 2021


December 31, 2020

ASSETS




Current assets:




Cash and cash equivalents

$

294



$

257


Accounts receivable, net

273



271


Inventories

75



72


Regulatory assets—current

14



23


Other current assets

243



98


Total current assets

899



721


Electric utility plant, net

7,773



7,539


Regulatory assets—noncurrent

567



569


Nuclear decommissioning trust

43



45


Non-qualified benefit plan trust

44



42


Other noncurrent assets

216



153


Total assets

$

9,542



$

9,069


 

 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, continued
(Dollars in millions)
(Unaudited)



September 30, 2021


December 31, 2020

LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

201



$

153


Liabilities from price risk management activities—current

39



14


Short-term debt



150


Current portion of long-term debt



160


Current portion of finance lease obligation

16



16


Accrued expenses and other current liabilities

611



322


Total current liabilities

867



815


Long-term debt, net of current portion

3,285



2,886


Regulatory liabilities—noncurrent

1,370



1,369


Deferred income taxes

419



374


Unfunded status of pension and postretirement plans

299



299


Liabilities from price risk management activities—noncurrent

89



136


Asset retirement obligations

241



270


Non-qualified benefit plan liabilities

97



101


Finance lease obligations, net of current portion

125



129


Other noncurrent liabilities

75



77


Total liabilities

6,867



6,456


Shareholders' Equity:




Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding as of September 30, 2021 and December 31, 2020




Common stock, no par value, 160,000,000 shares authorized; 89,409,012 and 89,537,331 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

1,237



1,231


Accumulated other comprehensive loss

(10)



(11)


Retained earnings

1,448



1,393


Total shareholders' equity

2,675



2,613


Total liabilities and shareholders' equity

$

9,542



$

9,069


 

 


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



Nine Months Ended September 30,


2021


2020

Cash flows from operating activities:




Net income

$

178



$

103


Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation and amortization

305



320


Deferred income taxes

17



(14)


Pension and other postretirement benefits

19



17


Allowance for equity funds used during construction

(13)



(11)


Decoupling mechanism deferrals, net of amortization

23




Amortization of net benefits due to Tax Reform



(17)


Deferral of incremental storm costs

(58)




Other non-cash income and expenses, net

(1)



38


Changes in working capital:




(Increase)/decrease in accounts receivable, net

(8)



(3)


(Increase)/decrease in inventories

(3)



10


(Increase)/decrease in margin deposits

3



(6)


Increase/(decrease) in accounts payable and accrued liabilities

61



24


Increase in margin deposits from wholesale counterparties

102




Other working capital items, net

22



27


Other, net

(65)



(46)


Net cash provided by operating activities

582



442


 

 

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



Nine Months Ended September 30,


2021


2020

Cash flows from investing activities:




Capital expenditures

(486)



(549)


Sales of Nuclear decommissioning trust securities

8



6


Purchases of Nuclear decommissioning trust securities

(6)



(5)


Other, net

(18)



(3)


Net cash used in investing activities

(502)



(551)






Cash flows from financing activities:




Proceeds from issuance of long-term debt

400



319


Payments on long-term debt

(160)



(98)


Borrowings on short-term debt

200



275


Repayments of short-term debt

(350)



(50)


Dividends paid

(112)



(103)


Repurchase of common stock

(12)




Other

(9)



(11)


Net cash provided by (used in) financing activities

(43)



332


Increase (Decrease) in cash and cash equivalents

37



223


Cash and cash equivalents, beginning of period

257



30


Cash and cash equivalents, end of period

$

294



$

253






Supplemental cash flow information is as follows:




Cash paid for interest, net of amounts capitalized

$

75



$

70


Cash paid for income taxes

16



9


 

 

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



Nine Months Ended September 30,


2021


2020

Revenues (dollars in millions):








Retail:








Residential

$

824



46

%


$

747



47

%

Commercial

518



29



463



29


Industrial

187



10



162



10


Direct Access

35



2



35



2


Subtotal

1,564



87



1,407



88


Alternative revenue programs, net of amortization

(23)



(1)






Other accrued revenues, net

12



1



13



1


Total retail revenues

1,553



87



1,420



89


Wholesale revenues

186



10



130



8


Other operating revenues

49



3



39



3


Total revenues

$

1,788



100

%


$

1,589



100

%









Energy deliveries (MWhs in thousands):








Retail:








Residential

5,875



30

%


5,621



30


Commercial

4,943



25



4,672



25


Industrial

2,773



14



2,552



13


Subtotal

13,591



69



12,845



68


Direct access:








Commercial

453



2



478



2


Industrial

1,228



7



1,114



6


Subtotal

1,681



9



1,592



8


Total retail energy deliveries

15,272



78



14,437



76


Wholesale energy deliveries

4,416



22



4,593



24


Total energy deliveries

19,688



100

%


19,030



100

%









Average number of retail customers:








Residential

799,182



88

%


789,726


88

%

Commercial

110,863



12



110,185


12


Industrial

191





194



Direct access

589





634



Total

910,825



100

%


900,739



100

%

 

 

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



Nine Months Ended September 30,


2021


2020

Sources of energy (MWhs in thousands):








Generation:








Thermal:








Natural gas

7,074



38

%


5,767



32

%

Coal

1,455



8



2,752



15


Total thermal

8,529



46



8,519



47


Hydro

778



4



919



5


Wind

1,843



10



1,720



9


Total generation

11,150



60



11,158



61


Purchased power:








Term

3,782



20



5,202



29


Hydro

3,091



16



1,585



9


Wind

749



4



256



1


Total purchased power

7,622



40



7,043



39


Total system load

18,772



100

%


18,201



100

%

Less: wholesale sales

(4,416)





(4,593)




Retail load requirement

14,356





13,608




The following table indicates the number of heating and cooling degree-days for the three months ended September 30, 2021 and 2020, along with 15-year averages based on weather data provided by the National Weather Service, as measured at Portland International Airport: 


Heating Degree-days


Cooling Degree-days


2021


2020


Avg.


2021


2020


Avg.

First Quarter

1,805



1,761



1,847








Second Quarter

498



554



629



238



99



93


July



11



7



258



180



182


August

9



1



6



249



197



196


September

45



35



61



93



115



77


Third Quarter

54



47



74



600



492



455


Year-to-date

2,357



2,362



2,550



838



591



548


Increase/(Decrease) from the 15-year average

(8)

%


(7)

%




53

%


8

%



 

 





Media Contact:


Investor Contact:


Mike Houlihan


Jardon Jaramillo


Corporate Communications


Investor Relations


Phone: 503-464-8596


Phone: 503-464-7051

 

 

Cision View original content:https://www.prnewswire.com/news-releases/portland-general-electric-announces-third-quarter-2021-results-301411497.html

SOURCE Portland General Company

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