Portland General Electric Announces Second Quarter 2022 Results

• Revising 2022 GAAP basis earnings guidance from $2.50 to $2.65 to $2.60 to $2.75 per diluted share; initiating non-GAAP basis adjusted full-year 2022 earnings guidance of $2.74 to $2.89 which reflects the exclusion of previously disclosed deferral reductions related to 2020
• Continued strong energy delivery and customer growth, coupled with favorable power cost conditions
• Filed for amortization of 2021 Power Cost Adjustment Mechanism, 2020 Labor Day Wildfire and February 2021 Ice Storm deferrals

PORTLAND, Ore., July 28, 2022 /PRNewswire/ -- Portland General Electric Company (NYSE: POR) today reported net income based on generally accepted accounting principles (GAAP) of $64 million, or $0.72 per diluted share, for the second quarter of 2022. This compares with GAAP net income of $32 million, or $0.36 per diluted share, for the second quarter of 2021.

"The region's growth, driven by the semiconductor and digital technology sectors, relies upon safe, reliable, clean, affordable energy," said Maria Pope, PGE president and CEO. "Our progress this quarter demonstrates our ongoing commitment to advancing Oregon's clean energy goals and mitigating risk across our system to keep our customers safe, particularly during wildfire season and high heat. With the operational and financial progress we are making, PGE is positioned for long-term growth."

Total revenues were driven by higher retail energy deliveries, due to continued growth in industrial demand, including high-tech and digital customers, offset by a reduction in the average price of deliveries due to a varying customer mix. Purchased power and fuel expense decreased due to strong hydro and power market conditions in 2022, and quarter over quarter tailwinds due to challenging market conditions in the second quarter of 2021. Operating and administrative expenses increased, driven by wildfire mitigation, grid resiliency and maintenance, enhancements to customer digital technology and higher professional services and insurance costs. Other income decreased due to declines in the value of the non-qualified benefit plan trust assets.

In July, PGE submitted amortization request filings to the OPUC for the 2021 Power Cost Adjustment Mechanism, 2020 Labor Day Wildfire, and February 2021 Ice Storm, representing $132 million of outstanding major deferrals. PGE anticipates resolution of these filings by the end of 2022 and plans to file an amortization request for the COVID-19 deferral, which has a $34 million balance as of June 30, 2022, in late 2022 or early 2023.

The OPUC acknowledged PGE's submitted shortlist of bids in the pending Renewable Request for Proposals (RFP) on July 15, 2022. The RFP is intended to procure at least 375 to 500 MW of qualifying renewable energy resources, approximately 375 MW of non-emitting dispatchable capacity resources, and up to 100 MW of renewable energy resources in support of the Green Future Impact program's PGE supply option. PGE has since commenced negotiations with shortlist bidders and plans to finalize negotiations prior to the end of 2022 to allow sufficient time to capture expiring federal production tax credits for the benefit of customers.

The proposals for renewable energy resources provide various combinations of wind, solar, and battery storage options that include power purchase agreements (PPA) along with Company-owned resources. The proposals for non-emitting dispatchable capacity resources provide battery storage options and a pumped storage option that include PPAs along with Company-owned resources. The ultimate outcome of the RFP process may involve the selection of multiple projects for both renewable energy and non-emitting dispatchable capacity resources.

In late April, the OPUC approved PGE's 2022 Wildfire Mitigation Plan, the foundational document that implements the Company's Wildfire Mitigation Program for assessing and addressing wildfire risks in PGE's region. Core components of the plan include PGE's risk assessment and modeling processes, system inspection, design and construction work, wildfire-related capital and technology investment plans, vegetation management plans and practices and proactive efforts employed during high-risk events. Customer and community safety is PGE's highest priority, and this plan specifies efforts to address wildfire risks and remain in compliance with all relevant wildfire-related requirements.

As previously announced, on July 22, 2022, the board of directors of Portland General Electric Company approved a quarterly common stock dividend of $0.4525 per share.  The quarterly dividend is payable on or before October 17, 2022, to shareholders of record at the close of business on September 26, 2022.

PGE is revising its estimate for full-year 2022 GAAP earnings guidance from $2.50 to $2.65 to $2.60 to $2.75 per diluted share; initiating non-GAAP basis adjusted full-year 2022 earnings guidance of $2.74 to $2.89 which reflects the exclusion of previously disclosed $17 million deferral reductions related to the year ended 2020. These are based on the following assumptions:

• An increase in energy deliveries between 2% and 2.5%, weather adjusted;
• Normal temperatures in its utility service territory;
• Average hydro conditions;
• 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 expense from between $620 million to $640 million, which includes the $17 million impact of released deferrals related to 2020;
• Depreciation and amortization expense between $420 million and $440 million;
• Effective tax rate of 15% to 20%;
• Cash from operations of $600 million to $650 million;
• Capital expenditures of $755 million; and
• Average construction work in progress balance of $270 million.

PGE will host a conference call with financial analysts and investors on Thursday, July 28, 2022, at 11 a.m. ET. The conference call will be webcast live on the PGE website at investors.portlandgeneral.com. A webcast replay will also be available on PGE's investor website "Events & Presentations" page beginning at 2 p.m. ET on July 28, 2022.

Maria Pope, President and CEO; Jim Ajello, Senior Vice President of Finance, CFO, Treasurer and CCO; and Jardon Jaramillo, Senior Director, Finance, Investor Relations, and Risk Management, will participate in the call. Management will respond to questions following formal comments.

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.

This press release contains certain non-GAAP measures, such as adjusted earnings, adjusted EPS and adjusted earnings guidance. These non-GAAP financial measures exclude significant items that are generally not related to our ongoing business activities, are infrequent in nature, or both. PGE believes that excluding the effects of these items provides a meaningful representation of the Company's comparative earnings per share and enables investors to evaluate the Company's ongoing operating financial performance. Management utilizes non-GAAP measures to assess the Company's current and forecasted performance, and for communications with shareholders, analysts and investors. Non-GAAP financial measures are supplementary information that should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP.

Items in the periods presented, which PGE believes impact the comparability of comparative earnings and do not represent ongoing operating financial performance, include the following:

• Non-cash Wildfire and COVID deferral reversal charge associated with the year ended 2020, resulting from the OPUC's 2022 GRC Final Order earnings test.

PGE's reconciliation of non-GAAP earnings guidance is below.

Portland General Electric (NYSE: POR) is a fully integrated energy company based in Portland, Oregon. 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 more than 130 years, PGE has powered the advancement of society, delivering safe, affordable, and reliable energy to Oregonians. PGE and its approximately 3,000 employees are working with customers to build a clean energy future. Together with its customers, PGE has the No. 1 voluntary renewable energy program in the U.S. PGE is committed to achieving at least an 80% reduction in greenhouse gas emissions from power served to customers by 2030 and 100% reduction by 2040. In 2021, PGE became the first U.S. utility to join The Climate Pledge. 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. In 2021, PGE, employees, retirees, and the PGE Foundation donated $4.8 million and volunteered 15,760 hours with more than 300 nonprofits across Oregon. For more information visit www.PortlandGeneral.com/news.

Statements in this press 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 the date of this report. 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," "based on," "believes," "conditioned upon," "considers," "estimates," "expects," "forecast," "goals," "intends," "needs," "plans," "promises," "seeks," "should," "subject to," "targets," and similar expressions.

Investors are cautioned that any such forward-looking statements are subject to risks and uncertainties, including, without limitation: the outcome of various legal and regulatory actions; 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; delays in the supply chain and increased supply costs (including application of tariffs impacting solar module imports), failure to complete capital projects on schedule or within budget, failure of counterparties to perform under agreement, or the abandonment of capital projects, which could result in the Company's inability to recover project costs, or impact our competitive position, market share, revenues and project margins in materials ways; default or nonperformance of counterparties from whom PGE purchases capacity or energy, which require the purchase of replacement power and renewable attributes at increased costs; complications arising from PGE's jointly-owned plant, including ownership changes, regulatory outcomes or operational failures; 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, including volatility of equity markets, reductions in demand for investment-grade commercial paper or interest rates, which could affect the access to and availability or cost of capital and result in delay or cancellation of capital projects or execution of the Company's strategic plan as currently envisioned; general economic and financial market conditions, including inflation; 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; employee workforce factors, including potential strikes, work stoppages, transitions in senior management, and the ability to recruit and retain key employees and other talent and turnover due to macroeconomic trends; 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 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.

Risks and uncertainties to which the Company are subject are further discussed in the reports that the Company has filed with the United States Securities and Exchange Commission (SEC). 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

The following table indicates the number of heating degree-days for the three months ended June 30, 2022 and 2021, along with 15-year averages based on weather data provided by the National Weather Service, as measured at Portland International Airport: 

SOURCE Portland General Company