Portland General Electric announces 2019 financial results and initiates 2020 earnings guidance

PORTLAND, Ore., Feb. 14, 2020 /PRNewswire/ -- Portland General Electric Company (NYSE: POR) today reported net income of $214 million, or $2.39 per diluted share, for the year ended Dec. 31, 2019. This compares with net income of $212 million, or $2.37 per diluted share, for the year ended Dec. 31, 2018. Net income was $61 million, or $0.68 per diluted share, for the fourth quarter of 2019. This compares with $49 million, or $0.55 per diluted share, for the comparable period of 2018.

"I am pleased with our financial results and the progress that we continue to make on our strategic objectives to decarbonize our power supply, electrify other sectors of the economy and operate efficiently," said Maria Pope, PGE president and CEO. "In 2020 we are focused on investments that enhance reliability and resiliency."

2019 earnings compared to 2018 earnings

The increase in full-year 2019 earnings was driven by an increase in revenues from higher retail prices and increased loads from industrial customers when compared to 2018. Largely offsetting the increase in revenues were higher distribution expenses due to higher vegetation management and wildfire mitigation efforts, a gain from the cash settlement of the Carty litigation in 2018 that did not recur in 2019, higher labor and benefit expenses, higher depreciation and amortization expense resulting from capital additions, and an increase in income tax expense attributable largely to fewer production tax credits.

Company Updates

Integrated Resource Plan (IRP)

In January 2020, PGE filed its final public comments with the Public Utility Commission of Oregon (OPUC) in its 2019 IRP. PGE responded to comments from stakeholders on a wide range of topics and proposed modifications to the Action Plan including delaying the acquisition of renewable resources from 2023 to 2024 to align with PGE's capacity need and the extended production tax credit availability afforded by House Resolution 1865. PGE also proposed a modification to its capacity action to allow for concurrent consideration of existing resources through bilateral negotiations and new non-emitting capacity resources through a request for proposal.

Capital Projects

Wheatridge Renewable Energy Facility

Construction is on schedule for the 300 megawatt wind generation component of the overall facility that is located in Morrow County, Oregon. PGE will own 100 megawatts of the wind generation component and purchase the balance of the wind output under a 30-year power purchase agreement. The facility will also include 50 megawatts of solar generation and 30 megawatts of battery storage. The wind component of the facility is expected to be in service during the fourth quarter of 2020, and the solar generation and battery storage in 2021. The facility will be incorporated into customer prices through PGE's Renewable Adjustment Clause. As of Dec. 31, 2019 the estimated cost of the project totals approximately $150 million, excluding allowance for funds used during construction (AFDC). Construction crews mobilized to the site in January and work has begun on initial site preparation.

Integrated Operations Center (IOC)

Construction is on schedule for the IOC, which will centralize key operations in a facility designed for enhanced resilience against seismic, cyber and physical security risks.  The facility is being designed for negligible structural damage under a maximum considered earthquake event using seismic (base) isolation. It is expected to be in service during the fourth quarter of 2021 at an estimated cost of approximately $200 million, excluding AFDC. Site preparation began in the third quarter of 2019. Construction permits have been granted and construction of the new facility is in progress.

2020 earnings guidance

PGE is initiating full-year 2020 earnings guidance of $2.50 to $2.65 per diluted share based on the following assumptions:

• An increase in retail deliveries between 0.5 and 1.5%, weather adjusted;
• Average hydro conditions for the year;
• 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 $590 million and $610 million; and
• Depreciation and amortization expense between $415 million and $435 million.

Fourth Quarter 2019 earnings call and webcast — Feb. 14, 2020

PGE will host a conference call with financial analysts and investors on Friday, Feb. 14, 2020, 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, Feb. 14, 2020, through 1 p.m. ET on Friday, Feb. 21, 2020.

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

The attached unaudited consolidated statements of income, consolidated balance sheets, and 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, serving 895,000 customers in 51 cities. For 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. With approximately 3,000 employees across the state, PGE is committed to helping its customers and the communities it serves build a clean energy future. For more information, visit PortlandGeneral.com/CleanVision.

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; 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; 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 liability for third party property damage; and cyber security breaches of the company's customer information system or operating systems, which may affect customer bills or other aspects of our operations. 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 expressly disclaims any current intention to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise. Prospective investors should also review the risks, assumptions and uncertainties listed in the company's most recent annual report on form 10-K and in other documents that we file 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

Source: Portland General Company

SOURCE Portland General Company