Portland General Electric Announces Third Quarter 2021 Results

Rhea-AI Summary

Portland General Electric (NYSE: POR) reported a net income of $50 million, or 56 cents per diluted share, for Q3 2021, turning around from a $17 million loss in Q3 2020. Increased revenues stem from higher retail energy deliveries, strong residential demand, and high-tech manufacturing growth, despite challenges from weather and market volatility. PGE plans to initiate a renewable RFP in December, aiming for significant clean energy capacity by 2030. The company also reaffirmed its 2021 earnings guidance of $2.70 to $2.85 per share.

Positive

• Net income increased to $50 million in Q3 2021 from a $17 million loss in Q3 2020.
• Revenues boosted by strong residential demand and growth in high-tech manufacturing.
• Plans to procure 1,000 MW of renewable and non-emitting capacity resources.
• Ranking as the largest voluntary renewable energy program in the nation with over 200,000 customers.
• Reaffirmed 2021 earnings guidance between $2.70 and $2.85 per diluted share.

Negative

• Operating expenses rose due to increased vegetation management for wildfire prevention.
• Risks associated with volatile power market and weather impacting results.

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

 

 

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SOURCE Portland General Company

FAQ

What are Portland General Electric's Q3 2021 earnings results?

Portland General Electric reported a net income of $50 million, or 56 cents per diluted share, in Q3 2021.

How does Portland General Electric's revenue in Q3 2021 compare to Q3 2020?

In Q3 2021, revenues increased due to higher retail energy deliveries, contrasting with a revenue decline in Q3 2020.

What plans does Portland General Electric have for renewable energy?

PGE plans to initiate a renewable RFP in December, aiming to procure 1,000 MW of renewable and non-emitting capacity resources.

What is Portland General Electric's earnings guidance for 2021?

PGE reaffirmed its 2021 earnings guidance, estimating $2.70 to $2.85 per diluted share.

What challenges did Portland General Electric face in Q3 2021?

PGE faced challenges from high temperatures and power market volatility affecting its results.