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spk05: Good morning, everyone, and welcome to the Portland General Electric Company's first quarter 2021 earnings results conference call. Today is Friday, April 30, 2021. This call is being recorded, and as such, all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key on your telephone keypad. If you do intend to ask a question, please avoid the use of speaker phones. For opening remarks, I will turn the conference call over to Portland General Electric's Senior Director of Investor Relations. Mr. Jordan Jaramillo. Please go ahead, sir.
spk08: Thank you, Renz. Good morning, everyone. I'm pleased that you're able to join us today. Before we begin this morning, I'd like to remind you that we've prepared a presentation to supplement our discussion, which we'll be referencing throughout the call. The slides are available on our website at investors.portlandgeneral.com. Referring to slide two, some of our remarks this morning will constitute forward-looking statements. We caution you that such statements involve inherent risks and uncertainties, and actual results may differ materially from our expectations. For a description of some of the factors that could cause actual results to differ materially, please refer to our earnings press release and our most recent periodic reports on Forms 10-K and 10-Q, which are available on our website. Leading our discussion today are Maria Pope, President and CEO, and Jim Agello, Senior Vice President of Finance, CFO, and Treasurer. Following their prepared remarks, we will open the line for your questions. Now, it's my pleasure to turn the call over to Marcia.
spk02: Thank you, Jordan, and thank you all for joining us today. Our financial results this quarter were strong. We reported net income of $96 million, or $1.07 per share, compared to net income of $81 million, or $0.91 per share, in the first quarter of last year. In light of the strong quarter and positive outlook, we are reaffirming our 2021 earnings guidance of $2.55 to $2.70 per share, as well as our long-term earnings and dividend growth rates. Jim will cover first quarter results in more detail, provide regulatory and capital updates, as well as discuss the outlook for the rest of the year. This quarter, again, presented significant weather-driven operational challenges. And I'm proud of how our teams came together, responding to the most severe ice, wind, and snowstorms in our history, improving our operations, and achieving important customer-focused results. In February, we restored over 750,000 customer outages, as nearly half of our customers were without power, many of whom experienced multiple outages over more than a two-and-a-half-week period. I want to recognize the hard work of our coworkers, mutual aid crews, and assistance from as far away as Southern California, Utah, Montana to Alberta, British Columbia, all of whom in the midst of a pandemic went above and beyond to restore power quickly and most importantly, safely. Even as we speak, crews continue to repair equipment and clear downed trees. as damage is still extensive. As of March 31st, the costs of the February storm were $87 million, which Jim will discuss in detail. The recent storms and wildfires last fall, on top of the pandemic, with so many people living, working, and learning remotely, underscore the importance of our ongoing system hardening and reinvestment programs, combined with deployment of digital capabilities AI, and smart grid technologies. Today versus a year ago, customers are experiencing about 16% less planned outages, average outage restoration times are about 7% faster, and outage text notifications and digital payment options are making a difference in customer satisfaction. And equally important to note is what did not happen during those February weather events. Our generation plants as well as wind and hydro facilities operated seamlessly, and power was generated across the region throughout the harsh conditions. Turning to load growth and the economy. For the last couple of years, we have discussed the strength of our service territory. Overall, year over year, customer count increased more than 1%, and load growth was up 1.2% on a weather-adjusted basis, and 2.3% after accounting for the harsh winter conditions. Residential usage was up 3%, weather adjusted, offsetting commercial declines of 5%. Industrial usage grew an impressive 8%, powered by the strength of the tech and digital sectors. Expansion within our region of several digital companies and the global semiconductor shortage are expected to continue and solidify our positive outlook. Overall, Oregon's economy is recovering, with nearly two-thirds of the state's pandemic-driven job loss recovered. Unemployment currently stands at 5.7% across our service territory. ESG. Portland General has long been an ESG leader, and this quarter we joined the Amazon Climate Pledge in keeping with our commitment to reduce carbon by 80% by 2030 over 2010 levels. and our aspirational goal of net zero by 2040. We also know that to make real progress on climate, we need to partner in addressing the admissions from transportation and other sectors. Last week, in partnership with Daimler Trucks North America, we celebrated the opening of the first of its kind heavy-duty electric truck charging site. This site, aligned with the West Coast Clean Transit Corridor Initiative, to electrify along the I-5 corridor from the borders with British Columbia to Mexico. And finally, I'd like to address the ongoing social unrest and importance of our diversity, equity, inclusion work. In these tumultuous times, corporations have an opportunity for change. At Portland General, our DE&I priorities are focused on recruiting, retaining, training, and promoting from our front lines to our board of directors. We are committed to transparency and have published for three years running our workforce and pay equity statistics. We've made good progress, but we know that there is still much work to do. As we look to the year ahead, we're excited to lead a clean energy transformation and humbled by the challenges as we work seamlessly to integrate ever-increasing amounts of renewable and distributed energy resources into a growing, reliant, and resilient grid, meeting customers' needs for safe, affordable, clean energy. I'll now turn it over to Jim.
spk03: Thanks, Maria. I too was impressed with the efforts of our teams across the company to restore power safely to customers during the February storms. As we turn to economic conditions, it's clear that we're beginning to see recovery take hold. Approximately 40% of Oregonians have had at least one vaccine shot, and as of mid-April, K-12 public schools reopened for in-person education, either hybrid or full-time. As of March 2021, the unemployment rate in PGE service territory was 5.7% compared to a 14% peak in April 2020. In the first quarter, Oregon saw accelerated job growth and, as of March, had recovered over half of the jobs lost last spring. Harder hit segments such as leisure and hospitality have posted noteworthy gains after experiencing a second wave of job losses in late 2020. While there are green shoots of recovery, we appreciate that many of our customers are still facing challenges. and we embrace our role as an essential service provider and partner to Oregon communities. Turning to slide five, I'll cover our financial performance. As Maria said, we reported $1.07 per share compared to $0.91 per share in the first quarter of 2020. First, we saw a $0.06 increase in total revenue. This is composed of $0.04 due to higher loads, which increased 1.2 percent year-over-year, weather-adjusted, and a two-cent positive impact from weather. Additionally, there was two cents from the earnings power associated with the Wheat Ridge Renewable Energy Facility, which was placed in service in the fourth quarter of 2020. Next, a three-cent decrease in net variable power costs driven by lower hydro wind production in 2021. While our wind production exceeded our expectations, it was still less than the unusually high levels of production experienced in 2020. A seven-cent decrease was associated with higher operating and maintenance administrative expense, which consists of five cents of favorable fixed-plant O&M, primarily due to lower maintenance expense at our generation facilities. This was offset by 12 cents of unfavorable administrative expenses, which included three cents of higher employee benefit expenses, three cents of higher legal and professional expense, and three cents from the timing of bad debt recognition under our COVID deferral, and three cents from other items. A five-cent increase was associated with lower depreciation and amortization expense, largely as a result of asset retirements, which were partially offset by capital addition. There was a four-cent increase in other income primarily attributed to market returns on the non-qualified benefit trust, There was an 11 cent increase from lower tax expense, primarily driven by a one-time recognition of a benefit from a local flow-through tax. Turning to the regulatory update, we are continuing to evaluate our cost structure to ensure that we're providing safe, reliable, and affordable service to our customers while making investments that leverage the use of technology and advance our strategy. We are still assessing our need and the appropriate timing to file a general rate case with the Oregon Public Service Utilities Commission for a 2022 test year. This last week, we requested a docket to be opened to select an independent evaluator with stakeholders for our upcoming RFP. This is the first step towards the RFP, the process of which is expected to continue into 2022 before finalizing potential selections. The RFP will seek both renewable energy and dispatchable resource bids. PGE has identified a roughly 500-megawatt capacity need that it will seek to fill as part of this 2021 all-source RFP. For the 2019 acknowledged IRP, PGE is permitted to have 150 megawatts of energy-producing resources like renewables to fill a portion of this capacity need. We plan to file a benchmark resource into this competitive process. Additionally, as it relates to capacity, we are continuing to pursue cost-competitive agreements for existing capacity in the region. If PGE is successful in these negotiations, it might reduce the size of the 2021 RFP, depending on the contracting dates for an existing capacity resource. Regarding the deferral related to our storm costs, detailed on slide 6, through March 31, 2021, we've incurred an estimated $87 million in incremental costs due to the February storm, of which $33 million were capital expenditures and $54 million were operating expenditures associated with our transmission and distribution system. We have a storm deferral mechanism that collects $4 million annually from retail customers to cover incremental expenses related to storm damages. and we defer any amount not utilized in the current year. In response to the February storms, we exhausted our storm collection balance for 2021 of $9 million to offset operating expenses. This brings the cumulative incurred cost from the February storm to be estimated at $45 million net as of March 31, 2021. We have filed an application for authorization to defer emergency restoration costs for the February storms. We expect a decision from the PUC on this in 2022. We're confident these costs were incurred prudently in response to this unique and unprecedented storm, although there are comparable storms of similar size and duration in other regions at a similar expense. The OPC has significant discretion in making the final determination of recovery and their conclusion of the overall prudence Turning to slide seven, which shows our updated capital forecast through 2025, we've increased our 2021 capital expenditures by $45 million this year, the majority of which relates to the capital expenditures from the recent storm restoration. Our capital plan remains on track, and we continue to invest primarily in projects that enhance the resiliency and reliability of our system for the benefit of customers while maintaining affordability. Given our guidance today, we raised our O&M guidance by $20 million. This is in response to several factors. $12 million of this increase is associated with the February storm response expense, which is ultimately offset in revenue. And the remaining $8 million is associated with additional initiatives to address wildfire risk, improve our outage restoration estimation, and outage response processes. On to slide eight. we continue to maintain a solid balance sheet, including strong liquidity and investment-grade ratings, accompanied by a stable outlook. Based on our strong financial condition, we do not expect to issue additional equity in 2021. We expect to fund 2021 capital expenditures and long-term debt maturities with cash from operations during 21, which is expected to range from $600 million to $650 million. We've also increased a long-term debt issuance later this year up to $350 million, which will refinance the short-term note closed earlier this year and satisfy our 2022 requirements. Total liquidity is $780 million, all of which is available. Earlier this week, our Board approved a dividend increase of $0.09 per share on an annualized basis, which represents a 5.5% increase This increase is consistent with our long-term dividend growth guidance of 5% to 7%, while observing a dividend payout ratio of 60% to 70%. Turning to our 2021 outlook, our first quarter performance was strong. We were on track to achieve our guided range and finish within the long-term growth guidance of 4% to 6% from the 2019 base year. We expect continued impacts from the pandemic on the economy and regional power pictures, through the second quarter. We anticipate a similar load composition to the trends that we've experienced over the last two quarters. Our commercial customers face risks associated with economic impact of the pandemic in Oregon, but the strength of our residential and industrial energy deliveries has mitigated this decline. Right now, we're still under the cap of our decoupling mechanism. Residential customer usage on a weather-adjusted basis is above the established threshold and is expected to be refunded to customers. As I settle in, I can see excellent fundamentals in the business. Low growth is strong, and we continue to see opportunities to drive efficiency in our operations, mostly through an investment in technology and developing a smarter, more resilient grid, all of which will result in better outcomes for our customers. Overall, we are continuing to reaffirm our full year 2021 earnings guidance of $2.55 to $2.70 per diluted share based on the assumptions outlined in our press release and our long-term growth target of 4% to 6% over time. And now, operator, we're ready for questions.
spk05: Thank you, sir. Ladies and gentlemen, if you have a question at this time, please press the star, then the number one on your touchstone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. We have our first question from the line of Insoo Kim from Goldman Sachs. Your line is now open.
spk07: Morning, Insoo.
spk05: Thank you.
spk07: Morning, Maria. First question on just the good performance in the quarter and setting up for the rest of the year. Could you just run through maybe some of the items like the tax benefit this quarter, some increased O&M, and how much of that you had already anticipated? How much do you think may be above the plan? Just more detail there.
spk03: Yeah, thanks, Sun Tzu. So the tax benefit, The 11 cents I mentioned here on the earnings walk bridge is really 9 cents associated with a local pass-through tax. That's a one-time adjustment. So, of course, that wasn't in the plan as we go forward here. And the rest of it call it a couple of cents, miscellaneous items on the tax side, right? So that is really the tax item, a local pass-through tax that should have been booked earlier and over time. Very simple, okay?
spk07: Got it. And if that's the case, does that mean just based on when you were giving the original 2021 guidance, all else equal, I know nine cents of it is more one time, but you're trending towards that upper half?
spk03: I wouldn't necessarily say that at this point in time, right? So we're really not altering guidance for the balance of the year, but this particular item wasn't included in the guidance that we offered earlier in February or today, for that matter. Understood.
spk07: And one more from me. I did see in the 10-Q that I think the Futures Training Commission has an investigation to the August 10th you know, trading incident. You know, I'm just not familiar with the process with that agency and what typical range of outcomes result from something like this. But I don't know if there's anything we can shed in terms of what we could expect over the next coming one.
spk03: Really nothing to shed in the way of predictions. These are very early days in the process like that. I would say it's not unexpected in matters such as this. Of course, we're going to fully collaborate with any review that's done by the agencies, and I will tell you we're fully disclosed on the matter, so in terms of the trading matter from last year, and obviously the board concluded its special review on the issue.
spk07: Got it. Thank you so much.
spk03: You're welcome.
spk05: Thank you. Our next question is from the line of Julian Smith from Bank of America. Please go ahead.
spk09: Hey, good morning team. Thank you for the time and opportunity. If I can kick this off just on the rate case timing super quickly here. You just said you don't necessarily know when or if still, but I presume that the positive results here in the first quarter delayed some of the timing here or How are you thinking about this in terms of the latest updates on factors?
spk03: It's Jim. How are you? So I would say to you that we're continuing to look at it literally all the time. We're constantly examining our cost structure, how we're managing through it. We're looking at community impacts. COVID is still with us, of course, but we're managing well, I think through the period of time. And if we, can be sure to manage and provide good customer care and pricing, that gives us a little more opportunity to delay the filing.
spk09: Excellent. Okay. And then if I can, I think also in the 10Q there was some discussion around this, I think it's called the Green Future Impact Program. but that seems like it might have some incremental opportunity. Can you talk about that relative to plan here and how you think about that against other generation needs?
spk03: Yeah, it's pretty early on. We've just received the order. It's an incremental 200 megawatts, as you probably have noticed, and there's an opportunity for us to provide more green power, which is in great demand in our region and territories. But at this point in time, I couldn't be very specific about how we're going to roll that out. We're still examining our options on that one. But we've got the largest volunteer renewable energy program in the U.S. still. This will add to that opportunity. But the details, we don't quite have yet.
spk02: Julian, it's really important that we're able to serve customers with the clean energy that they want, whether that is you know, small municipal customers. Jim just noted our voluntary renewable program, which is largely a residential and small commercial program. But we also, to our largest customers, they're increasingly wanting 100% green energy, and it's important that we're able to deliver that to them.
spk09: Right, but maybe to clarify this, on this program, your ownership opportunity or prospective ownership opportunity,
spk02: Yeah, I mean, that's a possibility, but it all depends on what's competitive and what's the best thing for customers.
spk03: Yeah, you will have noticed the prior, Julian, you probably noticed the prior announced transaction with 17 CNI customers earlier a number of months ago. So I would just leave it as such that this could be a buy-build opportunity. We're not sure yet.
spk09: Got it.
spk03: Excellent.
spk09: And then if I can squeeze this in real quick, I know that, um, you in particular, we're at some Senate hearings of late, um, and there's this widened, uh, tax bill, um, certainly novel in terms of how we would sort of rewrite the, the renewable tax code. Um, I'm curious if you have any perspectives to add to that, um, certainly early days altogether on tax reform, and the subject of renewable tax reform is something that we haven't really broached meaningfully yet. So any thoughts on that? I know, for instance, it includes a nuclear PTC. There's a few other pieces there that certainly are novel to the industry.
spk02: Great. Well, thank you, Julian. And, yes, what Senator Wyden is trying to do is really rationalize and modernize a lot of the tax incentives that go to our industry and the energy industry in total. and really focus those on clean energies, on new technologies. His bill is unique in a couple of ways. First, it's technology neutral. So all technologies, to the extent that they reduce carbon, are on the table. The other is it does not pick winners and losers. So there's some fixes for the normalization issues that utilities have faced in the past, creating a much more level playing field and allowing people for acceleration of a clean energy future. It includes transmission, it includes transportation sector, and it does not include nuclear at this point in time, although there's a lot of discussion taking place around that. As you know, 20% of the energy generated in the country is nuclear, and that's an important source of clean energy as we move forward if we're going to hit the aggressive 2030 and then 2035 goals as laid out by the administration.
spk09: Got it. Thanks, guys. I'll pass it on from here. All the best. Thank you.
spk05: Thank you. Our next question is from Anthony Crowdwell from Mizuho. Please go ahead.
spk06: Hey, good morning. Hopefully just two quick ones. One is any contribution this quarter from the PCAM mechanism? I apologize if you guys went over that already.
spk02: So in general, when we look at the PCAM, we look at whether it's over or under versus our baseline. It's calculated on a full-year basis. And this year, in the quarter, we were about $13 million under the baseline. However, it's just really too early days. As you probably have noted, the West is having an overall drought. Our hydro conditions remain pretty good in the Pacific Northwest. Right now, sort of the biggest mover of power prices from a hydro perspective is the Columbia River Basin, measured at the Dalles, which is right about 89%, 90%. But we are – I think it's just too early to call for the year.
spk06: Okay, great. And then if I could follow up on one of Insu's questions. Okay. I think it was an 11 cent benefit to tax this quarter. Jim went over the details between them and I think nine cents of the 11 was more of a one time in nature. How does that correspond to also the rise in guidance? meaning are you using the tax benefit maybe as an opportunity to maybe pull forward guidance with some wildfire risk? I know you had the storms, but also maybe pulling forward and doing some wildfire risk to give you some headroom later in the year or maybe in 2022.
spk02: Yeah, no, as Jim noted, we've not changed our guidance, and we're not picking any side of the ranges of our guidance. Again, it's just too earlier in the year. We did increase our O&M costs, as Jim outlined. And we had the one-time issue literally from the accounting adjustment we had on a – and it's a relatively small tax line. It just was over time.
spk03: Yeah, Anthony, I just want to point out that there's really no necessary connection between that tax item recognition and the O&M increase. The one that has to do primarily with the storm and the eight is to prepare us better for outage and other uses of technology on the grid. Apple and an orange, I would say.
spk02: Yeah, I would say overall we are investing in reliability, particularly as we look at significant weather events, potentially fires and others, making sure we are best prepared as possible.
spk06: Great. And then just lastly, also into addressing on the investigation with the SEC and then also on the Q, I think there's several lawsuits that have been filed relating to the trading incident last year. Just because I'm not familiar with the process, isn't an investigation something you could settle? Like you meet with the SEC and you settle, or that's not how an investigation works?
spk03: You know, we're entirely unsure of the direction this will go. As I said, it's very early days, and so I wouldn't want to speculate on the outcome of that. There's just no way to predict the outcome. So I'll just leave it at that.
spk06: Wait, thanks for taking my questions. You're welcome.
spk05: Thank you. Our next question is from Brian Russo from CWT. Please go ahead.
spk00: Hi, good morning.
spk02: Good morning.
spk00: So just to follow up on the PCAM, as you mentioned, you have $13 million below as of March of this year. I think the commentary in the queue is that you expect to be below the baseline for the full year of 2021, but is it basically just extrapolating what's recorded as of the first quarter, or is it kind of projecting for the remainder of the year, you know, based on hydro conditions and power prices, et cetera? And then does your guidance assume a zero PCAM balance?
spk02: Yeah. You know, our guidance has a little bit of a balance, as we noted in the queue, below the baseline. This time last year, we were $20 million below the baseline. And you'll look at the prior year, we were actually above the baseline in 2019. It's just too early days to tell. We're going through very interesting energy markets in the Pacific Northwest. The market prices are clearly higher than anyone would have expected this time last year or even a couple of months ago. And I think we just have a good, solid balance of the year to work through. And I don't think we'd want to call it until we are clearly past the third quarter time period.
spk00: Okay, understood. And then also, just to follow up, the $0.03 decline or headwind on net variable power costs is basically the delta of the $20 million below in first quarter 20 that you mentioned earlier. versus the $13 million below that you are in this first quarter. Yeah, okay.
spk02: Exactly. One of the things I think is really important to point out, last year was, in 2020, a remarkably good wind year. We had good hydro, but we had significantly above-average wind conditions. It was a terrific wind year.
spk00: Yep. And then on the RFP, you mentioned that you hope to finalize – you know, the independent auditor process sometime in 2022 and then start the RFP. Any idea on timing first half of 2022 or second half of 2022?
spk03: Yeah, it's hard to tell exactly, but I would say by the end of the first half we'll be, you know, relatively set to go there. But the main driver here is to get plants or capacity in service by 2024. So everything will be sort of solved from that endpoint and go backwards. So whether we're at one month or one quarter in 2022 is another issue, but we're really all about getting it in service by 2024.
spk02: One thing I would note in our past processes is that independent evaluator discussions and selection processes criteria have been particularly time-consuming as we've worked through it with parties and everyone involved. So I would expect, unless something changes, for this to take longer than many other states probably.
spk00: Understood. And then lastly, Portland General is clearly a leader in electrification and decarbonization, and you've made a number of announcements, including the truck battery charging stations a couple weeks ago with Daimler. I'm just wondering, when might this materialize into an investment scenario that gets layered into CapEx that you're able to earn a return of and on future investments?
spk02: Yeah, that's a great question, and it's one we're asking ourselves as well. The investment categories come in a couple of different buckets. The first one is just in terms of charging stations themselves and just the ability to charge, whether that's in the right-of-way, whether that is a residential, whether that is industrial, commercial, whatever. The next is really what I call the infrastructure and in particular what we call the make ready, so all the cabling that leads to those charging stations. That also includes upgrades to substations. So in many instances, there's a twofer as it enhances reliability and upgrades aging infrastructure to accommodate more charging. And then I think third is really energy usage, but really flexible energy usage so that we're able to charge batteries or maybe even in the future vehicle-to-grid batteries that optimizes more renewable energy, allowing us to not only charge when the sun is shining and the wind is blowing, but when prices are at their lowest. So we really see the opportunities here as very synergistic with our regular utility operations and enhancing reliability and the grid performance overall. So we look forward to the day when there is that much more volume as much as anyone does.
spk00: Okay, great. Thank you very much.
spk02: Thank you.
spk05: Thank you. The next is from Sophie Karp from KeyBank. Your line is now open.
spk01: Hi. Good morning. How are you? Good morning. Great. So a couple of questions here maybe. First, how are you thinking about the timing of the GRC in the context of also having to ask for the storm recovery, and maybe along those lines, if you could comment on what kind of mechanisms you envision. Maybe could you do something like securitization for the storm costs, or is it just going to be covered in rates? How should we think about this?
spk03: Thanks, Sophie. It's Jim. We're laying out the strategy right now, so we don't have it quite done to talk about today. But obviously, we have a number of deferrals. So the wildfire existing, the COVID existing, this new deferral that we've applied for on the recent storm is there, and then the possibility of a rate case. So we'll collaborate with our regulators to determine whether or not we bring those all together or we talk about those deferrals on a separate track. One clarification, we don't have the opportunity to do a securitization, but I believe we'll talk to the regulators, of course, about how we amortize these deferrals over some period of time. It could very well be wrapped up in the rate case as well. So the options are open, and they're subject to conversations with the regulators, which haven't happened yet, I would say.
spk01: Got it. Thank you for the color here. And then on the RFP process, so I think I heard correctly that you expect to bid a benchmark resource into that. Is that accurate? And if so, can you give us any color on what kind of resource could that be and the sizing of that?
spk03: Yeah, so it'll be about 150 megawatts. It'll be a non-emitting resource. It may include batteries as well. And so at this point in time, we're focused on picking the independent evaluator. That's just kicked off. As Maria just said, it could take many months to accomplish that. And so in the meantime, we're evaluating what our options are for the RFP. We will bid a benchmark resource into that campaign.
spk01: Got it. Thank you. And lastly from me, maybe on the wildfires, like you correctly pointed out, the West is still in a state of drought this year. Is there anything that you're doing maybe differently this year ahead of the wildfire season, given the experiences from 2020, to preemptively mitigate some of the potential damages that may ensue?
spk02: Sure. Thank you. As you know, We've been thinking about preparing and learning from our utility peers from California, Arizona, Colorado, and actually also those from Australia in terms of wildfire mitigation, the detection of wildfires, and then how we handle them should that occur in our service territory. Right now we're doing a tremendous amount of vegetation management. We're also working and collaborating with our community partners at the very local level, and overall enhancing our preparedness. It's really around continuous improvement, and we learned a lot from the wildfire season last September, and continue all of the work that we have been doing over the last number of years.
spk01: Thank you. It's all for me. Thank you.
spk05: Thank you. Our next question is from Travis Miller from Morningstar. Your line is now open.
spk04: Good morning. Thank you.
spk05: Good morning.
spk04: Just a real quick one on the dividend. Just confirming, with the raise that you had this quarter, this is the typical cadence that you expect to get back to going forward, all else equals. I just want to confirm that.
spk03: That's right, Travis. The board... adopted an increase 5.5%, $0.09 a share, $1.63 to $1.72, and that would put us on our regular cadence.
spk04: Okay, great. And then you got my EV question that I was going to ask, but let me ask a little follow-on to that. As you talk about these different areas, I understand that the infrastructure, and as you characterized it in terms of the one, two, three, the infrastructure part would be kind of your thing. What's your long-term strategy in terms of, for lack of a better word, outsourcing, the charging, the energy management part, the in-home energy management, all of that stuff? Obviously, we've seen a lot of companies come out and with services like that and with plans to grow like that, what's your long-term strategy in terms of owning that energy service part, whether it's the charging stations or the actual usage?
spk02: That's a great question. And actually, if you go onto our website, you can see a marketplace where you can buy thermostats with ETO, Energy Trust of Oregon, credits. and participate in a distributed energy program through Portland General. We're building out an integrated operations center, which will enhance our capabilities of managing a bidirectional grid. And we remain very focused on serving customers. As an example, we have distributed energy resource testbeds. where we're actually interacting with customers on their cell phone. They can opt into energy events and reduce their energy usage during critical peak times and shave off almost 10% on their bills during those months. And so for us, there's a tremendous amount of opportunity. We're also partnering with a number of technology partners. We don't expect to do it all, and many companies have terrific technologies that will enhance the capabilities of reliably managing the grid as we go forward.
spk04: Okay. And then if we think about just in terms of accounting and cash flow, would you think about that as kind of recoverable O&M, such that over time we would see O&M go up, but then kind of EV-related charges would flow through regulatory rates? Sure.
spk02: Yeah, we would expect that the work that we're doing is all within the utility. It's to enhance the customer's experience, particularly if customer's expectations change quite dramatically. And all of those actions really contribute to a more reliable grid. We have used our distributed energy system, our standby generation system, which is quite significant, several times during critical peak times to enhance shave off those peaks, creating less stress on the overall reliability of the system, and enhancing our resource adequacy. So we expect to only continue. We see all of these things as synergistic. And most importantly, as we add more renewable variable resources, they're not just synergistic, they're essential to maintaining reliability of the system and serving customers with the clean and affordable energy they want.
spk04: Okay, great. I appreciate it.
spk02: Thank you.
spk05: Thank you. I'm showing no further questions at this time. I would now like to turn the conference back to Ms. Maria Pope.
spk02: Thank you very much. We appreciate your questions and interest in joining us for today's call. We invite you to follow up as well as to join us after the second quarter in July. Thank you very much. Bye-bye.
spk05: Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect. Have a great day.
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