Portland General Electric Co

Good morning, everyone, and welcome to the Portland General Electric Company's third quarter 2021 earnings results conference call. Today is Friday, October 29th, 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'd like to withdraw your question, please 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'd like to turn the conference call over to Portland General Electric's Senior Director of Investor Relations, Treasury, and Risk Management, Hardan Jaramillo. Please go ahead, sir.

Thank you, Jonathan. 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 have 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 Maria.

Good morning and thank you, Jaradon, and thank you all for joining us. Hot summer weather and power market volatility had a significant impact on our region and on our results this quarter. Turning to slide four, we reported net income of $50 million or 56 cents per share for the third quarter of 2021. This compares with the loss of 17 million or 19 cents per share for the third quarter of 2020. Year-to-date financial performance is on track, and despite third-quarter volatility in the energy markets and higher O&M, we are reaffirming our 2021 earnings guidance of $2.70 to $2.85 per share. Our long-term outlook remains unchanged, and we are reaffirming our 4 to 6 percent long-term earnings growth guidance. Overall, our business is strong, driven by low growth from the technology and digital sectors, as well as elevated residential use due in part to the hot summer weather and continued COVID constraints. Year-to-date revenue is up 12% versus 2020 and for the quarter, up 17% versus last year. Jim will cover third quarter results in more detail, provide regulatory and capital updates, and discuss the outlook for the rest of the year. The ongoing impacts of climate change underscore the importance of investments and actions that we are taking to rapidly transition to a clean energy future and meet our 2030 decarbonization goals while also ensuring that we have sufficient capacity. We estimate that our 2030 targets will require approximately 1,500 to 2,000 megawatts of additional carbon-free resources and approximately 800 megawatts of not emitting capacity resources, in addition to removing coal from our portfolio. We're seeking approximately 1,000 megawatts of renewables and not emitting capacity resources as part of our RFP, which will be issued in December. As part of this procurement, we plan to add 375 to 500 megawatts of renewables to our portfolio. We will also bring on approximately 375 of non-admitting dispatchable capacity. We will work with the OPUC and parties to evaluate opportunities to procure additional resources should the types of projects submitted in the RFP process make sense for customers and are attractively priced. we could see procuring about a third of our clean energy resources needed to meet the 2030 emissions target reductions with this RFP. We not only need more renewables, we need to upgrade the grid to integrate these resources, making it easier for customers to participate in demand response and distributed energy programs, helping to keep service reliable and affordable. In our recent distributed system plan, we lay out plans for the grid of the future that supports robust two-way energy flows and better manages energy use, especially during peak periods. We estimate that as much as 25% of flexibility needed to meet our decarbonized future would come from customers and distributed energy resources, such as solar panels, batteries, electric vehicles. During the 2021 summer heat dome, we worked with customers to save 62 megawatts of power, equivalent to powering 25,000 homes. We're working to significantly grow this program to 500 megawatts by the end of 2023. We are very pleased to have been selected by the Department of Energy as part of their Connect Communities program. and are working with local DE&I groups on the placement of resources such as batteries, two-way EV charging, and solar panels to ensure that our customers and underserved communities participate in this clean energy transition. As one of the early participants in the Western energy imbalance market, we have been a leader in advocating for the expansion and strengthening of wholesale markets to increase reliability, accelerate decarbonization, and lower costs for customers. PGE and our utility partners across the West are working to bolster reliability planning, advance integrated markets, and examine the benefits of a Western regional transmission organization. Throughout these processes, we'll continue to advocate for rigorous resource adequacy standards. Sustainability is foundational to our business. In September, we published our ESG report, building upon our number one ranked voluntary renewable program. Sustainability is part of the fabric of everything we do, including financing. We recently adopted a green financing framework under which we successfully placed $150 million in green bonds. Yesterday, we filed a rate case with the Federal Energy Regulatory Commission to review our third-party transmission revenue. The revenue that we receive from these new prices will offset retail customer prices through a revenue credit. We continue to make progress on our 2022 general rate case and have reached settlements with stakeholders in October that resolves the cost of equity and gives 9.5 percent, as well as the 50-50 cash structure. We look forward to working with stakeholders on the remaining items. Finally, I'm pleased to welcome Dawn Farrell to our Board of Directors. Dawn retired as President and CEO of TransAlta in March. Her deep experience in the energy sector, as well as her leadership in transforming a thermal-based generation company to a leading clean renewable energy company will be important as we advance our own transformation. Now, I'd like to turn the call over to Jim.