Portland General Electric Co

everyone, and welcome to Portland General Electric Company's fourth quarter 2023 earnings results conference call. Today is Friday, February 16, 2024. 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 is 11 on your telephone keypad. If you would like to withdraw your question, please press star 11 again. If you do intend to ask a question, please avoid the use of speakerphones. For opening remarks, I will turn the call over to Portland General Electric's Manager of Investor Relations, Nick White. Please go ahead, sir.

Thank you, Daniel. Good morning, everyone. I'm happy you can join us today. Before we begin this morning, I would like to remind you that we have prepared a presentation to supplement our discussion, which we will 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. or a description of some of the factors that could cause our 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. Meeting our discussion today are Maria Pope, President and CEO, and Joe Terpich, Senior Vice President of Finance and CFO. Following their prepared remarks, we will open the line for your questions. Now it's my pleasure to turn the call over to Maria.

Thank you, Nick, and good morning. Thank you all for joining us today. Beginning with slide four, I'll discuss our 2023 full year and fourth quarter results and then turn to our outlook for 2024 and beyond. For the full year, we reported GAAP net income of $228 million or $2.33 per diluted share and non-GAAP adjusted net income of $233 million or $2.38 per share. This compares with GAAP net income of $233 million or $2.60 per share and non-GAAP adjusted net income of $245 million or $2.74 per share in 2022. For the fourth quarter, we reported net income of $68 million or $0.67 per share, up from the fourth quarter of 2022 of $50 million or $0.56 per share. While these are lower than expected results, we remain confident in our long-term growth trajectory of 5% to 7% and 2024 guidance of $2.98 to $2.18 per diluted share. To start, challenging weather impacted the quarter with mild conditions across the period and the second warmest December on record. This resulted in very low energy usage and historically low wind and hydro production. As a result, this combination, both to our revenue and purchase power and fuel expense performance fell short. The power cost challenges we faced in 2023 underscore the importance of risk reductions achieved as part of the 2024 general rate case. This includes 500 megawatts of hydro agreements, improving our capacity portfolio and the introduction of the reliability contingency event provision part of the PCAM. These are solid steps in reflecting actual power costs and extreme events. We also have more work to do and look forward to working with the Commission, other utilities, and regional stakeholders towards a holistic energy framework and solution. Finally, our results also reflect higher costs associated with continued capital investment to support grid resiliency and customer growth, and decarbonization. Turning to slide five. We consistently said that 2023 would be an investment year. Notwithstanding the challenges we faced, we achieved important milestones that have set the stage for 2024, including a constructive outcome in our general rate case. 2024 will be a year of growth supported by three key drivers. First, continued load growth led by high-tech and digital customers. Second, capital investment to enable this growth, advance our clean energy goals, and strengthen reliability and resilience. And third, ongoing operational discipline across our organization. I will touch on each of these in turn. First, we expect continued strong industrial load growth supported by state and federal policies. Microchips was recently awarded $72 million under the Federal Chips Act for $800 million expansion at their facility in Gresham. This is in addition to the multi-billion dollar investments by analog devices and others. This builds on the state of Oregon's appropriation of $240 million for semiconductor projects, 85% of which are in our service territories. Our capital plan now includes additional strategic transmission investments to enable this high tech and other customer growth, as well as renewable development. Joe will walk you through the updates to our plan in more detail. But at a high level, our transmission projects are largely within our service territory or adjacent. Many of these lower risk projects are reconducting existing lines. Related to renewable development, We are currently accepting and evaluating bids for the 2023 RFP throughout the first quarter of 2024, and we'll present the shortlist later in the year. Coming out of our last RFP, Clearwater Wind Project came online in January with an impressive 45% capacity factor, and we look forward to our battery storage projects coming online later this year and into 2025. Now on to slide six. Utilities across the country are dealing with increasing impacts of extreme weather. This January, a severe storm brought powerful combination of high winds, ice and snow that led to widespread damage and high power costs. In the face of these extraordinary conditions, we deployed an extraordinary response. This included more than 1,800 personnel, crews and support staff working hard to restore power and repair critical equipment. I want to take a moment to acknowledge and thank our teams and partners for all of their hard work in very challenging conditions. The storm came in multiple phases of severe weather and single digit temperatures. In the course of about a week, crews restored power to over half a million customers. This is a great example of how our teams are working together efficiently to deliver for customers when they need us most. Our response was informed by lessons learned from the severe storms we experienced in 2021, and we're continuing to improve in what used to be one in a decade events. This operational focus is showing up in other ways as well. Our results in 2023 reflect our strong execution on cost management, thanks to the extraordinary efforts of our team to streamline processes, leverage technology, and improve productivity. As we look to 2024, we continue to build on this progress. To reiterate, we're focused on three main areas to achieve growth in the coming year and beyond. First, exceptional customer growth. second, execution of our capital plan, and third, ongoing operational discipline. As such, we're well positioned to achieve 5% to 7% long-term earnings growth. With that, I'll turn it over to Joe, who will walk you through our financial results. Thank you.