Portland General Electric Co

Good morning, everyone, and welcome to Portland General Electric Company's fourth quarter and full year 2024 earning results conference call. Today is Friday, February 14th, 2025. This call is being recorded, and as such, all lines have been placed on mute to prevent any background noise. After the speaker's remark, there will be a question and answer period. If you would like to ask a question during this time, simply press star, then the numbers 11 on your telephone keypad. If you would like to withdraw your question, please press star 11 again. If you do attempt 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 Manager of Investor Relations, Nick White. Please go ahead, sir.

Thank you, Martin. Good morning, everyone. We're happy you could 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. 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 incentives 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. Turning to slide three, leading 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 is my pleasure to turn the call over to Maria.

Good morning, and thank you all for joining us today. In 2024, we experienced solid growth from new and returning customers, enhanced our operational reliability and resilience, achieved strong safety performance, and made significant investments in clean energy resources and battery storage. We delivered four quarters of strong financial results and overall a solid 2024. I'll start by summarizing our results, which you can find on slide four. For the full year, we reported gap net income of $313 million or $3.01 per diluted share. and non-GAAP net income of $327 million or $3.14 per share. This compares with 2023 GAAP net income of $228 million or $2.33 per share. Non-GAAP net income of $233 million or $2.38 per share. For the fourth quarter, we reported GAAP net income of $39 million or $0.36 per share compared to the fourth quarter of 2023 of $68 million or $0.67 per share. These results reflect our sustained growth and focus on operational excellence and top quartile customer demand. 2024 weather-adjusted energy usage increased 3% compared with 2023, again led by semiconductor manufacturing and data center customers, driving industrial growth of 11% year over year. With high-tech and digital customers continuing to invest and grow, we are increasing our long-term customer usage growth expectations from 2% up to 3% weather adjusted through 2029. Given the solid fundamentals and our focus on operating cost reductions, we're issuing 2025 earnings guidance of $3.13 to $3.33 per diluted share and reiterating our long-term dividend and EPS growth guidance of 5% to 7% using a base of $3.08 per share, the midpoint of our original 2024 guidance. Turning to slide five, execution was our imperative as we began 2024. While January last year started with historic winter ice storms that brought nearly half a million customer outages and extreme power market volatility, the extraordinary response of our line crews, generating plants, and operating teams highlighted our ability to respond and our focus on customer outage restoration. We had many significant accomplishments in 2024, including investing in our system, deploying over $1.2 billion in capital projects, targeting customer growth, grid resiliency, and decarbonization, advancing the 2023 RFP, receiving acknowledgement of the final shortlist from the Oregon Public Utility Commission, and starting negotiations with bidders. Returning customers to cost of service In 2024, we earned back two prominent customers and their 27 megawatts of demand, among others, and delivering solid results, achieving earnings in the upper quartile of our original guidance range. To build on our progress, we remain committed to five key priorities. First, enabling tech, high tech growth, Strong industrial growth and immigration made PGE an important part of our region's economic development. Second, customer values. Sustainability and clean energy continue to be important customer values and in the region. Third, customer affordability. We're looking at every cost and every program to keep them as low as possible and to align the economics of our most recent rate case. And fourth, risk reduction. We are prioritizing the safety of our teams and the compliance of our work while investing in stronger, more resilient grid to better withstand extreme weather and mitigate against wildfire risk. At the Oregon Legislature, we're advocating for wildfire legislation. And fifth, creating an investable energy future for Oregon. We're deepening our relationships with customers and stakeholders to ensure that our returns are competitive, that we can effectively attract investments to achieve these priorities. I'll touch on each of these before returning it to Joe. Enabling growth. We are fortunate to be one of the top growth markets in the country for data centers and semiconductor manufacturers. Proximity to the Trans-Pacific Subsea Fiber Network which terminates in our service territory, remains a key differentiator. In addition to the growth of data centers, Oregon continues to be strongly supportive of our region's semiconductor manufacturing. The state is providing $500 million in funding on top of billions of dollars already contracted federal funding to accelerate onshoring and reshoring of tech manufacturing. Second, our customers and communities we serve remain solidly focused on renewable energy. Clean energy represented 45% of our energy mix in 2024, a 7% compounded growth rate in non-emitting resources since 2020, as we made continued progress towards PGEs and Oregon's clean energy goals. Our region's focus on clean energy has always balanced affordability. Many of our largest industrial customers have aggressive sustainability goals, and our municipal customers representing the majority of our service area also have very public clean energy targets. Our residential customers continue to lead the energy transition with PGE's Voluntary Renewable Program, again, ranked number one by NREL. And this year, Oregon ranked as the number six electric vehicle market in the country. Integrating the Clearwater Wind Energy Center led to record wind integration in 2024. We also added significant battery storage, including the incoming 200 megawatt seaside battery. PGE will soon have over 500 megawatts of battery capacity. providing a vital tool for renewable integration, system reliability, and energy price stability. These resources were meaningfully lowering costs for customers, thanks to over 30% battery investment tax credit, as well as wind production tax credits. In prior quarters, I've highlighted our success with federal grants, and as of December 2024, over 300 million of direct PGE grants were under contract. Combined with our grant partners, our total exceeds $2 billion. Customer affordability. We're taking significant company-wide actions to reduce costs, align our cost structure to the economics of our latest rate review, and enhance the effectiveness of our work. In 2024, we leveraged innovation and technology to provide lasting efficiencies and benefits. For example, driving productivity with new AI-powered tools to streamline operations, improve load forecasting and predictive maintenance, as well as employee support. and deploying satellite imaging for vegetation management and utilizing weather station data for wildfire monitoring to enhance dynamic line ratings deployment across our transmission system. In 2025, we are realizing and evaluating programs that will maximize the capabilities of these and other technologies and diligently reducing our costs. We're focused on changes that will drive durable, long-term outcomes. Risk reduction. We made continued progress on our work to reduce risk across our business. Our ongoing work to strengthen our safety culture is yielding results. On a compounded annual basis since 2020, our OSHA recordable incident rate has fallen by 16%, and our lost time incident rate has decreased 27%. PGE's energy portfolio optimization and improving western market conditions led to a reduction in power cost volatility. We significantly increased routine vegetation management, addressing trees and other vegetation impacted by multiple years of record-setting high heat and drought. As we continue to drive operational improvements, we're also advocating at the state and federal levels for solutions that address the financial risk from extreme weather events, including wildfires. At the state level, we're focused on three areas. First, standards of care based on approved wildfire plans. Second, creation of Wildfire Backstep Fund to support timely resolution and recovery for wildfire victims. And third, limitations on liabilities. At the federal level, alongside peer utilities and EEI, are advocating for policy solutions that enhance the energy security of the U.S. and address shared risks of catastrophic events. This work is focused on four areas. First, addressing strict liability and expediting permits and authorizations for work on federal lands. Second, enabling electric utility customers access to FEMA assistance. Third, federal liability reforms. And fourth, creating a voluntary federal backstop fund. Creating an investable energy future for Oregon. We're deepening our relationships with customers and stakeholders to work towards competitive returns to attract capital and support the region's need for growth-driven infrastructure development and reliable and resilient clean energy. In December, we received a decision from the OPC and our 2025 review. While the outcome was not unexpected, it is less than what we had strived for, but it does not distract us from our priorities or change the focus on managing our business. We remain laser focused on affordability and committed to powering the growth safely and reliably serving the changing needs of customers. This has been our commitment for nearly 140 years and remains so. With that, let me turn it over to Jack. Thank you.