Portland General Electric Co

Good morning, everyone, and welcome to today's conference call with Portland General Electric. Today is Friday, May 1st, 2026. This call has been recorded and all lines have been placed on mute to prevent 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 period, press star, then the numbers 11 on your telephone keypad. To withdraw your question, please press star 11 again. If you do intend to ask the question, please avoid the use of speaker phones. For opening remarks, I will turn the conference over to Portland General Electric Senior Manager of Investor Relations, Earn Swartz. You may begin.

Thank you, Tawanda. Good morning, everyone, and thank you for joining us today. Before we begin, I would like to remind you that we issued a press release this morning and have prepared a presentation to supplement our discussion, which we will be referencing throughout the call. The press release and 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 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, I will turn things over to Maria. Good morning. Thank you, Erin.

Thank you all for joining us today. The first quarter delivered another stretch of warm winter weather, 10% year-over-year industrial customer demand growth, and continued maturity of our cost management initiatives. Beginning with slide four, I'll speak to our financial results and key drivers. For the first quarter, We reported GAAP net income of $45 million, or $0.38 per diluted share, and non-GAAP net income of $68 million, or $0.58 per share. Our non-GAAP results exclude the previously disclosed deferral adjustments related to the January 2024 storm restoration and reliability contingency event, and business transformation, optimization, and acquisition expenses. Our results reflect extremely mild weather, particularly in February and March, and lower seasonal usage from residential and small commercial customers, which Joe will cover in more detail. We will be engaging with our regulator to explore frameworks to help mitigate weather and other volatility impacting both revenue and power costs. Greater predictability is good for both customers and shareholders, and we recognize that this will be multi-year work. Despite weather and usage impacts, our team delivered a quarter of strong operational execution, including overcoming inflationary pressure and advancing our cost management program. adopting to power market conditions, positioning our portfolio and generation suite to deliver optimal value, and executing on our robust capital investment plan to support customer growth, clean energy, and long-term reliability. On recent calls, you have heard us highlight the company-wide work to optimize our cost structure. We are using our operational strength, which we've built over multiple years, to mitigate the impact of recent weather challenges by accelerating our cost management work. Our teams are squarely undertaking the challenge, and we are committed to delivering strong results. As such, we are reiterating our full year earnings guidance of $3.33 to $3.53 per diluted share. and our long-term earnings and dividend growth guidance of five to seven percent. Turning to slide five for updates on our five key strategic priorities. First, our teams made progress on the Washington acquisition and other key regulatory filings. In late March and early April, we filed applications with the Washington Utilities and Transportation Commission and the Oregon Public Utility Commission for approval of the Washington transaction. We anticipate the regulatory approval process to take about a year and continue to target a mid-2027 close. PGE's holding company proposal continues to advance. The docket's procedural schedule has been modestly extended. To prioritize timely resolution of the holding company, we have paused the transmission company. That said, formation of a transmission company remains part of our long-term strategy. We appreciate the ongoing collaboration and expect to engage with parties in the near future. having just received reply testimony late yesterday. Many issues have been resolved with a few key items remaining. The process is on course with a target final order date probably in August. Second, building upon our 2025 O&M cost management work, we continued driving efficiencies and improving productivity. We are accelerating this work given the very warm winter weather and first quarter results. Importantly, our large loan tariff proposal, UM 2377, is in the final stages of review with the OPUC, and we expect an order in the next several weeks. A transparent, predictable tariff for new and existing data centers strengthens protections for existing customers while supporting economic development in our region. Our proposed rate structure, under consideration, enabled by Oregon's recent legislation, includes a 26% increase in data center prices, which will help reduce the costs borne by residential and small business customers. As I noted, industrial demand growth is accelerating in our service area. We foresee robust energy usage from data centers and high-tech customers, with large customer capacity growing by about 10% compounded annually through 2030. This growth forecast is driven by existing customers and contracts already executed with new customers companies that own property and have civil work underway. Compared to Q1 last year, our data center customer load growth grew by 10%. Fourth, progress towards additional clean energy resource procurement. We filed our 2025 RFP final shortlist with the OPUC in February. as we aim to procure approximately 2,500 megawatts. The shortlist is composed of a diverse mix of projects and technologies to support our existing portfolio and growing customer demand. We look forward to working collaboratively with stakeholders to achieve commission acknowledgement in the coming months. And fifth, our year-round risk-based wildfire mitigation work remains on track as we prepare for the summer months. In parallel, regulators and policymakers are engaged in this critical topic. The OPUC, in coordination with the Oregon Department of Energy, has hired experts on wildfire liability policy options that balance customer needs for essential services, support for wildfire victims, and financial help of utilities. We expect the study's findings will help inform policymakers in advance of the 2027 legislative session. In December, we filed our 2026 through 2028 Wildfire Mitigation Plan, which represents a significant evolution, moving from an annual update to a forward-looking three-year strategic framework. As we progress through 2026, our focus continues to be on executing on our core priorities, solid operational performance, meeting growing energy demands, expanding into Washington State, and advancing customer-driven clean energy investments. With the first quarter behind us, opportunities are significant We are focused on achieving solid financial results and delivering value for customers, communities, and shareholders.