Portland General Electric Q2 2025 Earnings Report

Portland General Electric EPS Results

• Actual EPS: $0.66
• Consensus EPS: $0.65
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $0.69

Portland General Electric Revenue Results

• Actual Revenue: $807.00 million
• Expected Revenue: $797.97 million
• Beat/Miss: Beat by +$9.03 million
• YoY Revenue Growth: +6.50%

Portland General Electric Announcement Details

• Quarter: Q2 2025
• Date: 7/25/2025
• Time: Before Market Opens
• Conference Call Date: Friday, July 25, 2025
• Conference Call Time: 11:00AM ET

Portland General Electric (NYSE:POR), an integrated electric utility company, engages in the generation, wholesale purchase, transmission, distribution, and retail sale of electricity in the state of Oregon. It operates six thermal plants, three wind farms, and seven hydroelectric facilities. As of December 31, 2023, the company owned an electric transmission system consisting of 1,254 circuit miles, including 287 circuit miles of 500 kilovolt line, 413 circuit miles of 230 kilovolt line, and 554 miles of 115 kilovolt line; and served 934 thousand retail customers in 51 cities. It also has 28,868 circuit miles of distribution lines. Portland General Electric Company was founded in 1889 and is headquartered in Portland, Oregon.

Portland General Electric Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Industrial demand surged with Q2 load up 4.9% overall and 16.5% in the industrial segment, underpinning reaffirmed 2025 weather-adjusted demand growth guidance of 2.5%–3.5%.
• Positive Sentiment: Clean energy procurement is accelerating via a price refresh for the 2023 RFP to capture enhanced federal tax credits and an expedited 2025 RFP targeting a 2027 commercial operation date.
• Positive Sentiment: Customer affordability program and business transformation actions, including a reduction of over 300 positions and process improvements, drove a 6¢ EPS benefit from lower O&M expenses this quarter.
• Positive Sentiment: Regulatory progress was made through a stakeholder MOU to recover ~$600 million in rate base via the Seaside battery tracker and DSP Alternative Recovery Mechanism, paving the way for multi-year rate-making.
• Positive Sentiment: Q2 financials reported GAAP net income of $62 million ($0.56/share) and non-GAAP $73 million ($0.66/share), with 2025 earnings guidance reaffirmed at $3.13–3.33/share and long-term growth of 5%–7%.

Presentation

[Operator]

Good morning, everyone, and welcome to Portland General Electric Company's Second Quarter twenty twenty five Earnings Conference Call. Today is Friday, 07/25/2025. This call is being recorded, and as such, all lines have 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 numbers one one on your telephone keypad.

[Operator]

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 conference call over to Portland General Electric's Manager of Investor Relations, Nick White. Please go ahead.

[Nick White, Manager - IR at Portland General Electric Company]

Thank you, Victor. Good morning, everyone. I'm pleased 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.

[Nick White, Manager - IR at Portland General Electric Company]

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 ks 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 Terpic, Senior Vice President of Finance and CFO. Following their prepared remarks, we will open the line for your questions.

[Nick White, Manager - IR at Portland General Electric Company]

Now it's my pleasure to turn the call over to Maria.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Good morning, and thank you all for joining us today. Starting on slide four, our second quarter has been marked by strong execution across the business and significant advances in each of our five strategic priorities, which we've outlined in previous calls. First, investing in customer driven clean energy goals. Second, working to keep customer prices as low as possible. Third, supporting data center and high-tech growth and the region's economic development.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Fourth, reducing risk through operational execution, system hardening, and wildfire policies. And fifth, promoting investable energy future for Oregon, updating our corporate structure and aligning legislative and regulatory policies. Today, we stand at the intersection of high growth and in Oregon, a continued focus on clean energy, all while driving to meet customer needs reliably and affordably. Let me describe the progress we have made in each area. Clean energy.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

To align with the one big beautiful bill and take advantage of the changes to investment tax credits and production tax credits. We're undertaking a price refresh in our 2023 RFP and accelerating our 2025 RFP procurement. Our company, region and customers remain firmly committed to a decarbonized future, and we're adopting to build on our recent progress while also delivering maximum value. We're focused on securing projects that meet the latest timing and domestic content requirements, allowing us to maximize the impact of important federal tax credits. These credits are a significant tool in lowering the cost of clean energy and keeping customer prices as low as possible.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Joe will cover this in more detail shortly. Customer affordability. Our customer affordability commitment, multi year cost management work is underway and delivering results. This quarter, we made the difficult decision to reduce three thirty employed and contracted positions and now have process improvement work ongoing across our company. Every aspect of Portland General will be touched and everyone is involved.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Customer driven growth. Our strong growth continues. Importantly, we're seeing sustained growth from data center and high-tech customers, over 16% compared to the same quarter last year. This comes from over a dozen text manufacturing and infrastructure companies, including the upcoming return of a significant semiconductor company to PGE's cost of service. This robust demand builds on the significant high-tech and data center growth trajectory that we have seen for over seven plus years and benefits all customers, enabling grid wide improvements and infrastructure upgrades while spreading the company's fixed costs across a broader base.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

We're also pleased that the Oregon legislature passed the Power Act, which furthers growth and brings greater clarity to the rate making framework, enabling regulatory flexibility to the allocation of costs and direct long term contracting with data center customers. Risk management. We still have work to do on wildfire policy and are focused on supporting policies that clarify standards for wildfire mitigation, establish financial backstops, and provide timely recovery for victims. Operationally, we're deepening our focus on wildfire mitigation and prevention with system hardening and monitoring, quick response and collaboration with first responders, including the US Forest Service and Oregon Department of Forestry, and targeted use of public safety power shutoffs in response to high risk conditions. An investable energy future for Oregon.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

And finally, on our last call, we discussed our intent to file for a holding company. That notification was made on May 23. And today we completed the filings with the Oregon Public Utility Commission for the approval of a holding company under which the existing utility company and a separate transmission company will sit. This proposed corporate structure update is designed to help reduce the cost of investments and infrastructure as we work to achieve clean energy goals and serve society's rising needs for electricity, while working to keep customer prices as low as possible. We also worked in close collaboration with the customers and the Citizens Utility Board on the passage of the Fair Energy Act, which brings important clarity to future regulatory proceedings.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

This moves Oregon to a more predictable, multiyear rate making and offers additional flexibility and opportunities for securitization, as well as adjusting the timing of when new customer prices take effect. In state regulatory proceedings, we've strengthened collaboration with all parties and recent MOU with interveners and staff in both the Seaside Battery filing made in May and the Distributed System Plan Alternative Recovery Mechanism, the DSP arm, which we're filing later today. We're very pleased with these outcomes, which incorporate the Fair Energy Act requirements and provide well defined path forward. This combination of multi year rate making, the MOU, and other regulatory improvements drive towards regulatory predictability in Oregon while supporting greater precision in our planning and execution capabilities. I want to recognize PGE's legislative and regulatory teams for the exceptional work and outcomes achieved this quarter.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

This includes important progress made on numerous complex topics, outcomes that move PGE forward in serving our customers. Now let's turn to slide five for financial results, and then I'll turn it over to Joe. For the second quarter, we reported GAAP net income of $62,000,000 or $0.56 per diluted share. On a non GAAP basis, net income was $73,000,000 or $0.66 per share. This compares to second quarter GAAP net income of $72,000,000 or $0.69 per diluted share.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Q2 twenty twenty five non GAAP results exclude business transformation and optimization expenses as part of our customer affordability commitment and the updates to our corporate structure. This has been a busy quarter for Portland General Electric. We continue building on the momentum of the first half of twenty twenty five, executing on expectations and delivering results. We remain laser focused on our strategic priorities and continued execution. Thank you to the entire PCE team for your work this quarter, bringing safe, reliable energy to our customers and building upon our strong operational capabilities to deliver value for our stakeholders and the communities we serve. With that, I'll turn it over to Joe.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Thank you Maria and good morning everyone. Q2 has indeed been a busy period for PG and we've climbed a bunch of hills across the organization. Turning to slide six, our results reflect significant demand growth from industrial customers, mild spring temperatures and the maturing of our cost management and optimization program. Total load increased 4.9% overall and 6.1% weather adjusted as compared to q two twenty twenty four. Residential load decreased 2.3% quarter over quarter but increased 1% weather adjusted highlighting the warmer than average temperatures in April and May.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Residential customer count increased by 1.4% offset by continued energy efficiency. Commercial load increased slightly at point 3% overall or point 7% weather adjusted. Industrial load, particularly from data centers, continued its rapid acceleration with Q2 demand increasing 16.5% on a nominal and weather adjusted basis. We expect continued demand growth from our industrial customer class underpinning our reaffirmed weather adjusted 2025 load guidance of 2.5% to 3.5%. In the long run, with the 2023 CEP IRP update published in June captured fresh load inputs further solidifying our long term growth expectations of 3% through 2029.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Now, I'll cover our quarter earnings driver. We experienced a 32¢ increase in total revenue driven by a 12¢ increase from the 4.9% demand growth and a 20¢ increase from the average price of deliveries from improved recovery partially offset by delivery composition changes. A decrease from power cost of 20 driven by a 12¢ EPS decrease from power cost performance in 2024 that reverses for this comparison and an $08 decrease from current year power cost performance driven by less favorable wholesale and environmental credit market conditions. A $06 EPS increase from lower operations and maintenance expenses as we begin to realize the benefits and savings from our cost management and optimization work. A $0.13 EPS decrease from other operating expenses in support of the ongoing rate base investments made up of $0.10 from higher depreciation and amortization and $03 from higher interest expense.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

An $08 decrease from other items including $04 from dilution and 4¢ from other miscellaneous items. And lastly, a 10¢ decrease from business transformation and optimization expenses as we update our practices and corporate structure to achieve improved financing flexibility and lower long term, lower our long term cost. This brings us to our GAAP EPS of 56¢ per diluted share. After adjusting for the 10¢ impact, we reach our Q2 twenty twenty five non GAAP EPS of 66¢ per diluted share. Turning to slide seven for our five year capital forecast.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

We've made a modest reduction in 2025 our 2025 forecast due to efficiencies from our capital execution this year. Overall, we plan our plan continues to support the trajectory of our growth and the escalating needs of our customers and region. On the slide eight, I'll detail meaningful regulatory and stakeholder progress Maria highlighted earlier. After thorough engagement with regulatory stakeholders, PGE signed an MOU in June with the AP OPUC staff, the Oregon Cub, and AWAC, which will govern two important cost recovery proceedings. First, the expedited recovery of the seaside battery project, which began serving customers in early July.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

This filing has a proposed conclusion of October 2025. Second, an alternative recovery mechanism for distribution system assets, the DSP arm, which has a proposed conclusion of April 2026. As a result of the MOU, the earliest filing for our next general rate review would occur after q two twenty twenty six with the early earliest rate effective date being 05/01/2027. Combined, these two proceedings cover nearly 600,000,000 of critical rate based investments serving customers while also clarifying our regulatory path and go forward strategy. Moving to slide nine for an update on resource planning and procurement.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

With the passage of the federal legislative package, PGE is planning a price refresh for conforming bidders in the 2023 RFP. We undertook a very similar process in our 2021 RFP which also navigated tariff and tax policy changes. This refresh is a strong net positive allowing bidders to price in what was once uncertain, lowering risk and improving consideration of key macro factors. In collaboration with the RFP independent evaluator, we will work to update bid scoring and ranking to reflect pricing changes in the coming months. We still expect contract execution by year end and remain firmly committed to a 2027 COD target for these projects.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Overall, we expect a similar opportunity set for the 2023 RFP CapEx investments which supports our long term growth expectations. As we noted in the recent CEPIRP update, we have large procurement needs ahead driving the 2025 RFP which we plan to issue to the market in the coming weeks. The current timeline anticipates a final shortlist in the 2026 with contract execution later next year as we track to complete the projects by the end of the decade. We'll continue to utilize a lease cost and lease risk selection approach which will evolve to capture the changing tax policy environment and impacts to customer prices for RFP projects. At this time, we see limited tax credit exposure for the twenty twenty three RFP projects especially given the firm 2027 COD requirement.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

For the twenty twenty five RFP projects, tax credit eligibility will be key as we evaluate acceleration to keep customer prices, price impacts as low as possible. In both the 2023 and 2025 RFP, we are focused on maximizing tax credits to dampen customer price impacts. On to slide 10 for our liquidity and financing summary. Total liquidity at the end of Q2 was $980,000,000 and our credit ratings and outlook remains static since the last quarter. As of June 30, we have 104,000,000 of equity priced but not drawn under our ATM.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Our total equity target in 2025 remains at about 300,000,000 in support of our capital program. As our holding company application proceeds, we'll continue evaluating our financing needs as we seek the most efficient options for our customers and shareholders. This approach helps reduce costs, better serve customers, and creates optionality in how we fund critical grid investments in support of the growing demand for clean, reliable energy. This also dovetails with our broader cost management work, which is scaling as designed to reduce costs across the organization. We're leaving no stone unturned and we have, we enhance, as we enhance our practices and optimize our structure to safely operate, meet our financial commitments, and keep customer prices as low as possible.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

We are pleased with our year to date execution and remain committed to achieving our full year plan. Our progress in Q2 has kept us on course for a solid performance. We are reaffirming our 2025 adjusted earnings guidance of $3.13 to $3.33 per diluted share and our long term earnings and dividend growth guidance of 5% to 7%. We remain focused on safe, reliable and efficient operations advancing our strategic priorities and achieving our commitments to deliver value to our customers, communities and shareholders. And now operator, we are ready for questions.

[Operator]

Thank you. Our first question will come from the line of Richard Sunderland from JPMorgan. Your line is open.

[Richard Sunderland, Equity Research - North American Utilities & Power at JP Morgan]

Hey. Good morning. Thank you for the time today.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Good morning, Patrick.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Good morning.

[Richard Sunderland, Equity Research - North American Utilities & Power at JP Morgan]

A lot of things in motion here. Appreciate all the color. Maybe starting with this MOU and the seaside and distribution recovery proceedings. How do you think that MOU informs the path to actually progress through those two proceedings in a fashion versus a general rate case more broadly? I guess I'm curious how you think these proceedings will be different.

[Richard Sunderland, Equity Research - North American Utilities & Power at JP Morgan]

Is this just a focus on the prudency of capital? Maybe to frame it more broadly, how do you think about the 600,000,000 of rate base you highlighted is in those two proceedings? And how interveners are going to evaluate that under the terms of the MOU?

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Great question. And first of all, I think we've really front loaded a lot of the discussion with regards to the seaside battery projects, which by the way is fully operational and delivering tremendous value to customers, keeping energy prices lower as we're into these hot summer months. But as we also include the distributed system plan and much of our capital that is in the distribution system for customer growth as well as reliability, we're able to have a lot of these conversations before we actually get into a rate review proceeding. That allows for really good understanding and shared outcomes as we file the filings under those MOUs. The first, we hope to finish up in October.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

That would be the seaside battery project and the DSP arm in April. But again, think we're aligning interest, having shared understanding of the work that we're doing, which should lead to certainty, predictability, and driving value.

[Richard Sunderland, Equity Research - North American Utilities & Power at JP Morgan]

Understood. That was very helpful there. Switching to the RFP topics, you mentioned tax credit eligibility is key for the '25 RFP. I guess turning back to 2023, how do you think about the price refresh and then opportunities to execute those projects in the back half of the year? Is there a potential to accelerate some of the procurement from the '23 RFP where you seem less concerned with the tax credit eligibility?

[Richard Sunderland, Equity Research - North American Utilities & Power at JP Morgan]

I guess just 23 versus 25 RFPs, any other dynamics you'd highlight there? Thank you.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Hey, Richard. So, as it relates to 2023 RP, so yes, there is the opportunity to accelerate. The reprice will open up to all of the bidders that were in the original shortlist. So, that selection will be expanded. I mean, we do think it's good opportunity to drive certainty here.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

We expect similar performance that we saw the last case. But the whole point of this reprice RFP is to really be able to get clarity for these bidders and then also, know we were talking '23 but in '25 to start moving quickly on '25 to hopefully find to be able to have time to identify bidders who have that tax credit ability for those projects as well.

[Richard Sunderland, Equity Research - North American Utilities & Power at JP Morgan]

Got it. That's helpful. Then, sorry, just one final clean up for me. The business transformation efforts and the cost there, are those going to continue over the balance of the year into next? Or is that kind of a one and done on this quarter? Thank you.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Yeah. As it relates to the business transformation, we're we're just getting rolling. I mean, we're pretty we're pretty excited about the momentum that we we created. We would expect that that we'll incur, you know, cost or investments as it relates to the business transformation into next year. You know, a a collection of cost related to, you know, change management as well as other items.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

But clearly having, you know, the the benefits will will start to really yield themselves later this year and then have created pretty significant momentum into next year. On the cost exclusion side, that is something that will work into '26.

[Richard Sunderland, Equity Research - North American Utilities & Power at JP Morgan]

Thanks for the time today.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Thank you.

[Operator]

One moment for our next question. Our next question will come from the line of Chris Ellinghaus from Siebert Williams Bank. Your line is open.

[Chris Ellinghaus, Managing Director at Siebert Williams Shank.]

Hey everybody, how are

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Good morning Chris. Good.

[Chris Ellinghaus, Managing Director at Siebert Williams Shank.]

Good morning. Can you talk Maria a little bit about 3179 and some of the limitations that are within that legislation in terms of like rate timing and things like that. Will that make you make adjustments for when you try to time investment? Or is that just something you think you can just work around?

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Sure. So first of all, the bill that you're referring to is the Fair Act. And it's something that we worked collaboratively with the Citizens Utility Board, with customers. And we're really pleased that it creates the opportunity to really look at multi year rate making. And we are also focused on ensuring that all of our systems and our processes are aligned with customer prices going into effect in the April to November time period and not during the most difficult months of winter.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

So much of that is internal work that we need to do and isn't a problem, but just is some work to get done. Overall, we're very pleased with the ability to have increased securitization. And we've had a lot of good discussions on what does good long term rate making look like in the current environment and as we go forward. I think our MOUs that we've just talked about in answer to Richard's questions are right along those same lines of how do we work better together for outcomes that ensure adequate investment for our economic growth in the state of Oregon, for customers, and for reliability and affordability while delivering value to all stakeholders and good returns on equity.

[Chris Ellinghaus, Managing Director at Siebert Williams Shank.]

Okay. And with SB six eighty eight, can you just sort of talk about how you envision utilizing PBRs?

[Maria Pope, Director, President & CEO at Portland General Electric Company]

So when we look at the bill that you're referring to is what we call the Power Act. As we look to that, we're looking at performance metrics that are connected to our core work. In terms of performance rate making, I don't think we've been long talking about this with our regulators. I'm not overly concerned about working through these issues. Obviously, need clean energy, energy efficiency, and these aren't new concepts.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

In fact, you probably know that we have some of the most productive energy efficiency programs in the entire country. And Portland General Electric's customers, we have the number one clean energy program. But as we also look to serving a diversified and growing customer base, particularly data centers and semiconductors, all of these things work together.

[Chris Ellinghaus, Managing Director at Siebert Williams Shank.]

Okay. In the MOU, it's probably fairly irrelevant given the timing of the next GRC filing, but going forward into the future, does that MOU have any bearing on utilization of arms in the future?

[Maria Pope, Director, President & CEO at Portland General Electric Company]

No, I think we'll continue the conversations and keep looking at what's gonna work best given the different work we have in front of us and how we can best serve customers. So you wanna add something?

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

The MOU is a one time item specific to these and then the same thing with the arm. The arm is a specific item. And the way we think of the ARM seaside, they're a nice bridge between now, the next rate review and then ultimately a multi year plan. Think this ties nicely with the legislation that's come out there on the timing of rate cases. It continues to tie to our overall growth plan of just how these rate reviews can be laid out in a way where we can keep the cost as low as possible for the customer.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

We can manage our cost and do some internal items that really just bridge us across what is a longer period of time and create some clarity and certainty as we work through the regulatory framework over the next few years.

[Chris Ellinghaus, Managing Director at Siebert Williams Shank.]

Okay, that helps Joe, thanks. And lastly, you gave us a bunch of dockets to peruse for the weekend. Are you still seeing the seaside intervener testimony today to be filed?

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Hopefully. I would also say that there's more still to come. So Chris, you should be expecting DSP later this afternoon. And clearly you've got all of the HALTCO, Transco filings this morning.

[Chris Ellinghaus, Managing Director at Siebert Williams Shank.]

Yes, you gave us a lot of homework. I appreciate that.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Thank you.

[Chris Ellinghaus, Managing Director at Siebert Williams Shank.]

Okay, thanks. Appreciate the color.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Thank you. Take care.

[Operator]

One moment for our next question. Our next question will come from the line of Julien Dumoulin Smith from Jefferies. Your line is open.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Good morning, Julien.

[Brian Russo, Analyst at Jefferies]

Hi. Good morning. Hey. It's Brian Russo on for Julien. Good morning.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Good morning, Brian.

[Brian Russo, Analyst at Jefferies]

Hey. Just with the House Bill 3,179 and the DSP filing in the ARM, how would you see your ROEs trending until you get new base rates? I think 2025 guidance assumes an 8.8% to 9.1% versus your 9.34 allowed ROE. Do you think you can maintain that type of return level or should we expect any sort of degradation given the timing of the next base rate case?

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

So, good morning. Our intention here is that the combination of our cost management actions, the timing of these cases is to really continue in that same type of earnings band. We don't expect to see any additional lag. I think the range that you drive of earned, of the earned ROE side continues to be where our expectation lies with even considering this legislation. In all honesty, our regulatory plan, our growth plan contemplates something very similar to this.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

So, we'd expect performance that relative earn to allow to be insisting over this period.

[Brian Russo, Analyst at Jefferies]

Okay, great. And the '23 CEPIRP update actually calls for 800 megawatts more of renewables and storage. And I'm just curious, with the OBB, and does that increase Portland General's competitiveness to essentially improve the win rate, which I think historically has been about 25%?

[Maria Pope, Director, President & CEO at Portland General Electric Company]

So we talk about 25% as sort of a baseline that's in our financial forecast. But our actual performance has actually exceeded that. As when we work with parties on projects that end up as ownership, we're only focused on Portland General Electric customers. We're not looking at other customers to serve. So we're more focused on what would meet the needs of this specific region.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

And also making sure that we're very cost conscious and cost competitive as these are all least cost, least risk competitive projects. We've done well in the past. And we also have a number of PPAs that come into our service territory as well. And actually you can see those in the financial statements because we pull them out somewhat separately on the energy procurement line. So we have a balance with all parties to make sure that we're achieving least cost, least risk, clean energy options for customers.

[Brian Russo, Analyst at Jefferies]

All right. And then lastly, assuming the twelve month review and approval process for the HoldCo, how should we think about kind of the 08/2026 kind of new structure and capital markets initiatives? Is the $300,000,000 a year still applicable with fifty-fifty financing for RFP related investments? Or is there something about this HoldCo structure that can alter that and I guess just make it more efficient?

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Yes, so I mean, so as it relates to the HoldCo, we look forward to working through the proceeding here through to next year. The goal of the HoldCo is to drive flexibility. So, as the holdco gets ultimately defined and put in place and as a reminder, in addition there would be a transco. We will evaluate what flexibility it provides, how it allows us to yield greater benefits for our customers as well as us. And in that time, we will also rethink what that means to our financing plan.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

We really just We'll wanna wait and see how this lays itself out and then how do we most efficiently over time drive drive what benefits will come from having the hold.

[Brian Russo, Analyst at Jefferies]

Okay, great. Thank you very much.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Thank you.

[Operator]

One moment for next question. Our next question comes line of Nicholas Campanella from Barclays. Your line is open.

[Nicholas Campanella, Director at Barclays]

Hey, thanks. Happy Friday.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Happy Friday.

[Nicholas Campanella, Director at Barclays]

Yeah.

[Nicholas Campanella, Director at Barclays]

A lot of good questions. Just a quick follow-up on the RFP repricing. It sounds like you still see a good opportunity for ownership any outcome. But just with prices potentially being higher, is that additive to the current 9% rate base CAGR that you show in slides? Are there offsets elsewhere in the plan?

[Nicholas Campanella, Director at Barclays]

Can you just kind of talk about competition for capital in the plan at this point? And how you think about financing that?

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Sure. So as it relates to our base plan that we show as a specific capital, obviously doesn't include the results of the RFP. And then we have the illustrative growth. I mean, this really just underpins that illustrative growth that we showed a 25% rate, right? We yielded about a 60% win rate in 2021.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

But we really just think that the reprice here gives opportunity drive this certainty. We think it yields a very similar opportunity set for both the overall megawatts as well as our performance in the overall portfolio. I mean, we just think of it as the reprice here is driving certainty into what has been a bit of an uncertain time.

[Nicholas Campanella, Director at Barclays]

Okay. Okay. And then just this distribution filing that you're gonna be putting out there today. If that gets approved and then you're then going into file the next case after that, just what do rate cases look like if you have this type of structure in place going forward? I would imagine that they're less onerous from an ask level, kind of talk through some of the puts and takes around the benefits of that.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

I think we look at the overall puts and takes sort of in the totality of the whole. And it's really based on good conversations with all stakeholders, ensuring that we have alignment on the work that we're doing, keeping customer prices as low as possible. But ensuring that we are supporting and enabling the growth across the region that is making a difference in our economy.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Nick, if I could add, right? So we're When we think to the cases, right? I mean, we've been pretty clear on, you have the seaside tracker and then you have the DSP and then some kind of a rate review within the committed period, right? And the goal here is to have predictability both on our side as well as the stakeholder side. It allows us to have time to continue to drive the cost benefits that we're driving into the organization to yield here.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

But ultimately, I think of these all as steps along a path to get towards the multi year plan which gets to a place I think for both parties where we can get clarity and have clarity over longer periods of time here instead of some of these small steps. Although I think right now, I think there's some pretty clear thoughtful aligned steps that we have.

[Nicholas Campanella, Director at Barclays]

All right. We're looking forward to seeing it. Thank you.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Thank you.

[Operator]

One moment for our next question. Our next question will come from the line of Greg Oro from UBS.

[Gregg Orrill, Analyst at UBS Group]

I was just wondering if you could sort of talk about the balance of year sort of earnings bridge versus last year, sort of the variable power margin drivers to kind of bridge the gap there, which I think is around 47.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

You know, twenty twenty twenty four and 2025 are a little bit of a challenge to compare. You recall in '24, very front end loaded. Now, we came in above the midpoint of our guidance there on the actual results. But it was, you know, a lot of that earnings was in the first half of the year and it was weighted to what were some pretty favorable market conditions that occurred both on a load consumption side but also on a favorable pricing side at the same time. And if you recall in Q3 and Q4 of last year, we tailed off pretty significantly to where Q4 was quite a low performer.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

And this year, based on the way that the energy market has set themselves up, based on the way that the cost management and the cases have set themselves up, we see this as a much more evenly distributed plan. And we just need to continue to from where we sit right now continue on our path to staying on our net variable power cost plan and our results. So we think this year's a lot cleaner and not as unusual flow, right? The last year is the one that's causing more of the uncertainty. And we're pretty confident.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

I mean, on where we sit cost management wise understanding we had a warmer April and May. We we feel we're pretty up. We're we're set up pretty well to have a solid performance considering your normal bands of of market price and and load consumption.

[Gregg Orrill, Analyst at UBS Group]

Okay. Thank you, Joe.

[Operator]

One moment for our next question. Our next question comes from line of Sophie Karp from KBCM. Your line is open.

[Sophie Karp, Senior Equity Analyst - Utilities & Alternative Energy at KeyBanc Capital Markets]

Okay. Good morning. Thank you for taking my question, and I appreciate the comprehensive update this this morning. So I just kinda wanted to dig a little bit more on what Nick was asking. So with the seaside tracker in place, guess, and the distribution recovery separate, how much capital would you save and would be subject to general rate reviews and kind of rate cases going forward?

[Sophie Karp, Senior Equity Analyst - Utilities & Alternative Energy at KeyBanc Capital Markets]

Is there like a percentage you can think of to help us think about how the importance of rate cases might be diminished in the future?

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Sure. I think the best way of taking a look at that, Sophie, is looking at our capital plan as we go forward. And you'll see that the bulk of our capital spend, and it's on page seven of the slides, is in the distribution area. Much of that is reliability related work that we do. Much of this area that we serve grew about quite dramatically about sixty to forty years ago, and that equipment is getting older and it's quite a bit of replacement.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

We also have the renewable adjustment clause, the rack, for all wind and solar projects. And so that's another way that we can have customer prices tracked in. Then we also have for wildfire the AAC as well. So there's a lot of good work to create more predictability, which also enhances our ability from an operational planning standpoint along executing along five year discipline plans.

[Sophie Karp, Senior Equity Analyst - Utilities & Alternative Energy at KeyBanc Capital Markets]

Right, right, right. So yes, that sounds like a lot of the capital will be recovered more contemporaneous through these mechanisms. Can you remind us what would govern, I guess, the auto allowed ROEs over this entire kind of portfolio of capital spend? That the ROE that's going be set in this rate review or separate proceedings? Like how's it gonna work?

[Maria Pope, Director, President & CEO at Portland General Electric Company]

So taking a look at the ROE would require a general rate case. And we're planning on that in the future. But right now we have a really good bridge through great recovery opportunities of the capital we've just discussed, as well as a number of other improvements from our cost structure, as well as financing alternatives.

[Sophie Karp, Senior Equity Analyst - Utilities & Alternative Energy at KeyBanc Capital Markets]

Great, great. Thank you. And lastly for me, I guess, I'm assuming your next rate case would be a multi year rate case already?

[Maria Pope, Director, President & CEO at Portland General Electric Company]

We're going to start having that discussion with parties. And I wouldn't want to front run the conversations. There's benefits to that that allow for greater certainty of sort of the blocking and tackling kind of capital that we do, which we've long benefited from in terms of clean energy.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

I think Sophie, We think we have a clear path to ultimately get to it. I mean it'll be up to just working collaboratively with the groups to determine if that case is it. But we think we are well on path here. And it's just a matter of which case it will follow.

[Sophie Karp, Senior Equity Analyst - Utilities & Alternative Energy at KeyBanc Capital Markets]

That sounds good. Thank you. Appreciate the time.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Thank you.

[Operator]

One moment for our next question. Our next question will come from the line of Anthony Crowdell from Mizuho. Your line is open.

[Anthony Crowdell, Managing Director at Mizuho Financial Group]

Hey, good morning team.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Good morning.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Good morning.

[Anthony Crowdell, Managing Director at Mizuho Financial Group]

Hey, I wanted to jump on Nick's question, and I think Nick was jumping on Richard's question on but I just said you may not want to answer it. On one of the other earnings calls we had, earlier this week, one of the companies was talking about when you look at renewable projects and there's changes in tax law or I'm just using the word like there's some turbulence in the whole, business model, it's benefited certain developers and hurt other developers. And when I you guys had mentioned, I think your forecast is based on a 25% win rate from the RFPs, but you've achieved kind of, I think you said a 60% number. Do you see those numbers changing in the repricing of the RFPs?

[Maria Pope, Director, President & CEO at Portland General Electric Company]

No. I think as we look as we go forward, we're going to see what kind of projects come forth. We do have a number of very beneficial partnerships with developers. But we also have a number of completely third party developers that bid in. The 25% that you're referring to is illustrative in our forecast and sort of a baseline.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

As Joe mentioned, our most recent build percentages were about 60%.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

To add on, with where the IRP update sat, we believe that in this reprice, there is plenty of room for all parties here. We expect to have pretty solid performance. Back to Maria's, we use the 25% here is solely a guide.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

I think we need to remember that we have a great window while we have investment tax credits and production tax credits that can significantly reduce the cost of clean energy and customer prices.

[Anthony Crowdell, Managing Director at Mizuho Financial Group]

Got it. And then I want to jump on Richard's question. I think that was on the business transformation and optimization. And you talked that you would see that through 2025, those charges, and we'd start to see them benefiting in 2026. And my question is, did I hear that right?

[Anthony Crowdell, Managing Director at Mizuho Financial Group]

And do we see the same magnitude or the actual amount of the charges? Or does that improve as we move closer to the beneficial part of it?

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Yeah. So the the charges will will taper into '26. But I the charges are more front end loaded here. Right? We're making some pretty significant investments here that are the biggest investments in on the spend side are gonna be here in '25.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

They'll they'll trickle into '26 here. And and really just the and the true then benefits will really start to materialize. Obviously, are already benefits this year We'll materialize next year. We view the benefits that we'll see next year combined with the regulatory items as we talk to you is really part of our nice clear path to continue to perform in our earnings span. And overall, if you think to the cost, pretty solid performance.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Because we're trying to drive transformational change, we're gonna thoughtfully step into these changes over time. But even with that, the payback period of time on it from investment to true net return is really a year, right around a year or less.

[Anthony Crowdell, Managing Director at Mizuho Financial Group]

In our forecast and I think this is to Brian Russo's question, should we be updating our assumption for earned return once this program starts yielding fruit? Or that's not what you're trying to tell us?

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

So, no. We're saying is we believe that we Our earned return guidance, believe we've given you has somewhere around 70 basis points or so at the midpoint. We believe that right, our plan that we have now, we will hold that type of item. That has, that's a compressed number from what you've seen before. But we believe that the cost management plan will continue to continue to allow us to earn to get that earned ROE in that higher range that we've talked about in our guidance.

[Anthony Crowdell, Managing Director at Mizuho Financial Group]

Great. Thanks so much for taking my questions and congrats on a good quarter.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Thank you.

[Operator]

Thank you. One moment for our next question. Our next question will come from the line of Travis Miller from Morningstar. Your line is open.

[Travis Miller, Senior Equity Analyst at Morningstar]

Good morning, everyone. Thank you.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

Good morning.

[Travis Miller, Senior Equity Analyst at Morningstar]

I think you've answered the multiple derivatives of all of my questions, but have a higher level, maybe different subject here. As you get more of this industrial demand growth and that becomes a larger share of your total demand, how do you see that now?

[Travis Miller, Senior Equity Analyst at Morningstar]

Or how do you anticipate that changing purchase power costs, net variable costs, anything involved in the wholesale market? Just wondering if that industrial demand comes with a different type of pricing environment, or if that's the right one to use.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

So first of all, that's a great question and a complex question. The first is that under some of the legislation that just recently passed, it's the Power Act. And in the spirit of Chris Allen and I'll give you the number. It's UM2377. We are able to do long term contracting with key customers, in particular with data centers.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Ten year plus contracts, which will make a big difference in how we're able to securitize that investment into infrastructure and enable better financing long term. From a power cost standpoint, that will go all the way into generation projects, which should overall reduce power cost pressures on all customers. From the power cost side, many of the things that we have been doing have made a tremendous difference already. I would note that we have just under 500 megawatts of battery storage, which is really smooth customer prices, particularly during these critical periods of the summertime and cold winter days. But also are advancing across Western wide energy markets.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

We've announced our intention to join the energy day head market led by the California Independent System Operator. And that will also make a big difference in terms of procurement west wide and taking advantage of excess renewable energy generated in the Desert Southwest, and in California. We've seen remarkable change in power flows already and we expect to see more, which will only benefit customers in our region as we work to lower costs.

[Travis Miller, Senior Equity Analyst at Morningstar]

Okay. That's great. Appreciate that. All of that that you talked about and especially with the contracting opportunity, will that reduce some of the earnings exposure to net variable power costs or no change in that earnings exposure?

[Maria Pope, Director, President & CEO at Portland General Electric Company]

I think where we need to go to on the net variable power cost side is really looking at the underlying rate design, some improvements that we can make in our PCAM mechanism, as well as the volatility that we just see as an evolution of the growth of the region and the tighter markets overall, as well as balancing that with the energy day ahead market. We're going to have to rationalize how these work because there are some conflicts that we will experience in the 2026 after we go live with EDAM.

[Travis Miller, Senior Equity Analyst at Morningstar]

Okay. Perfect. I appreciate it. Then one quick clarification. The timing of that base rate case, is that part of the DSP or the MOUs or is that just your anticipation of when you might need a base rate case or

[Maria Pope, Director, President & CEO at Portland General Electric Company]

ahead, Dale.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

In the MOU, we haven't agreed upon a not before, a filing of not before that Q2 or the beginning of Q3 in 2026. So that is an agreed upon.

[Travis Miller, Senior Equity Analyst at Morningstar]

Okay, but you don't have to. Just after.

[Joseph Trpik, CFO & SVP - Finance at Portland General Electric Company]

You don't have to file. That is early That's but you don't have correct.

[Travis Miller, Senior Equity Analyst at Morningstar]

Okay. Thanks so much. Appreciate it.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Great. Thank you.

[Operator]

Thank you. I'm not showing any further questions in the queue. I would now like to turn the call back over to Maria Pope for closing remarks.

[Maria Pope, Director, President & CEO at Portland General Electric Company]

Great. Thank you for joining us all today. We appreciate your interest in Portland General Electric, and we hope to connect with you soon. Thank you very much. Have a great day.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.

Participants

Executives

• Nick White, Manager - IR
• Maria Pope, Director, President & CEO
• Joseph Trpik, CFO & SVP - Finance

Analysts

• Richard Sunderland, Equity Research - North American Utilities & Power at JP Morgan
• Chris Ellinghaus, Managing Director at Siebert Williams Shank.
• Brian Russo, Analyst at Jefferies
• Nicholas Campanella, Director at Barclays
• Gregg Orrill, Analyst at UBS Group
• Sophie Karp, Senior Equity Analyst - Utilities & Alternative Energy at KeyBanc Capital Markets
• Anthony Crowdell, Managing Director at Mizuho Financial Group
• Travis Miller, Senior Equity Analyst at Morningstar