Portland General Electric Q2 2026 Earnings Call Transcript

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Provided by Quartr
July 31, 2026

Key Takeaways

  • Positive Sentiment: PGE reported second-quarter non-GAAP earnings of $0.64 per diluted share, in line with expectations, and reaffirmed 2026 guidance of $3.33–$3.53 per share plus long-term earnings and dividend growth of 5%–7%.
  • Positive Sentiment: Industrial demand rose 11.2% year over year, driven by technology, semiconductor, and data-center customers. PGE expects approximately 10% annual growth in contracted large-customer capacity through 2030, while its newly approved large-load tariff raises data-center prices by about 30% and supports customer cost allocation.
  • Negative Sentiment: PGE plans to file a 2027 general rate case seeking a 4.8% overall price increase, including a 3.9% increase for residential customers. A separately forecast 2.4% reduction in net variable power costs could partially offset the increase beginning in January 2027.
  • Neutral Sentiment: The holding-company approval remains targeted for an August 25 decision, with settlement discussions continuing and some uncertainty over customer benefits and rate credits. Regulatory approvals for the Washington acquisition remain in progress, with closing still targeted for mid-2027.
  • Positive Sentiment: PGE advanced its renewable-resource procurement, with an OPUC-acknowledged shortlist spanning wind, solar, battery storage, and hybrid projects; contracts are expected by early 2027. The company also highlighted completed 2026 financing activity, unchanged investment-grade ratings, and a 5% annualized dividend increase.
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Earnings Conference Call
Portland General Electric Q2 2026
00:00 / 00:00

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Operator

Good morning everyone, and welcome to today's conference call with Portland General Electric. Today is Friday, July 31st, 2026. This call is being 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 time, press star, then the numbers one one on your telephone keypad. To withdraw your question, please press star one one 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 Senior Manager of Investor Relations, Erin Schwartz. Please go ahead.

Erin Schwartz
Erin Schwartz
Senior Manager of Investor Relations at Portland General Electric

Thank you, Dee Dee. 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 forms 10-K and 10-Q, which are available on our website.

Erin Schwartz
Erin Schwartz
Senior Manager of Investor Relations at Portland General Electric

Turning to slide three, leading our discussion today are Maria Pope, President and CEO, and Joe Trpik, 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.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Thank you, Erin, and good morning everyone. We appreciate you joining us today. The second quarter was marked by continued execution across our strategic priorities. Strong industrial demand growth of 11% when compared to second quarter of last year. Advancement of key proceedings, key regulatory proceedings, disciplined cost management, and continued progress on resource planning. Beginning with slide four, I'll speak to our financial results and key drivers. For the second quarter, we reported GAAP net income of $68 million or $0.59 per diluted share, and non-GAAP net income of $74 million or $0.64 per diluted share. Our non-GAAP results exclude business transformation, optimization, and acquisition-related expenses, which are not reflective of ongoing operational performance. These costs relate to the holding company formation, the pending Washington acquisition, and our customer affordability work.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

These results were in line with our expectation for the quarter and reflect strong execution. As a result, we are reaffirming our full-year earnings guidance of $3.33-$3.53 per diluted share and our long-term earnings and dividend growth guidance of 5%-7%. Turning to slide five for updates on our five strategic priorities. First, industrial demand growth remains an important element of our long-term outlook. Today, we serve 12 different data center customers, which make up approximately 1/3 of our total industrial usage. Total industrial load growth was approximately 10% compounded annually over the last five years. We continue to see strong demand from technology, semiconductor, and data center customers, with approximately 10% compounded annual growth expected through 2030. This outlook is supported by customers who are under contract and whom are already energized or actively advancing construction and facility development in our service area.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Second, affordability remains a national focus. We've taken proactive steps to address customer cost pressures, mitigate stranded asset cost risk, and enable growth that supports the long-term strength of our communities and continued economic development. In Q2, the OPUC issued a final order approving PGE's new large load tariff effective in July, raising average prices approximately 30% for data centers, while lowering rates for all other customers and capping several years of legislative and regulatory work. This important framework aligns infrastructure costs on an ongoing basis to customers driving new system investments while helping reduce costs for residential and small business customers. The tariff also creates greater certainty for large load customers by providing a clear pricing framework which supports investment decisions and continued economic development across our region.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

In addition to the changes implemented with our large load tariff, we continue to focus on operating costs and executing across our financial and operational priorities, which Joe will cover in more detail in a minute. Third, we're advancing our 2025 renewable RFP. During the quarter, the OPUC acknowledged the shortlist, marking an important milestone in the procurement process. The shortlist includes a diverse mix of wind, solar, battery storage, and hybrid resources with both purchase power and company-owned structures under consideration. We are now moving into commercial negotiations and expect to execute contracts by early 2027, subject to final negotiations and approvals. Fourth, our year-round wildfire mitigation work remains on track. We continue executing the actions identified in our 2026 through 2028 wildfire mitigation plan and remained engaged with policymakers and stakeholders regarding long-term wildfire policy discussions.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Across Oregon, there are several active wildfires, and we appreciate the significant actions that first responders and local communities are taking. None of these wildfires are in PGE's service territory. Fifth, next week we will file our 2027 general rate case. As proposed, the case would result in approximately 4.8% overall increase relative to currently approved prices effective July 1st, 2027, with residential customers seeking an approximately 3.9% increase. The residential increase would have been higher if not but for the large load tariff. The rate case increase is expected to be partially offset by lower net variable power costs, which are addressed separately through the annual update cost tariff and are currently forecast to reduce customer prices by approximately 2.4% beginning in January 1st. The filing is based on a proposed 50% debt, 50% equity capital structure, and a 9.75% return on equity.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

It reflects a balanced approach that supports continued investment in reliability, resiliency, and infrastructure needed to meet growing customer demand while maintaining affordability and delivering the financial foundation necessary to serve customers safely and effectively over the long-term. In parallel, we continue to advance our proposed holding company structure. We expect a final order at the end of August. The proposed structure will enhance financing flexibility and support our ability to invest in clean energy and meet significant customer and infrastructure needs over time. Lastly, our teams remain focused on the regulatory work to obtain approvals for the Washington acquisition and continue to target a mid-2027 closing. As we move through the second half of 2026, we remain focused on delivering safe, reliable, and affordable service while advancing clean energy investments, our expansion into Washington, and completing the formation of the holding company.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

At the same time, we are operating to our plan and executing on actions to deliver on our shareholder and customer commitments. With that, I'll turn things over to Joe. Thank you.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Thank you, Maria, and good morning, everyone. Turning to slide six, our second quarter results were consistent with our guidance and reflect solid execution across the business. Beginning with load trends year-over-year, total retail energy deliveries increased 3.9% compared to the second quarter of 2025 on a nominal basis, and we're up 2.7% weather-adjusted. As Maria mentioned, we continue to see strong demand from our technology, semiconductor, and data center customers, with approximately 10% annual large customer capacity growth expected through 2030. Industrial demand remained a key driver in the second quarter, increasing 11.2% year-over-year, reflecting continued demand from high tech and data center customers. Residential deliveries increased 1.3% on a nominal basis and were down 1.4% on a weather-adjusted basis, while commercial deliveries decreased 2% nominally and were down 2.8% weather-adjusted. Overall, weather-adjusted load across customer classes was largely consistent with our expectations.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Therefore, we are reaffirming our 2026 weather-adjusted load growth guidance of 1.5%-2.5%. Now we'll cover the primary year-over-year drivers for the earnings drivers for the quarter. A decrease from power cost of $0.18, primarily driven by expected intra-year timing of revenue collection and power cost recognition. We experienced a $0.22 increase in retail revenues, including a $0.10 increase from industrial demand, a $0.12 increase from additional cost recovery, reflecting the Seaside battery asset included in customer rates beginning in November 2025, and the distribution system planning recovery that began in April of 2026. Note that there was not a meaningful impact to our revenues from changes in residential or commercial customer usage over the year.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

A $0.12 decrease from other capital and financing costs in support of our ongoing rate base investments made up of $0.07 from higher depreciation and amortization, $0.03 from dilution, and $0.02 of additional interest expense. A $0.06 increase from O&M, reflecting strong cost management and productivity improvements across the organization. On to slide seven for our five-year capital forecast, which includes the 2026 and 2027 spend from the incoming 2023 RFP. I will note that this view does not contemplate CapEx from the 2025 RFP or the Washington acquisition, which, as Maria noted, are progressing as expected. On to slide eight for financing. We remain well-positioned.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

We have completed the majority of our 2026 financing activity, providing clear visibility to our funding needs for the year. This included $550 million equity issued under a forward sale, a $500 million ATM facility to further support the equity needs, a $350 million 24-month term loan satisfying our 2026 financing needs, and a $680 million delayed draw term loan related to the Washington acquisition, available until specific acquisition milestones are achieved and maturing 364 days after funding. Our investment-grade credit ratings remain unchanged. In July, the Board of Directors declared a quarterly common dividend of $0.55125 per share, representing an increase of 5% on an annualized basis. We remain committed to paying a competitive dividend in line with our 60%-70% payout target while balancing overall financing needs.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Our plan focuses on maintaining strong operating cash flows while supporting continued investment in customer-focused capital projects, all while advancing us towards our authorized capital structure. As we look to the second half of the year, we have a clear path to deliver on our guidance. We are providing quarterly guidance as the shape of our earnings is different than it has been in prior years. First, we expect improved power cost over the remainder of 2026, helping offset the first half timing headwind. Second, in Q4 2025, the weather detriment is not expected to recur, with our 2026 forecast assuming normal weather. Third, we expect margin improvement from the new large load tariff approved earlier this year. Fourth, we expect continued increased regulatory recovery, including the Seaside and DSP alternative revenue recovery mechanisms.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Finally, we are executing management actions across operating and power costs to support earnings through the remainder of the year. We remain focused on safe, reliable, and efficient operations, advancing our strategic priorities and delivering value for our customers, communities, and shareholders. Now, operator, we are ready for questions.

Operator

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Julien Dumoulin-Smith of Jefferies. Your line is open.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Morning, Julien.

Brian Russo
Brian Russo
Analyst at Jefferies

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

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Morning, Brian.

Brian Russo
Brian Russo
Analyst at Jefferies

I was just first, if you could comment on the slide presentation, you have 1.7 GW of additional data center pipeline. What kind of investment would be needed to support that? Is it generation? Is it part of the 2025 RFP? Just want to understand if that's like another bucket of potential growth investments for you guys.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Sure. First of all, let me give you a little bit of background on the 1.7 GW. The investments are in a number of different counties across our service territory, and the vast majority of that represents projects that are already in the permitting process. Many projects already have land ownership and are progressing really nicely. The 1.7 GW will also be under the UM 2377, which enables growth, pays for growth, is like what we like to say, or our Peak Growth Modifier and the most recent higher customer prices for data centers. We have not included any of the additional generation. You can see some transmission investments in our forecast, but not all of them, as some of them are beyond the 2030 time period.

Brian Russo
Brian Russo
Analyst at Jefferies

Okay, great. Then just on the upcoming multi- year rate plan filing. Looking ahead to the framework, are there any key areas to focus on in terms of the mechanisms to help you maintain that just inherent lag, which I think is you're trying to close that gap to 50 basis points on the structural side? Just wondering what we might expect in terms of proactive mechanics in that MYRP filing.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Morning, Brian. The multi-year framework, considering that it lists out for five years, right? Our focus will be making sure it has flexibility for us to operate the business as expected and to be able to adapt to change. Before we get to the multi-year, the way I focus on this is we have the general rate case that's here that will cover a period of time, then we're proposing a bridge mechanism to get us to the multi-year because the multi-year rate would not be filed until 2029. That would have rates effective in 2030. We're focused on this GRC, which would have rates effective July of next year, then a bridge mechanism that would bridge 2028 and 2029. Starting with the bridge mechanism, the design here is to be able to address inflation and cost between these full GRC type cases.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

To the multi-year, as I said, it's really about being able to balance and make sure that we can adapt considering it's five years, there's an amount of uncertainty in that that will occur. Having the flexibility to balance and adapt will be key for us.

Brian Russo
Brian Russo
Analyst at Jefferies

Okay, great. Then just lastly on wildfire legislation, as we quickly approach the 2027 legislative session, what's going to be the key focus for you, or how you are preparing for that to make some constructive steps in the upcoming session?

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Sure. It's a great question, and we will continue the discussions that we've been having over the last couple of years with a variety of stakeholders. One thing I would note that's really constructive and an improvement this year is the Oregon Public Utility Commission's work. They've hired Boston Consulting Group to do a study on wildfire and obviously, utilities. We look forward to the results of that report, probably in the early fall time period, and are very encouraged with that next good step, as well as working with stakeholders across the state, and key customers as well.

Brian Russo
Brian Russo
Analyst at Jefferies

Great. Thank you very much.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Thank you.

Operator

Thank you. Our next question comes from Shar Pourreza of Wells Fargo Securities. Your line is open.

Shar Pourreza
Shar Pourreza
Analyst at Wells Fargo Securities

Morning, guys. Good morning.

Shar Pourreza
Shar Pourreza
Analyst at Wells Fargo Securities

Morning, Maria.

Shar Pourreza
Shar Pourreza
Analyst at Wells Fargo Securities

Just on the Salem data center, I guess since the state's pullback only affects the state-owned portion of the site, not the private land, does that kind of change how you think about the 1.6 gig large load queue at all? Should we expect that to convert at the pace you guided to, or some haircut the right way to think about it? Thanks.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Sure. First of all, the 1.7 GW is not in our guidance. It would be in addition and upside to our guidance. Just for those of you who are not tracking everything that's taken place with regards to the data centers in Oregon, for the Salem region, one of our large customers had anticipated purchasing some state land, and the Governor will be reviewing that sale and has not made any final determination at this point in time. That is just a portion of the land that they own, or were planning on owning. The bulk of their investment would actually be on non-state land.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

In addition, there has been some discussion in Hillsboro on a data center moratorium, and most of our customers that are not in our forecast, but that we are working with additional upside, are actually already in the existing permitting process and grandfathered.

Shar Pourreza
Shar Pourreza
Analyst at Wells Fargo Securities

Got it. Okay, that's helpful. That clears up some confusion this morning. Just with the HoldCo approval process now kind of getting to the finish line, I guess, how are you thinking about maybe updating the street and what it means to the current plan, including maybe the balance sheet, EPS, financing flexibility? It's obviously accretive, how should we think about a plan update? Do you want to wait for other items to kind of play out, like the Washington acquisition, Seaside, et cetera? Thanks.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Morning, Shar.

Shar Pourreza
Shar Pourreza
Analyst at Wells Fargo Securities

Hey, Joe.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

We will give as much of an update as this process resolves itself. We will give an update how we can. You're right, Shar, we have multiple growth and earnings catalysts that sit in front of us that would have an interplay here. Any type of guidance we give will be somewhat of a flexible view of the world as we don't want to front-run the other processes that are out here. I agree with you. Having a holding company to align us with where the industry is and give us the flexibility to drive benefits for our customers and that further, I think, is important. We'll balance how we guide this as these items in front of us are critical to its true ability to drive value.

Shar Pourreza
Shar Pourreza
Analyst at Wells Fargo Securities

Got it. Thanks, Joe. Appreciate that. Thanks, Maria.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Thank you.

Operator

Thank you. Our next question comes from Sophie Karp with KeyBanc. Your line is open.

Sophie Karp
Sophie Karp
Analyst at KeyBanc

Hi, good morning. Thank you for taking my question. I wanted to ask you, with the large load ramp that you may be seeing, is there a scenario where this incremental load and associated cash flow offsets some of your financing needs? Is there a line of sight to that, or too early to speculate?

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Yeah, that's a great question. It's probably too early to speculate, but we're really pleased with the cooperation we had from all of our customers, the partnership with the PUC, the legislative changes that were made that resulted in a 30% customer price increase for data centers effective in early July, and the resulting impact of that as we move forward through the general rate case as well as future years. It will be very helpful as we move forward to our overall P&L.

Sophie Karp
Sophie Karp
Analyst at KeyBanc

Yeah. For sure. Okay. On the HoldCo outcome, I guess the hearings have concluded, as I understand. We heard the parties' positions, everybody's kind of said their piece. At this point, what do you see as the most likely outcome, and how would you frame the positive impact from it, as you see it today versus maybe where you started?

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Sure. First of all, it has been a process that's gone on for over a year. We've had many discussions, and we hope to conclude by the end of August. The most recent discussions that you're referring to were some concluding public testimony where people pretty much reiterated their same, and sort of from the beginning, public statements. There have been a number of settlement conferences. Some of these are confidential. We are really pleased with being able to come to an alignment on a number of important governance conditions, as well as customer benefits and other items. The case overall has great merit. Much of what we have proposed and agreed upon to is not just similar to Northwest Natural and other utilities' concluded results, but in some instances, absolutely identical in the types of conditions and aligns with the precedents that have been set.

Sophie Karp
Sophie Karp
Analyst at KeyBanc

All right. Thank you so much. It's all for me.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Thank you, Sophie.

Operator

Thank you. Our next question comes from Aidan Kelly of JPMorgan. Your line is open.

Aidan Kelly
Aidan Kelly
Analyst at JPMorgan

Hey, good morning. Thanks for the time today.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Morning.

Aidan Kelly
Aidan Kelly
Analyst at JPMorgan

If I could, maybe just picking up again on the HoldCo front, just how would you kind of characterize the delta between Portland and key stakeholders at this point? Do you see any risks of the proceeding getting further delayed or punted into next year at all? Or you feel firm on that August 25th deadline?

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Good morning. I think as we are working backwards here, I think all the key facts and all the key dialogue are really laid out pretty cleanly in the testimony. I think the facts are there to be considered pretty cleanly. I think when you talk to Delta here, which obviously varies by parties, there's pretty good alignment as it relates to a lot of the conditions that would fall through here on the case. There's always a bit of a delta on what I'll call the bid-ask spread on what is the benefit to the customers or what is the rate credit to the customer. I think fundamentally as to the conditions, we're relatively aligned. I think it comes down to maybe some of the finer points on the conditions, and then just really the bid-ask spread here is really where we sit.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

You can see that cleanly in some of the testimony from some of the parties. You'll notice that we're just really relatively aligned, and it comes down to dollars. We're pretty satisfied with the way we've laid out the case. We think it's pretty clear on the benefits that are available to the customers. We're pretty clear on it, as obviously as you all know, a pretty consistent practice to have across the industry. We think that, I'll close with the facts are there to have them decide the case. We haven't seen any indicators yet that it would extend, but obviously, we're waiting to see just like you would be.

Aidan Kelly
Aidan Kelly
Analyst at JPMorgan

Thanks. Appreciate the color there. Maybe if I could just shift to the GRC backdrop. Appreciate you guys kind of laying out your thoughts and goals there. I guess just zooming out, how would you kind of rate the current affordability backdrop versus the recent past, and your kind of key, I guess, items in the proposal that kind of drive that 4.8% net increase? Maybe if you could tee that up kind of compared to prior GRC cycles, just any thoughts kind of going into this filing next week?

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Sure. First of all, I want to note that we have not filed a general rate case in two and a half years. We take affordability very seriously, and we have been working diligently and effectively on our operating costs through our customer affordability commitments. This rate case reflects the benefits for residential small business and other customers from the most recent new load tariff, UM 2377, which, as I noted, raised data center prices by about 30%. Data center prices will go up significantly more than the average of 4.8%, and residential customers are lower at about 3.9%. We think that we have really done a lot to address affordability.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

When you factor in at January 1st our proposal to reduce energy costs through the Annual Update Tariff by 2.4%, it's really just a couple of percent increase for our customers as they move forward. We have also reflected really important infrastructure investments, some smart grid and grid enhancing technology investments, as well as reflected things that customers, particularly on the residential small commercial side, value and have been fairly vocal about. We look forward to proceeding over the next year through discussions collaboratively with all stakeholders in the Commission.

Aidan Kelly
Aidan Kelly
Analyst at JPMorgan

Thanks, Maria. Appreciate the color there. Sorry, there's just one more question I keep getting asked is: Is it possible for you guys to still settle the HoldCo today? Just like yes or no?

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Yes. Absolutely. As you know, we have a record of settling most of our discussions. It's August, or going into August, there's people on vacation and others, my hope is that we do settle quickly, but the date is August 25th. We may end up in a commission decision, and we look forward to continuing the conversations.

Aidan Kelly
Aidan Kelly
Analyst at JPMorgan

Great. Appreciate the time today. I'll leave it there.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Thank you. Take care.

Operator

Thank you.

Operator

Thank you.

Operator

Our next question comes from Anthony Crowdell of Mizuho. Your line is open.

Anthony Crowdell
Anthony Crowdell
Analyst at Mizuho

Hey, good morning, team. If I could just jump on the last question to start off. Any chance that it seemed that there's, and hopefully I'm not putting words in your mouth, it seemed that there's active settlement discussions going on, is there any chance the commission, actually, I think Sophie asked how hard is that August 25th deadline? Is there any chance that they would move that out knowing that there's active settlement discussions?

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Yeah. I guess, Anthony, Joe Trpik here. One, we haven't heard any dialogue to that. To your comment on the settlement dialogue, the settlement dialogues are always open and part of the process. This type of dialogue and settlement discussion's no different than other cases. I'm not sure that it would be some indicator that says to prolong the hearings.

Anthony Crowdell
Anthony Crowdell
Analyst at Mizuho

Again, are there settlement discussions going on with all the major parties, or are you kind of focused on maybe a smaller group of interveners?

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Yeah. Considering on how that we're in the middle of it here, there are discussions that are out there. I think any further detail would really front run some items. They're just open discussions that are out there.

Anthony Crowdell
Anthony Crowdell
Analyst at Mizuho

Great. I apologize if I'm just getting things confused. I believe, maybe earlier this year, you guys had pulled the transmission case not to confuse the holding company approval with the transmission rate case. The holding company, you know, approval still pending, and the thoughts of maybe the timing of why file the general rate case now prior to maybe closing, I am sorry, the holding company case up. Just curious on, you pulled one case because you really wanted the focus to be on the holding company structure, and now possibly going in to file another case prior to the holding company structure.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Sure. First of all, thank you for the question, and we do remain focused long-term on the transmission. Knowing that there was a considerable amount of work in front of the Commission, we really narrowed to the holding company, which includes the Washington acquisition, of course, and have had quite a few discussions with parties with regards to the general rate case and felt that this was an optimal time. If you may recall, led by the Citizens Utility Board, and some others, we worked with parties to come up with something, some legislation in addition to the POWER Act, which resulted in larger customer price increases for data centers, but for not having rate increases go in during certain times of the year.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Given the discussions that we've had so far with parties on the general rate case, we really felt that filing in August would be workable for everyone. Since we've not have had a rate case for two and a half years, timely.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Anthony, just a reminder, obviously, the Transco filing was a structural filing hearing, didn't really impact how or when we collect rates on the transmission assets. Those have worked themselves through the same process that they did before. Any of that timing or pulling of things doesn't have anything to do with rate recovery. It was solely structure.

Anthony Crowdell
Anthony Crowdell
Analyst at Mizuho

Got it. Just to make sure I have the sequence right. General rate case filing expectation, holding company formation, hopefully later in the month.

Anthony Crowdell
Anthony Crowdell
Analyst at Mizuho

Great.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

That is correct.

Anthony Crowdell
Anthony Crowdell
Analyst at Mizuho

Thanks.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

That is correct.

Anthony Crowdell
Anthony Crowdell
Analyst at Mizuho

Thanks for taking my questions.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Thank you.

Operator

Thank you. Our next question comes from Gregg Orrill of UBS. Your line is open.

Gregg Orrill
Gregg Orrill
Analyst at UBS

Yeah, thank you. Just regarding the reliability contingency structure, just maybe you could talk to what the prospects are for continuing that and how that was viewed by the commission. Why did they decide not to continue to move forward with that? Then maybe also just on the O&M reduction plan, if there's any sort of update on that and sort of the prospects going forward. Thank you. Given its success.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Yeah. Good morning. The Reliability Contingency Event, or RCE, was a mechanism that was afforded us in the last case that had a two-year period which expired here. That mechanism, we felt, worked quite effectively here. We had an unusual ice storm and had some significant deviations in cost, and it pretty effectively captured those differences. It was put in initially with a two-year timeframe with the expectation that we would ultimately align to broader power cost reform. That has not occurred as of yet, but the RCE did expire. I think, the staff at least viewed it as an experiment. It worked the way it's worked, and they ultimately would like to get away from that type of a mechanism and just ultimately address broader reform at some point in time in the future. That is sort of an expired item that we're not subject to currently.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Obviously, we like that type of mechanism.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Joe, I should go on and talk to your question about O&M. I do want to just comment that we are aligned with staff and with policymakers across the state on the impacts of extreme weather, and whether that is impacting customer energy usage, power costs, and we need to look more holistically at all of these things combined as we move forward. Joe, do you want to cover his question on O&M?

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Yeah. Thanks for asking on the O&M. I'm pretty happy with where we sit on the O&M side. As you may recall, Last year, we entered into a cost management program here, yielded about $25 million in benefits. In fact, those benefits are part included in the general rate case to help mitigate what costs, considering it has been two and a half years since we filed a case. We'll continue to proceed with the program. You can see some of the results this year as they fall through the earnings waterfall year-to-date. The company has been pretty committed to not just squeezing to find savings, but to transform, and we find ourselves, we've probably got another couple years of this left.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

I think to date, you would score the effort as successful and very aligned with our expectations and very aligned with how it ties into our longer-term strategy.

Gregg Orrill
Gregg Orrill
Analyst at UBS

Okay. Thanks for the updates.

Operator

Thank you. Our next question comes from Paul Fremont of Ladenburg Thalmann & Company. Your line is open.

Paul Fremont
Analyst at Ladenburg Thalmann & Company

Hey.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Morning, Paul.

Paul Fremont
Analyst at Ladenburg Thalmann & Company

Thank you, guys. Hey, thank you guys very much. I guess my first question is, I think earlier in the year and maybe towards the end of last year, you were pretty optimistic about being able to settle the HoldCo case. Do you feel less optimistic at this point or are you still in the camp that it's highly probable that you will settle the case?

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Sure. We were optimistic then, and we are optimistic now. We have a strong case, good benefits for customers, the discussions are ongoing.

Paul Fremont
Analyst at Ladenburg Thalmann & Company

Great. I guess during oral arguments, some of the commissioners sort of asked whether there are alternative mechanisms to double leverage to fund capital spending in the future. I think they mentioned securitization. Sort of any thoughts along those lines in terms of what alternatives might be available to the company?

Maria Pope
Maria Pope
President and CEO at Portland General Electric

I don't think we want to be front-running the process. The discussion that took place in oral arguments was as expected and one part of the process. Clearly, it's important to the company to have the flexibility afforded to the vast majority of utilities across the country in terms of having a holding company structure.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Yeah. Paul, can I just add, the focus on the holding company was about this is the structure that can yield the greatest benefits to the customers by a good distance and the one that gives us the most tools there. There are always alternatives out there, those alternatives, they can yield benefits, they will not yield as meaningful to both the customer and to design benefits as the structure that we proposed.

Paul Fremont
Analyst at Ladenburg Thalmann & Company

Great. I think that's it for me. Thank you very much.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Thank you, Paul.

Operator

Thank you. Our next question comes from Travis Miller of Morningstar. Your line is open.

Travis Miller
Travis Miller
Analyst at Morningstar

Hello. Thank you. You answered most of my questions, but just a couple quick clarifying ones. What's the earnings impact from the large load tariff that you have in the guidance, and what was initially included in the guidance? Has that changed at all?

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Initially in the guidance, obviously, we gave our broad guidance for the year. The large load tariff was a proposed document, and there was nothing included in. As we've gone through the year and as the large load tariff, we've incorporated the effects. We haven't to date quantified that, but we've incorporated the effects really as a balancing. As you know, we were reacting to some of the first quarter items. There's a modest amount of benefit that's layered in here for the year. Maybe I'll just leave it at that.

Travis Miller
Travis Miller
Analyst at Morningstar

Okay. Presumably, that would carry over at least through the first half of next year, right? It should be a little bump in growth all else equal.

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

That's right.

Travis Miller
Travis Miller
Analyst at Morningstar

Okay. One other quick clarifying one. The 10% five-year CAGR you're talking about, or at least through 2030, with the new customers, is that the ramping of existing contracted customers, or is there an assumption of some additional large load customers that you'll get in the next couple of years?

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

What I feel makes our disclosure there a bit unique is these are contracted customers. These are customers who are already either have constructed facilities or facilities that are under construction currently. This ramp is really about these contracted and constructed assets here for us, which I feel makes it a little different, is there is not a speculative queue here. The opportunity port that we talked to earlier on this call, that 1.7 GW, I guess some of that could have a different level of certainty, the ramp that we have at 10% is solid. They have names, they have locations, they have companies to them. We are pretty confident with the work that's laid out for the 10% ramp.

Travis Miller
Travis Miller
Analyst at Morningstar

Perfect. Real quick, presumably those customers, at least most of them, would pay that large load tariff?

Joe Trpik
Joe Trpik
SVP of Finance and CFO at Portland General Electric

Yeah. Those customers, the large load tariff is applicable to all customers once you meet certain megawatt criteria, yes. Obviously, those parties were able to respond and then were engaged in the process that ultimately resulted in the large load tariff.

Travis Miller
Travis Miller
Analyst at Morningstar

Okay. Great. Thanks so much.

Maria Pope
Maria Pope
President and CEO at Portland General Electric

Thank you very much. I think with that, we are finished and don't have any more questions. We want to thank everyone for your time today. We look forward to further conversations at conferences through the balance of the quarter and the fall. Thank you for your interest in Portland General Electric.

Operator

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Executives
    • Erin Schwartz
      Erin Schwartz
      Senior Manager of Investor Relations
    • Maria Pope
      Maria Pope
      President and CEO
    • Joe Trpik
      Joe Trpik
      SVP of Finance and CFO
Analysts
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