Portland General Electric Q4 Earnings Call Highlights

Key Points

• $1.9 billion acquisition: PGE agreed to buy PacifiCorp’s Washington utility assets (about 140,000 customers across ~2,700 sq. miles) in a joint venture where PGE will own 51% and Manulife/John Hancock 49%; management says the deal is expected to be accretive in the first full year and supports long-term 5%–7% EPS and dividend growth, with PGE targeting above the midpoint.
• Financing and approvals: PGE has commitments at signing (including bridge financing from Barclays and JPMorgan) and plans permanent financing of $600M Manulife equity, $700M secured utility debt, and $600M at a holdco (mix of securities); regulatory filings are expected in 30–60 days with an ~11–12 month review timeline and reciprocal break fees of about $35M if the deal fails to close.
• Operational results and outlook: 2025 GAAP net income was $306M (non‑GAAP $336M), with unusually warm weather reducing EPS by ~$0.17, but industrial load rose 14% and total load was up 3.8% (4.7% weather‑adjusted); PGE issued 2026 guidance of $3.33–$3.53 per share, reaffirmed long‑term growth targets, and highlighted a strong data‑center pipeline (430 MW recently contracted, ~1.7 GW of interest) plus planned clean‑energy projects coming online by 2027.

Portland General Electric NYSE: POR used a conference call Tuesday to discuss its 2025 financial results and 2026 outlook while detailing a definitive agreement to acquire PacifiCorp’s electric utility business in Washington for $1.9 billion. Management said the transaction would expand the company’s footprint into a new state and is expected to be accretive in the first full year after closing.

Acquisition of PacifiCorp’s Washington utility assets

President and CEO Maria Pope said the deal includes select generation, transmission, distribution and other utility assets in Washington and would add roughly 140,000 customers across a 2,700-square-mile service area anchored around Yakima, Walla Walla and other communities. Pope said the acquired operations would continue to operate as a Washington-regulated utility.

The company said it is partnering with Manulife Investment Management and its affiliate John Hancock, which will hold a 49% minority stake in the Washington business, with PGE owning 51% and operating the utility. Management described the structure as a joint venture with a five-person board on which PGE would hold a majority of seats.

Pope said the acquisition is forecast to be accretive in the first year and supports long-term EPS and dividend growth expectations of 5% to 7%. She added that PGE expects to be “squarely above the midpoint” of that long-term range, citing factors including financing plans, cost management and integration opportunities.

Executives said the transaction will require regulatory approvals from Washington, Oregon and other jurisdictions, as well as the Federal Energy Regulatory Commission (FERC). The company expects to submit filings in the next 30 to 60 days and said the regulatory process should take about 11 to 12 months after filings are submitted. Management also noted that Oregon applies a “no-harm” standard for approval while Washington uses a “net benefit” standard, with Washington potentially able to extend review by four months under certain circumstances.

Financing plan and transaction structure

CFO Joe Trpik said PGE obtained commitments at signing for the full $1.9 billion purchase price, including bridge financing from Barclays and JPMorgan, along with commitments from Manulife.

For permanent financing, management outlined a plan consisting of:

• $600 million equity contribution from Manulife
• $700 million secured debt at the Washington utility
• $600 million raised at a proposed holding company (“holdco”)

Trpik said the $600 million to be raised at the holdco is expected to be a “balanced mix” that could include debt, equity, hybrid or other securities, but he did not provide a specific breakdown, citing the ongoing regulatory process around the proposed corporate structure. Executives emphasized their intent to maintain investment-grade ratings across entities and said preliminary discussions with rating agencies have taken place.

Trpik also said the asset-purchase structure means PGE expects to assume “relatively few liabilities” as part of the transaction, given PacifiCorp’s multi-state structure.

Management disclosed that the agreement includes reciprocal break fees, generally valued at $35 million, for certain circumstances where the transaction does not close, including failure to obtain FERC or other regulatory approvals and certain outcomes related to regulator-approved rate base relative to contract terms.

2025 results: weather headwinds and strong industrial demand

For 2025, PGE reported GAAP net income of $306 million, or $2.77 per diluted share, and non-GAAP net income of $336 million, or $3.05 per share. Management said results were impacted by unusually warm weather in November and December, calling it the warmest period on record in the region since records began 85 years ago. The company said abnormal fourth-quarter weather reduced earnings by $0.17 per share, with December accounting for $0.14 of that impact due to 24% fewer heating degree days than average.

Despite the weather-related headwind, executives pointed to strong underlying demand and customer growth. Trpik said total load increased 3.8% year over year and 4.7% on a weather-adjusted basis. Industrial load rose 14% compared to 2024, while residential load declined 1.8% year over year but increased 0.4% when weather-adjusted. Commercial load was “largely flat,” and residential customer count increased 1.3%.

Pope said weather-adjusted load growth was about 5% for the year and attributed industrial growth to large customers such as high-tech manufacturers and data centers ramping usage. Trpik added that industrial customers have grown at a 10% compounded annual rate from 2020 through 2025 and are expected to continue at that pace through 2030.

2026 guidance and long-term targets

PGE issued 2026 earnings guidance of $3.33 to $3.53 per share and reaffirmed its long-term EPS and dividend growth guidance of 5% to 7%. The company also provided weather-adjusted load growth guidance of 2.5% to 3.5% for 2026 and long-term load growth guidance of 3% through 2030.

On cost management, Trpik said PGE reduced its overall cost structure by about $25 million in 2025, net of transformation costs, exceeding its targets. He said savings should increase as initiatives move to a full-year run rate in 2026 and as additional programs are rolled out, describing the effort as cumulative and intended to help manage inflation over multiple years.

Data center tariffs, RFP activity, and clean energy procurement

Pope highlighted continued contracting activity with large-load customers, saying PGE executed five additional data center contracts totaling 430 megawatts in the fourth quarter and early 2026. She also referenced a larger queue of potential demand, later describing it as 1.7 gigawatts of interest from a mix of existing and new customers.

Management said it is advancing a proposed Oregon data center tariff (UM2377), tied to 2025 legislation known as the POWER Act. Executives said the proposal would create a separate data center customer class and includes a 25% price increase for data center customers. In response to an analyst question, management said the tariff’s initial impact would be about a 2% reduction for residential and small business customers, with benefits expected to grow over time as data centers expand.

On clean energy procurement, PGE announced build-transfer agreements to construct:

• A combined 125 MW solar and 125 MW battery storage facility at Biglow
• A combined 240 MW solar and 125 MW battery facility as part of the Wheatridge expansion, with PGE owning 175 MW and procuring the remaining 190 MW via a power purchase agreement

Both projects are slated to come online by the end of 2027 and are expected to be eligible for federal investment tax credits between 30% and 40%, which management said would lower customer costs. PGE also said it is procuring 400 MW of battery capacity through two capacity storage agreements.

Trpik said PGE is also advancing its 2025 request for proposals (RFP) and planned to submit a final shortlist to the Oregon Public Utility Commission this week. He said the shortlist includes renewable and non-emitting capacity projects totaling about 5 gigawatts, with the company expecting a final selection of roughly 2,500 megawatts split between build-transfer agreements and PPAs.

In discussing risk, Pope said PacifiCorp has a Washington wildfire plan approved for 2024 through 2027 and that PGE would “pick up that plan” while bringing its own approach. In response to a question about wildfire exposure, management said the Washington service territory’s high-risk portion appears similar to Oregon’s and is “quite low,” estimating about 2% or roughly 20 distribution miles.

About Portland General Electric NYSE: POR

Portland General Electric NYSE: POR is an investor-owned electric utility headquartered in Tigard, Oregon, with roots tracing back to the late 19th century. The company generates, transmits and distributes electricity to residential, commercial and industrial customers across a broad territory in Oregon, primarily encompassing the Portland metropolitan area and surrounding regions.

As one of Oregon's largest electric utilities, Portland General Electric operates a diverse portfolio of generation assets, including hydroelectric facilities, natural gas–fired plants and renewable energy sources.

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