Portland General Electric's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Portland General Electric Company (POR)

Q1 2012 Results Earnings Call

May 03, 2012 11:00 AM ET

Executives

Bill Valach – Director, Investor Relations

Jim Piro – President and CEO

Maria Pope – Senior Vice President, Finance, CFO and Treasurer

Analysts

Neil Mehta - Goldman Sachs

Maury May – Power Insights

Brian Russo – Ladenburg Thalmann

Sarah Akers – Wells Fargo

James Bellessa – D. A. Davidson

Andrew Weisel – Macquarie Capital

David Tories – Bank of America-Merrill Lynch

Mark Barnett – Morningstar

Eric McCarthy – Praesidis Capital

John Alley – Decade Capital

Presentation

Operator

Good morning, everyone. And welcome to Portland General Electric Company’s First Quarter 2012 Earnings Results Conference Call. Today is Thursday, May 3, 2012. This call is being recorded and as such, all lines have been placed on mute to prevent any background noise. After the speaker’s remarks there will be a question-and-answer period. (Operator Instructions)

For opening remarks and introduction, I would like to turn the conference over to Portland General Electric’s Director of Investor Relations, Mr. Bill Valach. Please go ahead sir.

Bill Valach

Thank you, Rachel, and good morning, everyone. And we are very pleased that you’re able to join us today. Before we begin our discussion this morning, I’d like to make our customary statements regarding Portland General Electric’s written and oral disclosures and commentary.

There will be statements in this call that are not based on historical facts and as such constitute forward-looking statements under current law. These statements are subject to factors that may cause actual results to differ materially from the forward-looking statements made today.

For a description of some of the factors that may occur that could cause such differences, the company requests that you read our most recent form 10-K and form 10-Q. The form 10-Q for the first quarter 2012 is now available on our website at portlandgeneral.com.

The company undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise and this Safe Harbor statements should be incorporated as part of any transcript of this call. Portland General Electric’s first quarter earnings were released before the market opened today, and the release is available on our website at portlandgeneral.com.

Leading our discussion today are Jim Piro, President and CEO; and Maria Pope, Senior Vice President of Finance, CFO and Treasurer. Jim will begin today’s discussion by providing a general overview of the quarter results and our strategic capital projects. Then, Maria will provide more detail around the quarterly results. Following prepared remarks, we will then open the lines up for your questions.

And it’s my pleasure now to turn the call over to Jim.

Jim Piro

Thank you, Bill. Good morning, everyone and thank you for joining us. Welcome to Portland General Electric’s first quarter 2012 earnings call. PGE’s first quarter earnings were $49 million or $0.65 per diluted share, compared with $69 million or $0.92 per diluted share in the first quarter of 2011. These results reflect strong operating and financial performance and I’m pleased to report that we are reaffirming our 2012 earnings guidance of a $1.85 to $2 per diluted share.

On today’s call, I will give you an update on Oregon’s economy and the progress we’re making on our strategic initiatives. Then Maria will discuss PGE’s first quarter results, liquidity and our outlook for the remainder of 2012.

Now, let’s move on to the economic outlook in our operating area. Oregon continues to experience in migration and the state unemployment rate has dropped to 4 percentage points from last year to 8.6%, with the unemployment rate in our core operating area averaging 7.8%.

Quarter-over-quarter, we have added 3,500 customers and our weather adjusted retail energy deliveries are up. We expect to see growth in our industrial sector as a result of Intel’s large D1X facility and new data centers coming online as scheduled.

Now, I’ll give you an update on our strategic initiatives starting with operational excellence. We continue to deliver excellent operating performance company-wide. Our system operated extremely well. Our distribution reliability metrics remained strong and generating plant availability was high.

Overall satisfaction from residential, commercial and general business customers remains high and we continue to receive positive feedback that tells us we are meeting our customers’ needs.

We are continuing our benchmarking and best practices work to identify and implement system and technology improvements that result in cost efficiencies throughout the company.

We’ve already achieved significant savings with the installation of smart meters, and are pleased with the performance of our new financial and supply chain systems. We expect to see similar results as we deploy new technology and make process changes in our transmission and distribution areas.

Now, I’ll give you an update on our progress executing our integrated resource plan, action plan. Oregon Public Utility Commission is currently reviewing a draft of our combined capacity energy RFP. This RFP allows self-build benchmark proposals and bids from independent power developers or producers who also have the option to build on PGE’s benchmarks sites, so long as the plants are built to our specifications and would be owned and operated by us.

We are finalizing our benchmark proposals for the combined RFP and expect to receive the OPUC’s decision early next month. We anticipate the final decisions on what resources we select in the latter part of 2012 or early in 2013.

We are continuing negotiations on a benchmark resource for the renewable RFP and expect to file a draft of the renewable RFP with the commission next month with final resourced decisions in late 2012 or early 2013.

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