Portland General Electric Company (POR) Earnings

Management highlights

### Strategic Priority Progress - **Industrial Growth**: The company serves 12 data center customers, and expects 10% compounded annual large customer load growth through 2030 from already contracted customers that are either operational or actively developing facilities in the service territory. An additional 1.7 GW of upside capacity is in the permitting pipeline, beyond existing base guidance. - **Affordability & Regulatory Updates**: The Oregon Public Utility Commission (OPUC) approved a new large load tariff, effective July 2026, that raises average rates by 30% for data centers. This framework aligns infrastructure costs with new large customers, reduces rates for all other customer classes, and caps multiple years of regulatory and legislative work. The company will file its 2027 general rate case (GRC) next week, proposing a 4.8% overall average rate increase effective July 1, 2027, with a 3.9% increase for residential customers (lower than it would have been without the new large load tariff). A projected 2.4% customer price reduction from lower net variable power costs, effective January 1 2027, will partially offset the GRC increase. - **Clean Energy Procurement**: The company's 2025 Renewable RFP reached a key milestone, with the Oregon Public Commission acknowledging the shortlist of projects. The shortlist includes a diverse mix of wind, solar, battery storage, and hybrid resources, with both power purchase agreements and company-owned structures under consideration. Commercial negotiations are underway, with contract execution targeted for early 2027. - **Wildfire Mitigation**: Implementation of the 2026-2028 wildfire mitigation plan remains on schedule, and the company is engaged in long-term wildfire policy discussions with stakeholders. No active Oregon wildfires are currently in PGE's service territory. - **M&A & Corporate Structure**: The company continues to work toward regulatory approval for its pending Washington acquisition, targeting a mid-2027 closing. Holding company formation is progressing, with a final OPUC decision expected by the end of August 2026. ### Financial & Operational Updates - The company completed most of its 2026 financing activity, including a $550 million equity forward sale, $500 million ATM facility, $350 million 24-month term loan, and $680 million delayed draw term loan for the Washington acquisition. Investment grade credit ratings remain unchanged. - The Board of Directors declared a 5.125% quarterly common dividend increase to 55.125 cents per share, aligned with the company's 5-7% long-term growth target and 60-70% payout ratio target. - Ongoing cost management initiatives delivered $25 million in savings in 2025, with savings included in the 2027 GRC to offset customer rate increases. The multi-year cost transformation program remains on track.

Guidance

- Management reaffirmed full year 2026 GAAP diluted earnings per share guidance of $3.53, and reaffirmed long-term earnings and dividend growth guidance of 5-7% annually. - 2026 full year weather-adjusted load growth guidance is maintained at 1.5% to 2.5%, in line with the quarter's performance. - The 10% compounded annual large industrial customer growth guidance through 2030 is unchanged, and is based entirely on already contracted customers with active development plans. - The pending Washington acquisition remains on track to close in mid-2027, with holding company formation approval expected by the end of August 2026.

Segment performance

Portland General Electric reports retail energy deliveries by customer segment as follows for Q2 2026: 1) Industrial segment: Deliveries increased 11.2% year-over-year, driven by strong demand from high-tech, semiconductor, and data center customers. Data centers currently account for approximately 33% of total industrial usage, and industrial load has grown at ~10% compounded annually over the past five years. 2) Residential segment: Nominal deliveries increased 1.3% year-over-year, and decreased 1.4% on a weather-adjusted basis. 3) Commercial segment: Nominal deliveries decreased 2% year-over-year, and decreased 2.8% on a weather-adjusted basis. Total overall retail energy deliveries increased 3.9% year-over-year nominally, and 2.7% on a weather-adjusted basis. Total GAAP net income for the quarter was $68 million ($0.59 per diluted share), and non-GAAP net income (excluding one-time transformation, acquisition, and affordability-related costs) was $74 million ($0.64 per diluted share).

Risks & headwinds

- All forward-looking statements are subject to inherent uncertainties, and actual results may differ materially from projections due to regulatory, market, and project execution risks, as detailed in the company's 10-K and 10-Q filings. - There is uncertainty around the final OPUC decision on holding company formation, and the possibility of further delays to the approval process, though management has not seen indications of a delay to date. - Local permitting and policy changes (such as the proposed Salem state land sale review and Hillsboro data center moratorium) could impact the pace of development of the 1.7 GW upside data center pipeline, though most projects in the pipeline are already grandfathered or located on non-affected land. - Multi-year regulatory frameworks (such as the proposed multi-year rate plan) carry inherent uncertainty over five-year time horizons due to changing market and economic conditions.

Analyst Q&A

• Q: The company has 1.7 GW of additional data center pipeline. What investment is needed to support this, and is it included in the 2025 RFP? /

  A: The vast majority of these projects are already in permitting, with many already owning land and progressing well. Transmission investments for some of these projects are partially included in the current capital forecast, but additional generation capacity is not included. Most projects beyond the 2030 forecast period are not yet incorporated into current spending plans. The new large load tariff framework requires new growth to pay for its own associated infrastructure costs.

• Q: The proposed Salem data center site has a portion of state-owned land that is under review. Does this change your expected conversion pace for the large load queue? /

  A: The 1.7 GW pipeline is upside to existing base guidance, not included in current forecasts. Only a small portion of the proposed Salem development is on state-owned land, with the bulk of investment planned for private non-state land. Most additional projects in the pipeline are already in permitting and grandfathered under the recent Hillsboro moratorium, so the Salem review does not meaningfully change the outlook.

• Q: What can we expect from the upcoming 2027 general rate case, and how does the current affordability backdrop compare to prior cycles? /

  A: The company has not filed a general rate case in two and a half years, and has prioritized affordability through ongoing cost management. The new 30% data center rate reduction lowers the required residential rate increase to 3.9%, well below the overall 4.8% average increase. When combined with the 2.4% projected power cost reduction in January 2027, the net customer increase is only a couple of percent. The filing includes needed investments in smart grid and reliability infrastructure that customers have prioritized.

• Q: Is a settlement of the holding company approval case still possible, and what is the risk of delay? /

  A: Settlement is absolutely possible, and the company has a history of settling most regulatory cases. While discussions are ongoing and some stakeholders are on summer vacation, the OPUC still targets a decision by August 25. Management has not received any indication of an expected delay, and most key terms are already aligned, with only minor points and financial details remaining to be resolved.

• Q: Is the 10% industrial growth guidance based on contracted customers or speculative new projects? /

  A: The 10% compound annual growth guidance through 2030 is based entirely on already contracted customers that have either completed construction or have facilities actively under development. All projects have identified customers, locations, and firm plans, so the outlook is not speculative. The 1.7 GW pipeline of additional potential projects is separate upside, not included in the base 10% growth guidance.