PORTLAND GENERAL ELECTRIC CO /OR/ Q4 FY2024 earnings call

• 2024 saw solid growth from new and returning customers, enhanced operational reliability, strong safety performance, and significant clean energy and battery storage investments. - Executed over $1.2 billion in capital projects in 2024, targeting customer growth, grid resiliency, and decarbonization. - Advanced the 2023 RFP, received final shortlist acknowledgment from OPUC, and started negotiations. - Returned customers to cost of service, earning back two prominent customers with 27 MW of demand. - Key priorities include enabling high-tech and industrial growth, focusing on customer values and clean energy, ensuring customer affordability through cost reductions, reducing risks via safety culture and wildfire advocacy, and creating an investable energy future. - Leveraged AI tools for efficiency, satellite imaging for vegetation management, and weather data for wildfire monitoring. - Added significant battery storage, including a 200-MW seaside battery, and had over $300 million in direct grants under contract by December 2024, with total grants over $2 billion.

In 2024, Portland General Electric reported GAAP net income of $313 million or $3.01 per diluted share and non-GAAP net income of $327 million or $3.14 per share. The fourth quarter GAAP net income was $39 million or $0.36 per share compared to $68 million or $0.67 per share in the fourth quarter of 2023. Industrial growth was 11% year-over-year. Weather-adjusted energy usage increased 3% in 2024, led by semiconductor and data center customers. Customer usage growth expectations were updated from 2% to 3% weather-adjusted through 2029.

• 2025 earnings guidance: $3.13 to $3.33 per diluted share. - Reiterated long-term dividend and EPS growth guidance of 5% to 7% using $3.08 per share as the base. - 2025 weather-adjusted load growth expected to be 2.5% to 3.5%. - 2025 O&M expenses expected to be $795 million to $815 million, including $135 million of earnings neutral regulatory deferral amortizations, wildfire mitigation, and vegetation management costs.

• OSHA recordable incident rate fell 16% compounded annually since 2020 but still a risk. - Power cost volatility due to market conditions. - Wildfire risks requiring advocacy for policy solutions. - Regulatory uncertainties, including the outcome of rate reviews. - Structural lag in cost recovery, with a 70 basis point lag in 2024 that the company aims to reduce.

Q: Julien Dumoulin-Smith asked about wildfire efforts and cost structure.

A: Maria Pope discussed wildfire work at state and federal levels, including standards of care, backstop fund, and liability limitations. Joe Trpik talked about realigning cost structure to reduce structural lag.

Q: Richard Sunderland asked about O&M and regulatory strategy.

A: Joe Trpik spoke about reducing structural lag and Maria Pope discussed evaluating Seaside options and balancing regulatory considerations.

Q: Shar Pourreza asked about wildfire fund and equity contributions.

A: Joe Trpik said openness to equity contributions if liability standards are addressed.

Q: Michael Lonegan asked about Seaside tracker filing.

A: Maria Pope said they are considering multiyear regulatory solutions.

Q: Nicholas Campanella asked about rate base growth and common equity ratio.

A: Joe Trpik discussed rate base growth range and common equity ratio improvement plans.

Q: Anthony Crowdell asked about wildfire legislation timing.

A: Maria Pope said bills would be submitted in next two weeks and session ends in June.

Q: Paul Fremont asked about wildfire legislation replication.

A: Maria Pope discussed looking at best practices and balancing liabilities.

Q: Travis Miller asked about federal wildfire initiatives.

A: Maria Pope said there's recognition of need for federal action and efforts are complementary.