Q1 2021 Portland General Electric Co Earnings Call

April 30, 2021

[music].

Good morning, everyone and welcome to the Portland General Electric Company's first quarter 2021 earnings results Conference call. Today is Friday April 13, 2021. This call is being recorded and as such all lines have been placed.

On mute to prevent any background noise.

After the speakers remarks, there will be a question and answer period.

If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad.

If you would like to withdraw your question press the pound key on your telephone keypad.

If you do intend to ask a question. Please avoid the use of speaker phones.

For opening remarks, I will turn the conference call over to Portland General Electric's Senior director of Investor Relations.

Mr. Jordan higher Emilio. Please go ahead Sir.

Thank you Ren.

Everyone I am pleased that youre able to join US today before we begin this morning I'd like to remind you that we've prepared a presentation to supplement our discussion, which we'll be referencing throughout the call. The slides are available on our website at investors day, Portland General Dot com, referring to slide two some of our remarks. This morning will constitute forward looking.

<unk>, 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 earnings press release and our most recent periodic reports on forms 10-K, and 10-Q, which are available on our web site.

Leading our discussion today are Maria Pope President and CEO, and Jim Ajello Senior Vice President of Finance CFO and Treasurer. Following their prepared remarks, we will open the line for your questions now, it's my pleasure to turn the call over to margin.

Thank you John and thank you all for joining US today, our financial results. This quarter were strong we reported net income of $96 million or $1 seven per share compared to net income of $81 million or <unk> 91 per share in the first quarter of last year.

In light of the strong quarter on positive outlook, we're reaffirming our 2021 earnings guidance of $2 55 to $2 70 per share as well as our long term earnings and dividend growth rates.

Jim will cover first quarter results in more detail provide regulatory on capital updates as well as discuss the outlook for the rest of the year.

This quarter again presented significant weather driven operational challenges.

And I am proud of how our teams came together responding to the most severe.

Wind and snow storms in our history.

Improving our operations and achieving important customer focused results.

In February we restored over 750000 customer outages as nearly half of our customers were without power.

Many of whom experienced multiple outages.

Over more than two five week period.

I want to recognize the hard work of our co workers mutual aid crews and assistance from as far away as Southern California, Utah, Montana to Alberta, British Columbia, all of home in the midst of a pandemic went above and beyond to restore power quickly and most importantly safely.

Even as we speak crews continue to repair equipment and clear down to trees.

As damage is still extensive.

As of March 31, the cost of the February storm were $87 million, which Jim will discuss in detail.

The recent storms and wildfires last fall on top of the pandemic.

With so many people living working and learning remotely on.

Underscoring the importance of our ongoing system hardening and reinvestment programs combined with the deployment of digital capabilities, AI and smart grid technologies.

Today versus a year ago customers are experiencing about 16% less planned outages.

Average outlets restoration times or about 7% faster.

And average tech text notifications and digital payment options are making a difference in customer satisfaction.

And equally important to note is what did not happen during the February weather events, our generation plants as well as wind and hydro facilities operated seamlessly and.

And power was generated across the region throughout the harsh conditions.

Turning to load growth in the economy.

For the last couple of years, we have discussed the strength of our service territory.

Overall year over year customer count increased more than 1% and load growth was up one 2% on a weather adjusted basis and two 3% after accounting for the harsh winter conditions.

Residential usage was up 3% weather adjusted offsetting commercial declines of 5%.

Industrial usage grew an impressive 8% powered by the strength of the tech and digital sectors.

Expansion within our region of several digital companies and the global semiconductor shortage are expected to continue and solidify our positive outlook.

Overall, Oregon's economy is recovering.

With nearly two thirds of the states pandemic driven job loss recovered.

Unemployment currently stands at five 7% across our service territory.

ESG.

Portland General has long been an ESG leader and.

And this quarter, we joined the Amazon climate pledge in keeping with our commitment to reduce carbon by 80% by 2030 over 2010 levels and our aspirational goal of net zero by 2040.

We also know that to make real progress on climate, we need to partner in addressing the admissions from transportation and other sectors.

Last week in partnership with Daimler trucks, North America, we celebrated the opening of the first of its kind heavy duty electric truck charging site.

This site aligns with the West Coast Clean Transit corridor initiative to electrify along the I five corridor from the borders with British Columbia to Mexico.

And finally, I would like to address the ongoing social unrest and importance of our diversity equity inclusion work.

These in these tumultuous times corporations have an opportunity.

That's for change.

At Portland General are DNI priorities are focused on recruiting retaining training and promoting from our front line to our board of directors.

We are committed to transparency and have published for three years running our workforce and pay equity statistics.

We've made good progress, but we know that there is still much work to do.

As we look to the year ahead, we're excited to lead the clean energy transformation and humbled by the challenges as we work seamlessly to integrate ever increasing amounts of renewable and distributed energy resources into a growing reliance and resilient grid.

Any customer's needs for safe affordable clean energy.

I'll now turn it over to Jim Thanks Maria.

Two was impressed with the efforts of our teams across the company to restore power safely to customers during the February storms.

As we turn to economic conditions, it's clear that we're beginning to see recovery take hold approximately 40% of oregonians have had at least one vaccine shot and as of mid April K 12 public schools reopen for in person education, either hybrid or full time.

March 2021, the unemployment rate in <unk> service territory was five 7% compared to a 14% peak in April 2020 in the first quarter, Oregon saw accelerated job growth and as of March had recovered over half of the jobs lost less springs harder hit.

Such as leisure and hospitality have posted the noteworthy gains after experiencing a second wave of job losses in late 2020.

While there are green shoots of recovery. We appreciate that many of our customers are still facing challenges and we embrace our role as an essential service provider and partner to Oregon communities.

Turning to slide five I'll cover our financial performance as Maria said, we reported $1 <unk> per share compared to <unk> 91 per share in the first quarter of 2020.

First we saw a <unk> increase in total revenue. This is composed of <unk> due to higher loads, which increased one 2% over year over year weather adjusted on a <unk> positive impact from weather. Additionally, there was <unk> from the earnings power associated with the <unk>.

<unk> renewable energy facility, which was placed and serviced in the force fourth quarter of 2020.

Next a <unk> <unk> decrease in net variable power costs, driven by lower hydro wind production in 2021, while our wind production exceeded our expectations. It was still less than the unusually high levels of production experienced in 2020.

A <unk> <unk> decrease was associated with higher operating and maintenance.

Administrative expense, which consists of <unk> <unk> of favorable fixed plant O&M, primarily due to lower maintenance expense that our generation facilities.

This was offset by <unk> 12 of unfavorable administrative expenses, which included <unk> <unk> of higher employee benefit expenses, <unk> with higher legal and professional expense and <unk> <unk> from the timing of bad debt recognition under our COVID-19 deferral and <unk> from other items.

<unk> increase was associated with lower depreciation and amortization expense largely as a result of asset retirements, which were partially offset by capital addition.

There was a <unk> increase in other income primarily attributed to market returns on the non qualified benefit trust. There was an 11% increase from lower tax expense, primarily driven by a onetime recognition of the benefit from our local.

Flow through tax.

Turning to the regulatory update.

We are continuing to evaluate our cost structure to ensure that we're providing safe reliable and affordable service to our customers.

While making investments that leverage the use of technology and advance our strategy, we are still assessing our needs and the appropriate timing to file a general rate case with the Oregon Public service Utilities Commission for 2022 test year.

This last week, we requested a docket to be open to select an independent evaluated with stakeholders for our upcoming RFP. This is the first step towards the RFP process of which is expected to continue into 2022 before finalizing potential selections.

The RFP will seek both renewable energy and <unk> resource bids PGE has identified a roughly 500 megawatt capacity need that will seek to fill as part of this 2021 all source RFP.

For the 2019 acknowledged ERP PGE is permitted to have 150 megawatts of energy producing resources like renewables to fill a portion of this capacity need.

We plan to file a benchmark resource into this competitive process. Additionally, as it relates to capacity, we are continuing to pursue cost competitive agreements for existing capacity in the region. If PGE is successful in these negotiations it might reduce the size of the 2021 RFP depending.

On the contracting dates for an existing capacity resource.

Regarding the deferral related to our storm costs detailed on slide six through March 31 2021.

Incurred an estimated $87 million on incremental cost due to the February storm of which $33 million for capital expenditures and $54 million were operating expenditures associated with our transmission and distribution system. We have a storm deferral mechanism that collects $4 million annually from retail customer.

On to cover incremental expenses related to storm damages and we defer any amount not utilized in the current year.

In response to the February storms, we exhausted our storm collection balance for 2021 of $9 million to offset operating expenses. This brings the cumulative incurred costs from the February storm to be estimated at $45 million net as of March 31 2021.

We have filed an application for authorization to defer emergency restoration costs for the February storms.

We expect a decision from the PUC on this in 2022.

We are confident these costs were incurred prudently in response to this unique and unprecedented storm. Although there are comparable storms of similar size and duration and other regions at a similar expense. The op has significant discretion and making the final determination of recovery and their conclusion of the overall proof.

<unk>.

Turning to slide seven which shows our updated capital forecast through 2025, we've increased our 2021 capital expenditures by $45 million. This year, the majority of which relates to the capital expenditures from the recent storm restoration our capital plan remains on track and we continue to invest primarily in.

<unk> that enhance the resiliency and reliability of our system for the benefit of customers, while maintaining affordability.

Given our guidance today, we raised our O&M guidance by $20 million. This is in response to several factors $12 million of this increase is associated with the February storm response expense, which is ultimately offset in revenue and the remaining $8 million is associated with additional initiatives to address.

Yes, wildfire risk improve our outage restoration estimation and outage response processes on.

On to slide eight we continue to maintain a solid balance sheet, including strong liquidity and investment grade ratings accompanied by a stable outlook based on our strong financial condition, we do not expect to issue additional equity in 2021.

We expect to fund 2021 on capital expenditures and long term debt maturities with cash from operations during 'twenty one.

Which is expected to range from $600 million to $650 million. We've also increased a long term debt issuance later this year up to $350 million, which we'll refinance the short term no closed earlier this year and satisfy our 2022 requirements total liquidity of 780 <unk>.

Yeah.

All of which is available.

Earlier this week, our board approved a dividend increase of <unk> <unk> per share on an annualized basis, which represents a five 5% increase this increase is consistent with our long term dividend growth guidance of 5% to 7%, while observing a dividend payout ratio of 60% to 70%.

Turning to our 2021 outlook, our first quarter performance was strong and we're on track to achieve our guided range and finished within the long term growth guidance of 4% to 6% from the 2019 base here.

We expect continued impacts from the pandemic on the economy and regional power picture.

Through the second quarter.

We anticipate a similar load competition to the composition to the trends that we've experienced over the last two quarters, our commercial customers face risks associated with economic impact of the pandemic in Oregon, but the strength of our residential and industrial energy deliveries is mitigated this decline right.

Right now we're still under the cap of our decoupling mechanisms residential customer usage on a weather adjusted basis is above the established threshold and is expected to be refunded to customers as.

As I settle in I can see excellent fundamentals on the business low growth is strong and we continue to see opportunities to drive efficiency in our operations, mostly through an investment in technology and developing a smarter more resilient grid all of which will result in better outcomes for our customers.

Overall, we are continuing to reaffirm our full year 2021 earnings guidance of $2 55 to $2 70.

Per diluted share based on the assumptions outlined on our press release, and our long term growth target of 4% to 6% over time.

And now operator, we're ready for questions.

Thank you Sir.

Ladies and gentlemen, if you have a question at this time. Please press the Star then the number one on your thoughts on telephone.

If your question has been answered or you wish to remove yourself from the queue DFAST.

Keith.

We have our first question from the line of <unk> Kim from Goldman Sachs. Your line is now open.

Good morning, Thank you good morning.

First question on just the cash.

Performance in the quarter and setting up for the rest of the year could you just run through maybe.

If all of the items like the tax benefit this quarter. Some point for some increased O&M and how much of that you had already anticipated how much do you think it may be above the plan on just more detail there.

Yes, so the tax benefit the <unk> as I mentioned here on the on the earnings Walk Bridge is is really <unk> associated with a local pass through tax that's a one time adjustment so of course that wasn't in.

And the plan as we go forward here, so and the rest of it call. It a couple of miscellaneous items on the on the tax side right. So so that that is really the tax item on local pass through tax that should have been booked earlier in overtime very soon okay.

Got it and.

And if that's the case does that mean just based on when you were giving the original 2021 guidance all else equal I know <unk> is more one time, but you are trending towards that upper half.

I wouldn't necessarily say that at this point in time right. So we're really not altering guidance for the balance of the year, but this particular item wasn't included in the guidance that we offered earlier in February or today for that matter.

Understood.

And one more for me I guess.

On the 10-Q that the futures trading Commission has an investigation into the August trading incident.

Not familiar with the process with that agency on what typical range on a range of outcomes results from something like this but I don't know if theres anything can shed in terms of what we could expect over the next coming months.

Really nothing to shed in the way of predictions. These are very early days.

And the process like that.

I would say, it's not unexpected and matters such as this.

Of course, we're going to fully collaborate with any review that's done by the agencies and I will tell you we're fully disclosed on the matter. So in terms of the trading matter from last year and obviously the board concluded its special review on the on the issue.

Got it thank you so much.

Youre welcome.

Thank you. Our next question is from the line of Julien Smith from Bank of America. Please go ahead.

Yeah.

Hey, good morning team. Thank you for the time and opportunity.

If I can kick this off just on the rate case timing Super quickly here.

You just said you don't necessarily know winter, if still but I presume that the positive results here in the first quarter dry delayed some of the timing here or how are you thinking about this in terms of the latest updates on factors.

Julian it's Jim how are you so.

I would say to you that we're continuing to look at it.

Literally.

All the time, we're constantly examining our cost structure, how we're managing through it we're looking at community impacts COVID-19 is still with us of course.

But we are managing well I think through the period of time and if we can be sure to manage and provide good customer care and pricing that gives us a little more opportunity to delay the filing.

Excellent okay.

Then if I can.

I think also on the 10-Q there was some discussion around this.

I think it's called the green future impact program, but it seems like it might have some incremental opportunity can you talk about that relative to plan here on how you think about that against other generation needs.

Yes, its pretty early on we've just received the order. It's an incremental 200 megawatts of you probably have noticed and there is an opportunity for us to provide more green power, which is in great demand.

In our Norwegian territory, but at this point in time I couldnt be very specific about how we're going to roll that out we're still examining our options on that one but.

We've got the largest voluntary renewable energy program in the U S still.

Still this will this will add to that opportunity, but the details we don't quite have yet.

Julien, it's really important that we're able to serve customers with the clean energy that they want whether that is in a small municipal customers.

Jim just noted our voluntary renewable program, which is largely a residential and small commercial programs.

But we also to our largest customers. They are increasingly wanting 100% green energy and it's important that we're able to deliver that to them.

Right, but maybe to clarify on this program your ownership opportunity.

Or prospective ownership opportunities.

Yes.

That's a possibility, but it all depends on what's competitive.

And what's the best thing for customers you will have noticed okay.

Julian you probably noticed the prior <unk>.

Announced transaction with seven <unk>.

<unk> C&I customers earlier.

On a number of months ago. So I would I would just leave it as such that this could be a buy build opportunity we're not sure yet.

Got it excellent and then if I can squeeze a sense.

Brian I know that you in particular, where at some Senate hearings of late.

And is this widening tax bill.

<unk> novel in terms of how it would sort of rewrite.

Renewable tax code.

I'm curious if you have any perspective to add to that.

Certainly early days altogether on tax reform and the subject of renewable tax reform is something that we haven't really growth meaningfully yet so any thoughts on that I know for instance, it includes a nuclear PTC as a few other pieces there that certainly are novel to the industry.

Great well, thank you Julian and yes, what Senator Wyden is trying to do is really.

Rationalize and modernize a lot of the tax incentives that go to our industry and the energy industry in total.

And really focus those on clean energies on new technologies. His bill is unique in a couple of ways first is technology neutral.

So all technologies to the extent that they reduce carbon.

We are on the table.

The other is it does not pick winners and losers. So theres some fixes for the normalization issues that utilities have faced in the past, creating a much more level, playing field and allowing for acceleration on our clean energy future. It includes transmission includes transportation sector.

And it does not include nucleolar at this point in time, although there's a lot of discussion taking place around that as you know 20% of the energy generated in the country as nuclear and that's an important source of clean energy.

We move forward, if we're going to hit the aggressive 2030, and then 2035 goals as laid out by the administration.

Got it thanks, guys I'll pass it on from here all day. Thank you.

Thank you. Our next question is from Anthony crowds on from Mizuho <unk>.

Go ahead.

Hey, good morning, hopefully just two quick ones one is.

Any contribution this quarter from the pecan mechanism I apologize if you guys went over that already.

Yes.

So in general when we look at the Pecan, we look at how it whether it's over or under versus our baseline.

Calculated on a full year basis, and this year and co.

We were about $13 million under the baseline.

However, it's just really too early days.

As you probably have noted the west is having an overall drought our hydro conditions remain pretty good in the Pacific Northwest right now.

Biggest mover.

Power prices from a hydro perspective is the Columbia River basin measured at the Dallas, which is right about $89 90%.

But we are I think it's just too early to call for the year.

Okay, Great and then if I could follow up on one on <unk> question.

I think we've got a <unk> 10 benefit to tax this quarter, Jim on over the details between them and I think 911 was more of a onetime in nature, how does that correspond to also the.

Rising guidance, meaning.

Are you using a tax benefit maybe as an opportunity to maybe pull forward guidance with some wildfire risk I know you had the storms, but also maybe pulling forward and doing it demands on wildfire risk to give you. Some headroom later in the year or maybe in 2022.

Yes, no as Jim noted, we've not changed our guidance and we're not picking any side of the ranges of our guidance again, it's just too earlier in the year, we did increase our O&M costs as Jim outlined.

And we had the one time issue literally from the accounting adjustment we had on it on.

And it's a relatively small tax line out just with overtime.

Tony I just wanted to point out that there is really no necessary connection between that.

Tax item recognition.

The O&M increase the <unk> has to do primarily with the storm in the eight is to prepare us better for outage.

In other uses of technology on the grid, so apple on Apple and an Orange I would say.

Yes, I would say overall, we are investing in reliability and particularly as we look at significant weather events potentially fires.

And other is making sure we are best prepared as possible.

Great and then just lastly also into address it.

On the investigation with the SEC and then also on the Q I think there are several lawsuits that have been filed on <unk>.

Heading to the trading incident last year.

Just because I'm not familiar with the process isn't investigation is something you could settle like you meet with the SEC and you settle on.

Thats not how an investigation works.

We're entirely unsure of the direction. This will go as I said, it's very early days and so I wouldn't want to speculate on the outcome of that there's just no way to predict.

The outcome. So we'll just leave it at that.

Great. Thanks for taking my questions Youre welcome.

Okay.

Thank you. Our next question is from Brian Russo from Sidoti <unk> co head.

Yes, hi, good morning.

Good morning.

So just to follow up on the P. Chem.

As you mentioned 13 million below.

As of March of this year. So it's commentary on too is that do you expect to be below the baseline for the full year of 2021, but is it basically just extrapolating what.

Reported as of the first quarter or was it kind of projecting.

For the remainder of the year based on hydro conditions and pulp prices et cetera, and then does your guidance assume.

Zero PGM balance.

Our guidance has a little bit of a balance as we note in the queue below the baseline. This time last year, we were $20 million below the baseline and you look at the prior year, we were actually above the baseline in 2019.

I just it's just too early days to tell on we're going to very interesting energy markets in the Pacific Northwest.

<unk> prices are clearly higher than anyone would have expected. This time last year or even a couple of months ago.

And I think we just have a good solid.

On a balance of the year to work through and I don't think we'd want to call. It until we are clearly.

Past, the third quarter time period.

Okay understood.

And then also just a follow up the <unk> decline.

Headwind on net variable power cost is basically the delta of the $20 million below in first quarter. 'twenty. You said, you mentioned versus the 13 million below that you are.

And this first quarter, yes, okay exactly one of the things I think is really important to point out last year was in 2020, a remarkably good wins here and we had good hydro, but we had significantly above average wind conditions. It was it was a terrific wind here.

And then on the RFP you mentioned.

You hope to finalize.

Got it.

The independent auditor process.

On time in 2022, and then start the RFP.

Any idea on timing first half of 2022 or second half of.

2022.

Yes.

You are.

It's hard to tell exactly but I would say by the end of the first half will be relatively set to go there. So that the main the main driver here is to get.

Plants or capacity in service by 2024, so everything will be sort of solved from that endpoint and go backwards, so whether whether we're one month or one quarter in 2022 is another.

Issue, but we're really all about getting it.

Service by 2020 for one thing I would note in our past processes.

Is the independent evaluated discussions and selection processes criteria has been particularly time consuming as we've worked through it with parties and everyone involved so I would expect unless something changes for this to take longer than many states and many other states.

Probably.

Understood and then lastly, just Portland General is clearly a leader in electrification and decarbonization and you've made a number of announcements including index.

<unk> got truck battery charging stations, a couple of weeks ago with Daimler.

Wondering when might just materialized into.

Investments scenario that gets layered into capex.

You are able to earn.

Return on open on.

Future investments.

Yes, that's a great question and it's one we're asking ourselves is well the investment category has come in in a couple of different buckets. The first one is just in terms of charging stations themselves and just the ability to charge whether thats.

In the right away whether that is a residential whether that is industrial commercial whatever that next is really the what I call the infrastructure and in particular, what we call the make ready so all the cabling that leads to those charging stations.

It also includes upgrades to substation. So in many instances, there's a two four as it enhances reliability and upgrades ageing infrastructure to accommodate more charging and then I think third is really energy usage, but really flexible energy usage, so that we're able to charge batteries or maybe.

Even in the future vehicle to grid that optimizes more renewable energy, allowing us to not only charge on the Sun is shining and the wind is blowing but when prices are at their lowest so we really see the opportunities here is very synergistic with our regular utility operations and <unk>.

<unk> reliability.

And the grid performance overall.

So we look forward to the day when there is that much more volume as much as anyone does.

Okay, great. Thank you very much.

Thank you.

Thank you. The next is from Sophie Karp from Keybanc. Your line is now open.

Hi, Good morning, how are you good morning.

Alright, so a couple of questions here, maybe first on <unk>.

How are you thinking about the timing of the <unk> T. In the context of also having to ask for his storm recovery.

And maybe along those lines if you could comment on what kind of mechanisms you envision maybe could you do something like securitization for the storm cost or or is it just going to be encountered in rates can or how should we think about the about this.

Thanks, Sophie it's Jim so.

Were laying out the strategy right now so we don't have it.

It's quite done to talk about today, but obviously, we have a number of deferrals with the wildfire existing with COVID-19 existing this new deferral that we've applied for on the recent storm.

On clarification, we don't have the opportunity to do a securitization, but I believe will talk to the regulators of course about how we amortize these deferrals over over some period of time.

Could very well be wrapped up in the rate case as well. So the options are open and they are subject to have conversations with the regulators, which hasnt happened yet I would say.

Got it. Thank you for the color here and then on the RFP process. So I think I heard correctly that you expect to be the benchmark for any source into that.

Is that accurate and if so can you give us any color on what primary source code the B and C.

<unk> of that.

Yes, so so out of so it'll be about 150 megawatts.

It'll be a non emitting resource may include batteries.

As well.

So at this point in time, we're focused on picking the independent evaluate or that's just kicked off as Maria just said it could take many months to accomplish that and so in the meantime, we're evaluating what our options are for the RFP, we will bid a benchmark resource into that.

Into that campaign.

Got it. Thank you and lastly from me maybe on the wildfires like you correctly pointed out the west is still on the state of drought this year.

Is there anything that you're doing maybe differently. This year ahead of the wildfire season, given the experiences from <unk> to.

Preemptively mitigate some of the potential.

Damages that may ensue.

Sure. Thank you as you know we've been thinking about preparing and learning from our utility peers from California, Arizona, Colorado and actually also those from Australia in terms of wildfire mitigation.

Mitigation.

The detection of wildfires and then how we handle them.

That occur in our service territory.

Right now we're doing a tremendous amount of vegetation management, we're also working and collaborating with our community partners at the very local level and overall enhancing our preparedness, it's really around continuous improvement and we learned a lot from the wildfire season last September.

And continue all of the work that we have been doing over the last number of years.

Thank you that's helpful. Thank you.

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

Good morning, Thank you.

<unk>.

So real quick one on the dividend just confirming this is the with the raise that you had this quarter. This is the typical cadence that you expect to get back to going forward all else equal.

On a confirm that that's right Travis we the board.

Adopted a increased five 5% nine a share $1 63 to $1 72, and that would put us on our cadence on a regular cadence.

Okay, Great and then.

You got my EV question that I was going to ask but.

Let me ask a little follow on to that as you talk about these different areas I understand that.

Infrastructure and as you characterize it in terms of the 123 infrastructure part would be.

On a year thing right what are your on certain long term strategy in terms of.

For lack of a better word outsourcing that.

Charging the energy management part.

In home energy management, all of that stuff, obviously, we've seen a lot of companies come out.

Yes.

With services like that and with plans to grow like what's your long term strategy in terms of.

Owning that energy service part, where there's the charging stations or the actual usage.

That's a great question and actually if you go onto our website you can see a marketplace, where you can buy.

Thermostats with.

<unk> Energy Trust of Oregon credits.

And participate in a distributed energy programs through Portland General.

We are building out an integrated operations center, which will enhance our capabilities of managing a bidirectional grid and we remain very focused on serving customers.

As an example, we have.

Distributed energy resource test beds, where we're actually interacting with customers on their cell phone they can opt into energy events.

We will reduce their energy usage and critical peak times and shave off almost 10% on their bills.

During those during those months and so for us there's a tremendous amount of opportunity. We're also partnering with number of technology partners. We don't expect to do it all and many companies have terrific technologies that will enhance the capabilities of reliably manage the grid as we go forward.

Okay, and then if we think about just in terms of accounting and cash flow would you think about that.

Kind of recoverable O&M such that over time.

Would see O&M, but go back go up, but then kind of EV related.

Charges would flow through.

Yes, we would expect that the work that we're doing.

Is all within the utility.

To enhance customers' experience, particularly as customers' expectations changed quite dramatically.

And all of those actions really contribute to a more reliable grid. We have used our distributed energy system, our standby generation system, which is quite significant on several times during critical peak times to shave off those peaks.

Rating less stress on the overall reliability of the system and enhancing.

Our resource adequacy. So we expect to only continue we see all of these things is synergistic and most importantly, as we add more renewable variable resources theyre not just synergistic they are essential to maintaining reliability of the system and serving customers with the clean and affordable.

Energy they want.

Okay, Great I appreciate it thanks. Thank you.

Thank you.

I am showing no further questions at this time I would now like to during the conference back to Miss Maria.

Thank you very much we appreciate your questions and interest and joining us for today's call. We invite you to follow up as well as to join US after the second quarter in July. Thank you very much bye bye.

Okay.

Ladies and gentlemen. This concludes today's conference. Thank you for your participation and have a wonderful day.

You may all disconnect have a great day.

[music] zone.

[music].

Good morning, everyone and welcome to the Portland General Electric company's first quarter 2021 earnings results Conference call.

As of Friday April 13, 2021 day.

This call is being recorded and as such all lines have been placed on mute to prevent any background noise.

After the Speakers' remarks, there will be a question and answer period.

If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad.

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Speaker phones.

For opening remarks, I will turn the conference call over to Portland General Electric's Senior director of Investor Relations.

<unk> Jordan, our Emilio <unk> go ahead Sir.

And good morning, everyone I am pleased that Youre able to join US today before we begin this morning I'd like to remind you that we have prepared a presentation to supplement our discussion, which we'll be referencing throughout the call. The slides are available on our website at investors day, Portland General Dotcom.

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 earnings press release and our most recent.

Erotic reports on forms 10-K, and 10-Q, which are available on our website, leading our discussion today are Maria Pope President and CEO and Jim Ajello Senior Vice President of Finance CFO and Treasurer. Following their prepared remarks, we will open the line for your questions now, it's my pleasure to turn the call over to Mike.

Thank you John and thank you all for joining US today, our financial results. This quarter were strong we reported net income of $96 million or dollar seven per share compared to net income of 81 million or <unk> 91 per share in the first quarter of last year.

In light of the strong quarter on positive outlook, we're reaffirming our 2021 earnings guidance of $2 55 to $2 70 per share as well as our long term earnings and dividend growth rates.

Jim will cover first quarter results in more detail provide regulatory on capital updates as well as discuss the outlook for the rest of the year.

This quarter again presented significant weather driven operational challenges.

And I'm proud of how our teams came together responding to the most severe ice wind and snow storms in our history.

Improving our operations and achieving important customer focused results.

In February we restored over 750000 customer outages as nearly half of our customers were without power.

Many of whom experienced multiple outages.

Over more than two and a half week period.

I want to recognize the hard work of our coworkers mutual aid crews and assistance from as far away as Southern California, Utah, Montana to Alberta, British Columbia, all of home in the midst of a pandemic went above and beyond to restore power quickly and most importantly.

<unk>.

Even as we speak crews continue to repair equipment and clear down to trees.

Cause damage is still extensive.

As of March 31st the cost of the February storm were $87 million, which Jim will discuss in detail.

The recent storms and wildfires last fall on top of the pandemic.

With so many people living working and learning remotely on.

Underscore the importance of our ongoing system hardening and reinvestment programs combined with the deployment of digital capabilities, AI and smart grid technologies.

Today versus a year ago customers are experiencing about 16% less planned outages.

Average outlets restoration times or about 7% faster.

On average tech text notifications and digital payment options are making a difference in customer satisfaction.

And equally important to note is what did not happen during the February weather events, our generation plants as well as wind and hydro facilities operated seamlessly and.

And power was generated across the region throughout the harsh conditions.

Turning to load growth in the economy.

For the last couple of years, we have discussed the strength of our service territory.

Overall year over year customer count increased more than 1% and load growth was up one 2% on a weather adjusted basis and two 3% after accounting for the harsh winter conditions.

Residential usage was up 3% weather adjusted offsetting commercial declines of 5%.

Industrial usage grew an impressive 8% powered by the strength of the tech and digital sectors.

Expansion within our region of several digital companies and the global semiconductor shortage are expected to continue and solidify our positive outlook.

Overall, Oregon's economy is recovering.

With nearly two thirds of the state's pandemic driven job loss recovered.

Unemployment currently stands at five 7% across our service territory.

ESG.

Portland General has long been an ESG leader in.

And this quarter, we joined the Amazon climate pledge in keeping with our commitment to reduce carbon by 80% by 2030 over 2010 levels and our aspirational goal of net zero by 2040.

We also know that to make real progress on climate, we need to partner in addressing the admissions from transportation and other sectors.

Last week in partnership with Daimler trucks, North America, we celebrated the opening of the first of its kind heavy duty electric truck charging site.

This site aligns with the West Coast Clean Transit corridor initiative to electrified along the I five corridor from the borders with British Columbia to Mexico.

And finally, I'd like to address the ongoing social unrest and importance of our diversity equity inclusion work.

These in these tumultuous times corporations have an opportunity.

That's for change.

At Portland General are DNI priorities are focused on recruiting retaining training and promoting from our front lines to our board of directors.

We are committed to transparency and have published for three years running our workforce and pay equity statistics.

We've made good progress, but we know that there is still much work to do.

On a customer's needs for safe affordable clean energy.

I'll now turn it over to Jim Thanks Maria.

Two was impressed with the efforts of our teams across the company to restore power safely to customers during the February storms.

As of March 2021, the unemployment rate and PGE service territory was five 7% compared to a 14% peak in April 2020 in the first quarter, Oregon saw accelerated job growth.

And as of March had recovered over half of the jobs lost last spring.

Harder hit segments, such as leisure and hospitality have posted a noteworthy gains after experiencing a second wave of job losses in late 2020.

Turning to slide five I will cover our financial performance as Maria said, we reported $1 <unk> per share compared to <unk> 91 per share in the first quarter of 2024.

First we saw a 6% increase in total revenue. This is composed of <unk> due to higher loads, which increased one 2% year over year weather adjusted on a <unk> positive impact from weather. Additionally, there was <unk> from the earnings power associated with the <unk>.

<unk> renewable energy facility, which was placed in service and the force fourth quarter of 2020.

Next a <unk> <unk> decrease in net variable power costs, driven by lower hydro and wind production in 2021, while our wind production exceeded our expectations. It was still less than the unusually high levels of production experienced in 2020.

A <unk> <unk> decrease was associated with higher operating and maintenance.

Administrative expense, which consists.

<unk> <unk> of favorable fixed plant O&M, primarily due to lower maintenance expense that our generation facilities.

This was offset by <unk> 12 of unfavorable administrative expenses, which included <unk> <unk> of higher employee benefit expenses <unk> <unk> of higher legal and professional expense and <unk> <unk> from the timing of bad debt recognition under our COVID-19 deferral and <unk> from other items.

<unk> increase was associated with lower depreciation and amortization expense largely as a result of asset retirements, which were partially offset by capital addition.

There was a <unk> increase in other income primarily attributed to market returns on the Nonqualified benefit Trust. There was an 11% increase from lower tax expense, primarily driven by a onetime recognition of a benefit from our local.

Flow through tax.

Turning to the regulatory update.

We are continuing to evaluate our cost structure to ensure that we're providing safe reliable and affordable service to our customers.

This last week, we requested a docket to be open to select an independent evaluated with stakeholders for our upcoming RFP. This is the first step towards the RFP the process of which is expected to continue into 2022 before finalizing potential selections.

The RFP will seek both renewable energy and dispatch able resource bids PGE has identified a roughly 500 megawatt capacity need that we will seek to fill as part of this 2021 all source RFP.

For the 2019 acknowledged ERP PGE is permitted to have 150 megawatts of energy producing resources like renewables to fill a portion of this capacity needs.

On the contracting dates for an existing capacity resource.

Regarding the deferral related to our storm costs detailed on slide six through March 31 2021.

We have a storm deferral mechanism that collects $4 million annually from retail customers to cover incremental expenses related to storm damages and we defer any amount not utilized in the current year.

We have filed an application for authorization to defer emergency restoration costs for the February storms.

We expect a decision from the PUC on this in 2022.

<unk>.

Our capital plan remains on track and we continue to invest primarily in projects that enhance the resiliency and reliability of our system for the benefit of customers while maintaining affordability.

Wildfire risk improve our outage restoration estimation and outage response processes.

We expect to fund 2021 on capital expenditures and long term debt maturities with cash from operations during 'twenty one.

Yeah.

All of which is available.

We expect continued impacts from the pandemic on the economy and regional power picture through.

Through the second quarter, we anticipate a similar load competition to the composition to the trends that we've experienced over the last two quarters, our commercial customers face risks associated with economic impact of the pandemic in Oregon.

On the strength of our residential and industrial energy deliveries has mitigated this decline.

Right now we're still under the cap of our decoupling mechanism residential customer usage on a weather adjusted basis is above the established threshold and is expected to be refunded to customers.

Overall, we are continuing to reaffirm our full year 2021 earnings guidance of $2 55 to $2 70.

Per diluted share based on the assumptions outlined in our press release, and our long term growth target of 4% to 6% over time.

And now operator, we're ready for questions.

<unk>.

Thank you Sir.

Ladies and gentlemen, if you have a question.

Line. Please press the Star then the number one on your thoughts on telephone.

Your question has been answered or you wish to remove yourself from the queue DFAST defense.

We have our first question from the line of <unk> Kim from Goldman Sachs. Your line is now open.

Good morning, Thank you.

Good morning America.

First question on just the great performance in the quarter and setting up for the rest of the year could you just run through maybe.

The it's all of the items like the tax benefit this quarter. Some point for some increased O&M and how much of that you had already anticipated how much do you think it may be above the plan just more detail there.

Thanks, Vince so the tax benefit the 11th I mentioned here on the on the earnings Walk Bridge is is really <unk> associated with a local pass through tax that's a one time adjustment. So of course that wasn't in the plan as we go forward here. So.

The rest of it call. It a couple of miscellaneous items on the on the tax side right. So so that that is really the tax item on a local pass through tax that should have been booked earlier in overtime very soon okay.

Got it.

And if that's the case does that mean just based on when you were giving the original 2020 on guidance all else equal I know <unk> is more one time, but you are trending towards that upper half.

Understood.

And one more for me I could see in the.

The 10-Q that you think.

The futures trading Commission it has an investigation into the August trading incident.

I'm, just not familiar with the process with that agency.

What typical range on a range of outcomes results from something like this but I don't know if theres anything can shed in terms of what we could expect over the next coming months.

Really nothing to shed in the way of predictions. These are very early days.

In the process like that.

I would say, it's not unexpected in matters such as this.

Got it thank you so much.

Youre welcome.

Thank you. Our next question is from the line of Julien Smith from Bank of America. Please go ahead.

Hey, good morning, James Thank you for the time and opportunity.

If I can kick this off just on the rate case timing Super quickly here.

You just said you don't necessarily know when or if still but I presume that the positive results here on the first quarter dry delayed some of the timing here or how are you thinking about this in terms of the latest updates on package.

Julian it's Jim how are you so.

I would say to you that we're continuing to look at it.

Literally.

All the time, we're constantly examining our cost structure, how we're managing through it we're looking at community impacts COVID-19 is still with us of course.

But we are managing well I think through the period of time and if we can be sure to manage and provide good customer care and pricing that gives us a little more opportunity to delay the filing.

Excellent okay.

Then if I can.

I think also on the 10-Q there was some discussion around this.

In our Norwegian territory, but at this point in time I couldnt be very specific about how we're going to roll that out we're still examining our options on that one but.

We've got the largest volunteer renewable energy program in the U S still.

Still this will this will add to that opportunity, but the details we don't quite have yet.

Julian it's really important that we're able to serve customers with the clean energy that they want whether that is in a small municipal customers.

Jim just noted our voluntary renewable program, which is largely a residential and small commercial programs, but we also to our largest customers. They are increasingly wanting 100% green energy and it's important that we're able to deliver that to them.

Right, but maybe to clarify the on this program your ownership opportunity.

Our perspective ownership opportunities.

Yes.

Thats a possibility, but it all depends on what's competitive.

And what's the best thing for customers you will have noticed that.

Julian you probably noticed the prior <unk>.

<unk> transaction with seven seven.

<unk> 17, C&I customers earlier.

A number of months ago. So I would I would just leave it as such that this could be a buy build opportunity we're not sure yet.

Got it excellent and then if I can squeeze a sense.

Brian I know that you.

<unk> in particular, where at some Senate hearings of late.

And there's this widening tax bill.

<unk> novel in terms of how it would sort of rewrite.

Renewable tax code.

I'm curious if you have any perspective to add to that.

Certainly early days altogether on tax reform and the subject of renewable tax reform is something that we haven't really broached meaningfully yet so any thoughts on that I know for instance, it includes a nuclear PTC. There is a few other pieces there that certainly are novel to the industry.

Great well, thank you Julian and yes, what Senator Wyden is trying to do is really.

Rationalize and modernize a lot of the tax incentives that go to our industry and the energy industry in total.

And really focus those on clean energies on new technologies.

As Bill is unique in a couple of ways first is technology neutral.

So all technologies.

The extent that they reduce carbon.

Are on the table. The other is it does not pick winners and losers. So theres some fixes for the normalization issues that utilities have faced in the past, creating a much more level, playing field and allowing for acceleration on the clean energy future. It includes transmission includes transportation sector.

And it does not include nuclear at this point in time, although there's a lot of discussion taking place around that as you know 20%.

The energy generated in the country as nuclear and that's an important source of clean energy as we move forward. If we're going to hit the aggressive 2030, and then 2035 goals as laid out by the administration.

Got it thanks, guys I'll pass it on from here all day. Thank.

Thank you.

Thank you. Our next question is from Anthony crowds law from Mizuho. Please go ahead.

Hey, good morning, hopefully just two quick ones one is.

Any contribution this quarter from the pecan mechanism I apologize if you guys on or was that already.

Yes.

So in general when we look at the Pecan, we look at how that whether it's over or under versus our baseline is calculated on a full year basis and this year in the core.

Order, we were about $13 million under the baseline.

However, it's just really too early days.

As you probably have noted the west is having an overall drought our hydro conditions remain pretty good in the Pacific Northwest right now.

Biggest mover of power prices from a hydro perspective is the Columbia River basin measured at the Dallas, which is right about 80, 990%.

But we are I think it's just too early to call for the year.

Okay, Great and then if I could follow up on one on <unk> question.

I think it was at 11% benefit to tax this quarter, Jim on over the details between them and I think 911 was more of a onetime in nature.

How does that correspond to also the rising guidance, meaning.

Are you using net tax benefit maybe as an opportunity to maybe pull forward guidance with some wildfire risk I know you had the storms, but also maybe pulling forward and doing it demands on wildfire risk to give you. Some headroom later in the year or maybe in 2022.

And we had the onetime issue literally from the accounting adjustment, we had on it on and.

And it's a relatively small tax on it just with overtime.

Tony I just wanted to point out that there is really no necessary connection between that.

Tax item recognition.

The O&M increase the <unk> has to do primarily with the storm in the eight is to prepare us better for outage.

In other uses of technology on the grid, so apple on Apple and an Orange I would say.

Yes, I would say overall, we are investing in reliability and particularly as we look at significant weather events potentially fires.

Now there is making sure we are best prepared as possible.

Great and then just lastly also into address it.

On the investigation with the SEC and then also on the Q I think there are several lawsuits that have been filed.

Waiting to the trading incident last year.

Just because I am not familiar with the process isn't investigations something you could settle like you meet with the SEC a new setup.

That's not how an investigation works.

We're entirely unsure of the direction. This will go as I said, it's very early days and so I wouldn't want to speculate on the outcome of that there's just no way to predict.

The outcome. So we'll just leave it at that.

Great. Thanks for taking my questions Youre welcome.

Okay.

Thank you. Our next question is from Brian Russo from Sidoti. Please go ahead.

Yes, hi, good morning.

Good morning.

So just to follow up on the P. Chem.

As you mentioned 13 million below.

As of March of this year Steve's commentary on <unk>. Two is that do you expect to be below the baseline for the full year of 2021, but is it basically just extrapolating what.

Reported as of the first quarter or does it kind of projecting.

For the remainder of the year based on hydro conditions and pulp prices et cetera, and then does your guidance assume.

Zero PGM balance.

Our guidance has a little bit of a balance as we noted in the Q below the baseline.

This time last year, we were $20 million below the baseline and you look at the prior year, we were actually above the baseline in 2019.

I just it's just too early days to tell on we're going to very interesting energy markets in the Pacific Northwest.

Market prices are clearly higher than anyone would have expected. This time last year or even a couple of months ago.

We just have a good solid.

Balance of the year to work through and I don't think we would want to call. It until we are clearly.

Past, the third quarter time period.

Okay understood.

And then also to follow up the <unk> decline.

Headwind on net variable power cost is basically the delta of the.

$20 million below in first quarter 'twenty that you mentioned versus the 13 million below that you are.

And this first quarter, yes, okay exactly one of the things I think is really important to point out last year was in 2020, a remarkably good wind year now we had good hydro, but we had significantly above average wind conditions. It was it was a terrific win here.

And then on the RFP you mentioned.

You hope to finalize.

Got it.

The independent auditor process.

On time in 2022, and then start the RFP.

Any idea on timing first half of 2022 or second half.

Of 2022.

Yes.

You are.

It's hard to tell exactly but I would say by the end of the first half will be relatively set to go there. So that the main the main driver here is to get.

Plants or capacity in service by 2024, so everything will be sort of solved from that endpoint and go backwards, so whether whether we're at one month or one quarter in 2022 is another.

Issue, but we're really all about getting it in service by 2020 for one thing I would note in our past processes.

Probably.

Understood and then lastly, just Portland General is clearly a leader in electrification and decarbonization and you've made a number of announcements including.

It was a Chuck truck battery charging stations, a couple of weeks ago with Daimler.

Wondering when might just materialized into.

Investments scenario that gets layered into capex.

You are able to earn a.

Our return on open on.

Future investments.

In the right away whether that is a residential whether that is industrial commercial whatever that next is really the what I call the infrastructure and in particular, what we call the make ready so while the cabling that leads to those charging station that also includes upgrades to.

The substation so in many instances, there's a two four as it enhances reliability and upgrades ageing infrastructure to accommodate more charging and then I think third is really energy usage, but really flexible energy usage, so that we're able to charge batteries or maybe even in the future vehicle to grid.

That optimizes more renewable energy, allowing us to not only charge on the Sun is shining and the wind is blowing but when prices are at their lowest so we really see the opportunities here as very synergistic with our regular utility operations and enhancing reliability.

And the grid performance overall.

So we look forward to the day when there is that much more volume as much as anyone does.

Okay, great. Thank you very much.

Thank you.

Thank you. The next is from Sophie Karp from Keybanc. Your line is now open.

Hi, Good morning, how are you good morning.

Alright, so a couple of questions here, maybe first on <unk>.

How are you thinking about the timing of the <unk> T. In the context of also having to ask for his storm recovery.

And maybe along those lines if you could comment on what kind of mechanisms you envision maybe could you do something like securitization for the storm costs or or is it just going to be encountered in rates can there how should we think about about this.

Thanks, Sophie it's Jim so.

Were laying out the strategy right now so we don't have it's quite done to talk about today, but obviously, we have a number of deferrals with the wildfire existing co.

<unk> existing this new deferral that we've applied for on the recent storm.

Is there and then the possibility of a rate case, so we will collaborate with our regulators to determine whether or not we bring those altogether or we talk about those deferrals on a separate track one clarification, we don't have the opportunity to do a securitization, but I believe we will.

I'll talk to the regulators of course about how we amortize these deferrals over over some period of time, it could very well be wrapped up in the rate case as well. So the options are open and they are subject to have conversations with the regulators, which hasnt happened yet I would say.

Got it. Thank you for the color here and then on the RFP process. So I think I heard correctly that you expect to be the benchmark for any sourcing to that.

Is that accurate and if so can you give us any color on whats primary source could that be and the sizing of that.

Yes, so so out of so it'll be about 150 megawatts.

It'll be a non emitting resource may include batteries.

As well and so at this point in time, we're focused on picking the independent evaluate or that's just kicked off as Maria just said it could take many months to accomplish that and so in the meantime, we're evaluating what our options are for the RFP, we will bid a benchmark resource into that.

Into that campaign.

Got it. Thank you and lastly from me maybe on the wildfires like you correctly pointed out the west is still on the state of drought this year.

Is there anything that you're doing maybe differently. This year ahead of the wildfire season, given the experiences from I'm sorry on your 'twenty three.

Preemptively mitigate some of the potential damages that may ensue.

Sure. Thank you as you know we've been thinking about preparing and learning from our utility peers from California, Arizona, Colorado and actually also those from Australia in terms of wildfire.

Mitigation.

The detection of wildfires and then how we handle them.

That occur in our service territory.

And continue all of the work that we have been doing over the last number of years.

Thank you that's all for me thank you.

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

Good morning, Thank you.

Morning.

So real quick one on the dividend just confirming this is the with the raise that you had this quarter. This is the typical cadence that you expect to get back to going forward all else equal.

Wanted to confirm that that's right Travis we the board.

Adopted a increased five 5% nine a share $1 63 to $1 72, and that would put us on our cadence on a regular cadence.

Okay, Great and then.

You got my EV question that I was going to ask but.

Let me ask a little follow on to that as you talk about these different areas I understand that the infrastructure and as you characterize it in terms of the 123 infrastructure part would be.

Kind of Youre seeing what are your long term strategy in terms of.

For lack of a better word outsourcing.

The charging the energy management part.

In home energy management, all of that stuff, obviously, we've seen a lot of companies come out.

With services like that and with plans to grow like what's your long term strategy in terms of owning that.

Energy service part, where there's the charging stations or the actual usage.

That's a great question and actually if you go on to our website you can see a marketplace, where you can buy a firm.

<unk> thermostats with.

Eto Energy Trust of Oregon credits.

And participate in a distributed energy programs through Portland General.

We are building out an integrated operations center, which will enhance our capabilities of managing a bidirectional grid and we remain very focused on serving customers.

As an example, we have.

Distributed energy resource test beds, where we're actually interacting with customers on their cell phone they can opt into energy events.

It will reduce their energy usage strict critical peak times and shave off almost 10% on their bills.

During those during those months and so it's for US there's a tremendous amount of opportunity. We're also partnering with number of technology partners. We don't expect to do it all and many companies have terrific technologies that will enhance the capabilities of reliably manage the grid as we go forward.

Okay, and then if we think about just in terms of accounting and cash flow would you think about that.

Kind of recoverable O&M such that on overtime.

Would see O&M, but go back go up, but then kind of EV related.

Charges would flow through.

Regulatory rates.

Yes, we would expect that the work that we're doing is all within the utility.

It's to enhance customers' experience, particularly as customers' expectations changed quite dramatically.

And all of those actions really contribute to a more reliable grid. We have used our distributed energy system, our standby generation system, which is quite significant.

Several times during critical peak times to shave off those peaks, creating less stress on the overall reliability of the system.

And enhancing.

Our resource adequacy, so we expect to only continue.

You see all of these things is synergistic and most importantly, as we add more renewable variable resources, they're not just sales.

Just take their essential to maintaining reliability of the system and serving customers with the clean and affordable energy they want.

Okay, Great I appreciate it thanks. Thank you.

Yes.

Thank you.

I am showing no further questions at this time I would now like turn the conference back in this Maria flow.

Ladies and gentlemen. This concludes today's conference. Thank you for your participation and have a wonderful thing you may all disconnect have a great day.

Q1 2021 Portland General Electric Co Earnings Call

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