Q3 2023 Portland General Electric Company Earnings Call
Speaker 1: transcript
Speaker 1: Good morning, everyone, and welcome to Portland General Electric Company's third quarter, 2023, Earnings Results Conference Call.
Good morning, everyone and welcome to Portland General Electric company's third quarter 'twenty to 'twenty three earnings result conference call.
Speaker 1: transcript
Speaker 1: Today is Friday, October 27th, 2023. This call is being recorded. And as such, all lines have been placed on mute to prevent any background.
Today is Friday October 27, 2023, this call is being recorded.
And as such all lines have been placed on mute to prevent any background noise.
Speaker 1: transcript
Speaker 1: After the speakers remarked, there will be a question and answer period. If you would like to ask a question during this time, press star then the numbers one one on your telephone keypad. If you would like to withdraw your question, please press star one one again.
After the Speakers' remarks, there will be a question and answer period. If you would like to ask a question. During this time press Star then the number is one one on your telephone keypad. If you would like to withdraw your question. Please press star one one again.
If you do intend to ask a question. Please avoid they use a speaker phone.
Speaker 1: transcript
Speaker 1: If you do intend to ask a question, please avoid the use of speaker.
For opening remarks, I will turn the conference over to Portland General Electrics manager of Investor Relations. Nick White. Please go ahead Sir.
Speaker 1: transcript
Speaker 1: For opening remarks, I will turn the conference over to Portland General Electric's Manager of Investor Relations, Nick White. Please go ahead.
Speaker 2: transcript
Speaker 2: Thank you, Lateef. Good morning, everyone. I'm happy you can join us today.
Thank you Latif and good morning, everyone I'm happy you can join us today.
Speaker 2: transcript
Speaker 2: Before we begin this morning, I would like to remind you that we have prepared a presentation to supplement our discussion, which we will be referencing throughout the call. The slides are available on our website at investors.porlandgeneral.com.
Before we begin this morning, I would like to remind you that we have prepared a presentation to supplement our discussion, which we will be referencing throughout the call.
Slides are available on our website at investors Dot Portland General Dot com, referring.
Speaker 2: transcript
Speaker 2: referring to slide two, some of our remarks this morning will constitute forward-looking statements.
Referring to slide two some of our remarks. This morning will constitute forward looking statements.
Speaker 2: transcript
Speaker 2: We caution you that such statements involve inherent risks and uncertainties and actual results made different materially from our expectations.
<unk> you that such statements involve inherent risks and uncertainties and actual results may differ materially from our expectations are.
Speaker 2: transcript
Speaker 2: or a description of some of the factors that can cause actual results to different material leaf. Please refer to our earnings press release and our most recent periodic reports on forms 10K and 10Q, which are available on our website.
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 website.
Speaker 3: transcript
Speaker 3: Meeting our discussion today, our Maria Pope, President and CEO , and Joe Turbic, Senior Vice President of Finance and CFO . Following their prepared remarks, we will open the line for your questions. Now is my pleasure to turn the call over to Maria. Thank you, Nick, and good morning. Thank you all for joining us today. Beginning with slide four, I'll start by discussing our results for the corner and speak to the key drivers as well as our outlook for the balance of the year.
Leading our discussion today are Maria Pope President and CEO, and Joe <unk> Senior Vice President of Finance and CFO.
Following their prepared remarks, we will open the line for your questions now it is my pleasure to turn the call over to Maria Thank.
Thank you Nick and good morning.
Thank you all for joining us today.
Beginning with slide four I will start by discussing our results for the quarter and speak to the key drivers as well as our outlook for the balance of the year.
For the third quarter, we reported GAAP net income of $47 million or <unk> 46 cents per diluted share.
Speaker 3: transcript
Speaker 3: But a third quarter, we reported Gatnet income of $47 million or $46 per diluted chair. This compares with third quarter, 2022 results of $58 million or $65 per diluted chair. Clearly, it-
This compares with third quarter 2022 results of 58 million or <unk> 65 per diluted share.
Clearly it was a tough quarter.
Speaker 3: transcript
Speaker 3: The key drivers include first continued load growth from industrial customers, offset by reductions in residential and commercial usage, partially driven by cooler weather overall.
The key drivers included first continued logcap from industrial customers offset by reductions in residential and commercial usage.
Driven by cooler weather overall.
And second <unk>.
Speaker 3: transcript
Speaker 3: volatile power costs from a major seed event in mid-August, which resulted in transmission congestion issues and a significant spike in energy costs. I will touch.
Volatile power costs.
Major heat event in mid August, which resulted in transmission congestion issues and a significant spike in energy costs.
I will touch on each in turn.
Speaker 3: transcript
Speaker 3: Turning to line five, we continue to see solid growth from industrial customers, particularly data centers. However, this growth is chunky and we saw modest growth in the third quarter. Overall, through the first nine months of the year, industrial load has grown over 6.5% compared to 2022. We foresee continued growth in the fourth quarter and potentially even higher industrial growth in the coming years.
Turning to slide five we continue to see solid growth from industrial customers, particularly data centers. However, this growth is chunky and we saw modest growth in the third quarter.
Overall.
The first nine months of the year industrial has grown over six 5% compared to 2022.
Foresee continued growth in the fourth quarter and potentially even higher industrial growth in the coming years.
Speaker 3: transcript
Speaker 3: with strong legislative tailwinds at both the state and federal level. There is significant government support through grants and other incentives focused on a civic and act of sex.
With strong legislative tailwind at both the state and federal level, there is significant government support.
And other incentives focused on the semiconductor sector.
Speaker 3: transcript
Speaker 3: 15% of US-Nicodakur manufacturing occurs in our state, largely within PGE.
15% of U S semiconductor manufacturing and curves in our state law.
Largely within PGE service territory.
Speaker 3: transcript
Speaker 3: The sector will benefit not only from the federal chipset, but from the 240 million that the Oregon legislature has allocated to 15 semiconductor companies.
This sector will benefit not only from the federal chipset, but from the $240 million, the Oregon legislature as allocated 15 semiconductor companies.
Speaker 3: transcript
Speaker 3: As a result of these investments, state officials are projecting over $40 billion in new Oregon projects and over 6,000 new jobs.
As a result of these investments state officials are projecting over $40 billion in new Oregon projects and over 6000 new jobs.
Speaker 3: transcript
Speaker 3: Recent expansion and announcement announcements have been made by Intel, Microchip and analog device.
Recent expansion announcements announcements have been made by Intel microchip and analog devices.
Operator: Good morning everyone and welcome to Portland General Electric Company's third quarter, 2023 earnings results conference call. Today is Friday, October 27, 2023. This call is being recorded and as such all lines have been placed on mute to prevent any background noise.
In the third quarter, we also saw modest reductions in residential and commercial energy as compared to last year.
Speaker 3: transcript
Speaker 3: In the third quarter, we also saw modest reductions in residential and commercial energy use compared to last year driven by cooler weather in the late summer as well as energy efficiency, rooftop solar and overall distributed energy adoption.
Driven by cooler weather in the late summer as well as energy efficiency rooftop solar and overall distributed energy adoption.
Speaker 3: transcript
Speaker 3: Given lower than planned third quarter loads, we have revised our full year, 2023, growth guides to 2% weather adjusted, consistent with our long-term acceptation.
Given the lower than planned third quarter loads, we have revised our full year 2023 growth guidance to 2% weather adjusted consistent with our long term expectations.
Operator: After the speakers remarked there will be a question and answer period. If you would like to ask a question during this time, press star, then the number is one one on your telephone keypad. If you would like to withdraw your question, please press star one one again. If you do intend to ask a question, please avoid the use of speaker phones.
Speaker 3: transcript
Speaker 3: The second driver of third-cutter results was hired power costs, stemming from the record breaking heat of the...
The second driver of third quarter results with higher power costs stemming from the record breaking heat event.
Speaker 3: transcript
Speaker 3: P-D-E said a new peak load that surpassed our previous summer peak by 6%.
PGE set a new peak load that surpassed our previous summer peak by 6%.
Nick White: For opening remarks, I will turn the conference over to Portland General Electric's Manager of Investor Relations, Nick White. Please go ahead, sir. Thank you, Latif. Good morning, everyone. I'm happy you can join us today. Before we begin this morning, I would like to remind you that we have prepared a presentation to supplement our discussion, which we will be referencing throughout the call. The slides are available on our website at investors.poorlandgeneral.com. Referring to slide two, some of our remarks this morning will constitute forward-looking statements.
Speaker 3: transcript
Speaker 3: During this time, we also, in this day, had Vid Columbia peak pricing of nearly $1,000 per megawatt hour given significant transmission issues and constraints.
During this time, we also in this day ahead mid Columbia peak pricing of nearly $1000 per megawatt hour given significant transmission issues and constraints.
Our generation plants performed well there.
Speaker 3: transcript
Speaker 3: Our generation plants performed well. Very well. And we're well integrated with our contracted energy supply.
Very well and we are well integrated with our contracted energy supply.
Speaker 3: transcript
Speaker 3: We also saw meaningful customer demand response reduction.
We also saw meaningful customer demand response reductions.
Speaker 3: transcript
Speaker 3: Even still, our overall purchase power and fuel expense increased significantly.
Even still our overall purchase power and fuel expense increased significantly.
Nick White: We caution you that such statements involve inherent risks and uncertainties and actual results made different materially from our expectations. For a description of some of the factors that can cause actual results to different materially, please refer to our earnings press release and our most recent periodic reports on forms 10K and 10Q, which are available on our website.
Speaker 4: transcript
Speaker 4: I want to thank and recognize our PGE colleagues who helped ensure that customers continue to receive safe, reliable, and unearant to power throughout the heat wave.
I want to thank and recognize our PGE colleagues to help to ensure that customers continue to receive safe.
Liable and uninterrupted power throughout the heatwave.
Given the impact of power costs on our third quarter results, we are narrowing our guidance range for the year.
Speaker 3: transcript
Speaker 3: Given the impact of power costs on our third quarter results, we are narrowing our guidance range for the year. We now expect 2023 results to be in the range of $2.60, $2.65 per share, as compared to the previous range of $2.60 to $2.75 per share.
Nick White: Meeting our discussion today, our Maria Pope, President and CEO, and Joe Turbick, Senior Vice President of Finance and CFO. Following their prepared remarks, we will open the line for your questions.
We now expect 2023 results to be in the range of $2 $62 65 per share as compared to the previous range of $2 60.
Maria Pope: Now is my pleasure to turn the call over to Maria. Thank you, Nick, and good morning. Thank you all for joining us today.
$2 75 per share.
Speaker 3: transcript
Speaker 3: We anticipate fourth-card results to improve as a result of normalized power cost conditions.
We anticipate fourth quarter results to improve as a result of normalized power cost conditions.
Maria Pope: Beginning with slide four, I'll start by discussing our results for the quarter and speak to the key drivers as well as our outlook for the balance of the year. For the third quarter, we reported that the key drivers' cabinet income of 47 million or 46 cents per diluted share. This compares with third quarter 2022 results of 58 million or 65 cents per diluted share. Clearly, it was a tough quarter. The key drivers include first continued load growth from industrial customers, offset by reductions in residential and commercial usage, partially driven by cooler, weather overall, and second, volatile power costs from a major heat event in mid-August, which resulted in transmission congestion issues and a significant spike in energy costs.
Speaker 3: transcript
Speaker 3: Just as a reminder, fourth quarter 2022, regional gas prices peaked to over $55 per MMB to you, an average mid-seat power prices rose to $2.65, excuse me, $265 per megawatt hour.
Just as a reminder.
Quarter 2022 regional gas prices peaked at over $55 per MLP to yield an average mid C power prices rose to $2 65, excuse me $265 per megawatt hour.
Speaker 3: transcript
Speaker 3: Additionally, while year-to-date power cost performance has been challenging relative to the annual update tariff or AUT, we anticipate a more favorable resource mix and market conditions to the fourth quarter.
Additionally.
While year to date power cost performance has been challenging relative to the annual update tariff our AUT.
We anticipate a more favorable resource mix and market conditions to the fourth quarter.
Speaker 4: transcript
Speaker 4: And finally, we expect continued effective O&M cost management and to hit our 2023 target.
And finally, we expect continued effective O&M cost management and to hit our 2023 targets.
Joe will walk through our project grade for fourth quarter in more detail.
Speaker 4: transcript
Speaker 4: Bill will walk through our projectory for fourth quarter in more detail. Overall, our capital program.
Overall, our capital programs are on track with Clearwater wind expected to come online later this year and continued progress on our previously announced battery storage projects.
Maria Pope: I will touch on each in turn. Turning to slide five, we continue to see solid growth from industrial customers, particularly data centers. However, this growth is chunky and we saw modest growth in the third quarter. Overall, through the first nine months of the year, industrial load has grown over 6.5 percent compared to 2022. We foresee continued growth in the fourth quarter, and potentially even higher industrial growth in the coming years, with strong legislative tailwinds at both the state and federal level.
Speaker 4: transcript
Speaker 4: Clearwater Wind, expected to come online later this year, and continued progress on our previously announced battery storage project.
Speaker 4: transcript
Speaker 4: These are in addition to our base capital work that support customer growth as well as grid improvements, focused on greater safety, as well as reliability, and extreme weather resilience.
These are in addition to our base capital work that support customer growth as well as grid improvements.
On greater safety as well as reliability and extreme weather resilience.
Speaker 4: transcript
Speaker 4: Two other significant highlights from the third quarter include.
Two other significant highlights in the third quarter include <unk>.
Speaker 4: transcript
Speaker 4: including our 2024 rate case negotiations and the announcement of several federal grants will enable the acceleration of new technologies and transmission constructions.
Including our 2024 rate case negotiations.
And the announcement of several federal grants works will enable the acceleration of new technologies and transmission construction.
Maria Pope: There is significant government support through grants and other incentives focused on the semiconductor sector. 15% of U.S, semiconductor manufacturing occurs in our state, largely within PGE service territory. The sector will benefit not only from the federal chipset, but from the 240 million that the Oregon legislature has allocated to 15 semiconductor companies. As a result of these investments, state officials are projecting over $40 billion in new Oregon projects and over 6,000 new jobs.
Speaker 4: transcript
Speaker 4: I'll start with our GRC, which we're very pleased to conclude with parties and a way to commission order expected in the coming week.
I'll start with our <unk>, which we're very pleased to conclude with parties and a way to commission order expected in the coming weeks.
Speaker 4: transcript
Speaker 4: Overall, we settled recovery of ongoing capital investments, operating and maintenance costs and notably wall fire, but safe management expenses and importantly risk reduction in our power cost recovery framework. An important first step in addressing our PKM mechanism. Let's Joe, we'll touch on...
Overall, we settled recovery of ongoing capital investments operating and maintenance costs, notably wildfire vegetation management expenses, and importantly risk reduction and our power cost recovery framework, an important first step in addressing our P. Chem mechanism with.
Joe will touch on in his remarks.
We also maintained a 50 50 capital structure and a nine 5% Roe.
Speaker 4: transcript
Speaker 4: We also maintained a 50-50 capital structure and a 9.5% ROE.
Maria Pope: Recent expansion announcements have been made by Intel, Microchip, and analog devices. In the third quarter, we also saw modest reductions and residential and commercial energy use compared to last year, driven by cooler weather in the late summer, as well as energy efficiency, rooftop solar, and overall distributed energy adoption.
Additionally, we received approval to amortize $27 million in wildfire deferrals and collect forecasted wildfire mitigation costs under the automatic adjustment costs.
Speaker 4: transcript
Speaker 4: Additionally, we received approval to advertise 27 million in wildfire deferrals and collect forecasted wildfire mitigation costs under the automatic adjustment cost.
Lastly, federal grants were pleased and excited with the three department of energy announcements that build upon the work we're doing to advance the clean energy transition and in collaboration with our regional partners.
Speaker 4: transcript
Speaker 4: Lastly, federal grants. We're pleased and excited with the three Department of Energy and Nounsmen that build upon the work we're doing to advance the claim energy transition and in collaboration with our regional partners.
Maria Pope: Given lower than planned, third quarter loads, we have revised our full year 2023 growth guides to 2% weather adjusted, consistent with our long-term acceptations. The second driver of third quarter results was higher power costs, stemming from the record-breaking heat event. PGE said a new peak load that surpassed our previous summer peak by 6%. During this time, we also in this day-to-day had mid-combia peak pricing of nearly $1,000 per megawatt hour, given significant transmission issues and constraints.
Speaker 4: transcript
Speaker 4: First, DOE announced a $250 million grant to support upgrading the Bethel Round View Transmission Line from 230 to 500 KZ in partnership with the Confederated Tribes of the Warm Springs.
<unk> deal, we announced a $250 million grant to support upgrading the vessel round few transmission line from 230 to 500 kv and partnership with the Confederated tribes of the warm Springs.
Speaker 4: transcript
Speaker 4: The tribes have been our partner and co-owner of the 500 megawatt Pelten Roundguit Hydro Projects along the D'Shoet River for decades. The D'shoet River for decades.
The tribes have been our partner and co owner of the 500 megawatt Pelton round hydro projects, along the shoots river for decades.
Second.
Speaker 4: transcript
Speaker 4: HEE Utilidad and Nvidia have consorts him that was awarded $50 million grant for Smart Chip Red Project to improve visibility, reliability, and overall grid management.
PGE utility data and Nvidia.
Whereas consortium that was awarded $50 million grant for Smart chip grid project to improve visibility reliability and overall risk management.
Maria Pope: Our generation plants performed well, very well, and were well integrated with our contracted energy supply. We also saw meaningful customer demand response reductions. Even still, our overall purchase power and fuel expense increased significantly. I want to thank and recognize our PGE colleagues who helped ensure that customers continued to receive safe, reliable, and unearned power throughout the heat wave.
Speaker 4: transcript
Speaker 4: And lastly, the Pacific Northwest Hydrogen Association's hub is one of seven projects nationwide to move forward to the next step and negotiations with DOE.
And lastly, the Pacific Northwest hydrogen associations hub as one of seven projects nationwide to move forward to the next step and negotiations with Doe.
Speaker 4: transcript
Speaker 4: PGE is contributing our former Bourbon Coal Plant site and water rights for the Green Hydrogen Production Facility. We also look forward to an off-take agreement and working on Green Hydrogen Power Generation.
PGE is contributing our former Boardman coal plant site at water rights for the Green hydrogen production facility. We also look forward to an offtake agreement and working on Green hydrogen power generation.
Maria Pope: Given the impact of power costs on our third quarter results, we are narrowing our guidance range for the year. We now expect 2023 results to be in the range of $2.60, $2.65 per share, as compared to the previous range of $2.60 to $2.75 per share. We anticipate fourth quarter results to improve as a result of normalized power cost conditions. Just as a reminder, fourth quarter 2022 regional gas prices peaked to over $55 per MMB2, an average mid-seat power prices rose to $2.65 per megawatt hour.
Speaker 3: transcript
Speaker 3: These award selections represent just the start.
These awards selections represent just the start near.
Speaker 4: transcript
Speaker 4: near-term capital will be determined in 2024 as negotiations proceed.
Near term capital, who will be determined in 2024 as negotiations proceed.
Speaker 4: transcript
Speaker 4: We are still pursuing additional projects and opportunities and have submitted over $65 million in incremental grants to support another $125 million in additional projects, as well as have other projects in the pipe.
We are still pursuing additional projects and opportunities and have submitted over $65 million in incremental grants to support another $125 million and additional projects as well as have other projects in the pipeline.
These projects represent a growing momentum in the region that will create meaningful benefits for customers and communities for years to come.
Speaker 3: transcript
In summary.
Speaker 3: transcript
Speaker 3: despite challenging operating conditions in the third quarter. We made important progress towards strengthening key cost recovery mechanisms as part of the constructive GRC seven.
Despite challenging operating conditions in the third quarter, we made important progress towards strengthening key cost recovery mechanisms as part of the constructive GSE settlement.
Maria Pope: Additionally, while year-to-date power cost performance has been challenging relative to the annual update tariff or AUT, we anticipate a more favorable resource mix and market conditions to the fourth quarter, and finally, we expect continued effective O&M cost management and to hit our 2023 targets.
Speaker 3: transcript
Speaker 3: Our entire team is laser focused on execution for the remainder of the year.
Our entire team is laser focused on execution for the remainder of the year.
Our long term growth plan is increasingly well established underpinned by investments to meet growing customer needs.
Speaker 4: transcript
Speaker 4: Our long-term growth plan is increasingly well established, underpinned by investments, made growing customer needs, ensuring grid resilience, and leading the clean energy transition.
Ensuring grid resilience and leading the clean energy transition.
Maria Pope: So we'll walk through our project rate for fourth quarter in more detail. Overall, our capital programs are on track, with clear water wind expected to come online later this year and continued progress on our previously announced battery storage projects. These are in addition to our base capital work that support customer growth as well as grid improvements focused on greater safety, as well as reliability and extreme weather resilience.
Speaker 4: transcript
Speaker 4: our recent regulatory progress and ongoing capital investment reinforces our confidence that our long-term earnings growth rate of five to seven percent in 2024 and beyond.
Our recent regulatory progress and ongoing capital investment reinforces our confidence in our long term earnings growth rate of 5% to 7% in 2024 and beyond.
Speaker 4: transcript
Speaker 4: With that, I'll turn it over to Joe. We'll walk you through our financial results. Thank you.
With that I'll turn it over to Joe who will walk you through our financial results. Thank you.
Speaker 5: transcript
Speaker 5: Thank you, Maria, and good morning, everyone. I'll cover our Q3 results before providing updates on our rate case, capital investments, and liquidity and finance.
Thank you Maria and good morning, everyone I'll cover our Q3 results before providing updates on our rate case capital investments and liquidity and financing.
Maria Pope: Two other significant highlights from the third quarter include including our 2024 rate case negotiations and the announcement of several federal grants will enable the acceleration of new technologies and transmission construction. I'll start with our GRC, which we are very pleased to conclude with parties and a way to commission order expected in the coming weeks. Overall, we settled recovery of ongoing capital investments, operating and maintenance costs notably wall fire, but safe management expenses and importantly risk reduction in our power cost recovery framework.
Speaker 5: transcript
Speaker 5: Moving to slide six, our third quarter results reflect dynamic load and customer composition, challenging weather and power market conditions, continued epithesis on grid resiliency and execution of our capital plan.
Moving to slide six our third quarter results reflect dynamic loading customers composition challenging weather and power market conditions continued emphasis on grid resiliency and execution of our capital plan.
Speaker 5: transcript
Speaker 5: The economy in our service territory continues to display strength. As Maria noted, regional economist, anticipates significant investment in our area, particularly focused on semi-conducting manifests.
The economy in our service territory continues to display strength as Maria noted regional economies anticipate significant investment in our area, particularly focused on semiconductor manufacturing.
Speaker 5: transcript
Speaker 5: Many large high tech companies in our footprint have signaled upcoming growth projects that could result in sizeable economic benefits to our region.
Many large high tech companies in our footprint have signaled upcoming growth projects that could result in sizable economic benefits to our region.
Speaker 5: transcript
Speaker 5: Unemployment in our region was 3.4% as of September below the national average of 3.8%. Industrial load growth continued albeit at a more moderate rate than witnessed in the first and second orders, which we see as a short-term deviation on a long-term industrial growth trend.
Unemployment in our region was three 4% as of September below the National average of three 8% industrial.
Maria Pope: An important first step in addressing our PK mechanism, which Joe will touch on in his remarks. We also maintained a 50-50 capital structure and a 9.5% ROE. Additionally, we received approval to advertise 27 million in wall fire deferrals and collect forecasted wall fire mitigation costs under the automatic adjustment costs.
Industrial load growth continued, albeit at a more moderate rate than witnessed in the first and second quarters, which we see as a short term deviation on a long term industrial growth trend.
Total Q3, 2023 loads increased by 2% weather adjusted compared to Q3 2022.
Speaker 5: transcript
Speaker 5: Total Q3 2023 loads increased by 0.2% weather adjusted compared to Q3 2022.
Speaker 5: transcript
Speaker 5: on a non-weather adjusted basis. Total load decreased 0.9% year over year, as weather was less severe across the full quarter, despite a hotter aug-
Maria Pope: Lastly, federal grants. We are pleased and excited with the three Department of Energy announcements that build upon the work we're doing to advance the claim energy transition and in collaboration with our regional partners. First, DOE announced a 250 million dollar grant to support upgrading the Bethel Round View transmission line from 230 to 500 KZ in partnership with the Confederated Tribes of the Warm Springs. The Tribes have been our partner and co-owner of the 500 megawatt Pelten Round View Hydro projects along the Dichutes River for decades.
On a non weather adjusted basis total LOE decreased 9% year over year as weather was less severe.
Maria Pope: Second, AGE Utilidada and Nvidia will have consortium that was awarded 50 million dollar grant for smart chip grid project to improve visibility, reliability and overall grid management. And lastly, the Pacific Northwest Hydrogen Association's hub is one of seven projects nationwide to move forward to the next step and negotiations with DOE. PGE is contributing our former Bourbon Coal Plant site and water rights for the Green Hydrogen Production Facility. We also look forward to an offtake agreement and working on green hydrogen power generation.
The full quarter. Despite a hotter August Q3, 2022 average temperatures were the hottest on record for the third quarter in our region.
Speaker 5: transcript
Speaker 5: Q3 2022 average temperatures were the hottest down record for the third quarter in our region.
Speaker 5: transcript
Speaker 5: We continue to see significant heat this summer, but we saw a milder weather in September , which had 35% fewer cooling degree days than compared to 2022.
We continue to see significant heat this summer, but we saw a milder weather in September which had 35% fewer cooling degree days and compared to 2022.
Residential load decreased two 5%.
Speaker 5: transcript
Speaker 5: Residential load decreased 2.5% or 0.5% weather adjusted compared to Q3 2022. Viewer cooling degree days, an increased energy efficiency and distributed energy resource adoption contributed to this decrease. Residential customer growth increased 0.7%.
5% weather adjusted compared to Q3, 2022 fewer cooling degree days and increased energy efficiency and distributed energy resource adoption contributed to this decrease residential customer growth.
Increased 7%.
Commercial load decreased two 1% or one 2% weather adjusted as we also witnessed increased penetration of energy efficiency and <unk> among commercial customers.
Speaker 5: transcript
Speaker 5: Commercial load decreased 2.1% or 1.2% weather adjusted as we also witnessed increased penetration of energy efficiency and DERs among commercial customers.
Speaker 5: transcript
Speaker 5: Industrial load growth continued in Q3 2023, increasing 2.5% or 2.7% weather adjusted. As Maria mentioned, we view this moderation compared to previous quarters as temporary and anticipate a continuation of the growth cycle that we have been observing in recent years.
Industrial load growth continued in Q3, 2023, increasing two 5% or two 7% weather adjusted.
As Maria mentioned, we view this model, we view this moderating compared to previous quarters as a temporary as temporary and anticipate a continuation of the growth cycle that we've been observing in recent years.
Third quarter.
Speaker 5: transcript
Speaker 5: Third quarter, power market conditions remain challenging in 2023 with resource scarcity during the peak periods surrounding the August heat event, having a acute impact on the quarter. I'll now cover.
Market conditions remain challenging in 2023 with resource scarcity during the peak period surrounding the August heat event, having acute impact on the quarter.
Maria Pope: These award selections represent just the start. Near term capital will be determined in 2024 as negotiations proceed. We are still pursuing additional projects and opportunities and have submitted over $65 million in incremental grants to support another $125 million in additional projects as well as have other projects in the pipeline.
I'll now cover our financial performance quarter over quarter.
Speaker 5: transcript
Speaker 5: We experience an 18 cent decrease in total revenues driven by a 0.9 percent decrease in total deliveries combined with unbearable changes in the average price of deliveries due to lower residential and commercial low.
We experienced an 18% decrease in total revenues driven by a 9% decrease in total deliveries combined with unfavorable changes in the average price of deliveries due to lower residential and commercial loads.
Maria Pope: These projects represent growing momentum in the region that will create meaningful benefits for customers and communities for years to come.
Speaker 5: transcript
Speaker 5: Q3-22 power cost conditions were also challenging, and 27 cents of the quarter over quarter earnings change is attributable to power cost headwinds in 2022 that we normalize for this comparison.
Q3, 'twenty two power cost conditions were also challenging in 2007 <unk> of the quarter over quarter earnings changes attributable grid power cost headwinds in 2022 that we normalize for this comparison.
Maria Pope: In summary, despite challenging operating conditions in the third quarter, we made important progress towards strengthening key cost recovery mechanisms as part of the constructive GRC settlement. Our entire team is laser-focused on execution that the remainder of the year. Our long-term growth plan is increasingly well-established, underpinned by investments and meet growing customer needs, ensuring grid resilience, and leading the clean energy transition. Our recent regulatory progress and ongoing capital investment reinforces our confidence that our long-term earnings growth rate of 5% to 7% in 2024 and beyond.
Speaker 5: transcript
Speaker 5: Current year power costs were also elevated, driving a 7 cent EPS decrease in the quarter, reflecting costs that were higher than anticipated in our annual update tariff.
Current year power costs were also elevated driving a <unk> <unk> EPS decrease in the quarter, reflecting costs that were higher than anticipated in our annual update tariff.
Speaker 5: transcript
Speaker 5: There was a two-cent decrease in EPS from higher operating expenses net of deferral related items primarily driven by higher generation and grid maintenance costs.
There was a <unk> <unk> decrease in EPS from higher operating expenses net of deferral related items, primarily driven by higher generation and grid maintenance costs.
Speaker 5: transcript
Speaker 5: We also saw a six-cent impact from depreciation and amortization expense due to higher plant bounces year over year.
We also saw a <unk> <unk> impact from depreciation and amortization expense due to higher plant balances year over year.
A <unk> <unk> decrease from the impact of higher interest expense due to higher long term debt balances and short term debt balances carried for a part of the third quarter.
Speaker 5: transcript
Speaker 5: A three cent decrease from the impact of higher interest expense due to higher Long-term debt balances and short-term debt balances carried for a part of the third quarter
Speaker 5: transcript
Speaker 5: A seven-sang root decrease due to the dilutive impact of draws on the equity forward sale, which last occurred in mid-June.
A <unk> <unk> decrease due to the dilutive impact of draws on the equity forward sale, which last occurred in mid July.
Joe Turbick: With that, I'll turn it over to Joe who will walk you through our financial results. Thank you. Thank you, Maria, and good morning, everyone. I'll cover our Q3 results before providing updates on our rate case, capital investments, and liquidity and financing. Moving to slide six, our third quarter results reflect dynamic load and customer composition, challenging weather and power market conditions, continued ethnsis on grid resiliency and execution of our capital plan. The economy in our service territory continues to display strength, as Maria noted, regional economists anticipate significant investment in our area, particularly focused on semi-conducting manufacturing.
Speaker 5: transcript
Speaker 5: Finally, we had a 3 cent decrease from other items, which included 8 cents of a decrease in other income due to prior your medical plan by outgain did not reoccur partially offset by 3 cent increase from higher AFU DC, from clean energy and base capital project under construction.
Finally, we had a <unk> <unk> decrease from other items, which included.
<unk> of the decrease in other income due to a prior year medical plan buyout gain did not that did not reoccur, partially offset by <unk> increased from higher AFDC from clean energy and base capital project under construction.
Speaker 5: transcript
Speaker 5: and two cents increase from higher returns on non-qualified benefit trust and other miscellaneous items.
And <unk> increased from higher returns on non qualified benefit trust and other miscellaneous items.
Speaker 5: transcript
Speaker 5: Starting to page 7 for summary of our 2024 general rate case to date, which remains subject to OPUC approval. As Maria highlighted earlier, we are pleased to reach a constructive settlement on the remaining items, including recovery of recent capital investments and operating costs to maintain the system reliability and resilience.
Turning to page seven for a summary of our 2024 general rate case to date, which remains subject to PUC approval as Maria highlighted earlier, we were pleased to reach a constructive settlement on the remaining items, including recovery of recent capital investments and operating costs to maintain the system reliability and resiliency given the <unk>.
Joe Turbick: Many large high-tech companies in our footprint have signaled upcoming growth projects that could result in sizeable economic benefits to our region. Unemployment in our region was 3.4% as of September below the national average of 3.8%. Industrial load growth continued, albeit at a more moderate rate than witnessed in the first and second quarters, which we see as a short-term deviation on a long-term industrial growth trend. Total Q3 2023 loads increased by 0.2% weather adjusted compared to Q3 2022.
Speaker 5: transcript
Speaker 5: Given the frequency and magnitude of extreme weather and resource constraints in our region, including the August heat event, the reliability contingency event provision represents a constructive solution to our power cost recovery framework. This update better reflects the impact of climate change and dynamic regional market markets that we have been a historically experienced.
<unk> see a magnitude of extreme weather and resource constraints in our region, including the August heat event. The reliability contingency event provision represents a constructive solution to our power cost recovery framework. This update better reflects the impact of climate change in dynamic regional Mark markets that we have historically experienced.
Speaker 5: transcript
Speaker 5: Additionally, steps in the docket will continue in the coming weeks, including annual power cost updates in November . A commission decision is expected by December , but could come sooner for race effective January 1, 2024.
Additionally steps in the docket.
We'll continue in the coming weeks, including annual power cost updates in November a commission decision is expected by December but could come sooner for rates effective January one 2024.
Joe Turbick: On a non-weather adjusted basis, total load decreased 0.9% year-over-year as weather was less severe across the full quarter despite a hotter August. Q3 2022 average temperatures were the hottest down record for the third quarter in our region. We continue to see significant heat this summer, but we saw a milder weather in September, which had 35% fewer cooling degree days than compared to 2022. Residential load decreased 2.5% or 0.5% weather adjusted compared to Q3 2022.
On to slide eight which shows our current capital forecast through 2027.
Speaker 5: On this slide, eight, which shows our current capital forecast through 2027.
Speaker 5: transcript
Speaker 5: We are continuing to evaluate emerging transmission projects that Maria and I mentioned in the Q2 call and plan to provide a robust capital forecast update on the Q4 call in February .
We are continuing to evaluate emerging transmission project.
Maria and I mentioned at the Q2 call and plan to provide a robust capital forecast update on the Q4 call in February.
I will also note that the PG portion of projects receiving grant funds is not yet reflected in these figures is scoping and negotiations are ongoing we will reflect these projects hit our forecast once final plans have crystallized.
Speaker 5: transcript
Speaker 5: I will also note that the PG portion of projects receiving grant funds is not yet reflected in these figures as scoping in negotiations are ongoing.
Speaker 5: transcript
Speaker 5: We will reflect these project in our forecast once final plans have crystallized.
Joe Turbick: Viewer cooling degree days and increased energy efficiency and distributed energy resource adoption contributed to this decrease. Residential customer growth increased 0.7%. Commercial load decreased 2.1% or 1.2% weather adjusted as we also witness increased penetration of energy efficiency and DERs among commercial customers. Industrial load growth continued in Q3 2023, increasing 2.5% or 2.7% weather adjusted. As Maria mentioned, we view this moderation compared to previous quarters as temporary and anticipate a continuation of the growth cycle that we have been observing in recent years. Third quarter, power market conditions remain challenging in 2023 with resource scarcity during the peak period surrounding the August heat event having a acute impact on the quarter.
Speaker 5: transcript
Speaker 5: The 2023 RFP has worked through preliminary administrative steps and is expected to officially launch to the market in the coming weeks. Its submissions are expected in early 2024 with submission of a project shortlist anticipated in the first half of next year. Project selection will take place shortly after in mid 2024.
The 2023 RFP has worked through preliminary administrative steps and is expected to officially launch to the market in the coming weeks at submissions are expected in early 2024 with submission of a project shortlist anticipated in the first half of next year project selection will take place shortly after in mid <unk>.
24.
Speaker 5: transcript
Speaker 5: Turning to slide nine for summary of our liquidity and capital fine.
Turning to slide nine for a summary of our liquidity and capital findings.
Speaker 5: transcript
Speaker 5: our equity, sorry, our liquidity and financing. Our strong balance sheet, investment grade credit ratings and stable credit outlook remained unchanged from our previous disclosure.
Our equity.
Our liquidity and financing our strong balance sheet investment grade credit ratings and stable credit outlook remains unchanged from our previous disclosures.
Speaker 5: transcript
Speaker 5: Total available liquidity as of September 30th, 2023 is 925 minutes.
Available liquidity as of September 32023 is $925 million.
Speaker 5: transcript
Speaker 5: In mid-August, we amended our existing revolving credit facility to extend the maturity, while also upsizing from 650 to 750 million to provide additional flexibility.
In mid August we amended our existing revolving credit facility to extend the maturity, while also upsizing from $650 to $750 million to provide additional flexibility.
Joe Turbick: I'll now cover our financial performance quarter over quarter. We experience an 18-cent decrease in total revenues driven by a 0.9% decrease in total deliveries combined with unfavorable changes in the average price of deliveries due to lower residential and commercial loads. Q3 2022, power cost conditions were also challenging and 27 cents of the quarter over quarter earnings change is a current year power cost were also elevated driving a 7-cent EPS decrease in the quarter reflecting costs that were higher than anticipated in our annual update tariff.
Speaker 5: transcript
Speaker 5: We also executed a $500 million. The first mortgage bond purchased agreement in late August , including $300 million of that that was issued as of September 30th, with the remaining $200 million to be issued under a delayed draw feature in the fourth quarter.
We also executed a $500 million.
First mortgage bond purchase agreement in late August, including $300 million of that that was issued as of September 30, with the remaining 200 million to be issued under the delayed draw feature in the fourth quarter.
Speaker 5: transcript
Speaker 5: As I said previously, we issued the remaining $92 million under the equity board facility in July . And we continue to have equity market availability under our ATM program.
As I said previously we <unk>.
The remaining $92 million under the equity forward facility in July and we continue to have equity market availability under our ATM program.
Speaker 5: transcript
Speaker 5: PGE has entered into a foregale agreements for 58 million of the total 300 million of the ATM as of the third quarter.
GE has entered into a forward sale agreements for $58 million of the totaled $300 million of the ATM as of the third quarter.
Speaker 5: transcript
Speaker 5: We remain confident in our balance sheet and our ability to access the capital markets and continue strong interest from both debt and equity investors in recent off.
We remain confident in our balance sheet and our ability to access the capital markets.
And continued strong interest from both debt and equity investors in recent offerings.
Joe Turbick: There was a 2-cent decrease in EPS from higher operating expenses net of the furl-related items, primarily driven by higher-generation and grid maintenance costs. We also saw a 6-cent impact from depreciation and amrization expense due to higher plant balances year over year. A 3-cent decrease from the impact of higher interest expense due to higher long-term debt balances and short-term debt balances carried for a part of third quarter. A 7-cent decrease due to the dilutive impact of draws on the equity forward sale which last occurred in mid July.
Careful dilution management remains an important focus as we continue to track towards our authorized 50 50 capital structure over time and maintain flexibility in financing.
Speaker 5: transcript
Speaker 5: Careful delusion management remains an important focus as we continue to track towards our authorized 50, 50 capital structure over time and maintain flexibility in financing up.
Options.
Speaker 5: transcript
Speaker 5: Our results in the third quarter continue to reflect our investment year thesis as we execute to establish a sturdy growth foundation for PGE. They also reflect ongoing challenges that we are are all working to diligently manage through year end. Some of the headwinds we have faced in Q3 are expected to dissipate in the last three months of the year, including in power cost. Turning to slide ten for outlook for the fourth quarter.
Our results in the third quarter continued to reflect our investment year thesis as we execute to establish a sturdy growth foundation for PD. They.
They also reflect ongoing challenges that we are.
We're all working to diligently manage through year end some of the headwinds we have faced through Q3 are expected to dissipate in the last three months of the year, including in power cost turning to slide 10 for our outlook for the fourth quarter.
Joe Turbick: Finally, we had a 3-cent decrease from other items which included 8-cent of a decrease in other income due to prior your medical plan by outgain did not reoccur partially offset by 3-cent increase from higher AFU-DC from clean energy and base capital project under construction and 2-cent increase from higher returns on non-qualified benefit trust and other miscellaneous items. Starting to page 7 for a summary of our 2024 general rate case today which remains subject to OPUC approval.
Speaker 5: transcript
Speaker 5: As Maria touched on earlier, indicators point to a more reasonable power market condition, especially compared to Q4 2022, which saw cold weather, pipeline disruptions, and regional gas storage anomalies drive Pacific, Northwest gas and power prices to extreme levels.
As Maria touched on earlier indicators point to a more reasonable power market condition, especially compared to Q4, 2022, which saw cold weather pipeline disruptions in regional gas storage anomalies drive Pacific northwest gas and power prices to extreme levels.
Speaker 5: transcript
Speaker 5: Due to these factors, fourth quarter of power costs were meaningfully hired, then considered in the AUT baseline, which is represented in the chart.
Due to these factors fourth quarter power costs were meaningfully higher.
When considered in the AUT baseline, which is represented in the chart.
Joe Turbick: As Maria highlighted earlier, we are pleased to reach a constructive settlement on the remaining items including recovery of recent capital investments and operating costs to maintain the system reliability and resiliency. Given the frequency and magnitude of extreme weather and resource constraints in our region, including the August heat event, the reliability contingency event provision represents a constructive solution to our power cost recovery framework. This update better reflects the impact of climate change and dynamic regional markets that we have been historically experiencing.
We expect impacts of load growth depreciation interest expense and dilution observed year to date to continue.
Speaker 5: transcript
Speaker 5: We expect impacts of load growth, depreciation, interest expense, and dilution observed year-to-date to continue.
Speaker 5: transcript
Speaker 5: Operating costs execution remains a critical component of our plan and all corners of our business are leaning into drive savings and results. Given these efforts, we expect our fourth quarter on them to come in below our current full year run rate.
Operating cost execution remains a critical component of our plan and all corners of our business are leaning in to drive savings and results. Given these efforts, we expect our fourth quarter O&M to come in below our current full year run rate.
Finally, we expect an improved resource mix compared to our.
Speaker 5: transcript
Speaker 5: Finally, we expect an improved resource mix compared to our AUT expectations that will allow us to make up ground in our annual power cost position. This includes better availability of generating resources, improved plant outage expectations, and portfolio optimization that allows strategic dispatch of our generation fleet.
Expectations that will allow us to make up ground in our annual power cost position. This includes better availability of generating resources.
Joe Turbick: Additionally, steps in the docket will continue in the coming weeks, including annual power cost updates in November. A commission decision is expected by December but could come sooner for rates effective January 1, 2024, on the slide 8, which shows our current capital forecast through 2027. We are continuing to evaluate emerging transmission projects that Maria and I mentioned in the Q2 call and plan to provide a robust capital forecast update on the Q4 call in February.
<unk> plant outage expectations.
Portfolio optimization that allows strategic disparate dispatch of our generation fleet.
Speaker 5: transcript
Speaker 5: You do load results in the third quarter being below expectation. We are revising our 2023 full year weather adjusted load growth guidance from 2.5% to 3% to 2%, which is in line with our long term expectation.
Due to lower results in the third quarter being below expectation, we are revising our 2023 full year weather adjusted load growth guidance from two 5% to 3% to 2%, which is in line with our long term expectation.
Speaker 5: transcript
Speaker 5: We continue to have strong visibility to incoming projects concentrated among digital and high-tech customers, which are continuing their growth path. As such, we remain confident in the load profile in our area and are reiterating our long-term load growth guidance of 2% through 2027.
We continue to have strong visibility to incoming projects concentrated among digital and high tech customers, which are continuing their growth path as such we remain confident in the load profile in our area and are reiterating our long term load growth guidance of 2% through 2027.
Joe Turbick: I will also note that the PG portion of projects receiving grant funds is not yet reflected in these figures as scoping in negotiations are ongoing. We will reflect these projects in our forecast once final plans have crystallized. The 2023 RFP has worked through preliminary administrative steps and is expected to officially launch to the market in the coming weeks. It's submissions are expected in early 2024 with submission of a project shortlist anticipated the first half of next year. Project selection will take place shortly after in 2024.
As Maria noted earlier, we are narrowing our full year earnings guidance to $2 60 to $2 65 per diluted share to reflect power cost challenges experienced in the third quarter, we have sharpened our load expectations for Q4, and anticipate power costs and O&M execution will drive necessary results to achieve this range.
Speaker 5: transcript
Speaker 5: As Maria noted earlier, we are narrowing our full year earnings guidance to 260 to 265 per glute chair to reflect power cost challenges experienced in the third quarter. We have sharpened our load expectations for Q4 and anticipate power costs and O&M execution will drive necessary results to achieve this range.
Speaker 5: transcript
Speaker 5: 2023 continues to represent a key pivot point for our direction toward sustained growth and value for customers and shareholders.
123 continues to represent a key pivot point for our direction towards sustained growth and value for customers and shareholders.
Joe Turbick: Turning to slide 9 for a summary of our liquidity and capital finance, our equity and financing, our strong balance sheet investment grade credit ratings and stable credit outlook remain unchanged from our previous disclosures. Total available liquidity as of September 30, 2023 is 925 million. In mid August, we amended our existing revolving credit facility to extend the maturity while also up sizing from 650 to 750 million to provide additional flexibility. We also executed a 500 million dollar first mortgage bond purchase agreement in late August, including 300 million of that that was issued as of September 30 with the remaining 200 million to be issued under a delayed draw feature in the fourth quarter.
Speaker 5: transcript
Speaker 5: Constructive regulatory clarity, a robust capital investment pipeline and solid service territory fundamentals give us renewed confidence in reaching our earnings growth guides of 5% to 7% in 2024 and beyond.
Constructive regulatory clarity.
Our robust capital investment pipeline and solid service territory fundamentals give us renewed confidence in reaching our earnings growth guidance of 5% to 7% in 2024 and beyond.
Speaker 5: transcript
Speaker 5: As we enter the final months of 2023, our ongoing focus of providing clean, reliable, and affordable energy remains unchanged. We look forward to furthering this core mission which will enable prolonged value for our customers, communities, and shareholders. And now, operator.
As we enter the final months of 2023, our ongoing focus on providing clean reliable and affordable energy remains unchanged. We look forward to furthering this quarter mission, which will enable prolonged value for our customers communities and shareholders.
And now operator, we are ready for questions.
Thank you as a reminder to ask a question you will need to press star one one on your telephone to remove yourself from the queue. You May Press Star one one again, please standby, while we compile the Q&A roster.
Speaker 1: transcript
Speaker 1: Thank you, as a reminder, to ask a question, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. Please stand by while we compile. The
Joe Turbick: As I said previously, we issued the remaining 92 million dollars under the equity forward facility in July, and we continue to have equity market availability under our ATM program. PGE has entered into a forward sale agreement for 58 million of the total 300 million of the ATM as of the third quarter. We remain confident in our balance sheet and our ability to access the capital markets and continued strong interest from both debt and equity investors in recent offerings.
Our first question.
Speaker 6: transcript
Speaker 6: comes from the line of Shah Perezza of Guggenheim partners. Thank you. Good morning, Maria. Morning, Joe.
Comes from the line of Shar <unk> of Guggenheim partners.
Good morning, guys.
Good morning, Good morning, Joe.
Good morning, Joe you.
You discussed getting I guess, a little bit more in the weeds on the capex profile on longer term spending run rate right, regardless of the Rfps I know, obviously, we're going to get an update on <unk> <unk> been in the seat for a few months now.
Speaker 7: transcript
Speaker 7: CapEx Procon longer term spending right right regardless of the RPs I know obviously we're gonna get an update in 4Q you've been in the seat you know for a few months now And you're still kind of looking at that declining CapEx profile on the slides Can you just maybe elaborate on what you mean by robust? I mean as it's fair to assume that $800 million run rate will step up materially Just directly how we should think about it as we head into the fourth quarter. Thanks
Joe Turbick: Careful pollution management remains an important focus as we continue to track towards our authorized 50 50 capital structure over time and maintain flexibility in financing options. Our results in the third quarter continue to reflect our investment year thesis as we execute to establish a 30 growth foundation for PGE. They also reflect ongoing challenges that we are all working to diligently manage through year end.
We're still kind of looking at that declining capex profile on the slides can you just maybe elaborate on what you mean by robust.
Is it fair to assume that $800 million run rate will step up materially just directionally, how we should think about it as we head into the fourth quarter. Thanks.
So.
Joe Turbick: Some of the headwinds we have faced through Q3 are expected to dissipate in the last three months of the year, including in power cost turning to slide 10 for outlook for the fourth quarter. As Maria touched on earlier, indicators point to a more reasonable power market condition, especially compared to Q4 2022, which saw cold weather, pipeline disruptions and regional gas storage anomalies drive Pacific Northwest gas and power prices to extreme levels.
Yeah. Thanks, So the way I look at it is so when we say more robust I think we would like to provide more transparency as we work through 24 and the further years.
Speaker 5: transcript
Speaker 5: to think sharp up. So, the way I look at it is, so when we say more robust, I think we would like to provide more transparency as we work through 24 and the further years of our base business, the transmission that Maria had mentioned before, as well as what I'll call the potential for the opportunities, be it the RFPs that we've spoken to and the grant. It would not...
Our base business the transmission that Maria had mentioned before as well as what I'll call.
The potential for the opportunities be it the rfps that we've spoken to it and the grants.
Would not.
Speaker 5: transcript
Speaker 5: be unreasonable to say there's some upward pressure there. But, Char, that's what we're waiting for is as we get through the rate case outcome here and get a little more clarity on the transmission plan and the grants, that we hopefully can give a little more of a transparent, longer view of the possibilities as opposed to what is, as you see there, a relatively flat plan.
Unreasonable to say, there's some upward pressure there, but that's what we're waiting for is as we get through the rate case outcome here and get a little more clarity on the transmission plan and.
Joe Turbick: Due to these factors, fourth quarter of power costs were meaningfully higher than considered in the AUT baseline, which is represented in the chart. We expect impacts of load growth, depreciation, interest expense and pollution observed year to date to continue. Operating costs execution remains a critical component of our plan and all corners of our business are leaning into drive savings and results. Given these efforts, we expect our fourth quarter O&M to come in below our current full year run rate.
The grants that we hopefully can give a little more of a <unk>.
Transparent longer view of the possibilities as opposed to what it is.
As you see there are relatively flat plan.
Speaker 5: transcript
Speaker 5: And part that we'll also weigh into that as it relates to that base, I should say, is how the most recent IRP that has come out impacts our base capital as it relates to supporting renewables as well.
And part of it will also weigh into that as it relates to that base I should say is the most how the most recent.
IOP that has come out impacts are our base capital as it relates to supporting renewables as well.
Speaker 7: transcript
Speaker 7: Got it. And then just on the financing side, Joe, just obviously, I guess, how should we think about the forward equity?
Got it and then just on the financing side, Joe just obviously I guess, how should we think about the forward equity.
Joe Turbick: Finally, we expect an improved resource mixed compared to our AUT expectations that will allow us to make up ground in our annual power cost position. This includes better availability of generating resources, improved plant outage expectations, and portfolio optimization that allows strategic dispatch of our generation fleet. Due to load results in the third quarter being below expectation, we are revising our 2023 full year weather adjusted load growth guidance from 2.5% to 3% to 2%, which is in line with our long term expectation.
Speaker 7: transcript
Speaker 7: finding and for any sort of wins under the next RFP round. I think it's awarded next year, right? If you have an ATM now, is that kind of the avenue you're gonna look at at this point?
Financing for any sort of wins under the next RFP round I think it's awarded next year right. So you have an ATM now is that kind of the avenue, you're going to look at at this point.
Yes, I think we continue to evaluate based on the expectations and the outcomes that will come from the RFP our approaches, but I mean, I think an approach that starts with a base of having an ATM to support US right. We can re currently as much as we had about $250 million left to issue right.
Speaker 5: transcript
Speaker 5: Yeah, I think we can we continue to evaluate based on, you know, the expectations and the outcomes that will come from the R. F. P. R. Approaches. But I mean, I think an approach that starts with a base of having an A. T. M. to support us, right? We currently, as much as we have
Speaker 5: transcript
Speaker 5: you know, about $250 million left to issue, right? The cash flows of the ATM are still, we haven't yielded any from so far, but we'll continue to evaluate the ATM as it relates to supporting our business from a base, a transmission, and others, and then evaluate it on an episodic basis based on the size of any of these significant wins that could come from an RFP.
The cash flows of the ATM or we haven't yielded any from so far but we will we will continue to evaluate the ATM as it relates to supporting our business from a from a base of transmission and others and then evaluating on an episodic basis based on the size of the any of the significant wins that could come from an RFP.
Joe Turbick: We continue to have strong visibility to incoming projects concentrated among digital and high tech customers, which are continuing their growth path. As such, we remain confident in the load profile in our area and are reiterating our long term load growth guidance of 2% through 2027. As Maria noted earlier, we are narrowing our full year earnings guidance to 2.6% to 2.65% per due to chair to reflect power cost challenges experienced in the third quarter.
Okay got it.
Speaker 7: transcript
Speaker 7: Okay, got it. And then lastly, just for me is maybe just tied a little bit deeper into the power cost aspect of the settlement. And now, I guess, how do you see the mechanism you got for, let's just say, extreme events? Actually, insulating the EPS volatility. For example, like, how would have impacted this quarter if you had it in place that past all?
And then lastly, just for me is maybe just tied a little bit deeper into the power cost aspect of the settlement.
I guess, how do you see the mechanism you got for let's just say extreme events is actually insulating. The EPS volatility for example, like how would have impacted this quarter. If you had it in place that past August thanks.
Joe Turbick: We have sharpened our load expectations for Q4 and anticipate power cost and O&M execution will drive necessary results to achieve this range. 2023 continues to represent a key pivot point for our direction toward sustained growth and value for customers and shareholders. Constructive regulatory clarity, a robust capital investment pipeline, and solid service regulatory fundamentals give us renewed confidence in reaching our earnings growth guidance of 5% to 7% in 2024 and beyond. As we enter the final months of 2023, our ongoing focus of providing clean, reliable, and affordable energy remains unchanged. We look forward to furthering this quarter mission, which will enable prolonged value for our customers, communities, and shareholders.
Speaker 5: transcript
Speaker 5: Right. And then so you know, the mechanism itself is not finalized as of as of yet, but based on our understanding so that the definition of an event with there would be three items that would that would come into to play as as evaluating the if there was an event, which would be the day had mid mid Columbia index price.
Alright.
So the mechanism itself is not finalized as of as of yet, but based on our understanding so that the <unk>.
Definition of event with there would be three items that would that would come into play as evaluating if there was an event, which would be the day had mid mid Columbia Index price.
Speaker 5: transcript
Speaker 5: EG's eligibility to request resource adequacy assistance and then a neighboring balancing authority that's publicly declared an event. So those are sort of what we believe the definitions would be. Sharif, if we applied those, we do believe the heat event that occurred in August would have triggered that definition.
<unk> eligibility to request resource adequacy assistance, and then a neighboring balancing authority.
That's publicly declared an event. So those are sort of what we believe the definitions would be charged if we applied those we do believe the heat event that occurred in August would have would have triggered that definition.
Operator: And now, operator, we are ready for questions. Thank you, as a reminder, to ask a question, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. Please stand by while we compile the Q&A roster.
Speaker 5: transcript
Speaker 5: We'd also believe that if we were to look to the prior years, there was a significant collection of events that, not just this heat event, if we were looking to 22 and 21, there are several events that would meet that.
We would also believe that if we were to look through the prior years. There were there was a significant collection of events that not just as heat event. If we were looking into 'twenty, two and 'twenty. One there are several events that would meet that so so we do believe that a portion of our costs that are incurred in this current year would've been defined to pull into that we're not.
Speaker 5: transcript
Speaker 5: So we do believe that a portion of our cost that are incurred in this current year would have been defined to pull into that. We're not, you know, because the commission has an issued an order and we haven't finalized, we're not at the point of declaring what that value or average would be. But once the order comes out and we have that clarity, we'll consider.
Char Perezza: Our first question comes from the line of Char Perezza of Guggenheim partners. Good morning, Maria. Good morning, Joe. You discussed getting a little bit more in the weeds on the CAPEX protocol on longer-term spending, right? Regardless of the RFPs. I know, obviously, we're going to get an update in 4Q. You've been in the seat for a few months now, and you're still looking at that declining CAPEX profile on the slides. Can you just maybe elaborate on what you mean by robust?
The Commission has hasnt issued an order and we Havent finalized we're not at the point of declaring what that value our average would be but once the orders comes out we have that clarity will consider.
Speaker 5: transcript
Speaker 5: you're discussing what that average impact would have been over the last number of years here, potentially as we get to your end.
Discussing what that average impact would have been over the last number of years here potentially as we get to year end, but there is that there is is there something there yes.
Speaker 5: transcript
Speaker 5: But is there something there? Yes, are these events something that occur at least, you know, and we're so yes.
Events something that occurred.
And so yes.
Speaker 7: transcript
Speaker 7: Okay, perfect. Thank you guys. We'll see you in a couple weeks. Appreciate it.
Okay perfect. Thank you guys will see in a couple of weeks appreciate it.
Great. Thank you. Thank you.
Thank you.
Speaker 1: transcript
Speaker 1: Our next question comes from the line of Richard Sunderland of J.P. Morgan.
Our next question comes from the line of Richard Sunderland of J P. Morgan.
Char Perezza: I mean, is it fair to assume that $800 million dollar run rate will step up materially? Just directly how we should think about it as we head into the fourth quarter. Thanks. The way I look at it is, so when we say more robust, I think we would like to provide more transparency as we work through 24 and the further years of our base business, the transmission that Maria had mentioned before, as well as what I'll call the potential for the opportunities, be it the RFPs that we've spoken to and the grant would not be unreasonable to say there's some upward pressure there.
Good morning, Good morning can you hear me.
Yes.
Speaker 1: transcript
Speaker 1: Great. Thank you for the time today. A lot of helpful color on the quarter and looking to 4Q here as well.
Great. Thanks for the time today.
A lot of helpful color on the quarter and looking at <unk> as well, maybe starting on the O&M, but just wanted to make sure as parts and this correctly. It sounded like you were standing up some savings specifically to help this year.
Speaker 1: transcript
Speaker 1: starting on the LNM, but just wanted to make sure it's parsing this correctly. It sounds like you were standing up some savings specifically to help this year. Is that the case and how does that flow through versus, I guess, effectively your plan at the start of the year and then just to be more precise on kind of 23 versus beyond are any savings kind of structural in the 2024 and more long.
Is that the case.
How does that flow through versus I guess effectively youre playing at the start of the year and then just to be more precise on kind of 23 versus beyond.
These savings are structural in mid 2024 and more long term.
Char Perezza: But Char, that's what we're waiting for is as we get through the rate case outcome here and get a little more clarity on the transmission plan and the grants that we hopefully can give a little more of a transparent longer view of the possibilities as opposed to what is right as you see there a relatively flat plan. And you know in part that will also weigh into that as it relates to that base, I should say is you know the most how the most recent IRP that has come out impacts our our base capital as it relates to supporting renewables as well.
So Joe you want to take this one sure good morning, Richard So as it relates to OEM O&M. So yes, we do believe some work that we've been doing throughout the throughout the year when I say throughout the year more think that April and beyond.
Speaker 5: transcript
Speaker 5: to show you what take this on. Sure. Morning Richard. So as it relates to OEM, so OEM, so yes, we do believe some work that we've been doing throughout the year. When I say throughout the year, more think to April and beyond, we'll yield some benefits to us financially as reducing us below our run rate that we're currently at for the full year. We did see a...
Will yield some benefits to us financially as reducing us below our run rate that we're currently at for the full year, we did see a a sort of a reduction in our what I'll call our overspend to expectation in the third quarter, but we were still over but we expect in the fourth quarter, we will yield some O&M savings those O&M.
Speaker 5: transcript
Speaker 5: A a sort of a reduction in our what i'll call our overspend to expectation in the third quarter But we were still over but we we we expect in the fourth quarter We will yield some o&m savings those o&m savings are meant to be
Char Perezza: Got it and then just on the financing side Joe just obviously I guess how should we think about the forward equity. Finance and for any sort of wins under the next RFP round I think it's awarded next year right if you have an ATM now is that kind of the avenue you're going to look at at this point. Yeah well I think we can we continue to evaluate based on you know the expectations and the outcomes that will come from the RFP are approaches but I mean I think an approach that starts with a base of having an ATM to support us right we can recurrently as much as we have.
<unk> are.
To be like a structural going forward management of our cost. So we would expect to have the same structure in place. These are not one time items two to achieve benefits for the year, but more structural items as we relate to changing the way, we manage our cost and run our business going.
Speaker 5: transcript
Speaker 5: a structural going forward management of our cost. I mean, so we would expect to have that the same structure in place. These are not one-time items to achieve benefits for the year, but more structural items as we relate to changing the way we manage our cost and run our business.
Speaker 4: transcript
Speaker 4: going forward. So we would expect that for it to continue. Richard, one thing is you look at our external statements. I think it's important that we acknowledge that there's a couple of things going on. The first is you can see the amortization of deferrals from the ice storm, wildfire events, prior P. Cam years, and other things.
Going forward, so we would expect that.
Richard one of the things as you look at our external statements I think it's important that we acknowledge that there is a couple of things going on there.
Char Perezza: You know about 250 million left to issue right the cash flows of the ATM are are still we haven't yielded any from so far but we'll we'll continue to evaluate you know the ATM is relates to supporting our our business from a from a base a transmission and others and then evaluating on an episodic basis based on the size of the any of these significant wins that could come from an RFP. Okay got it and then lastly just for me is maybe just tied a little bit deeper into the power cost aspect of the settlement and now I guess how do you see the mechanism you got for let's just say extreme events is actually insulating the EPS volatility for example like how would have impacted this quarter we had it in place that past August thanks.
First as you can see the amortization of deferrals from the ice storm wildfire events.
Prior to <unk> and other things are increasing that O&M line.
Speaker 3: transcript
Speaker 3: are increasing that O and M line. But so are ongoing wildfire prevention work, all of the mitigation we do, the interaction we do with the U.S. Forest Service and local entities really around vegetation management and others. And to this rate case, there were some really important mechanisms that were put in place.
But so our ongoing wildfire prevention work all of the mitigation, we do the interaction we do with the U S Forest service and local entities.
Really around vegetation management and others to this rate case, there was some really important mechanisms that were put in place that combined with what Joe was speaking of in terms of the ongoing.
Speaker 4: transcript
Speaker 4: That combined with what Joe was speaking of in terms of the ongoing.
Speaker 4: transcript
Speaker 4: alignment, reduction in our cost, plain frankly just driving efficiencies using technology better.
<unk> alignment.
Reduction in our cost quite frankly, just deriving efficiencies using technology better.
Char Perezza: Right and then so you know the mechanism itself is not finalized as of as of yet but based on our understanding so that the definition of an event with there would be three items that would that would come into to play as as evaluating the if there was an event which would be the day had mid mid Columbia index price. EGs eligibility to request resource adequate the assistance and then a neighboring balancing authority that's publicly declared an event so those are sort of what we believe the definitions would be sharp if we applied those we do believe the heat event that occurred in August would have would have triggered that definition.
Speaker 4: transcript
Speaker 4: You can see we've had planted availability most recently at the 96%ile. What we've raised, and our first average rate was just 1.7%. That was a huge contributor, particularly to the third quarter.
Can see we've had the plant availability and most recently as the 96 percentile range.
And our forced outage rate was just one 7% that was a huge contributor particularly to the third quarter.
Speaker 3: transcript
Speaker 3: We can see in our distribution system work order output is a 12% improvement year over year. We're seeing for customers that are crew alignment and scheduling restoration priorities.
Can see in our distribution system.
Four quarter output is at 12% improvement year over year.
Seeing for customers that our CRO alignment and scheduling restoration priorities and.
Speaker 3: transcript
Speaker 3: and our duration of impacting events was an improvement of 13 percent and overall 1.3 million customer minute outages, excuse me, customer outage minutes were saved just from 2022. So there's a real impact not only to our cost structure and to better operations.
Our duration of impacting events.
An improvement of 13% and overall $1 3 million customer minute outages teeny customer outage minutes.
Char Perezza: We'd also believe that if we were to look to the prior years there were there was a significant collection of events that you know not just this heat event if we were looking to 22 and 21 there are several events that would meet that so. So we do believe that a portion of our our costs that are incurred in this current year would have been defined to fall into that we're not you know because they the commission has has an issues in order and we haven't finalized we're not at the point of declaring what that value or average would be but once the orders come down we have that clarity will consider.
We're saying just from 2022, so it's a real impact not only to our cost structure and to better operations.
Speaker 4: transcript
Speaker 4: but to serving our customers more reliably with power that they've come to expect as we've seen increasing amounts of extreme events throughout our area.
To serving our customers small reliably.
With the power that they have come to expect as we have seen increasing amounts of extreme events throughout our area.
Understood.
Very helpful color.
Char Perezza: You're discussing what that you know average impact would have been over the last number of years here you know potentially as we get to direct but there is there is there's something there yes are these events something that occur at least you know and we're so yes. Yes. Okay. Perfect. Thank you guys. We'll see you in a couple of weeks. Appreciate it. Thank you.
Speaker 8: transcript
Speaker 8: Maybe zooming out to a high level, and Maria, you brought this up in terms of the wildfire work, but could you speak a little bit to sort of what you're focused on and what your work with the industry is focused on in terms of wildfires overall as an industry issue? It's been obviously hugely topical this summer and for prior years. Just curious if there's anything you can share in terms of where you and EEI are focused on this front.
Maybe zooming out.
High level and Maria you brought this up in terms of the wildfire work, but.
Could you speak a little bit to sort of what you're focused on your work with the industry is focused on in terms of.
<unk> fires overall as an industry issue.
Then obviously future topical the summary for prior years, just curious if theres anything you can share in terms of.
Richard Sunderland: Our next question comes from the line of Richard Sunderland of JP Morgan. Good morning. Can you hear me? Yes. Great. Thanks for the time today. A lot of help for color on the quarter and looking at four keys here as well. You may be starting on the LNM. It just wanted to make sure it's parsing this correctly. It sounds like you were standing up some savings specifically to help this year.
Where are you in.
We are focused on this front currently.
Sure. It's a good question and let me turn first to ourselves internally.
Speaker 4: transcript
Speaker 4: Sure, it's a good question. And let me turn first to ourselves internally. We have absolutely improved our practices, better use of technology and some truly cutting edge technologies where we're able to share that access with other parties, whether it be forest agencies, the national
We have absolutely improved our practices better use of technology and some truly cutting edge technologies, where we are able to share that access with other.
Richard Sunderland: Is that the case and how does that flow through versus I guess effectively your plan at the start of the year and then just to be more precise on kind of 23 versus beyond are any savings kind of structural in the 2024 and more long term. To do you want to take this on? Sure. Good morning, Richard. So as it relates to oh, and so yeah, oh, and so yes, we do believe some work that we've been doing throughout the throughout the year when I say throughout the year more think to April and beyond will yield some benefits to us financially as reducing us below our run rate that we're currently at for the full year.
Speaker 3: transcript
Speaker 3: the state and the local entities where we're working in conjunction on vegetation management. The Ag Bill that's working its way through Congress I think is a really good example where we've, includes timber and debris removal on an expedited basis. We've also had permit reform in particular with the U.S. Forest Service, reducing permits from several years down to months.
The state and the local entities, where we're working in conjunction on vegetation management. The add bill that's working its way through Congress I think is a really good example, where we've includes timber and debris removal.
On expedited basis, we've also had permanent reform in particular with the U S Forest service, reducing permits from several years downturn months and really accelerated our collaboration and our improved practices as we look both at the state level and federal level, clearly we need to do more.
Speaker 4: transcript
Speaker 4: and really accelerated our collaboration and our improved practices.
Speaker 4: transcript
Speaker 4: As we look both at the state level and the federal level, clearly we need to do more as a high priority across the industry and as well as with regulators. And so I think you'll see increased actions coming that really support the ongoing reliability and important service that utilities provide.
Richard Sunderland: We did see a sort of a reduction in our what I'll call our over spend to expectation in the third quarter, but we were still over but we we we expect in the fourth quarter. We will yield some O and M savings. Those O and M savings are meant to be like a structural going forward management of our cost. I mean, so we would expect to have that the same structure in place.
It's a high priority across the industry.
And as well as with regulators and so I think youll see increased actions coming that really support the ongoing reliability and an important service that utilities provide.
Speaker 8: transcript
Speaker 8: God, thank you. Maybe one last one from EZ. The state and federal work he cited around the semiconductors industry and then your latest IRP update. Is that all harmonized or is there even some elements of this that have emerged that are you additive to that outlook as you recently refreshed it?
Got it thank you and maybe one last one for me.
The state and federal work he cited around the semiconductors industry and then your latest update.
Richard Sunderland: These are not one-time items to to achieve benefits for the year, but more structural items as we relate to changing the way we manage our cost and run our business going forward. So we would expect that for continue. Richard, one thing is you look at our external statements. I think it's important that we acknowledge that there's a couple of things going on. The first, as you can see, the amortization of deferrals from the ice storm, wildfire events, prior PCAM years, and other things are increasing that O and M line, but so are ongoing wildfire prevention work, all of the mitigation we do.
Is that all harmonized or is there even some elements of this that have emerged that are additive to that outlook.
We refreshed it.
Speaker 4: transcript
Speaker 4: So I think the use of the word harmonize is a really interesting term. We are seeing, you know, the pace of change.
So I think that use of the word harmonized is a really interesting term we are seeing.
The pace of change.
Speaker 4: transcript
Speaker 4: And clearly the programs that we've seen come out of the Federal Government Department of Energy that supports transmission, better use of a smart grid, and our partnerships between tribes all the way to NVIDIA.
And clearly the programs that we've seen come out of the federal government Department of LNG that supports transmission better use of the smart grid and our partnerships between tribes all the way to Nvidia.
Richard Sunderland: The interaction we do with the US Forest Service and local entities really around vegetation management and others, and to this rate case, there was some really important mechanisms that were put in place that combined with what Joe was speaking of in terms of the ongoing alignment, reduction in our cost, quite frankly, just driving efficiencies using technology better. You can see we've had planned availability, most recently is the 96 percentile, but we're great, and our first average rate was just 1.7 percent.
Speaker 3: transcript
Speaker 3: are really making a difference. But you take a look at the chip fact and then what the state of Oregon has done through the Center Conductor Task Force.
Are really making a difference but you take a look at the chipset and then what the state of Oregon has done through the semiconductor task force and the legislature is appropriation of $240 million of matching funds.
Speaker 4: transcript
Speaker 4: and the legislature's appropriation of $240 million of matching funds.
Speaker 4: transcript
Speaker 4: You can find on the state website the 15 companies that will receive funds ranging from just a couple million dollars to a hundred and fifteen million dollars.
It's fine on the state website.
<unk> companies that will receive.
Funds raising ranging from just a couple of million dollars to $115 million.
Those projects some of which.
Speaker 4: transcript
Speaker 4: Some of which are included in our forecast, but the majority are not. And if you look at that list, about 85% of those projects are actually in Portland General Electric Service territory.
Are included in our forecast that the majority or not and if you look at that list about 85% of those projects are actually in Portland General Electric service territory. So for the next decade. It is a tremendous opportunity for the company.
Richard Sunderland: That was a huge contributor, particularly to the third quarter. We can see in our distribution system, work order output is at 12 percent improvement year over year. We're seeing for customers that are crew alignment and scheduling restoration priorities. And our duration of impacting events was an improvement of 13 percent, and overall 1.3 million customer-minute outages to the customer out of minutes were saved just from 2022. So there's a real impact not only to our construction and to better operations, but to serving our customers more reliably with the power that they come to expect as we've seen increasing amounts of extreme events throughout our area. Understood. That was very helpful, Collar.
Speaker 4: transcript
Speaker 4: So for the next decade, it is a tremendous opportunity for the company, for the region. And it's also combined with a pretty extensive workforce support and investment in our universities.
For the region and is also combined with pretty extensive workforce support and investment in our universities really focusing in on an important re shoring up our technical strengths as a country and just as a reminder, 15% of semiconductor manufacturing.
Speaker 4: transcript
Speaker 4: really focusing in on an important reshoring of our technical strengths as a country. And just as a reminder, 15% of send-in doctor manufacturing is in this region. So it's a real strength for our state and for the company.
In this region. So it's a real strength for our state and for the company.
Great. Thank you very much for the time today.
Thank you.
Yes.
Speaker 1: transcript
Speaker 1: Thank you. Our next question comes from the line of Julianne Dumoulin-Smith of Bank of America.
Thank you.
Our next question comes from the line of Julien Dumoulin Smith Bank of America.
Speaker 9: transcript
Speaker 9: Hey, good morning. Hey, thank you guys. Appreciate it.
Hey, good morning team.
Maria Pope: Maybe zooming out to a high level and Maria, you brought this up in terms of the wildfire work, but could speak a little bit to sort of what you're focused on and what your work with the industry is focused on in terms of wildfires overall is an industry issue. It's been obviously huge and topical this summer and for prior years. The series that there's anything you can share in terms of where you and E.I, are focused on this fund permanently.
You guys I appreciate it let me.
Speaker 9: transcript
Speaker 9: Perhaps let's pick up on that last question there quickly. How do you think about tying the timeline between having a more normalized 2% here in the current year to getting up to some of the higher level that you talked about earlier?
So let's pick up on that last question. There quickly how do you think about tying the sort of the timeline between having a more normalized 2% here in the current year to kind of getting up to some of the higher levels that you talked about earlier.
Speaker 9: transcript
Speaker 9: you know, just a moment ago with some of the benefits from the Chips Act, and at the same time still having, you know, that 2% long-term. I mean, sort of, how do you see the profile of that sales growth and the confidence for, I think, previously when we connected?
Just a moment ago with some of the benefits from the chipset and at the same time still having that 2% long term I mean sort of how do you see the profile of that sales growth and the competence for I think previously when we connected some some really strong commentary around customer growth sustaining itself. In addition to the sale of weather adjusted sales growth sustaining itself.
Speaker 9: transcript
Speaker 9: Some really strong commentary around customer growth, sustaining itself, in addition to sale, whether just a sales growth, sustaining itself here in the medium term. I don't want to put words.
Maria Pope: Sure, it's a good question. And let me turn first to ourselves internally. We have absolutely approved our practices, better use of technology and some truly cutting edge technologies where we're able to share that access with other parties. Whether it be forest agencies in the national, the state and the local entities, where we're working in conjunction on vegetation management, the Ag Bill that's working its way through Congress. I think it's a really good example where we've includes timber and debris removal on an expedited basis.
In the medium term.
I don't want to put words in your mouth, but it's really good.
Speaker 3: transcript
Yes, no no. Its interesting we look at it as building blocks and I think that has rarely been a period of time of so much change and opportunity.
So first of all we are a stage in our region.
That has benefited from in migration and while that has paused most.
Most recently.
We continue to see really strong like blocking and tackling economic growth across our service territory.
Speaker 4: transcript
Speaker 4: What we also are seeing is increased data centers and the continued digital expansion. One of the things that's important about that is that many of those facilities are built, but not yet built out.
What we also are seeing is increased data centers and the continued digital expansion.
Maria Pope: We've also had permanent reform in particular with the US Forest Service, producing permits from several years down to months and really accelerated our collaboration and our improved practices. As we look both at the state level and the federal level, clearly we need to do more in the high priority across the industry and as well as with regulators. And so I think you'll see increased actions coming that really support the ongoing reliability and important service that utilities provide. Got it. Thank you.
One of the thing Thats important about that is that many of those facilities are built but not yet built out.
Speaker 4: transcript
Speaker 4: And so the infrastructure is there and you'll see the capacity built out over the coming months and quarters.
And so the infrastructure is there and youll see the capacity built out over the coming months and quarters and then finally, the longer term and really significant opportunities.
Speaker 4: transcript
Speaker 4: And then finally, the longer term and really significant opportunities comes in the manufacturing side of things. And this is everyone from Silicon manufacturers all the way down to setting connector manufacturers to those who are really helping with the tools and cutting us development like a lab research or our metrics or other.
It comes in the manufacturing side of things and this is everyone.
From Silicon manufacturers, all the way down to semiconductor manufacturers to those who are really helping with the tools and cutting is development of Lam research of our mentor graphics or others.
Maria Pope: Maybe one last one from E.D. The state and federal work he cited around the semiconductors industry. And then your latest IRP update. Is that all harmonized or is there even some elements of this that have emerged that are attitude for that outlook as you recently refreshed it? So I think the use of the word harmonized is a really interesting term. We are seeing, you know, the pace of change. And clearly the programs that we've seen come out of the federal government department of energy that supports transmission.
Speaker 3: transcript
Speaker 3: And there's quite a bit of opportunity that we, some of which we can see today and are already serving, and much of which will come out over the number of quarters, years, and actually even through the decade. It's truly game-changing for the state, as well as for us as a utility, to be able to serve such growth.
And there is quite a bit of opportunity that will that we some of which we can see today and are already serving and much of which will come out over the number of quarters years and actually even through the decade, it's truly game changing for the state as well as for us as a utility.
To be able to serve such growth.
Speaker 9: transcript
Speaker 9: Got maybe just declared by that. You're not pulling back on any of your earlier confidence.
Yes, maybe just to clarify that you are not pulling back on any of your earlier comments.
Speaker 3: transcript
Speaker 3: in light of the 20. No, you know what I think? Yeah. No, we aligned our 2023 number really with our long-term guidance of 2%.
In light of the 2000 I think.
No we aligned our 2023 number really with our long term guidance of 2%.
Maria Pope: Better use of the smart grid and our our partnerships between tribes all the way to Nvidia are really making a difference. But you take a look at the chip fact and then what the state of Oregon has done through the semiconductor task force and the legislatures appropriation of $240 million of matching funds. You can find on the state website the 15 companies that will receive funds raising ranging from just a couple million dollars to $115 million.
Speaker 4: transcript
Speaker 4: You know, I think it's, we feel very confident in the 2% number. And I think my comments underlie optimism for even higher growth than that.
I think it is.
I'm very confident in the 2% number and I think my comments underlie optimism for even higher growth than that.
Speaker 9: transcript
Speaker 9: Okay. All right. Fair enough. I'm just trying to tease the near term to the long term here. And then if you can, I mean, speaking about, you know, kind of reconciling 23 against the longer term, how about 23 and the levers that you've pulled here to keep it at the lower end, you know, despite the litany of more weather-related pressures here, as you alluded to earlier. Is there a read in the 24 that we should be aware of? I know you provided some commentary.
Okay, Alright fair enough Im just trying to tease the near term for the long term here.
And then if you can.
Speaking about kind of reconciling 23 against the longer term, how about 23 and the levers that you've pulled here to keep it at the lower end despite the lithia.
Or weather related pressures here as you alluded to earlier is there a read into 24 that we should be aware of I know you provided some commentary.
Maria Pope: Those projects some of which are included in our forecast but the majority are not. And if you look at that list about 85% of those projects are actually in Portland general electric service territory. So for the next decade it is a tremendous opportunity for the company for the region. And it's also combined with a pretty extensive workforce support and investment in our universities really focusing in on an important reassuring of our technical strengths as a country. And just as a reminder 15% of sending doctor manufacturing is in this region so it's a it's a real strength for our state and for the company.
In the remarks, but is there any kind of direct read through whether it's O&M or otherwise in terms of pull forward.
Speaker 9: transcript
Speaker 9: remarks, but is there any kind of direct read through whether it's on them or otherwise in terms of pull forward The 24 we should just be ready
24, we should just be ready for it.
Speaker 4: transcript
Speaker 4: Yep, no, I think it's Joe outlined. We have really focused cost management efforts on how we manage the business, stay very coeximate to customer prices and drive efficiencies across our organization. But we remain confident in the long-term growth rate of five to seven percent. And as we have always said, 2023 was an investment year.
Yes, no I think as Joe outlined we have really focused cost management efforts on how we.
Managed the business stay very cognizant that customer prices.
And drive efficiencies across our organization, but we remain confident in the long term.
The growth rate, 5% to 7% and as we've always said 2023 was an investment year.
Okay.
Operator: Great, thank you very much for the time today. Thank you.
Got it but no hesitation on 24 and turn from what I can tell no none at all.
Speaker 9: transcript
Speaker 9: from what I can tell. No, not at all. Okay, wonderful. Thank you so much, right? You guys take care.
Okay wonderful. Thank you so much you guys take care.
Julien Dumoulin Smith: Our next question comes from the line of Julien Dumoulin Smith, a bank of America. Hey, good morning. Hey, thank you guys. Appreciate it. Let me perhaps let's pick up on that last question there quickly. How do you think about tying the timeline between having a more normalized 2% here in the current year, to getting up to some of the higher level that you talked about earlier, just a moment ago with some of the benefits and the chips act, and at the same time still having that 2% long term.
Thank you chip.
Thank you.
Speaker 1: transcript
Speaker 1: Our next question comes from the line of Nicholas Campanella of Barclays.
Our next question comes from the line of Nicholas Campanella of Barclays.
Speaker 10: transcript
Speaker 10: Hey, thanks for taking a break. Good morning. Good morning. Great. I guess just on the revenue increase to 391 million, I know that there's a lot of moving pieces with power costs and you called out the 183 for power costs, but is the net of those two numbers, that's what's falling to the bottom line, or is that too simplistic?
Hey, Thanks for taking my questions. Good morning, good morning, good morning.
Just on the the revenue increased to $391 million.
I know that Theres, a lot of moving pieces with power costs and you called out the 183 for power costs, but the net of those two numbers, that's what's falling to the bottom line or is that too simplistic.
Julien Dumoulin Smith: I mean, how do you see the profile of that sales growth and the competence for, I think previously, when we connected some really strong commentary around customer growth, sustaining itself, in addition to sale, whether or just sales growth, sustaining itself here in the medium term. I don't want to put words on your mouth, but good work. Yeah, no, no, it's interesting.
I think.
Speaker 5: transcript
Speaker 5: I'm not sure I would do that math on the net of the power cost. And specifically, we're talking about 2024 here, but I think.
I'm not sure I would do that math on the netted of power costs and specifically.
We're talking about 2024 here I think.
Speaker 5: transcript
Speaker 5: the performance of what we'll talk about in mine is obviously our
The performance of what will fall to the bottom line is obviously, our AD load recovery or return on the assets here as we build to 20 for the rate case overall and the net outcome that we have we're pretty we're pretty satisfied that it was really constructive dialogue and in the case itself fits with.
Speaker 5: transcript
Speaker 5: our load recovery, our return on the assets here as we build to 24, I mean, the rate case overall and the net outcome that we have, we're pretty, you know, we're pretty satisfied that it was a really constructive dialogue. And the case itself fits within our, what I'll call our calculus to Maria's comments of our long-term.
Julien Dumoulin Smith: We look at it as building blocks and I think there's really been a period of time of so much change and opportunity. So first of all, we're a state and a region that has benefited from immigration, and while that has paused, most recently, we continue to see really strong like blocking and tackling economic growth across our service territory. What we also are seeing is increased data centers and the continued digital expansion.
In our what I'll call, our calculus to Maria's comments of our our long term growth plan.
Speaker 10: transcript
Speaker 10: Great, great. And then, can you just expand a little on why load and demand mix was an issue for third quarter, but what's just driving your confidence level for the fourth quarter? I'm sorry if I missed that.
Great Great and then could you just expand a little on why.
Load and demand mix was an issue for third quarter, but whats just driving your confidence level for the fourth quarter I am sorry, if I missed that.
Speaker 5: transcript
Speaker 5: And so I think as you relate specifically to the third quarter, right, that the mixed shift was...
Julien Dumoulin Smith: One thing that's important about that is that many of those facilities are built, but not yet built out. And so the infrastructure is there, and you'll see the capacity built out over the coming months and quarters. And then finally, the longer term and really significant opportunities comes in the manufacturing side of things. And this is everyone from Silicon manufacturers all the way down to setting connector manufacturers to those who are really helping with the tools and cutting us development like a land research or a matter of graphics or others.
Yes, so I think as it relates specifically to the third quarter. The mix shift was was away from the residential commercial heading heading towards the larger and it's really due to two things that occur more.
Speaker 5: transcript
Speaker 5: was away from the residential commercial heading towards the larger. And it's really due to two things that occur more, the one that occurs more in the summer period and one overall, one is the energy efficiency. We have a little more penetration on energy efficiency at that commercial and that residential level. But also, and more of the summer item, there was rooftop solar penetration that was occurring at both that commercial and that residential level that was pushing down the overall load. Mostly for commercial.
The one that occurred more in the summer period and one overall one is energy efficiency.
More penetration on the energy efficiency at that commercial and residential level, but also at the summer item there as rooftop solar penetration that was occurring at bolt that commercial in that residential level that was pushing down the overall load in the customer growth continues to be as we had anticipated I believe you had seven.
Speaker 5: transcript
Speaker 5: you know, continues to be as we had in cascaded, I believe we had 0.7% customer growth, but it's just that that pressure from the energy efficiency and the DER penetration that they're driving.
Julien Dumoulin Smith: And there's quite a bit of opportunity that we some of which we can see today and are already serving and much of which will come out over the number of quarters years and actually even through the decade. It's truly game-changing for the state as well as for us as a utility to be able to serve such growth. Yeah, maybe just to clarify that, you're not pulling back on any of your earlier confidence in light of the 20%.
Percent customer growth, but it's just that that pressure from the energy efficiency and the DVR penetration that are driving it.
Okay, Great and then just one more Joe just on the equity I thought that you said that you would you would pull the full ATM down by the end of the year if I'm wrong. Please correct me, but just as an aside.
Speaker 10: transcript
Speaker 10: Okay, great. And then just one more, Joe, just on the equity, I thought that you said that you would you would pull the full ATM down by the end of the year. If I'm wrong, please, please correct me. But just as an aside, how do you kind of think about on this current cap X plan with the equity announced to date your ability to get to the 50% or is there more that needs to that we need to be thinking about. Thank you.
How do you kind of think about on this current Capex plan with the equity announced to date your ability to get to the 50% or is there more that needs to then we need to be thinking about thank you.
Julien Dumoulin Smith: No, you don't think? Yeah. No, we aligned our 2023 number really with our long-term guidance of 2%. You know, I think it's we feel very confident in the 2% number, and I think my comments underlie optimism for even higher growth than that. Okay, all right, fair enough. I'm just trying to tease the near-term for the long-term here. And then if you can, I mean speaking about, you know, kind of reconciling 23 against the longer term, how about 23 in the levers that you've pulled here to keep it at the lower end, you know, despite the litany of more weather-related pressures here as you alluded to earlier.
So I think specifically as it relates to the ATM, we have not pulled down on the ATM as opposed to what we had have entered into is about.
Speaker 5: transcript
Speaker 5: So, all right, thank you. As specifically as it relates to the ATM, we have not pulled down on the ATM as a fall. So what we have entered into is about, I believe we disclose $58 million of the ATM we have entered into agreements on none of which we have closed upon. So from a cash flow standpoint, right, the entire ATM is outstanding, which 240-ish million is left to take into the market. As it relates to...
I believe we disclosed $58 million of the ATM, we have entered into agreements on none of which we have closed upon so from a cash flow standpoint, right D&B entire ATM is outstanding with $248 million is left to take into the market.
As it relates to.
Speaker 10: transcript
Speaker 10: Could you say your second part of your question again, just to make sure I don't answer it as it relates to the capital? I just wanted to be sure, are you leaving it open to whether or not you would pull that down by the end of the year, or could that be further feathered into 24 and beyond?
Or could you say your second part of your question and just to make sure I don't answer it as it relates to the capital I. Just wanted to be sure are you are you, leaving it open to whether or not you would you would pull that down by the end of the year or can that be further feathered into 'twenty four and beyond.
Julien Dumoulin Smith: Is there a read in the 24 that we should be aware of? I know you provided some commentary, in the remarks. But is there any kind of direct read through whether it's ONM or otherwise in terms of pull forward, that to 24 we should just be ready for? Yeah, no, I think it's Joe outlawed. We have really focused cost management efforts on how we manage the business, stay very confident to customer prices, and drive efficiencies across our organization.
Speaker 5: transcript
Speaker 7: I would say that the ATM that we have and the equity needs are complete for this year and the ATM would be open for next year. We don't have any at least current needs and obviously we'll always be opportunistic with our equity, but we do not have any current needs for the ATM.
I would I would say that the ATM that we have in the b.
Our equity needs are complete for this year and the ATM would be open for for Nick for next year, we don't have any at least current needs and we obviously would always be opportunistic.
With our equity, but we do not have any any current needs for the ATM.
Thank you.
Julien Dumoulin Smith: But we remain confident in the long-term growth rate of five to seven percent. And as we have always said, 2023 was an investment year. Got it, but no hesitation on 24 in turn. From what I can tell. No, not at all. Okay, wonderful. Thank you so much, right? You guys take care. Thank you, YouTube.
Thank you.
Our next question comes from the line of.
Speaker 1: transcript
Speaker 1: Our next question comes from the line of Greg Orill of UBS.
Greg Oro of UBS.
Speaker 11: transcript
Speaker 11: Yeah, thank you. Hey, good morning. Um, so, uh, 2 parts. Um, 1st, just.
Good morning, guys. Thank you hey, good morning.
So.
Two parts.
First.
Just.
How do you.
Regarding the 27 to 32 <unk> driver on the current year.
Speaker 11: transcript
Speaker 11: you know, regarding the 27 to 32 cent driver on the current year, they have very power costs. What?
Nicholas Campanella: Thank you. Our next question comes from the line of Nicholas Campanella of Barclays. Hey, thanks for taking questions.
Variable power costs.
What.
Yes.
How do you how do you think about.
Speaker 11: transcript
Speaker 11: How do you think about putting that range in place? What kind of gets you there? And...
Nicholas Campanella: Good morning. I guess just on the revenue increase to 391 million, I know that there's a lot of moving pieces with power costs and you called out the 183 for power costs, but is the net of those two numbers? That's what's falling to the bottom line, or is that too simplistic? You know, I think that's right. I would do that, that math on the net of the power cost. And specifically we're, we're talking about 2024 here.
Putting that range.
<unk>.
It kind of gets you there.
And then secondly.
Speaker 11: transcript
Speaker 11: Are you thinking about the level of ownership in
How are you thinking about the level of ownership.
In.
Speaker 11: transcript
Speaker 11: you know renewables in your RFP and just maybe not a, maybe not a number, but you know, sort of,
Renewables and your pure RFP in gist.
Maybe another way.
Maybe not a number but.
Uh huh.
Sort of appetite for ownership I guess.
Sure.
Speaker 4: transcript
Speaker 4: Okay, so let me take your first question and then your second and if I don't do an adequate job, I'll cancel in. So with regards to power cost the 27 to 32 cents.
Okay.
Nicholas Campanella: Yeah. But I, I think the, you know, the performance of what will fall to the bottom line is obviously our, our load recovery, our, our return on the assets here as, as we build to, to 24. I mean, the rate case overall and the net outcome that we have were pretty, you know, were, were pretty satisfied that it was a really constructive dialogue. And, and the case itself fits within our, we'll call our calculus to Maria's comments of our, our long term growth plan. Great.
So let me take your first question and then your second and.
Dumped inadequate chapa TL can fill in.
So with regards to power cost the 27 to <unk> 32.
Speaker 3: transcript
Speaker 3: You know, roughly about half of that, I wouldn't call it sort of structural. And you can see that in the AUT numbers, you can see it in what we sort of have already in place for the quarter. The other part is really the work that we do every day. And the work that we can see, and that would not be unusual for those kind of activities to yield the kind of results.
Roughly about half of that.
Good call set of structural.
And you can see that.
Now in the Eiichi numbers.
We think we can see it and what we sort of have already.
In place for the quarter.
The other part is really the work that we do every day.
Nicholas Campanella: And then can you just expand a little on why load and demand mix was an issue for third quarter, but what's just driving your confidence level for the, for the, for the fourth quarter? I'm sorry if I missed that. Yeah. So I think as you relate specifically to the third quarter, right? The, the, the mix shift was, was away from the residential commercial heading, heading towards the larger. And it's really due to two things that occur more is they, the, the one that occurs more in the summer period and one overall.
And the work that we can see in it that would not be unusual for those kind of activities to yield those kind of results.
Speaker 4: transcript
Speaker 4: for what is them pretty challenging for a quarter and a lot of work that we have to do. We feel confident that we'll get there.
For what is a pretty challenging fourth quarter and a lot of work, but we have to do we feel confident that we'll get there.
Speaker 3: transcript
Speaker 3: With regards to the RFP, the RFP will be issued shortly. We will put in a short list of
With regards to the RFP.
Hey.
RFP will be issued shortly we will put in a <unk>.
A short list of.
Nicholas Campanella: One is energy efficiency. We have a little more penetration on energy efficiency at that commercial and that residential level. But also, and more of the, the summer item, there was, there was rooftop solar penetration that, that was occurring at both that commercial and that residential level. That was, was pushing down the overall load. I mean, that the customer growth, you know, continues to be as we had anticipated. I believe we had 0.7% customer growth, but it's just that, that pressure from the energy efficiency and the, the ER penetration that they're driving. Okay, great.
Speaker 3: transcript
Speaker 3: of opportunities that the company would hope to be able to participate in. Those have a little bit of a different timing just to make sure that there is
Of opportunities.
The company would hope to be able to participate in.
Those have a little bit of a different timing just to make sure that there is.
Speaker 4: transcript
Speaker 4: full transparency, but we're looking for the final RFP to be out by the end of this year. The first half probably the short list will be submitted by that time.
Full transparency, but we're looking for the final RFP to be out by the end of this year.
The first half probably the shortlist will be submitted by that time, and we would hope to by the end of 2024, we would have finished some.
Speaker 4: transcript
Speaker 4: We would hope that by the end of 2024, we would have finished some negotiations, obviously overseen by an independent evaluator to make sure that we are driving.
<unk>, obviously overseen by an independent evaluated to make sure that we're driving.
Speaker 4: transcript
Speaker 4: the lowest cost, least risk projects for our community.
The lowest cost least risk projects.
Joe Turbick: And then just one more, Joe, just on the, on the equity. I thought that you said that you would, you would pull the, the full ATM down by the end of the year. If I'm wrong, please, please correct me, but just as an aside, how do you kind of think about on this current CAPX plan with the equity announced to date? Your ability to get to the 50% or is there more that needs to, that we need to be thinking about?
For our customers and we've been pretty fortunate so far with regards to the companies.
Speaker 4: transcript
Speaker 4: And we've been pretty fortunate so far with regards to the company's ownership projects. And that has really been being able to drive competitive costs, be able to manage.
Ownership projects and that has really been being able to drive competitive costs.
Be able to manage the risks and quite frankly have very good partners as we move forward. So we would hope to have the same circumstances as we enter into 2024 and beyond clearly theres a lot of opportunities.
Speaker 3: transcript
Speaker 3: and quite frankly have very good partners as we move forward. So we would hope to have the same circumstances.
Joe Turbick: Thank you. So, all right, thank you. Specifically, as it relates to the ATM, we have not pulled down on the ATM of the fall. So what we have, have entered into is about, you know, we have, I believe we disclose $58 million in of the ATM we have entered into agreements on none of which we have closed upon. So from a cash flow standpoint, right, the entire ATM is outstanding with 240-ish million is left to take into the market.
Speaker 3: transcript
Speaker 3: as we enter into 2024 and beyond. Clearly, there's a lot of opportunities.
I appreciate it.
Thank you.
Speaker 1: transcript
Speaker 1: Again, to ask a question, please press star 11 on your telephone. Once again, that star 11 on your telephone to ask a question.
Again to ask a question. Please press star one one on your telephone once again Thats Star one one on your telephone to ask a question.
Joe Turbick: As it relates to our, could you say your second party question and just make sure I don't answer it as it relates to the capital. I just wanted to be sure, are you, are you leaving it open to whether or not you would, you would pull that down by the end of the year or could not be further feathered into 24 and beyond? I would say that the ATM that we have in the, you know, the equity needs are complete for this year and the ATM would be open for next year. We don't have any, at least current needs. And we obviously would always be opportunistic with, with our equity, but we do not have any, any current needs for, for the ATM. Thank you.
Speaker 1: transcript
Speaker 1: Our next question comes from the line of Andrew Levi of Heights Hedge Asset Management.
Our next question comes from the line of Andrew Levi of Hite hedge asset management.
Hi, Andy.
Speaker 12: transcript
Speaker 12: Hi, Andy. Hi, how are you? We can't. Yep. Okay. Okay. That's good. All the good thing. There's a few questions if you don't mind. Just on the audience.
Oh, yes, we can.
That's a good good thing.
Just a few questions if you don't mind.
Just on the.
The August.
Ed.
Things a little bit.
For the quarter.
You have this.
Settlement.
PJM in place.
Speaker 12: transcript
Speaker 12: Just for that event, not for the quarter, but just for that event, how would that have?
Just for that event for the quarter, but just for that event, how would that have kind of played out.
Speaker 12: transcript
Speaker 12: how would we think about the numbers? Again, it's more of a guesstimate by you guys, but I'm just curious.
How would we think about the numbers again, it's more of a guesstimate, but you guys.
Greg Orrell: Our next question comes from the line of Greg Orrell of UBS. Yes. Thank you. Hey, good morning. So two parts. First, just how do you, you know, regarding the 27 to 32 cent driver on the current year, they have very power costs. What, you know, how do you, how do you think about putting that range in place? What, what kind of gets you there? And, and then secondly, are you thinking about the level of ownership in, you know, renewables in your, your RFP and, and just maybe not a, maybe not a number, but, you know, sort of appetite for ownership, I guess. Okay.
I'm just curious.
So Eddie.
So we are back to what I said earlier. So we do believe the August event would be.
Speaker 5: transcript
Speaker 5: So we are, you know, back to right-ten earlier. So we do believe the obvious event would be, would meet the definition. Although that definition is still to be finalized by the Commission Order.
Would meet the definition, although that definition is still to be finalized by the commission order.
Each event here is unique but to your comment.
Speaker 5: transcript
Speaker 5: Each event here is unique, but to your comment, and we are we're not assigning numbers here yet, but there would there be some I hate to be so vague, but would there be some impact to our our results this year if.
Joining numbers here, yet, but would there be some.
I hate to be so big but would there be some impact to our our results this year.
Speaker 5: transcript
Speaker 5: if it was treated positively, yes. And this event was not even though each event is unique, not uncommon. Over the last from 20 to 22, there were about 15 events that we believe would meet the definition of an RCE over about 40 days. So Andy, too, for right now, I would say that we believe there would have been.
If it was which treated positively yes.
This event was not an even though each event is unique not uncommon over the last from 'twenty to 'twenty. Two there were about 15 events that we would meet the definition of an RC over about 40 days, so Andy too, but right now I would say that we believe there would have been some positive impact to the results for the quarter.
Speaker 7: transcript
Speaker 5: some positive impact to the results for the quarter. If this meets the definition, but we'd like to wait and see and make sure we're aligned on that definition and calculation with the commission's order before we sort of declare what the result would or could have.
If this meets the definition, but wed like to wait and see and make sure. We're aligned on that definition and calculation with the with the Commission's order before we sort of declare the what the result would or could have been.
Maria Pope: So let me take your first question, and then your second, and if I don't do an adequate job, Joe can fill in. So with regards to power cost, the 27 to 32 cents, you know, roughly about half of that, I wouldn't call sort of structural. And you can see that, you know, in, in the AUT numbers, you can, you can, we can see it in what we sort of have already in place for the quarter.
Speaker 12: transcript
Speaker 12: And if this is a solid first step, as we work to have power cost mechanism that is comparable to other utilities across the country. And I guess that's something for the next red filing as well to try that.
Andy This is a solid first step.
Yes.
We work to have power cost mechanism that is comparable to other utilities across the country.
Okay, and I guess that.
That's something for the next rate filing as well to try that.
Prove once again.
My second question.
Maria Pope: The other part is, is really the work that we do every day. And the work that we can see in this, that would not be unusual for those kind of activities to yield those kind of results. For what is a pretty challenging for a quarter and a lot of work that we have to do, we feel confident that we'll get there.
Is around transmission capex.
And obviously, we have to wait for the fourth quarter.
Talked about a robust.
On the Capex in general, but can you just talk about your transmission strategy and how that may.
Speaker 12: transcript
Speaker 12: But can you just talk about your transmission strategy and how that may ultimately play into the RFP?
Joe Turbick: With regards to the RFP, where RFP will be issued shortly, we will put in a, a short list of opportunities that the company would hope to be able to participate in. Those have a little bit of a different timing, just to make sure that there is full transparency, but we're looking for the final RFP to be out by the end of this year. The first half, probably the short list will be submitted by that time.
Play into the Rfps.
How much capital you kind of want to deploy from one to the other transmission capex being a little bit more predictable.
Because obviously there are no rfps involved.
Speaker 4: transcript
Speaker 4: Sure. Well, thank you. And clearly, you know, we're similar to other utilities across the country.
Sure well, thank you and clearly were similar to other utilities across the country as we look at increased electricity use growing service territory.
Speaker 3: transcript
Speaker 3: We look at increased electricity use, growing service territory, and renewable development transmission is an important component. When we look at our transmission strategy in particular, the core of our projects that we're looking at are actually within our service territory or adjacent to our service territory. Many of them are re-conductoring, most of them use existing rights of way. And so they're relatively lower risk easier to execute projects.
And renewable development transmission is an important component.
When we look at our transmission.
Joe Turbick: And we would hope that by the end of 2024, we would have finished some negotiations, obviously overseen by an independent evaluator to make sure that we are driving the lowest cost, least-risk projects for our customers. And we've been pretty fortunate so far with regards to the company's ownership projects. And that has really been being able to drive competitive costs, be able to manage risks, and quite frankly have very good partners as we move forward.
Strategy in particular, the core of our projects that we're looking at are actually within our service territory are adjacent to our service territory.
Any of them are re conductor ing most of them use existing rights of way.
So they are relatively lower risk are easier to execute projects.
Speaker 4: transcript
Speaker 4: And as we build those out and better understand.
And as we build those out and better understand the significant growth in customer usage, we will have more announcements as we move forward.
Speaker 4: transcript
Speaker 4: of the significant growth in customer usage. We will have more announcements as we move forward. We're very encouraged as well by the discussions at the federal level with regards to facilitating faster transmission siting and making all of the permitting easier to do. There's no question that we need to build transmission. And whether it is the Pelton-Round Butte line in partnership with the Confederated Tribes of the Warm Springs.
We're very encouraged as well by the discussions at the federal level with regards to facilitating faster transmission siting and making all of the permitting easier to do there's no question that we need to build transmission and whether it is the pellet around mute line in partnership with competitors.
Joe Turbick: So we would hope to have the same circumstances as we enter into 2024 and beyond. Clearly there's a lot of opportunities. Thanks. Appreciate it. Thank you. Again, to ask a question, please press star 11 on your telephone. Once again, that's star 11 on your telephone to ask a question.
So the warm springs or re conductor ing and within service territory, where it's a really important opportunity.
Speaker 13: transcript
Speaker 13: or re-conductoring and within service territory work. It's a really important opportunity as we move forward. And we will have a decade of projects in front of us that will enhance our overall reliability. Okay. And up.
We move forward.
We will have a decade of projects in front of us.
Andrew Levi: Our next question comes from the line of Andrew Levi of height hedge asset management. Hi, Andy. Hey, how are you?
That will enhance our overall reliability.
Okay.
I just wanted to get back to.
PJM because.
Andrew Levi: We can't. Okay, that's good. All the good things.
Honestly.
A couple of people hit me up here on.
Andrew Levi: Just a few questions, if you don't mind. Just on the audience. I heard things a little bit for the quarter. If you had this settlement on the PCAM in place, just for that event, not for the quarter, but just for that event, how would that have kind of played out and how would we think about the numbers? Again, you know, it's more of a guesstimate way you guys, but I'm just curious.
Well my IV.
Speaker 12: transcript
Speaker 12: So, I just want to make sure there's no confusion. So, the 7-cent hit or 7-cent negative variable quarter over quarter from net variable power cost.
So as we make sure there's no confusion so.
The seven head <unk>.
<unk> negative.
Variable quarter over quarter.
Net variable power costs.
You're not saying that the pecan mechanism.
That has been.
Modified with only have helped devices.
Speaker 12: transcript
Speaker 12: seven cents or should we not is that not like apples to apples that that negative seven cents and how that Without getting
Or should we not is that not like apples to apples.
Andrew Levi: So, you know, Andy, good morning. So we are, you know, back to what I said earlier, so we do believe the obvious event would be, would meet the definition, although that definition is still to be finalized by the commission order. Each event here is unique, but to your comment, and we are not assigning numbers here yet, but there, would there be some impact, I hate to be so vague, but would there be some impact to our results this year?
Seven.
And I'll leave it to.
Without getting into the details of it because I think some people are kind of looking at it where.
Just straight apples to apples I'm guessing, it's not that simple.
Speaker 5: transcript
Speaker 5: No, and Andy, so, as you know, each year, the PCAM, we set our baseline, and, you know, and that 7 cents over a year is just really our relative performance, you know, in the quarter relative to the baseline. So, it is, you know, is potentially any impact of the heat event inside of that performance, but that is in no way meant to identify that. It is just the overall, the design by quarter of how the AUT identified net variable power cost to our performance. So, you know, there's no direct linkage.
No.
So.
Each year, the PK and we set our baseline in that 7% year over year is just really our relative performance in the quarter relative to the baseline. So it is is potentially any impact of the heat even inside of that performance, but that is in no way meant to identify that it is just the overall.
Andrew Levi: If it was treated positively, yes, and this event was not even though each event is unique, not uncommon over the last from 20 to 22, there were about 15 events that we believe would meet the definition of an RCE over about 40 days. So, Andy, too, for right now, I would say that we believe there would have been some positive impact to the results for the quarter. If this meets the definition, but we'd like to wait and see and make sure we're aligned on that definition and calculation with the commission's order before we started to clear the, what the result would or could have been. Andy, this is a solid first step as we work to have a power cost mechanism that is comparable to other utilities across the country.
<unk> designed by quarter of how the AUT.
<unk> identified net variable power cost to our performance. So there is no direct linkage.
Sure.
Speaker 12: transcript
Speaker 12: Right and then as you get into the fourth quarter, that's part of the reason why.
And then as you get into the fourth quarter. That's part of the reason why there is such a large benefit because there was such a large.
At last year and now you are getting recovery of that this year.
Speaker 7: transcript
Speaker 7: As a reminder, so as it relates to year-to-date, we disclosed in the 10-Q, we are $28 million above the baseline. Part of what drives the fourth quarter through that resource availability mix is an expectation that we will move from being above the baseline to some amount below the baseline by the end of the year.
As a reminder, so as it relates to year to date as we disclosed in the 10-Q.
$8 million above above the baseline part of what drives the fourth quarters do that that.
That resource availability mix is an expectation that we will we will move from being above the baseline to some amount, but below the baseline by the end of the year.
Andrew Levi: Okay, and I guess that's something for the next rate filing as well to try to improve once again.
Okay.
Maria Pope: Then my second question is around transmission capex, and obviously we have to wait for the fourth quarter, you know, you talk about a robust update on the capex in general. But can you just talk about your transmission strategy and how that may ultimately play into the RFP's and how much capital you kind of want to deploy from one to the other and with transmission capex being a little bit more predictable because obviously they know RFP's involved.
Okay, and then I guess I guess.
Part of it is wholesale fuel as well for the fourth quarter right.
Right.
Speaker 5: transcript
Speaker 5: Right, that is, you know, to the key to the fourth quarter here is the expectations of resource mix, you know, what will consider normal, normal win, normal weather, normal, what we'll call normal market pricing. And that all will allow us to optimize our portfolio and help us to
The key to the fourth quarter here is the expectations of resource mix.
We'll consider normal normal wind, nor the normal weather normal what we'll call normal market pricing and that all will allow us to optimize our portfolio and help us to move.
Speaker 12: transcript
Speaker 12: You know, moving within the, within the P camp band between the, above the ball. I mean, it seems like you guys are in great shape, heading into 20.
Moved into within the <unk> band between the above below.
I mean, it seems like you guys are in great shape heading into 'twenty four and beyond.
Maria Pope: Sure, well, thank you. And clearly, you know, we're similar to other utilities across the countries. We look at increased electricity use, growing service territory and renewable development transmission is an important component. When we look at our transmission strategy in particular, the core of our projects that we're looking at are actually within our service territory or adjacent to our service territory. Many of them are re-conductoring most of them use existing rights of way.
This rate case settlement and hopefully gets approved.
Modifications, you got top line growth robust capex opportunities and.
Commission Thats been.
Very supportive and you guys working well with them.
I don't I don't see anything.
On the negative side.
Don't know if you guys.
Any differently, but.
Yes.
Speaker 5: transcript
Speaker 14: You know, Andy, we continue right. The rate case outcome, we would agree it was very, very constructive. The growth opportunities that we have previously spoken to are continue to be supported. And when I say growth on the investments, I either through the IRP update or through some of the most recent grants that there's clearly the opportunities and are sort of a longer term growth plan, you know, the facts that came out during the quarter to continue to validate that.
We continue right the rate case outcome, we would agree it was very very constructive.
Maria Pope: And so they're relatively lower risk easier to execute projects. And as we build those out and better understand the significant growth and customer usage, we will have more announcements as we move forward. And we're very encouraged as well by the discussions at the federal level with regards to facilitating faster transmission fighting and making all of the permitting easier to do. There's no question that we need to build transmission and whether it is the pattern around you line and partnership with confederate tribes of the warm springs or re-conductoring and within service territory work. It's a really important opportunity as we move forward. And we will have a decade of projects in front of us that will enhance our overall reliability.
The growth opportunities that we have previously spoken to are continued to be supported and when I say growth on the investments either through the AARP.
Update or through some of the most recent grant that theres clearly the opportunities and sort of a longer term growth plan.
The facts that came out during the quarter continue to validate that that point.
Okay.
Speaker 14: transcript
Speaker 15: People are getting tired of hearing me ask questions. I'm going to move on, but have a great weekend, guys. Thank you, Andy. Thanks, Andy. Thank you.
People are getting tired of hearing me ask questions.
Have a great weekend guys.
Thank you Andy Thanks, Andy.
Thank you.
Our next question.
It comes from the line of Travis Miller.
Of Morningstar, Inc. Please go ahead Travis.
Speaker 11: transcript
Speaker 11: Thank you. Good morning, Travis. Good morning. Quick follow on to some of the discussion early. The decoupling mechanism that was in the settlement, how would that affect?
Thank you Kevin.
Joe Turbick: Okay, and I just want to get back to PKM because honestly I'm pretty honest, right? A couple people hit me up here on my IB. So I just want to make sure there's no confusion. So the seven cent hit or seven cent negative variable quarter over quarter from net variable power costs. You're not saying that that PKM mechanism that has been modified, but only of helped by seven cents, or is that not like apples to apples, that negative seven cents, and how that PKM without getting into the details of it.
Turning.
A quick follow on to some of the discussion earlier.
Decoupling mechanism that was in the settlement.
Or would that have affected.
Speaker 11: transcript
Speaker 11: Some of the variability in our earnings or just financials in general this year and the third.
Some of the variability in the earnings are just financials in general this year in the third quarter.
It's a good question and in the third quarter, where we did see lower residential on small commercial.
Speaker 4: transcript
Speaker 4: It's a good question. And in the third corner where we did see lower residential and small commercial energy usage, it would have had an impact. We had had a decoupling mechanism previously, and this decoupling mechanism is a good first step in improving how it's looked. I'd also say that that weather has...
Energy usage, it would've had an impact.
How the decoupling mechanism previously.
This decoupling mechanism is a good first step.
And improving how it's looked I'd also say that.
Weather.
<unk> has had.
Speaker 4: transcript
Speaker 4: have had a significant impact on the third quarter, and that would not have been included.
<unk> had a significant impact on the third quarter.
Joe Turbick: I think some people are kind of looking at it where, you know, just straight apples to apples. I'm guessing it's not that simple. Andy, so as you know, each year the PKM we set our baseline. And you know, in that seven cents year over year, it's just really our relative performance, you know, in the quarter to the baseline. So it is, you know, is potentially any impact of the heat of then inside of that performance, but that is a no way meant to identify that it is just the overall the design by quarter of how the AUT identified net variable power cost to our performance.
And that would not have been included.
Okay. Okay, good and then I got it.
Speaker 11: transcript
Speaker 11: Okay, okay, we're good. And then, again, related, are there capital investment
Are there capital investments that you can make over the next couple of years that might reduce.
Speaker 11: transcript
Speaker 11: that you can make over the next couple of years that might reduce.
Speaker 11: transcript
Speaker 11: either the variability in some of those extreme events or in general power cost variability on the cap.
Even though the variability in some of those extreme events are in general power cost variability on.
On the capital side any thoughts yes.
Speaker 4: transcript
Speaker 4: Yes, absolutely. And as we look at on the power cross side, I mentioned we had a solid first step with regards to the PCAM. We've also invested significantly in our processes, our people, our systems with more work to do, but it is making a difference and we're able to update our annual update tariffs with those annually when we don't have a rate case.
And as we look at on the power cost side I mentioned, we had a solid first step with regards to the pecan. We've also invested significantly in our processes our people our systems with more work to do but it is making a difference and we're able to update our annual update tariff with those.
Joe Turbick: So, you know, there's no direct link. Right. And then as you get into the fourth quarter, that's part of the reason why there's such a large benefit because there was such a large hit last year. Now you're getting recovery of that this year. Right. As a reminder, so as it relates to year to date is we we disclosed an attend queue. We are we're $28 million above above the baseline part of what drives the fourth quarters through that that resource of availability mixes and expectation that we will we will from being above the baseline to some amount below the baseline by the end of the year.
When we don't have a rate case, we also have additional capacity contracts and.
Speaker 4: transcript
Speaker 4: We've also have additional capacity contracts and our three battery storage projects, which are progressing quite well, will have a significant impact on our ability to be able to balance.
Our three battery storage projects, which are progressing quite well have a significant impact on our ability to be able to balance.
Speaker 3: transcript
Speaker 3: between days, not necessarily provide longer-term reliability but certainly more price stability around power costs. All of them are important and I would add that the region continues to move forward with day-ahead market discussions as well as resource adequacy discussions through the Western Power Pool.
Between days not necessarily provide longer term reliability, but certainly the warrant price stability around power costs. All of them are important and I would add that the region continues to move forward with day ahead market discussions as well as resource adequacy discussions through the western powerful.
Joe Turbick: Okay. And then I guess I guess part of it is also fuel as well, right for the fourth quarter, right. That is, you know, to the key to the fourth quarter here is the expectations of resource mix. You know, what we'll consider normal, normal win, normal, normal weather, normal, what we'll call normal market pricing. And that all will allow us to optimize our portfolio and help us to move, you know, move within the within the PCAM band between the above to both.
So all of those things taken together will improve the situation.
Speaker 4: transcript
Speaker 4: So all of those things taken together will improve the situation.
Okay, great that's great. Thanks.
Thank you.
Speaker 1: transcript
Speaker 1: Thank you. I would now like to turn the call back over to Maria Pope for closing remarks, madam.
Thank you I would now like to turn the call back over to Maria Pope for closing remarks Madam.
Thank you very much we appreciate your interest in Portland General Electric we look forward to connecting with everyone. Soon in particular, those who will be at the EI conference in a couple of weeks. Thank you for joining us this morning.
Speaker 4: transcript
Speaker 4: Thank you very much. We appreciate your interest in Portland General Electric. We look forward to connecting with everyone soon in particular those who will be at the EDI conference in a couple of weeks. Thank you for joining us this morning. Have a good weekend and day.
Maria Pope: I mean, it seems like you guys are in great shape heading into 24. I mean beyond, you know, yes. This way of case settlement that hopefully gets approved, you've had modifications, you got a top line growth, robust cat next opportunities and, you know, commission that's been, you know, very supportive and you guys working well with them. I mean, I don't, I don't see anything, you know, on the negative side. I don't know if you guys could do it any differently.
We have today.
Speaker 1: transcript
Speaker 1: This concludes today's conference call. Thank you for participating. You may now.
This concludes today's conference call. Thank you for participating you may now disconnect.
[music].
Maria Pope: You know, we, Andy, we continue, right, the rate case outcome, we would agree it was very, very constructive. The growth opportunities that we have previously spoken to are, you know, continue to be supported. And when I say grows on the investments, I'd either through the IRP update or through some of the most recent grants that, you know, there's clearly the opportunities and are sort of a longer term growth plan. And, you know, the facts that came out during the quarter continue to validate that point.
Okay.
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Okay.
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Operator: Okay, people are getting tired of hearing me ask questions so I'm going to move on but I have a great weekend guys. Thank you Andy. Thanks Andy.
Hum.
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Yes.
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Travis Miller: Thank you. Our next question comes from the line of Travis Miller of Morningstar Inc. Please go ahead Travis. Thank you. Hi. Morning, Travis. Good morning. Quick follow on to some of the discussion early. The decoupling mechanism that was in the settlement. How would that have affected some of the variability in the earnings or just financials in general this year and the third quarter? It's a good question and in the third quarter where we did see lower residential and small commercial energy usage it would have had an impact.
Okay.
Travis Miller: We had had a decoupling mechanism previously and this decoupling mechanism is a good first step in improving how it looked. I'd also say that weather has had a significant impact on the third quarter and that would not have been included. Okay, okay. Very good and then again related are there capital investments that you can make over the next couple of years that might reduce either the variability in some of those extreme events or in general power cost variability on the capital side.
Travis Miller: Yes, absolutely. And as we look at on the power cost side, you know, I mentioned we had a solid first step with regards to the PCAM. We've also invested significantly in our processes, our people, our systems with more work to do, but it is making a difference and we're able to update our annual update tariff with those annually when we don't have a rate case. We've also have additional capacity contracts and our three battery storage projects which are progressing quite well.
[music].
Travis Miller: We'll have a significant impact on our ability to be able to balance between days, not necessarily provide longer term reliability, but certainly the more price stability around power cost. All of them are important and I would add that the region continues to move forward with day ahead market discussions, as well as resource advocacy discussions through the Western Powerful. So all of those things taken together will improve the situation. Okay, great. That's great. Thanks. Thank you.
Maria Pope: I would now like to turn the call back over to Maria Pope for closing remarks. Madam. Thank you very much. We appreciate your interest in Portland General Electric. We look forward to connecting with everyone soon in particular those who will be at the EDI conference in a couple of weeks. Thank you for joining us this morning. That was a good weekend today.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Thank you very much.
Speaker 15: transcript
Speaker 16: I.
Operator: Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Orrill, Paul Fremont Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Orrill, Paul Fremont, Paul Fremont, Gregg Orrill, Paul Fremont, Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Orrill, Paul Fremont,[inaudible] Paul Fremont, Gregg Orrill, Paul Fremont, Gregg[inaudible] Paul Fremont, Gregg Orrill, Paul Fremont Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Orrill, Paul Fremont, Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Orrill, Paul Fremont, Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Paul Fremont, Gregg Orrill, Paul Fremont, Gregg[inaudible] Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Orrill, Paul Fremont, Gregg[inaudible] Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Paul Fremont, Gregg Orrill, Paul Fremont, Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Orrill, Paul Fremont, Gregg[inaudible] Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Orrill, Paul Fremont, Gregg Good morning everyone and welcome to Portland General Electric Company's third quarter, 2023 Earnings Results Conference Call. Today is Friday, October 27, 2023.
[music].
[music].
Speaker 1: transcript
Speaker 1: Good morning, everyone, and welcome to Portland General Electric Company's third quarter, 2023, your earnings results conference call. Today is Friday, October 27, 2023. This call is being recorded, and as such, all lines have been placed on mute to prevent any functions.
Good morning, everyone and welcome to Portland General Electric Company's third quarter 2023 earnings result conference call.
Today is Friday October 27, 2023, this call is being recorded.
And as such all lines have been placed on mute to prevent any background noise.
Speaker 1: transcript
Speaker 1: After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, press star, then the numbers 1-1 on your telephone keypad. If you would like to withdraw your question, please press star 1-1 again.
After the Speakers' remarks, there will be a question and answer period. If you would like to ask a question. During this time.
Star then the number is one one on your telephone keypad. If you would like to withdraw your question. Please press star one one again.
Speaker 1: transcript
Speaker 1: If you do intend to ask a question, please avoid the use of speaker.
If you do intend to ask a question. Please avoid the use of speaker phones.
Speaker 1: transcript
Speaker 1: For opening remarks, I will turn the conference over to Portland General Electric's Manager of Investor Relations, Nick White, please go ahead.
For opening remarks, I will turn the conference over to Portland General Electrics manager of Investor Relations. Nick White. Please go ahead Sir.
Speaker 2: transcript
Speaker 2: Thank you, Lateef. Good morning, everyone. I'm happy you can join us today.
Thank you Latif and good morning, everyone I'm, hoping you can join us today.
Speaker 2: transcript
Speaker 2: Before we begin this morning, I would like to remind you that we have prepared a presentation to supplement our discussion, which we will be referencing throughout the call. The slides are available on our website at investors.portlandgeneral.com.
Before we begin this morning, I would like to remind you that we have prepared a presentation to supplement our discussion, which we will be referencing throughout the call.
Slides are available on our website at investors Dot Portland General Dot com, referring.
Speaker 2: transcript
Speaker 2: referring to slide two, some of our remarks this morning will constitute forward-looking statements.
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.
Speaker 2: transcript
Speaker 2: We caution you that such statements involve inherent risks and uncertainties, and actual results may differ materially from our expectations.
Speaker 2: transcript
Speaker 2: or a description of some of the factors that can cause actual results to different material leaf. Please refer to our earnings press release and our most recent periodic reports on forms 10K and 10Q, which are available on our website.
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 website.
Speaker 4: transcript
Speaker 4: Meeting our discussion today, our Maria Pope, President and CEO , and Joe Turbic, Senior Vice President of Finance and CFO . Following their prepared remarks, we will open the line for your questions. Now is my pleasure to turn the call over to Maria. Thank you, Nick, and good morning. Thank you all for joining us today. Beginning with slide four, I'll start by discussing our results for the corner and speak to the key drivers as well as our outlook for the balance of the year.
Leading our discussion today are Maria Pope President and CEO, and Joe <unk> Senior Vice President of Finance and CFO.
During their prepared remarks, we will open the line for your questions.
It is my pleasure to turn the call over to Maria.
Thank you Nick and good morning. Thank.
Thank you all for joining us today.
Beginning with slide four I'll start by discussing our results for the quarter and speak to the key drivers as well as our outlook for the balance of the year.
Speaker 4: transcript
Speaker 4: For the third quarter, we reported Gap Net Income of $47 million or $0.46 per diluted share. This compares with third quarter 2022 results of $58 million or $0.65 per diluted share. Clearly, it
For the third quarter, we reported GAAP net income of $47 million or <unk> 46 cents per diluted share.
This compares with third quarter 2022 results of 58 million or <unk> 65 per diluted share.
Clearly it was a tough quarter.
Speaker 3: transcript
Speaker 3: The key drivers include first continued load growth from industrial customers, offset by reductions in residential and commercial usage, partially driven by cooler weather overall.
The key drivers included first continued logcap from industrial customers offset by reductions in residential and commercial usage, partially driven by cooler weather overall.
Second <unk>.
Speaker 4: transcript
Speaker 4: volatile power costs from a major feed event in mid-August, which resulted in transmission congestion issues and a significant spike in energy costs. I will touch.
Volatility power costs from a major event in mid August, which resulted in transmission congestion issues and a significant spike in energy costs.
I will touch on each in turn.
Turning to slide five we continue to see solid growth from industrial customers, particularly data centers. However, this growth is chunky and we saw modest growth in the third quarter.
Speaker 3: transcript
Speaker 3: Turning to slide five, we continue to see solid growth from industrial customers, particularly data centers. However, this growth is chunky and we saw modest growth in the third quarter. Overall, through the first nine months of the year, industrial load has grown over 6.5% compared to 2022. We foresee continued growth in the fourth quarter and potentially even higher industrial growth in the coming years.
Overall.
The first nine months of the year industrial has grown over six 5% compared to 2022.
We foresee continued growth in the fourth quarter and potentially even higher industrial growth in the coming years.
Speaker 4: transcript
Speaker 4: With strong legislative tailwinds at both the state and federal level, there is significant government support through grants and other incentives focused on a semiconductor sector.
With strong legislative tailwind.
At both the state and federal level, there is significant government support grants and other incentives focused on the semiconductor sector.
Speaker 3: transcript
Speaker 3: 15% of U.S. semiconductor manufacturing occurs in our state, largely within PGE.
15% of U S semiconductor manufacturing and courage in our state.
Largely within PGE service territory.
Speaker 4: transcript
Speaker 4: The sector will benefit not only from the Federal CHIPS Act, but from the $240 million that the Oregon Legislature has allocated to 15 semiconductor companies.
This sector will benefit not only from the federal chipset, but.
From the $240 million, the Oregon legislature as allocated 15 semiconductor companies.
As a result of these investments state officials are projecting over $40 billion in new Oregon projects and over 6000 new jobs.
Speaker 4: transcript
Speaker 3: As a result of these investments, state officials are projecting over $40 billion in new Oregon projects and over 6,000 new jobs.
Speaker 4: transcript
Speaker 4: Recent expansion announcements have been made by Intel, Microchip, and Analog Devices.
Recent expansion in Atlanta announcements have been made by Intel micro chip and analog devices.
Speaker 4: transcript
Speaker 4: In the third quarter, we also saw modest reductions in residential and commercial energy use compared to last year driven by cooler weather in the late summer as well as energy efficiency, rooftop solar and overall distributed energy adoption.
In the third quarter, we also saw modest reductions in residential and commercial energy as compared to last year.
Driven by cooler weather in the late summer as well as energy efficiency rooftop solar and overall distributed energy adoption.
Operator: This call is being recorded. And as such, all lines have been placed on mute to prevent any background noise. After the speakers remarked, there will be a question and answer period. If you would like to ask a question during this time, press star, then the number is one one on your telephone keypad. If you would like to withdraw your question, please press star one one again. If you do intend to ask a question, please avoid the use of speaker phones.
Speaker 3: transcript
Speaker 3: given lower than planned third quarter loads, we have revised our full year 2023 growth guidance to 2% weather adjusted, consistent with our long-term expectation.
Given the lower than planned third quarter loads, we have revised our full year 2023 growth guidance to 2% weather adjusted consistent with our long term expectations.
The second driver of third quarter results with higher power costs stemming from the record breaking heat event.
Speaker 3: transcript
Speaker 3: The second driver of third-quarter results was higher power costs stemming from the record-breaking heat event.
Speaker 3: transcript
Speaker 3: PGE set a new peak load that surpassed our previous summer peak by 6%.
PGE set a new peak load that surpassed our previous summer peak by 6%.
Nick White: For opening remarks, I will turn the conference over to Portland General Electric's Manager of Investor Relations, Nick White.
Speaker 4: transcript
Speaker 4: During this time, we also in this day had mid-Columbia peak pricing of nearly $1,000 per megawatt hour, given significant transmission issues and constraints.
During this time, we also in this day ahead mid Columbia peak pricing of nearly $1000 per megawatt hour given significant transmission issues and constraints.
Nick White: Please go ahead, sir. Thank you, Lateef.
Nick White: Good morning everyone. I'm happy you can join us today. Before we begin this morning, I would like to remind you that we have prepared a presentation to supplement our discussion, which we will be referencing throughout the call. The slides are available on our website at investors. PortlandGeneral.com. 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.
Speaker 4: transcript
Speaker 3: Our generation plants performed well, very well, and were well integrated with our contracted energy supply.
Our generation plants performed well there.
Very well and we are well integrated with our contracted energy supply.
Speaker 3: transcript
Speaker 3: We also found meaningful customer demand response reduction.
We also saw a meaningful customer demand response reductions.
Nick White: Or a description of some of the factors that can cause actual results to differ materially. Please refer to our earnings press release and our most recent periodic reports on forms 10K and 10Q, which are available on our website. Meeting our discussion today, our Maria Pope, President and CEO and Joe Turbic, Senior Vice President of Finance and CFO. Following their prepared remarks, we will open the line for your questions.
Speaker 4: transcript
Speaker 3: Even still, our overall purchase power and fuel expense increased significantly.
Even still our overall purchase power and fuel expense increased significantly.
Speaker 4: transcript
Speaker 4: I want to thank and recognize our PGE colleagues who helped ensure that customers continue to receive safe, reliable, and unearant of power throughout the heat wave.
I want to thank and recognize our PGE colleagues to help to ensure that customers continue to receive safe reliable and uninterrupted power throughout the heatwave.
Speaker 3: transcript
Speaker 3: Given the impact of power costs on our third quarter results, we are narrowing our guidance range for the year. We now expect 2023 results to be in the range of $2.60, $2.65 per share, as compared to the previous range of $2.60 to $2.75 per share.
Given the impact of power costs on our third quarter results, we are narrowing our guidance range for the year.
We now expect 2023 results to be in the range of $2 $62 65 per share as compared to the previous range of $2 60.
Maria Pope: Now is my pleasure to turn the call over to Maria. Thank you, Nick, and good morning. Thank you all for joining us today.
$2 75 per share.
We anticipate fourth quarter results to improve as a result of normalized power cost conditions.
Speaker 3: transcript
Speaker 3: We anticipate fourth quarter results to improve as a result of normalized power cost conditions.
Maria Pope: Beginning with slide four, I'll start by discussing our results for the corner and speak to the key drivers as well as our outlook for the balance of the year. For the third quarter, we reported Gatnet income of 47 million or 46 cents per diluted share. This compares with third quarter 2022 results of 58 million or 65 cents per diluted share. Clearly, it was a tough quarter. The key drivers include first continued load growth from industrial customers, offset by reductions in residential and commercial usage, partially driven by cooler weather overall, and second, volatile power costs from a major feed event in mid-August, which resulted in transmission congestion issues and a significant spike in energy costs.
Just as a reminder.
Speaker 3: transcript
Speaker 3: Just as a reminder, fourth quarter 2022, regional gas prices peaked to over $55 per MMB to you. An average mid-seat power price is rose to $2.65, excuse me, $265 per megawatt hour.
Quarter 2022 regional gas prices peaked at over $55 per MLP to you.
On average mid C power prices rose to $2 65, excuse me $265 per megawatt hour.
Additionally.
Speaker 4: transcript
Speaker 4: Additionally, while year-to-date power cost performance has been challenging relative to the annual update tariff or AUT, we anticipate a more favorable resource mix and market conditions through the fourth quarter.
While year to date power cost performance has been challenging relative to the annual update tariff our A&P we.
Dissipate, a more favorable resource mix and market conditions to the fourth quarter.
Speaker 4: transcript
Speaker 4: And finally, we expect continued effective O&M cost management and to hit our 2023 target.
And finally, we expect continued effective O&M cost management and to hit our 2023 targets.
Joe will walk through our project grade for fourth quarter in more detail.
Speaker 4: transcript
Speaker 3: Phil will walk through our projectory for fourth quarter in more detail. Overall, our capital program.
Overall, our capital programs are on track with Clearwater wind expected to come online later this year and continued progress on our previously announced battery storage projects.
Maria Pope: I will touch on each in turn. Turning to slide five, we continue to see solid growth from industrial customers, particularly data centers. However, this growth is chunky and we saw most growth in the third quarter. Overall, through the first nine months of the year, industrial load has grown over 6.5 percent compared to 2022. We foresee continued growth in the fourth quarter and potentially even higher industrial growth in the coming years, with strong legislative tailwinds at both the state and federal level.
Speaker 3: transcript
Speaker 3: Clearwater Wind expected to come online later this year and continued progress on our previously announced battery storage project.
Speaker 3: transcript
Speaker 3: These are in addition to our base capital work that support customer growth as well as grid improvements, focused on greater safety, as well as reliability, and extreme weather resilience.
These are in addition to our base capital work that support customer growth as well as grid improvements.
On greater safety as well as reliability and extreme weather resilience.
Two other significant highlights in the third quarter include <unk>.
Speaker 4: transcript
Speaker 4: Two other significant highlights from the third quarter include.
Speaker 4: transcript
Speaker 3: concluding our 2024 rate case negotiations and the announcement of several federal grants which will enable the acceleration of new technologies and transmission construction.
Including our 2024 rate case negotiations.
And the announcement of several federal grants sports will enable the acceleration of new technologies and transmission construction.
Maria Pope: There is significant government support through grants and other incentives focused on the semiconductor sector. 15% of US semiconductor manufacturing occurs in our state, largely within PGE service territory. The sector will benefit not only from the federal chipset, but from the 240 million that the Oregon legislature has allocated to 15 semiconductor companies. As a result of these investments, state officials are projecting over $40 billion in new Oregon projects and over 6,000 new jobs.
Speaker 4: transcript
Speaker 4: I'll start with our GRC, which we're very pleased to conclude with parties and await a commission order expected in the coming week.
I'll start with our <unk>, which we're very pleased to conclude with parties and a way to commission order expected in the coming weeks.
Speaker 4: transcript
Speaker 3: Overall we've settled recovery of ongoing capital investments, operating and maintenance costs, notably wildfire vegetation management expenses, and importantly risk reduction in our power cost recovery framework. An important first step in addressing our PKM mechanism. Ms. Jo will touch on.
Overall, we settled recovery of ongoing capital investments operating and maintenance costs, notably wildfire vegetation management expenses, and importantly risk reduction and our power cost recovery framework, an important first step in addressing our P. Chem mechanism with.
Which Joe will touch on in his remarks.
Speaker 4: transcript
Speaker 4: We also maintained a 50-50 capital structure and a 9.5% ROE.
We also maintained a 50 50 capital structure and a nine 5% Roe.
Maria Pope: Recent expansion announcements have been made by Intel, microchip and analog devices. In the third quarter, we also saw modest reductions in residential and commercial energy use, compared to last year, driven by cooler weather in the late summer, as well as energy efficiency, rooftop solar and overall distributed energy adoption.
Speaker 4: transcript
Speaker 4: Additionally, we received approval to amortize $27 million in wildfire deferrals and collect forecasted wildfire mitigation costs under the Automatic Adjustment Clause.
Additionally, we received approval to amortize $27 million in wildfire deferrals and collect forecasted wildfire mitigation costs under the automatic adjustment costs.
Lastly, federal grants were pleased and excited with the three department of energy announcements that build upon the work we're doing to advance the clean energy transition and in collaboration with our regional partners.
Speaker 4: transcript
Speaker 3: Lastly, federal grants. We're pleased and excited with the three Department of Energy announcements that build upon the work we're doing to advance the clean energy transition and in collaboration with our regional partners.
Maria Pope: Given lower than planned third quarter loads, we have revised our full year 2023 growth guides to 2% weather adjusted, consistent with our long term expectations. The second driver of third quarter results was higher power costs, stemming from the record-breaking heat event. PGE said a new peak load that surpassed our previous summer peak by 6%. During this time, we also, in this day, it had mid-Columbia peak pricing of nearly $1,000 per megawatt hour.
Speaker 4: transcript
Speaker 4: First, DOE announced a $250 million grant to support upgrading the Bethel Round View Transmission Line from 230 to 500 KZ in partnership with the Confederated Tribes of the Warm Springs.
<unk> deal, we announced a $250 million grant to support upgrading the vessel round view transmission line from 230 to 500 kv and partnership with the Confederated tribes of the warm Springs.
Speaker 4: transcript
Speaker 4: The tribes have been our partner and co-owner of the 500-megawatt Pelton-Round Butte Hydro Projects along the Deschutes River for decades.
The tribes have been our partner and co owner of the 500 megawatt Pelton round hydro projects, along the disputes river for decades.
Second.
Speaker 4: transcript
Speaker 4: AGE Utilidad and Nvidia has consortium that was awarded $50 million grant for Smart Chimp Grid Project to improve visibility, reliability, and overall grid management.
PGE utility data and in video.
Maria Pope: It was significant transmission issues and constraints. Our generation plants performed well, very well, and were well integrated with our contracted energy supply. We also saw meaningful customer demand response reductions. Even still, our overall purchase power and fuel expense increased significantly. I want to thank and recognize our PGE colleagues who helped ensure that customers continued to receive safe, reliable, and unearned power throughout the heatwave. Given the impact of power costs on our third quarter results, we are narrowing our guidance range for the year.
We'll have a consortium that was awarded $50 million grant for smart chip grid project to improve visibility reliability and overall risk management.
Speaker 4: transcript
Speaker 4: And lastly, the Pacific Northwest Hydrogen Association's hub is one of seven projects nationwide to move forward to the next step and negotiations with DOE.
And lastly, the Pacific Northwest hydrogen associations hub as one of seven projects nationwide to move forward to the next step and negotiations with Doe.
PGE is contributing our former Boardman coal plant site at water rights for the Green hydrogen production facility. We also look forward to an offtake agreement and working on Green hydrogen power generation.
Speaker 3: transcript
Speaker 3: PGE is contributing our former Bourbon Coal Plant site at Water Rights for the Green Hydrogen Production Facility. We also look forward to an off-take agreement and working on Green Hydrogen Power Generation.
These awards selections represent just the start.
Speaker 3: transcript
Speaker 3: These award selections represent just the start.
Maria Pope: We now expect 2023 results to be in the range of $2.60, $2.65 per share, as compared to the previous range of $2.60 to $2.75 per share. We anticipate fourth quarter results to improve as a result of normalized power cost conditions. Just as a reminder, fourth quarter 2022 regional gas price is peaked to over $55 per MMB to you. An average mid-C power price is rose to $2.65 per megawatt hour. Additionally, while year-to-day power cost performance has been challenging relative to the annual update tariff or AUT, we anticipate a more favorable resource mix and market conditions to the fourth quarter, and finally, we expect continued effective O&M cost management and to hit our 2023 targets.
Speaker 4: transcript
Speaker 4: Near-term capital will be determined in 2024 as negotiations proceed.
Near term capital will be determined in 2024 as negotiations proceed.
We are still pursuing additional projects and opportunities and have submitted over $65 million in incremental grants to support another $125 million and additional projects as well as have other projects in the pipeline.
Speaker 4: transcript
Speaker 4: We are still pursuing additional projects and opportunities and have submitted over $65 million in incremental grants to support another $125 million in additional projects, as well as have other projects in the pipeline.
Speaker 3: transcript
Speaker 3: These projects represent growing momentum in the region that will create meaningful benefits for customers and communities for years to come.
These projects represent growing momentum in the region that will create meaningful benefits for customers and communities for years to come.
In summary.
Despite challenging operating conditions in the third quarter, we made important progress towards strengthening key cost recovery mechanisms as part of the constructive JRC settlement.
Speaker 3: transcript
Speaker 3: Despite challenging operating conditions in the third quarter, we made important progress towards strengthening key cost recovery mechanisms as part of the constructive GRC settlement.
Speaker 3: transcript
Speaker 3: Our entire team is laser focused on execution for the remainder of the year.
Our entire team is laser focused on execution for the remainder of the year.
Speaker 4: transcript
Speaker 4: Our long-term growth plan is increasingly well established, underpinned by investments, made growing customer needs, ensuring grid resilience, and leading the clean energy transition.
Our long term growth plan is increasingly well established underpinned by investments to meet growing customer needs.
Ensuring grid resilience and leading the clean energy transition.
Maria Pope: So we'll walk through our project rate for fourth quarter in more detail. Overall, our capital programs are on track, with clear water wind expected to come online later this year and continued progress on our previously announced battery storage projects. These are in addition to our base capital work that support customer growth as well as grid improvements focused on greater safety as well as reliability and extreme weather resilience.
Speaker 4: transcript
Speaker 4: Our recent regulatory progress and ongoing capital investment reinforces our confidence in our long-term earnings growth rate of 5 to 7 percent in 2024 and beyond.
Our recent regulatory progress and ongoing capital investment reinforces our confidence and our long term earnings growth rate of 5% to 7% in 2024 and beyond.
Speaker 4: transcript
Speaker 4: With that, I'll turn it over to Joe, who will walk you through our financial results. Thank you.
With that I'll turn it over to Joe who will walk you through our financial results. Thank you.
Thank you Maria and good morning, everyone I'll cover our Q3 results before providing updates on our rate case capital investments and liquidity and financing.
Speaker 5: transcript
Speaker 5: Thank you, Maria, and good morning, everyone. I'll cover our Q3 results before providing updates on our rate case, capital investments, and liquidity and finance.
Maria Pope: Two other significant highlights from the third quarter include including our 2024 rate case negotiations and the announcement of several federal grants will enable the acceleration of new technologies and transmission construction. I'll start with our GRC, which we're very pleased to conclude with parties and a way to commission order expected in the coming weeks. Overall, we settled recovery of ongoing capital investments, operating and maintenance costs notably wall fire, but safe management expenses, and importantly risk reduction in our power cost recovery framework.
Speaker 5: transcript
Speaker 5: Moving to slide six, our third quarter results reflect dynamic load and customer composition, challenging weather and power market conditions, continued emphasis on grid resiliency, and execution of our capital plan.
Moving to slide six our third quarter results reflect dynamic loading customers composition challenging weather and power market conditions continued emphasis on grid resiliency and execution of our capital plan.
Speaker 5: transcript
Speaker 5: The economy in our service territory continues to display strength. As Maria noted, regional economist anticipates significant investment in our area, particularly focused on semi-conducting manufacturing.
The economy in our service territory continues to display strength as Maria noted regional economies anticipate significant investment in our area, particularly focused on semiconductor manufacturing.
Speaker 5: transcript
Speaker 5: Many large high-tech companies in our footprint have signaled upcoming growth projects that could result in sizable economic benefits to our region.
Many large high tech companies in our footprint have signaled upcoming growth projects that could result in sizable economic benefits to our region.
Speaker 5: transcript
Speaker 5: Unemployment in our region was 3.4 percent as of September , below the national average of 3.8 percent. Industrial load growth continued, albeit at a more moderate rate than witnessed in the first and second quarters, which we see as a short-term deviation on a long-term industrial growth trend.
Unemployment in our region was three 4% as of September below the National average of three 8% industrial.
Maria Pope: An important first step in addressing our PK mechanism with Joe will touch on in his remarks. We also maintained a 5050 capital structure and a 9.5% ROE. Additionally, we received approval to advertise 27 million in wall fire deferrals and collect forecasted wall fire mitigation costs under the automatic adjustment costs.
Industrial load growth continued, albeit at a more moderate rate than witnessed in the first and second quarters, which we see as a short term deviation on a long term industrial growth trend.
Speaker 5: transcript
Speaker 5: Total Q3 2023 loads increased by 0.2% weather adjusted compared to Q3 2022.
Total Q3, 2023 loads increased by 2% weather adjusted compared to Q3 2022.
Maria Pope: Lastly, federal grants. We're pleased and excited with the three Department of Energy announcements that build upon the work we're doing to advance the claim energy transition and in collaboration with our regional partners. First, deal we announced a 250 million dollar grants support upgrading the Bethel round view transmission line from 230 to 500 KV in partnership with the confederated tribes of the warm springs. The tribes have been our partner and co-owner of the 500 megawatt pelton round view hydro projects along the disputes river for decades.
Speaker 7: transcript
Speaker 7: on a non-weather-adjusted basis, total load decreased 0.9% year-over-year as weather was less severe across the full quarter despite a hotter August .
On a non weather adjusted basis total LOE decreased 9% year over year as weather was less severe.
The full quarter. Despite a hotter August Q3, 2022 average temperatures were the hottest on record for the third quarter in our region.
Speaker 5: transcript
Speaker 5: Q3 2022 average temperatures were the hottest on record for the third quarter in our region.
Speaker 5: transcript
Speaker 5: We continue to see significant heat this summer, but we saw a milder weather in September , which had 35% fewer cooling degree days than compared to 2022.
We continue to see significant heat this summer, but we saw a milder weather in September which had 35% fewer cooling degree days than compared to 2022.
Speaker 5: transcript
Speaker 5: Residential load decreased 2.5% or 0.5% weather adjusted compared to Q3 2022. Fewer cooling degree days and increased energy efficiency and distributed energy resource adoption contributed to this decrease. Residential customer growth increased 0.7%.
Residential load decreased two 5% or 5% weather adjusted compared to Q3 2022 fewer cooling degree days and increased energy efficiency and distributed energy resource adoption contributed to this decrease residential customer growth.
Maria Pope: Second, AGE Utilidad and Nvidia will have consortium that was awarded 50 million dollar grant for smart chip grid project to improve visibility reliability and overall grid management. And lastly, the Pacific Northwest Hydrogen Association's hub is one of seven projects nationwide to move forward to the next step and negotiations with DOE. PGE is contributing our former bourbon coal plant site and water rights for the green hydrogen production facility. We also look forward to an off take agreement and working on green hydrogen power generation.
Increased 7%.
Commercial load decreased two 1% or one 2% weather adjusted as we also witnessed increased penetration of energy efficiency and <unk> among commercial customers.
Speaker 5: transcript
Speaker 5: Commercial load decrease 2.1% or 1.2% weather adjusted, as we also witness increased penetration of energy efficiency and DERs among commercial cuts.
Speaker 5: transcript
Speaker 5: Industrial load growth continued in Q3 2023, increasing 2.5% or 2.7% weather adjusted. As Maria mentioned, we view this moderation compared to previous quarters as a temporary, as temporary and anticipate a continuation of the growth cycle that we have been observing in recent years.
Industrial load growth continued in Q3, 2023, increasing two 5% or two 7% weather adjusted as Maria mentioned, we view. This model we view this moderation compared to previous quarters as a temporary as temporary and anticipate a continuation of the growth cycle that we have been observing in recent years.
Speaker 5: transcript
Speaker 14: Third quarter power market conditions remain challenging in 2023 with resource scarcity during the peak period surrounding the August heat event having acute impact on the quarter. I'll now cover our
Third quarter.
Maria Pope: These award selections represent just the start near term capital will be determined in 2024 as negotiations proceed. We are still pursuing additional projects and opportunities and have submitted over $65 million in incremental grants to support another $125 million in additional projects as well as have other projects in the pipeline. These projects represent growing momentum in the region that will create meaningful benefits for customers and communities for years to come.
Our market conditions remain challenging in 2023 with resource scarcity during the peak period surrounding the August heat event, having acute impact on the quarter.
I'll now cover our financial performance quarter over quarter.
We experienced.
Speaker 5: transcript
Speaker 14: We experienced an $0.18 decrease in total revenues driven by a 0.9% decrease in total deliveries combined with unfavorable changes in the average price of deliveries due to lower residential and commercial loads.
<unk>, an 18% decrease in total revenues driven by a 9% decrease in total deliveries combined with unfavorable changes in the average prices deliveries due to lower residential and commercial load.
Speaker 5: transcript
Speaker 14: Q3-22 power cost conditions were also challenging, and 27 cents of the quarter over quarter earnings change is attributable to power cost headwinds in 2022 that we normalize for this comparison.
Q3, 'twenty two power cost conditions were also challenging in 2007 <unk> of the quarter over quarter earnings changes attributable grid power cost headwinds in 2022 that we normalize for this comparison.
Maria Pope: In summary, despite challenging operating conditions in the third quarter, we made important progress towards strengthening key cost recovery mechanisms as part of the constructive GRC settlement. Our entire team is laser focused on execution to the remainder of the year. Our long-term growth plan is increasingly well-established, underpinned by investments and made growing customer needs, ensuring grid resilience, and leading the clean energy transition. Our recent regulatory progress and ongoing capital investment reinforces our confidence that our long-term earnings growth rate of 5% to 7% in 2024 and beyond.
Current year power costs were also elevated driving a <unk> <unk> EPS decrease in the quarter, reflecting costs that were higher than anticipated in our annual update tariff.
Speaker 5: transcript
Speaker 14: Current year power costs were also elevated, driving a 7th and EPS decrease in the quarter, reflecting costs that were higher than anticipated in our annual update tariff.
There was a <unk> <unk> decrease in EPS from higher operating expenses net of deferral related items, primarily driven by higher generation and grid maintenance costs.
Speaker 5: transcript
Speaker 14: There was a two-cent decrease in EPS from higher operating expenses net of deferral related items primarily driven by higher generation and grid maintenance costs.
Speaker 5: transcript
Speaker 14: We also saw a six-cent impact from depreciation and amortization expense due to higher plant bounces year over year.
We also saw a <unk> <unk> impact from depreciation and amortization expense due to higher plant balances year over year.
Speaker 5: transcript
Speaker 14: a three cent decrease from the impact of higher interest expense due to higher long-term debt balances and short-term debt balances carried for a part of third core.
<unk> <unk> decrease from the impact of higher interest expense due to higher long term debt balances and short term debt balances carried for a part of the third quarter.
Speaker 5: transcript
Speaker 14: A 7 cent decrease due to the dilutive impact of draws on the equity forward sale, which last occurred in mid-July.
A <unk> <unk> decrease due to the dilutive impact of draws on the equity forward sale, which last occurred in mid July.
Joe Turbick: With that, I'll turn it over to Joe who will walk you through our financial results. Thank you. Thank you, Maria, and good morning, everyone.
Finally, we had a <unk> <unk> decrease from other items, which included.
Speaker 5: transcript
Speaker 14: Finally, we had a 3 cent decrease from other items, which included 8 cents of a decrease in other income due to prior your medical plan by outgain did not reoccur, partially offset by 3 cent increase from higher AFU DC, from clean energy and base capital project under construction.
Joe Turbick: I'll cover our Q3 results before providing updates on our rate case, capital investments, and liquidity and financing. Moving to slide six, our third quarter results reflect dynamic load and customer composition, challenging weather and power market conditions, continued ethnsis on grid resiliency and execution of our capital plan. The economy in our service territory continues to display strength, as Maria noted, regional economists anticipate significant investment in our area, particularly focused on semi-conducting manufacturing.
Eight tenths of a decrease in other income due to a prior year medical plan buyout gain did not that did not reoccur, partially offset by <unk> increased from higher AFDC from clean energy and base capital project under construction.
Speaker 5: transcript
Speaker 14: and two cents increase from higher returns on non-qualified benefit trust and other miscellaneous items.
And <unk> increased from higher returns on non qualified benefit trust and other miscellaneous items.
Turning to page seven for a summary of our 2024 general rate case to date, which remains subject to PUC approval as <unk>.
Speaker 5: transcript
Speaker 14: Starting to page 7 first, summary of our 2024 general rate case to date, which remains subject to OPUC approval. As Maria highlighted earlier, we are pleased to reach a constructive settlement on the remaining items, including recovery of recent capital investments and operating costs to maintain the system reliability and resilience.
<unk> highlighted earlier, we were pleased to reach a constructive settlement on the remaining items, including recovery of recent capital investments and operating costs to maintain the system reliability.
Joe Turbick: Many large high-tech companies in our footprint have signaled upcoming growth projects that could result in sizeable economic benefits to our region. Unemployment in our region was 3.4% as of September, below the national average of 3.8%. Industrial load growth continued, albeit at a more moderate rate than witnessed in the first and second quarters, which we see as a short-term deviation on a long-term industrial growth trend. Total Q3 2023 loads increased by 0.2% weather adjusted compared to Q3 2022.
<unk> and resiliency, given the frequency and magnitude of extreme weather and resource constraints in our region, including the August heat event. The reliability contingency event provision represents a constructive solution to our power cost recovery framework. This update better reflects the impact of climate change in dynamic regional Mark markets that we have.
Speaker 5: transcript
Speaker 14: Given the frequency and magnitude of extreme weather and resource constraints in our region, including the August heat event, the reliability contingency event provision represents a constructive solution to our power cost recovery framework. This update better reflects the impact of climate change and dynamic regional markets that we have been historically experiencing.
Historically experiencing.
Speaker 5: transcript
Speaker 14: Additionally, steps in the docket will continue in the coming weeks, including annual power cost updates in November . A commission decision is expected by December , but could come sooner for rates effective January 1, 2024.
Additionally steps in the docket.
We'll continue in the coming weeks, including annual power cost updates in November a commission decision is expected by December but could come sooner for rates effective January one 2024.
Joe Turbick: On a non-weather adjusted basis, total load decreased 0.9% year-over-year as weather was less severe across the full quarter, despite a hotter August. Q3 2022 average temperatures were the hottest down record for the third quarter in our region. We continue to see significant heat this summer, but we saw a milder weather in September, which had 35% fewer cooling degree days than compared to 2022. Residential load decreased 2.5% or 0.5% weather adjusted compared to Q3 2022.
Speaker 5: transcript
Speaker 14: On to slide eight, which shows our current capital forecast through 2027.
On to slide eight which shows our current capital forecast through 2027.
Speaker 5: transcript
Speaker 14: We are continuing to evaluate emerging transmission projects that Maria and I mentioned in the Q2 call and plan to provide a robust capital forecast update on the Q4 call in February .
We are continuing to evaluate emerging transmission project.
Maria and I mentioned at the Q2 call and plan to provide a robust capital forecast update on the Q4 call in February.
Speaker 5: transcript
Speaker 14: I will also note that the PGE portion of projects receiving grant funds is not yet reflected in these figures as scoping and negotiations are ongoing.
I will also note that the PG portion of projects receiving grant funds is not yet reflected in these figures as scoping and negotiations are ongoing we will reflect these projects hit our forecast once final plans have crystallized.
Speaker 5: transcript
Speaker 14: We will reflect these project in our forecast, one spinal plan to crystallize.
Joe Turbick: Viewer cooling degree days, an increased energy efficiency and distributed energy resource adoption contributed to this decrease. Residential customer growth increased 0.7%. Commercial load decreased 2.1% or 1.2% weather adjusted, as we also witnessed increased penetration of energy efficiency and DERs among commercial customers. Industrial load growth continued in Q3 2023, increasing 2.5% or 2.7% weather adjusted. As Maria mentioned, we view this moderation compared to previous quarters as temporary and anticipate a continuation of the growth cycle that we have been observing in recent years.
The 2023 RFP has worked through preliminary administrative steps and is expected to officially launch to the market in the coming weeks at submissions are expected in early 2024 with submission of a project shortly as anticipated in the first half of next year project selection will take place shortly after in mid <unk>.
Speaker 5: transcript
Speaker 14: The 2023 RFP has worked through preliminary administrative steps and is expected to officially launch to the market in the coming weeks. Bid submissions are expected in early 2024 with submission of a project shortlist anticipated in the first half of next year. Project selection will take place shortly after in mid-2024.
24.
Speaker 5: transcript
Speaker 14: Turning to slide 9 for a summary of our liquidity and capital findings.
Turning to slide nine for summary of our liquidity and capital findings.
Speaker 5: transcript
Speaker 14: Our equity sorry our liquidity and financing our strong balance sheet investment grade credit ratings and stable credit Outlook remain unchanged from our previous disclosure
Our equity.
Our liquidity and financing our strong balance sheet investment grade credit ratings and stable credit outlook remains unchanged from our previous disclosures.
Speaker 5: transcript
Speaker 14: Total available liquidity as of September 30th, 2023, is 925 minutes.
Total available liquidity as of September 32023 is $925 million.
Joe Turbick: Third quarter, power market conditions remain challenging in 2023 with resource scarcity during the peak periods surrounding the August heat event having a acute impact on the quarter. I'll now cover our financial performance quarter over quarter. We experience an 18-cent decrease in total revenues driven by a 0.9% decrease in total deliveries combined with unfavorable changes in the average price of deliveries due to lower residential and commercial loads. Q3 2022, power cost conditions were also challenging and 27 cents of the quarter over quarter earnings change is a trivial power cost headwinds in 2022 that we normalize for this comparison.
Speaker 5: transcript
Speaker 14: In mid-August, we amended our existing revolving credit facility to extend the maturity, while also up sizing from 655 to 750 million to provide additional flexibility.
In mid August we amended our existing revolving credit facility to extend the maturity, while also upsizing from $650 to $750 million to provide additional flexibility.
Speaker 5: transcript
Speaker 14: We also executed a $500 million. The first mortgage bond purchased agreement in late August , including $300 million of that that was issued as of September 30th, with the remaining $200 million to be issued under a delayed draw feature in the fourth quarter.
We also executed a $500 million.
First mortgage bond purchase agreement in late August, including $300 million of that that was issued as of September 30, with the remaining 200 million to be issued under the delayed draw feature in the fourth quarter.
Speaker 5: transcript
Speaker 14: As I said previously We issued the remaining 92 million dollars under the equity forward facility in July And we continue to have equity market availability under our atm program
As I said previously we <unk>.
The remaining $92 million under the equity forward facility in July and we continue to have the equity market availability under our ATM program.
Speaker 5: transcript
Speaker 14: PGE has entered into a foretold agreement for 58 million of the total 300 million of the ATM as of the third quarter.
<unk> has entered into a forward sale agreements for $58 million of the total $300 million of the ATM as of the third quarter.
Joe Turbick: Current year power cost were also elevated, driving a 7-cent EPS decrease in the quarter, reflecting costs that were higher than anticipated in our annual update tariff. There was a 2-cent decrease in EPS from higher operating expenses, net of the furl-related items, primarily driven by higher generation and grid maintenance costs. We also saw a 6-cent impact from depreciation and amortization expense due to higher plant balances year over year. A 3-cent decrease from the impact of higher interest expense due to higher long-term debt balances and short-term debt balances carried for a part of third quarter.
Speaker 5: transcript
Speaker 14: We remain confident in our balance sheet and our ability to access the capital markets and continued strong interest from both debt and equity investors in recent auctions.
We remain confident in our balance sheet and our ability to access the capital markets.
And continued strong interest from both debt and equity investors in recent offerings.
Speaker 5: transcript
Speaker 14: Careful dilution management remains an important focus as we continue to track towards our authorized 50-50 capital structure over time and maintain flexibility in financing.
Careful dilution management remains an important focus as we continue to track towards our authorized 50 50 capital structure over time and maintain flexibility in financing.
Options.
Our results in the third quarter continued to reflect our investment thesis as we execute to establish a sturdy growth foundation for PGE. They.
Speaker 5: transcript
Speaker 14: Our results in the third quarter continue to reflect our investment year thesis as we execute to establish a sturdy growth foundation for PGE. They also reflect ongoing challenges that we are are all working to diligently manage through year end. Some of the headwinds we have faced in Q3 are expected to dissipate in the last three months of the year, including in power cost. Turning to slide ten for outlook for the fourth quarter.
They also reflect ongoing challenges that we are.
We're all working to diligently manage through year end some of the headwinds we have faced through Q3 are expected to dissipate in the last three months of the year, including in power cost turning to slide 10 for our outlook for the fourth quarter.
Joe Turbick: A 7-cent decrease due to the derivative impact of draws on the equity forward sale which last occurred in mid July. Finally, we had a 3-cent decrease from other items which included 8-cent of a decrease in other income due to prior your medical plan by outgain did not reoccur.
As Maria touched on earlier indicators point to a more reasonable power market condition, especially compared to Q4, 2022, which saw cold weather pipeline disruptions in regional gas storage anomalies drive Pacific northwest gas and power prices to extreme levels.
Speaker 5: transcript
Speaker 14: As Maria touched on earlier, indicators point to a more reasonable power market condition, especially compared to Q4 2022, which saw cold weather, pipeline disruptions, and regional gas storage anomalies drive Pacific Northwest gas and power prices to extreme levels.
Joe Turbick: Partially offset by 3-cent increase from higher AFU-DC from clean energy and base capital project under construction and 2-cent increase from higher returns on non-qualified benefit trust and other miscellaneous items. Starting to page 7 for summary of our 2024 general rate case to date which remains subject to OPUC approval. As Maria highlighted earlier, we are pleased to reach a constructive settlement on the remaining items including recovery of recent capital investments and operating costs to maintain the system reliability and resiliency.
Speaker 5: transcript
Speaker 14: Due to these factors, fourth quarter of power costs were meaningfully hired, then considered in the AUT baseline, which is represented in the chart.
Due to these factors fourth quarter power costs were meaningfully higher.
When considered in the AUT baseline, which is represented in the chart.
Speaker 5: transcript
Speaker 14: We expect impacts of load growth, depreciation, interest expense, and dilution observed year-to-date to continue.
We expect impacts of load growth depreciation interest expense and dilution observed year to date to continue.
Speaker 5: transcript
Speaker 14: Operating cost execution remains a critical component of our plan, and all corners of our business are leaning in to drive savings and results. Given these efforts, we expect our fourth quarter O&M to come in below our current full year run rate.
Operating cost execution remains a critical component of our plan and all corners of our business are leaning in to drive savings and results. Given these efforts, we expect our fourth quarter O&M to come in below our current full year run rate.
Joe Turbick: Given the frequency and magnitude of extreme weather and resource constraints in our region, including the August heat event, the reliability contingency event provision represents a constructive solution to our power cost recovery framework. This update better reflects the impact of climate change and dynamic regional markets that we have been a historically experiencing. Additionally, steps in the docket will continue in the coming weeks including annual power cost updates in November.
Speaker 5: transcript
Speaker 14: Finally, we expect an improved resource mix compared to our AUT expectations that will allow us to make up ground in our annual power cost position. This includes better availability of generating resources, improved plant outage expectations, and portfolio optimization that allows strategic dispatch of our generation fleet.
Finally, we expect an improved resource mix compared to our.
Expectations that will allow us to make up ground in our annual power cost position. This includes better availability of generating resources.
<unk> plant outage expectations.
Portfolio optimization that allows strategic disparate dispatch of our generation fleet.
Joe Turbick: A commission decision is expected by December but could come sooner for rates effective January 1, 2024, on the slide 8, which shows our current capital forecast through 2027. We are continuing to evaluate emerging transmission projects that Maria and I mentioned in the Q2 call and plan to provide a robust capital forecast update on the Q4 call in February. I will also note that the PG portion of projects receiving grant funds is not yet reflecting these figures as scoping and negotiations are ongoing.
Due to lower results in the third quarter being below expectation, we are revising our 2023 full year weather adjusted load growth guidance from two 5% to 3% to 2%, which is in line with our long term expectation.
Speaker 5: transcript
Speaker 14: You do load results in the third quarter being below expectation. We are revising our 2023 full year weather adjusted load growth guidance from 2.5% to 3% to 2%, which is in line with our long term expectation.
Speaker 5: transcript
Speaker 14: We continue to have strong visibility to incoming projects concentrated among digital and high-tech customers, which are continuing their growth path. As such, we remain confident in the load profile in our area and are reiterating our long-term load growth guidance of 2% through 2027.
We continue to have strong visibility to incoming projects concentrated among digital and high tech customers, which are continuing their growth path as such we remain confident in the load profile in our area and are reiterating our long term load growth guidance of 2% through 2027.
Joe Turbick: We will reflect these projects in our forecast once final plans to crystallize. The 2023 RFP has worked through preliminary administrative steps and is expected to officially launch to the market in the coming weeks. It's submissions are expected in early 2024 with submission of a project shortlist anticipated in the first half of next year. Project selection will take place shortly after in mid 2024.
Speaker 5: transcript
Speaker 14: As Maria noted earlier, we are narrowing our full year earnings guidance to 260 to 265 per glute chair to reflect power cost challenges experienced in the third quarter. We have sharpened our load expectations for Q4 and anticipate power costs and O&M execution will drive necessary results to achieve this range.
As Maria noted earlier, we are narrowing our full year earnings guidance to $2 60 to $2 65 per diluted share to reflect power cost challenges experienced in the third quarter, we have sharpened our load expectations for Q4, and anticipate power costs and O&M execution will drive necessary results to achieve this range.
Speaker 5: transcript
Speaker 14: 2023 continues to represent a key pivot point for our direction towards sustained growth and value for customers and shareholders.
123 continues to represent a key pivot point for our direction towards sustained growth and value for customers and shareholders.
Joe Turbick: Turning to slide 9 for summary of our liquidity and capital finance, our equity, sorry, our liquidity and financing, our strong balance and investment grade credit ratings and stable credit outlook remain unchanged from our previous disclosures. Total available liquidity as of September 30th, 2023 is 925 million. In mid August, we amended our existing revolving credit facility to extend the maturity while also up sizing from 650 to 750 million to provide additional flexibility.
Speaker 5: transcript
Speaker 14: constructive regulatory clarity, a robust capital investment pipeline, and solid service territory fundamentals give us renewed confidence in reaching our earnings growth guidance of 5 to 7 percent in 2024 and beyond.
Constructive regulatory clarity.
Our robust capital investment pipeline and solid service territory fundamentals give us renewed confidence in reaching our earnings growth guidance of 5% to 7% in 2024 and beyond.
Speaker 5: transcript
Speaker 14: As we enter the final months of 2023, our ongoing focus of providing clean, reliable, and affordable energy remains unchanged. We look forward to furthering this core mission which will enable prolonged value for our customers, communities, and shareholders. And now, operator.
As we enter the final months of 2023, our ongoing focus on providing clean reliable and affordable energy remains unchanged. We look forward to furthering this quarter mission, which will enable prolonged value for our customers communities and shareholders.
Joe Turbick: We also executed a $500 million first mortgage bond purchase agreement in late August, including $300 million of that that was issued as of September 30th with the remaining $200 million to be issued under a delayed draw feature in the fourth quarter. As I said previously, we issued the remaining $92 million under the equity forward facility in July, and we continue to have equity market availability under our ATM program. PGE has entered into a forward sale agreement for 58 million of the total 300 million of the ATM as of the third quarter.
And now operator, we are ready for questions.
Speaker 1: transcript
Speaker 1: Thank you, as a reminder, to ask a question, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. Please stand by while we compile the...
Thank you as a reminder to ask a question you will need to press star one one on your telephone to remove yourself from the queue. You May Press Star one one again, please standby, while we compile the Q&A roster.
Our first question.
Speaker 6: transcript
Speaker 6: comes from the line of Shah Perezza of Guggenheim partners. Thank you. Good morning, Maria. Morning, Joe.
Comes from the line of Shar <unk> of Guggenheim partners.
Good morning, guys.
Good morning, Good morning, Joe.
Good morning, Joe you.
Joe Turbick: We remain confident in our balance sheet and our ability to access the capital markets and continue strong interest from both debt and equity investors in recent offerings. Careful delusion management remains an important focus as we continue to track towards our authorized 50-50 capital structure over time and maintain flexibility in financing options. Our results in the third quarter continue to reflect our investment year thesis as we execute to establish a 30 growth foundation for PGE. They also reflect ongoing challenges that we are all working to diligently manage through year end.
You discussed getting I guess, a little bit more in the weeds on the capex profile on longer term spending run rate right, regardless of the Rfps I know, obviously, we're going to get an update on <unk> <unk> been in the seat for a few months now.
Speaker 7: transcript
Speaker 7: CapEx Procon longer term spending one rate, right? Regardless of the RFPs, I know obviously we're gonna get an update in 4Q, but you've been in the seat, for a few months now. And we're still kind of looking at that declining CapEx Pro file on the slides. Can you just maybe elaborate on what you mean by robust? I mean, is it fair to assume that $800 million run rate will step up materially? Just directly how we should think about it is we head into the fourth quarter. Thanks.
We're still kind of looking at that declining capex profile on the slides can you just maybe elaborate on what you mean by robust.
Is it fair to assume that $800 million run rate will step up materially just directionally, how we should think about it as we head into the fourth quarter. Thanks.
So.
Joe Turbick: Some of the headwinds we have faced through Q3 are expected to dissipate in the last three months of the year, including in power cost, turning to slide 10 for outlook for the fourth quarter. As Maria touched on earlier, indicators point to a more reasonable power market condition, especially compared to Q4 2022, which saw cold weather, pipeline disruptions and regional gas storage anomalies drive Pacific Northwest gas and power prices to extreme levels.
Yeah. Thanks, John So the way I look at it is when we say more robust I think we would like to provide more transparency as we work through 24 and the further years.
Speaker 5: transcript
Speaker 14: Thanks, Char. So, you know, the way I look at it is so when we say more robust, I think we would like to provide more, you know, transparency as we work through 24 and the further years of our base business, the transmission that Maria had mentioned before, as well as what I'll call, you know, the potential for the opportunities, be it the RFPs that we've spoken to it and, and the grants, it would not,
Our base business the transmission that Maria had mentioned before as well as what I'll call.
The potential for the opportunities be it the rfps that we've spoken to it and the grants.
Would not.
Speaker 5: transcript
Speaker 14: be, you know, unreasonable to say there's some some upward pressure there. But that's what we're what we're waiting for is as we get through the rate case outcome here and get a little more clarity on the transmission plan and and the grants that we we hopefully can give a little more of a transparent, longer view of the possibilities as opposed to, you know, what is as you see there, a relatively flat plan.
Unreasonable to say, there's some upward pressure there, but that's what we're waiting for is as we get through the rate case outcome here and get a little more clarity on the transmission plan and.
Joe Turbick: Due to these factors, fourth quarter of power costs were meaningfully higher than considered in the AUT baseline, which is represented in the chart. We expect impacts of load growth, depreciation, interest expense and delusion observed year to date to continue. Operating costs execution remains a critical component of our plan and all corners of our business are leaning in to drive savings and results. Given these efforts, we expect our fourth quarter O&M to come in below our current full year run rate.
The grants that we hopefully can give a little more.
Transparent longer view of the possibilities as opposed to what it is.
As you see there are relatively flat plant.
Speaker 5: transcript
Speaker 14: And part that we'll also weigh into that as it relates to that base, I should say, is how the most recent IRP that has come out impacts our base capital as it relates to supporting renewables as well.
In part that will also weigh into that as it relates to that base I should say is the most how the most recent.
IOP that has come out impacts are our base capital as it relates to supporting renewables as well.
Got it and then just on the financing side, Joe just obviously I guess, how should we think about the forward equity.
Joe Turbick: Finally, we expect an improved resource mixed compared to our AUT expectations that will allow us to make up ground in our annual power cost position. This includes better availability of generating resources, improved plant outage expectations and portfolio optimization that allows strategic dispatch of our generation fleet. Due to load results in the third quarter being below expectation, we are revising our 2023 full year weather adjusted load growth guidance from 2.5% to 3% to 2% which is in line with our long term expectation.
Speaker 7: transcript
Speaker 7: Got it. And then just on the financing side, Joe, just obviously, I guess, how should we think about the forward equity?
Speaker 7: transcript
Speaker 7: finding and for any sort of wins under the next RFP round. I think it's awarded next year, right? So you have an ATM now, is that kind of the avenue that I'll look at at this point?
Financing for any sort of wins under the next RFP round I think it's awarded next year right. So you have an ATM now is that kind of the avenue, you're going to look at at this point.
Speaker 5: transcript
Speaker 14: that we can we continue to evaluate based on, you know, the expectations and the outcomes that will come from the RFP are approaches. But I mean, I think an approach that starts with a base of having an ATM to support us, right? We can we currently as much as we have.
Yes, I think we continue to evaluate based on the expectations and the outcomes that will come from the RFP our approaches, but I think an approach that starts with a base of having an ATM to support US right. We can re currently as much as we had about $250 million left to issue right.
Speaker 7: transcript
Speaker 7: You know, about 250 million left to issue right the cash flows of the ATM are still we haven't yielded any from so far but we'll continue to evaluate the ATM is related to supporting our business from a From a base a transmission in others and then evaluated on an episodic basis based on the size of the any of these significant wins that could come from an R.
Joe Turbick: We continue to have strong visibility to incoming projects concentrated among digital and high tech customers which are continuing their growth path. As such, we remain confident in the load profile in our area and are reiterating our long term load growth guidance of 2% through 2027.
The cash flows of the ATM.
We haven't yielded any from so far but we will we will continue to evaluate the ATM as it relates to supporting our business from a from a base of transmission and others and then evaluate it on an episodic basis based on the size of the any of the significant wins that could come from an RFP.
Joe Turbick: As Maria noted earlier, we are narrowing our full year earnings guidance to 260 to 265 per due to chair to reflect power cost challenges experienced in the third quarter. We have sharpened our load expectations for Q4 and anticipate power cost and O&M execution will drive necessary results to achieve this range. 2023 continues to represent a key pivot point for our direction toward sustained growth and value for customers and shareholders. Constructive regulatory clarity, a robust capital investment pipeline and solid service territory fundamentals give us renewed confidence in reaching our earnings growth guidance of 5% to 7% in 2024 and beyond.
Speaker 7: transcript
Speaker 7: Okay, got it. And then lastly, just for me is maybe just tied a little bit deeper into the power cost aspect of the settlement. And now, I guess, how do you see the mechanism you got for, let's just say, extreme events as actually insulating the EPS volatility? For example, like, how would have impacted this quarter if he had it in place that past?
Okay got it.
And then lastly, just for me is maybe just tied a little bit deeper into the power cost aspect of the settlement.
I guess, how do you see the mechanism you got in for let's just say extreme events is at.
Actually insulating the EPS volatility for example, like how would have impacted this quarter. If you had it in place that past August thanks.
Alright.
Speaker 5: transcript
Speaker 14: Right. And then so you know, the mechanism itself is not finalized as of as of yet, but based on our understanding so that the the definition of an event with there would be three items that would that would come into to play as as evaluating the if there was an event which would be the day had mid mid Columbia index price.
The mechanism itself is not finalized as of as of yet, but based on our understanding so that the definition of event would there would be three items that would that would come into play as evaluating if there was an event, which would be the day had mid mid Columbia Index price.
Joe Turbick: As we enter the final months of 2023, our ongoing focus of providing clean, reliable and affordable energy remains unchanged. We look forward to furthering this core mission which will enable prolonged value for our customers, communities and shareholders.
Sure.
Speaker 5: transcript
Speaker 14: EG's eligibility to request resource adequacy assistance and then a neighboring balancing authority that's publicly declared an event. So those are sort of what we believe the definitions would be. Sharif, if we applied those, we do believe the heat event that occurred in August would have triggered that definition.
<unk> eligibility to request resource adequacy assistance, and then a neighboring balancing authority.
That's publicly declared an event. So those are sort of what we believe the definitions would be charged if we applied those we do believe the heat event that occurred in August would have would have triggered that definition.
Operator: And now operator, we are ready for questions. Thank you, as a reminder, to ask a question, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. Please stand by while we compile the Q&A roster.
Speaker 5: transcript
Speaker 5: We'd also believe that if we were to look to the prior years, there was a significant collection of events that, not just this heat event, if we were looking to 22 and 21, there are several events that would meet that.
We would also believe that if we were to look through the prior years. There were there was a significant collection of events that not just as heat event. If we were looking into 'twenty, two and 'twenty. One there are several events that would meet that so so we do believe that a portion of our costs that are incurred in this current year would have been defined to pull into that we're not because they the commission hasnt issued an order and we have.
Speaker 5: transcript
Speaker 5: So we do believe that a portion of our our costs that are incurred in this current year would have been defined to pull into that. We're not, you know, because they, the commission has has an issued an order and we haven't finalized. We're not at the point of declaring what that value or average would be. But once the order comes out and we have that clarity, we'll consider
Char Perezza: Our first question comes from the line of Char Perezza of Guggenheim partners. Good morning, Joe. You discussed getting a little bit more in the weeds on the CAPEX proton longer term spending. Regardless of the RFPs, I know we are going to get an update in 4Q. You have been in the seat for a few months now and you are still looking at that declining CAPEX profile on the slides. Can you elaborate on what you mean by robust?
Finalized we're not at the point of declaring what that value our average would be but once the orders comes out we have that clarity will consider.
Speaker 5: transcript
Speaker 14: you know, discussing what that, you know, average impact would have been over the last number of years here, you know, potentially as we get to your end.
Discussing what that average impact would have been over the last number of years here potentially as we get to year end, but there is that there is is there something there. Yes are these events something that occurred.
Speaker 5: transcript
Speaker 14: But is there something there? Yes, are these events something that occur at least, you know, and we're so yes.
And so yes.
Speaker 7: transcript
Speaker 7: Okay, perfect. Thank you guys. We'll, we'll see you in a couple of weeks. Appreciate it.
Okay perfect. Thank you guys will see in a couple of weeks appreciate it.
Great. Thank you. Thank you.
Thank you.
Speaker 1: transcript
Speaker 1: Our next question comes from the line of Richard Sunderland of JP Morgan.
Our next question comes from the line of Richard Sunderland of J P. Morgan.
Char Perezza: As it is fair to assume that $800 million run rate will step up materially, just directly how we should think about it as we add in to the 4Q. Thanks. The way I look at it is, so when we say more robust, I think we would like to provide more transparency as we work through 24 and the further years of our base business, the transmission that Maria had mentioned before, as well as what I'll call the potential for the opportunities, be it the RFPs that we've spoken to and the grant, it would not be unreasonable to say there's some upward pressure there.
Good morning, Good morning can you hear me.
Yes, great.
Speaker 8: transcript
Speaker 8: Great, thanks for the time today. A lot of helpful color on the quarter and looking to 4Q here as well.
Great. Thanks for the time today.
A lot of helpful color on the quarter and looking at <unk> as well.
Speaker 8: transcript
Speaker 8: starting on the O&M. I just wanted to make sure I was parsing this correctly. It sounds like you were standing up some savings specifically to help this year. Is that the case? And how does that flow through versus I guess effectively your plan at the start of the year? And then just to be more precise on kind of 23 versus beyond, are any of these savings kind of structural in the 2024 and more long-term?
On the O&M, but just wanted to make sure as parts and this correctly.
Sounded like you were standing up some savings specifically to help this year.
Thats the case and how does that flow through versus I guess effectively youre playing at the start of the year and then just to be more precise on kind of 23 versus beyond.
Savings are structural in the 2024 and more long term.
Char Perezza: But Char, that's what we're waiting for is as we get through the rate case outcome here and get a little more clarity on the transmission plan and the grants that we hopefully can give a little more of a transparent longer view of the possibilities as opposed to what is right as you see there a relatively flat plan. And you know, in part that we'll also weigh into that as it relates to that base, I should say is, you know, the most, how the most recent IRP that has come out impacts our our base capital as it relates to supporting renewables as well.
Speaker 5: transcript
Speaker 14: to show you what take this up. Sure. Morning Richard. So as it relates to OEM, so OEM, so yes, we do believe some work that we've been doing throughout the year. When I say throughout the year, more think to April and beyond, we'll yield some benefits to us financially as reducing us below our run rate that we're currently at for the full year. We did see a...
So Joe you want to take this one sure good morning, Richard So as it relates to OEM O&M. So yes, we do believe some work that we've been doing throughout the throughout the year when I say throughout the year more think that April and beyond.
I'll yield some benefits to us financially as reducing us below our run rate that we're currently at for the full year, we did see a a sort of a reduction in our what I'll call our overspend to expectation in the third quarter, but we were still over but we expect in the fourth quarter, we will yield some O&M savings those O&M save.
Speaker 5: transcript
Speaker 14: a sort of a reduction in our what I'll call our overspend to expectation in the third quarter, but we were still over, but we expect in the fourth quarter we will yield some O&M savings. Those O&M savings are meant to be.
Char Perezza: Got it and then just on the financing side Joe just obviously I guess how should we think about the forward equity, finance and for any sort of wins under the next RFP round, I think it's awarded next year right so you have an ATM now is that kind of the avenue you're going to look at at this point. Yeah, well I think we can we continue to evaluate based on you know the expectations and the outcomes that will come from the RFP are approaches, but I mean I think an approach that starts with a base of having an ATM to support us right we can recurrently as much as we have.
<unk> are.
To be like a structural going forward management of our costs. So we would expect to have the same structure in place. These are not one time items two to achieve benefits for the year, but more structural items as we relate to changing the way, we manage our cost and run our business going.
Speaker 5: transcript
Speaker 14: A structural going forward management of our cost mean so we would expect to have that the same structure in place These are not one-time items to to achieve benefits for the year But more structural items as we relate to changing the way we manage our cost and run our business
Speaker 4: transcript
Speaker 17: going forward. So we would expect that to continue. Richard, one of the things as you look at our external statements, I think it's important that we acknowledge that there's a couple of things going on. The first is you can see the amortization of deferrals from the ice storm, wildfire events, prior PCAM years and other things.
Going forward, so we would expect that.
Richard one of the things as you look at our external statements I think it's important that we acknowledge that there is a couple of things going on.
Char Perezza: You know about 250 million left to issue right the cash flows of the ATM are are still we haven't yielded any from so far but we'll we'll continue to evaluate you know the ATM is relates to supporting our our business from a from a base a transmission and others and then evaluating on an episodic basis based on the size of the any of these significant wins that could come from an RFP. Okay got it and then lastly just for me is maybe just tied a little bit deeper into the power cost aspect of the settlement and now I guess how do you see the mechanism you got for let's just say extreme events is actually insulating the EPS volatility for example like how would have impacted this quarter we had it in place that past August thanks.
First as you can see the amortization of deferrals from the ice storm wildfire events.
Prior to <unk> now that things are.
Speaker 3: transcript
Speaker 17: are increasing that O and M line. But so are ongoing wildfire prevention work, all of the mitigation we do, the interaction we do with the U.S. Forest Service and local entities, really around vegetation management and others. And to this rate case, there were some really important mechanisms that were put in place.
Increasing.
That O&M line.
So our ongoing wildfire prevention work all of the mitigation, we do the interaction we do with the U S Forest service and local entities.
<unk> really around vegetation management and others.
Its rate case, there was some really important mechanisms that were put in place that combined with what Joe was speaking of in terms of the ongoing.
Speaker 4: transcript
Speaker 4: That combined with what Joe was speaking of in terms of the ongoing
Speaker 4: transcript
Speaker 17: alignment, reduction in our cost. Quite frankly, just driving efficiencies using technology better.
Alignment.
Reduction in our cost quite frankly, just deriving efficiencies using technology better.
Char Perezza: Right and then so you know the mechanism itself is not finalized as of as of yet but based on our understanding so that the definition of an event with there would be three items that would that would come into to play as as evaluating the if there was an event which would be the day had mid mid Columbia index price. EG's eligibility to request resource adequate the assistance and then a neighboring balancing authority that's publicly declared an event so those are sort of what we believe the definitions would be sharp if we applied those we do believe the heat event that occurred in August would have would have triggered that definition.
Speaker 4: transcript
Speaker 17: You can see we've had plant availability most recently at the 96th percentile rate, and our first status rate was just 1.7 percent. That was a huge contributor, particularly to the third quarter.
You can see we've had the plant availability most recently as the 96 percentile.
Right.
And our forced outage rate was just one 7% that was a huge contributor particularly to the third quarter, we can see in our distribution system.
Speaker 3: transcript
Speaker 3: We can see in our distribution system, work order output is a 12 percent improvement year over year. We're seeing for customers that are crew alignment and scheduling restoration priorities.
Four quarter output is at 12% improvement year over year.
Seeing for customers that our CRO alignment and scheduling restoration priorities and.
Speaker 4: transcript
Speaker 17: And our duration of impacting events was an improvement of 13% and overall 1.3 million customer-minute outages, to the customer-outage minutes were saved just from 2022. So there's a real impact not only to our construction and to better operation.
Our duration of impacting events.
An improvement of 13% and overall $1 3 million customer minute outages.
The customer outage minutes.
Char Perezza: We also believe that if we were to look to the prior years there were there was a significant collection of events that you know not just this heat event if we were looking to 22 and 21 there are several events that would meet that so. So we do believe that a portion of our our cost that are incurred in this current year would have been defined to fall into that we're not you know because they the commission has has an issue in order and we haven't finalized we're not at the point of declaring what that value or average would be but once the orders come down we have that that clarity will consider.
Save just from 2022, so it's a real impact not only to our cost structure and to better operations, but to serving our customers small reliably.
Speaker 4: transcript
Speaker 17: but to serving our customers more reliably with the power that they've come to expect as we've seen increasing amounts of extreme events throughout our area.
The power that they have come to expect as we have seen increasing amounts of extreme events throughout our area.
Understood that's very helpful color.
Char Perezza: You're discussing what that you know average impact would have been over the last number of years here you know potentially as we get to direct but there is there is there's something there yes are these events something that occur at least you know and we're so yes. Yes. Okay. Perfect. Thank you, guys. We'll see you in a couple of weeks. Appreciate it. Thank you.
Speaker 8: transcript
Speaker 8: Maybe zooming out to a high level and Maria, you brought this up in terms of the wildfire work, but could speak a little bit to sort of what you're focused on and what your work with the industry is focused on in terms of wildfires. Overall, it's an industry issue. It's been obviously hugely topical this summer and for prior years. I'm just curious if there's anything you can share in terms of where you and EI are focused on this front.
Maybe zooming out to a high level summary of you brought this up in terms of the wildfire work, but.
Could you speak a little bit to sort of what you're focused on and what youre work with the industry is focused on in terms of.
The wildfires overall as an industry issue, which then obviously gigi topical the summary for prior years, just curious if theres anything you can share in terms of.
Richard Sunderland: Our next question comes from the line of Richard Sunderland of JP Morgan. Good morning. Can you hear me? Yes. Great. Thanks for the time today. A lot of help for color on the quarter and looking at four keys here as well. You may be starting on the LNM. I just wanted to make sure it's parsing this correctly. It sounds like you were standing up some savings specifically to help this year.
Where are you in.
We are focused on the strong currently.
Speaker 4: transcript
Speaker 17: Sure, it's a good question. And let me turn first to our cells internally. We have absolutely approved our practices, better use of technology and some truly cutting edge technologies where we are able to share that access with other parties, whether it be forest agencies or the national.
Sure. It's a good question and let me just turn first to ourselves internally.
We have absolutely improved our practices better use of technology and some truly cutting edge technologies, where we are able to share that access with other.
Parties, whether it be forest agencies the Nashville.
Joe Turbick: Is that the case and how does that flow through versus I guess effectively your plan at the start of the year and then just to be more precise on kind of 23 versus beyond are any savings kind of structural in the 2024 and more long term. To do you want to take this up? Sure. Morning, Richard. So as it relates to oh, and so yeah, oh, and so yes, we do believe some work that we've been doing throughout the throughout the year when I say throughout the year more things to April and beyond will yield some benefits to us financially as reducing us below our run rate that we're currently at for the full year.
Speaker 3: transcript
Speaker 17: the state and the local entities, where we're working in conjunction on vegetation management. The Ag Bill that's working its way through Congress, I think is a really good example, where we've includes timber and debris removal on an expedited basis. We've also had permit reform in particular with the US Forest Service producing permits from several years down to mud.
The state and the local entities, where we're working in conjunction on vegetation management. The AG Bill Thats working its way through Congress I think is a really good example, where we've includes timber and debris removal.
On expedited basis, we've also had permanent reform in particular with the U S Forest service, reducing permits from several years down to months and really accelerated our collaboration and our improved practices as we look both at the state level and federal level, clearly we need to do more.
Speaker 4: transcript
Speaker 17: and really accelerated our collaboration and our improved practices.
Speaker 4: transcript
Speaker 17: As we look both at the state level and the federal level, clearly we need to do more as a high priority across the industry and as well as with regulators. And so I think you'll see increased actions coming that really support the ongoing reliability and important service that utilities provide.
Joe Turbick: We did see a sort of a reduction in our old what I'll call our over spend to expectation in the third quarter, but we were still over but we we we expect in the fourth quarter. We will yield some of the O&M savings. Those O&M savings are meant to be like a structural going forward management of our cost. I mean, so we would expect to have that the same structure in place. These are not one-time items to to achieve benefits for the year, but more structural items as we relate to changing the way we manage our cost and run our business going forward.
It's a high priority across the industry.
And as well as with regulators and so I think youll see increased actions coming that really support the ongoing reliability and an important service that utilities provide.
Got it. Thank you maybe one last one for me.
Speaker 8: transcript
Speaker 8: God, thank you. Maybe one last one from me, the state and federal work he cited around the semiconductors industry. And then your latest IRP update, is that all harmonized or is there even some elements of this that have emerged that are you additive to that outlook as you recently refreshed it?
The state and federal work he cited around the semiconductors industry and then.
Latest update.
Is that all harmonized or is there even some elements of this that have emerged that are additive to that outlook.
Maria Pope: So we would expect that for continue. Richard, one thing is you look at our external statements. I think it's important that we acknowledge that there's a couple of things going on. The first, as you can see, the amortization of deferrals from the ice storm, wildfire events, prior PCAM years, and other things are increasing that O&M line. But so are ongoing wildfire prevention work, all of the mitigation we do, the interaction we do with the US Forest Service and local entities, really around vegetation management and others.
We refreshed it.
Speaker 4: transcript
Speaker 17: So I think the use of the word harmonize is a really interesting term. We are seeing, you know, the pace of change.
So I think that use of the word harmonized is a really interesting terms we are seeing.
The pace of change.
Speaker 4: transcript
Speaker 17: And clearly the programs that we've seen come out of the federal government Department of Energy that supports transmission better use of the smart grid and our partnerships between tribes all the way to Nvidia.
And clearly the programs that we've seen come out of the federal government Department of energy that supports transmission better use of the smart grid and our partnerships between tribes all the way to Nvidia.
Speaker 3: transcript
Speaker 17: are really making a difference. But you take a look at the chip fact and then what the state of Oregon has done through the Senate Conduct or Task Force.
Are really making a difference but you take a look at the chipset and then what the state of Oregon has done through the semiconductor task force and the legislature is appropriation of $240 million of matching funds.
Maria Pope: To this rate case, there was some really important mechanisms that were put in place. That combined with what Joe was speaking of in terms of the ongoing alignment reduction in our cost, quite frankly, just driving efficiencies using technology better. You can see we've had planned availability, most recently is the 96 percentile rate, and our first average rate was just 1.7 percent. That was a huge contributor, particularly to the third quarter. We can see in our distribution system, work order output is at 12 percent improvement year over year.
Speaker 4: transcript
Speaker 17: and the legislature's appropriation of $240 million of matching funds.
Speaker 4: transcript
Speaker 17: You can find on the state website the 15 companies that will receive funds ranging from just a couple million dollars to $115 million dollars.
The final state website.
<unk> companies that will receive.
Funds raising ranging from just a couple of million dollars to $115 million.
Those projects some of which.
Speaker 4: transcript
Speaker 17: Some of which are included in our forecast, but the majority are not. And if you look at that list, about 85% of those projects are actually in Portland General Electric Service territory.
Are included in our forecast that the majority or not and if you look at that list about 85% of those projects are actually in Portland General Electric service territory. So for the next decade is a tremendous opportunity for the company.
Speaker 4: transcript
Speaker 17: So for the next decade, it is a tremendous opportunity for the company, for the region. And it's also combined with a pretty extensive work force support and investment in our universities.
Maria Pope: We're seeing for customers that are crow alignment and scheduling restoration priorities. And our duration of impacting events was an improvement of 13 percent. And overall 1.3 million customer minute outages to the customer average minutes were saved just from 2022.
For the region and is also combined with pretty extensive workforce support and investment in our universities really focusing in on an important re shoring up our technical strengths as a country and just as a reminder, 15% of semiconductor manufacturing.
Speaker 4: transcript
Speaker 4: really focusing in on an important reshoring of our technical strengths as a country. And just as a reminder, 15% of semiconductor manufacturing is in this region. So it's a real strength for our state and for the company.
In this region. So it's a real strength for our state and for the company.
Maria Pope: So there's a real impact not only to our construction and to better operations, but to serving our customers more reliably with power that they come to expect as we've seen increasing amounts of extreme events throughout our area. I understand that's very helpful color. Maybe zooming out to a high level and Maria, you brought this up in terms of the wildfire work, but could speak a little bit to sort of what you're focused on and what your work with the industry is focused on in terms of wildfires overall is an industry issue.
Great. Thank you very much for the time today.
Thank you.
Yes.
Speaker 1: transcript
Speaker 1: Thank you. Our next question comes from the line of Julianne, DumaLan Smith, a bank of America.
Thank you.
Our next question comes from the line of Julien Dumoulin Smith Bank of America.
Hey, good morning, Hey, Thank you guys appreciate it let me.
Speaker 9: transcript
Speaker 9: Hey, good morning, hey, thank you guys appreciate it.
Speaker 9: transcript
Speaker 9: So let's pick up on that last question there quickly. How do you think about tying the timeline between having a more normalized 2% here in the current year to getting up to some of the higher level that you talked about earlier?
So let's pick up on that last question. There quickly how do you think about tying the sort of the timeline between having a more normalized 2% here in the current year to kind of getting up to some of the higher levels that you talked about earlier.
Speaker 7: transcript
Speaker 7: you know, just a moment ago with some of the benefits from the Chips Act, and at the same time still having, you know, that 2% long term, I mean, sort of how do you see the profile of that sales growth and the confidence for, I think previously when we connected, some really strong commentary around customer growth, sustaining itself, in addition to sales, whether just sales growth, sustaining itself here in the medium term.
Just a moment ago with some of the benefits from the chipset and at the same time still having that 2% long term I mean sort of how do you see the profile of that sales growth and the competence for I think previously when we connected some some really strong commentary around customer growth sustaining itself. In addition to the sale of weather adjusted sales growth sustaining itself.
Maria Pope: It's been obviously huge and topical this summer and for prior years. It's the series that there's anything you can share in terms of where you and E.I, are focused on this fund permanently. Sure, it's a good question. And let me turn first to ourselves internally. We have absolutely approved our practices, better use of technology and some truly cutting edge technologies where we're able to share that access with other parties. Whether it be forest agencies in the national, the state and the local entities where we're working in conjunction on vegetation management.
In the medium term.
I don't want to put words in your mouth, but Julian.
Speaker 3: transcript
Speaker 17: No, no, it's interesting. We look at it as building blocks and I think there's really been a period of time of so much change and opportunity. So first of all, we're a state and a region that has benefited from immigration and well-bed his pause. Most recently, we continue to see really strong like blocking and tackling economic growth across our service territory.
No no its interesting we look at it as building blocks and I think that has rarely been a period of time of so much change and opportunity.
So first of all we are a stage in our region.
That has benefited from in migration and while that has paused most.
Most recently.
We continue to see really strong like blocking and tackling economic growth across our service territory.
Maria Pope: The ag bill that's working its way through Congress, I think is a really good example where we've includes timber and debris removal on an expedited basis. We've also had permit reform in particular with the US Forest Service producing permits from several years down to months and really accelerated our collaboration and our improved practices. As we look both at the state level and the federal level, clearly we need to do more in the high priority across the industry and as well as with regulators.
Speaker 4: transcript
Speaker 17: What we also are seeing is increased data centers and the continued digital expansion. One of the things that's important about that is that many of those facilities are built, but not yet built out.
What we also are seeing is increased data centers and the continued digital expansion.
One of the thing Thats important about that is that many of those facilities are built but not yet built out.
Speaker 4: transcript
Speaker 17: And so the infrastructure is there and you'll see the capacity built out over the coming months and quarters.
And so the infrastructure is there and youll see the capacity built out over the coming months and quarters and then finally, the longer term and really significant opportunities.
Speaker 4: transcript
Speaker 17: And then finally, the longer term and really significant opportunities comes in the manufacturing side of things. And this is everyone from Silicon manufacturers all the way down to setting connector manufacturers to those who are really helping with the tools and cutting as development like a lab research or our metrics or other.
On the manufacturing side of things and this is everyone.
Maria Pope: And so I think you'll see increased actions coming that really support the ongoing reliability and important service that utilities provide. Got it. Thank you. Maybe one last one from E.D. The state and federal work he cited around the semiconductors industry and then your latest IRP update. Is that all harmonized or is there even some elements of this that have emerged that are you additive to that outlook as you recently refreshed it?
From Silicon manufacturers, all the way down to semiconductor manufacturers to those who are really helping with the tools and cutting edge development of Lam research of our mentor graphics or others.
Speaker 3: transcript
Speaker 17: And there's quite a bit of opportunity that will, some of which we can see today and are already serving, and much of which will come out over the number of quarters, years, and actually even through the decade. It's truly game-changing for the state, as well as for us as a utility, to be able to serve such growth.
And there is quite a bit of opportunity that will that we some of which we can see today.
Already serving and much of which will come out over the number of quarters years and actually even through the decade, it's truly game changing for the state as well as for us as a utility to be able to serve such growth.
Maria Pope: So I think the use of the word harmonized is a really interesting term. We are seeing you know the pace of change. And clearly the programs that we've seen come out of the federal government department of energy that supports transmission. Better use of the smart grid and our our partnerships between tribes all the way to Nvidia are really making a difference. But you take a look at the chip fact and then what the state of Oregon has done to the semiconductor task force and the legislatures appropriation of $240 million of matching funds.
Speaker 9: transcript
Speaker 9: Got maybe just declared by that. You're not pulling back on any of your earlier confidence.
Yes, maybe just to clarify that you are not pulling back on any of your earlier comments.
Speaker 4: transcript
Speaker 17: in light of the 20. No, you know, I think. Yeah. No, we, we, we aligned our, our 2023 number really with our long-term guidance of 2%.
In light of the 'twenty I think yes.
We aligned our 2023 number really with our long term guidance of 2%.
Speaker 4: transcript
Speaker 17: You know, I think it's, we feel very confident in the 2% number. And I think my comments underlie optimism for even higher growth than that.
I think it is.
I'm very confident in the 2% number and I think my comments underlie optimism for even higher growth than that.
Okay, Alright fair enough Im just trying to tease the near term for the long term here.
Speaker 7: transcript
Speaker 7: Okay. All right. Fair enough. I'm just trying to keep the near term for the long term here. And then, if you can, I mean, speaking about, you know, kind of reconciling 23 against the longer term, how about 23 and the levers that you've pulled here to keep it at the lower end, you know, despite the litany of more weather-related pressures here, as you alluded to earlier? Is there a read in the 24 that we should be aware of? I know you provided some commentary.
And then if you can.
Maria Pope: You can find on the state website the 15 companies that will receive funds raising ranging from just a couple million dollars to $115 million. Those projects some of which are included in our forecast but the majority are not. And if you look at that list about 85% of those projects are actually in Portland general electric service territory. So for the next decade it is a tremendous opportunity for the company for the region.
Speaking about kind of reconciling 23 against the longer term, how about 23 and the levers that you've pulled here to keep it at the lower end despite the lithia.
Or weather related pressures here as you alluded to earlier is there a read into 24 that we should be aware of I know you provided some commentary.
Speaker 9: transcript
Speaker 9: remarks, but is there any kind of direct read through whether it's on them or otherwise in terms of pull forward that to 24 we should just be ready.
In the remarks, but is there any kind of direct read through whether it's O&M or otherwise in terms of pull forward.
24, we should just be ready for it.
Yes, no I think as Joe outlined we have really focused cost management efforts on how we.
Speaker 4: transcript
Speaker 17: Yeah, no, I think it's Joe outlined. We have really focused cost management efforts on how we manage the business, stay very cognizant to customer prices and drive efficiencies across our organization. But we remain confident in the long term growth rate five to seven percent. And as we've always said, twenty, twenty three was an investment year.
Maria Pope: And it's also combined with a pretty extensive workforce support and investment in our universities really focusing in on an important reshoring of our technical strengths as a country. And just as a reminder 15% of sending doctor manufacturing is in this region so it's a it's a real strength for our state and for the company.
<unk> the business stay very cognizant that customer prices.
And drive efficiencies across our organization, but we remain confident in the long term.
Growth rate of 5% to 7% and as we've always said 2023 was an investment year.
Okay.
Operator: Great. Thank you very much for the time today. Thank you.
Got it but no hesitation on 24 <unk>.
Speaker 9: transcript
Speaker 9: from what I can tell. No, none at all. Okay, wonderful. Thank you so much. All right, you guys take care.
What I can tell no none at all.
Okay wonderful. Thank you so much you guys take care.
Julien Dumoulin Smith: Our next question comes from the line of Julien Dumoulin Smith, a bank of America. Hey, good morning. Hey, thank you guys. Appreciate it. Let me perhaps let's pick up on that last question there quickly. How do you think about tying the timeline between having a more normalized 2% here in the current year to getting up to some of the higher level that you talked about earlier, just a moment ago with some of the benefits in the chips act, and at the same time still having that 2% long term.
Thank you chip.
Thank you.
Speaker 1: transcript
Speaker 1: Our next question comes from the line of Nicholas Campanella of Barclays.
Our next question comes from the line of Nicholas Campanella of Barclays.
Hey, Thanks for taking my questions. Good morning, Good morning, Good morning I.
Speaker 10: transcript
Speaker 10: Hey, thanks for taking a break. Good morning. Good morning. Great. I guess just on the revenue increase to 391 million, I know that there's a lot of moving pieces with power costs and you called out the 183 for power costs. But is the net of those two numbers, that's what's falling to the bottom line? Or is that too simplistic?
I guess just on the the revenue increased to $391 million.
I know that Theres, a lot of moving pieces with power costs and you called out the 183 for power costs, but the net of those two numbers, that's what's falling to the bottom line or is that too simplistic.
Julien Dumoulin Smith: How do you see the profile of that sales growth and the confidence for previously when we connected some really strong commentary around customer growth, sustaining itself, in addition to sale, whether or just sales growth, sustaining itself here in the medium term. I don't want to put words on your mouth. It's interesting. We look at it as building blocks, and I think there's really been a period of time of so much change and opportunity.
I think.
I'm not sure I would do that math netted of power costs, and specifically, where we're talking about 2024 here yes.
Speaker 5: transcript
Speaker 14: That's right. I would do that, that math on the net of the power cross. And specifically, we're, we're talking about 2024 here. But I think
Speaker 5: transcript
Speaker 14: the, you know, the performance of what will fall to the bottom line is obviously our.
<unk>.
The performance of what will fall to the bottom line is obviously, our AD load recovery or return on the assets here as we build to 20 for the rate case overall and the net outcome that we have we're pretty we're pretty satisfied that it was really constructive dialogue and in the case itself.
Speaker 5: transcript
Speaker 14: our load recovery, our return on the assets here as we build to 24, I mean, the rate case overall and the net outcome that we have, we're pretty, you know, we're pretty satisfied that it was a really constructive dialogue and the case itself fits within our, what I'll call our calculus to Maria's comments of our long-term.
Julien Dumoulin Smith: First of all, we're a state and a region that has benefited from immigration, and while that has paused, most recently, we continue to see really strong like blocking and tackling economic growth across our service territory. What we also are seeing is increased data centers and the continued digital expansion. One thing that's important about that is that many of those facilities are built, but not yet built out. The infrastructure is there and you'll see the capacity built out over the coming months and quarters.
Within our what I'll call, our calculus to Maria's comments of our our long term growth plan.
Great.
Speaker 10: transcript
Speaker 10: Great, great. And then, um, could you just expand a little on why load and demand mix was an issue for third quarter, but what's just driving your confidence level for the, for the, for the fourth quarter. I'm sorry if I missed that.
Great and then could you just expand a little on why.
Load and demand mix was an issue for third quarter, but whats just driving your confidence level for the fourth quarter I am sorry, if I missed that.
Speaker 5: transcript
Speaker 14: And so I think as you relate specifically to the third quarter, right, that the mixed shift was...
Yes, so I think as it relates specifically to the third quarter right.
Mix shift was was away from the residential commercial heading heading towards the larger and it's really due to two things that occur more.
Speaker 5: transcript
Speaker 18: was away from the residential commercial heading towards the larger. And it's really due to two things that occur more. Is that one that occurs more in the summer period and one overall? One is energy efficiency. We have a little more penetration on energy efficiency at that commercial and that residential level, but also and more the summer item. There was there was rooftop solar penetration that that was occurring at both that commercial and that residential level that was pushing down the overall load, the customer growth.
Julien Dumoulin Smith: Then finally, the longer term and really significant opportunities comes in the manufacturing side of things. This is everyone from Silicon manufacturers all the way down to setting connector manufacturers to those who are really helping with the tools and cutting us development like a land research or a matter of graphics or others. There's quite a bit of opportunity that we some of which we can see today and are already serving and much of which will come out over the number of quarters years and actually even through the decade.
The one that occurred more in the summer period and one overall one is energy efficiency.
Little more penetration on the energy efficiency at that commercial and residential level, but also at the summer item there as rooftop solar penetration that was occurring at bolt that commercial in that residential level.
We're pushing down the overall load in the customer growth.
Speaker 5: transcript
Speaker 18: you know, continues to be as we had anticipated. I believe we had 0.7% customer growth, but it's just that that pressure from the energy efficiency and the DER penetration that they're driving.
Used to be as we had anticipated I believe we had 7% customer growth, but it's just that that pressure from the energy efficiency and the DVR penetration that are driving it.
Okay, Great and then just one more Joe just on the equity I thought that you said that you would you would pull the full ATM down by the end of the year if I'm wrong. Please correct me, but just as an aside.
Speaker 10: transcript
Speaker 10: Okay, great. And then just one more, Joe, just on the equity, I thought that you said that you would pull the full ATM down by the end of the year. If I'm wrong, please correct me. But just as an aside, how do you kind of think about on this current CAPX plan with the equity announced to date, your ability to get to the 50% or is there more that needs to, that we need to be thinking about? Thank you.
Julien Dumoulin Smith: It's truly game-changing for the state as well as for us as a utility to be able to serve such growth. Maybe just to clarify that, you're not pulling back on any of your earlier confidence in light of the 20. No, you know what I think? No, we aligned our 2023 number really with our long-term guidance of 2%. I think we feel very confident in the 2% number and I think my comments underlie optimism for even higher growth than that.
How do you kind of think about on this current Capex plan with the equity announced to date your ability to get to the 50% or is there more that needs to then we need to be thinking about thank you.
Speaker 5: transcript
Speaker 18: So, all right, thank you. As specifically as it relates to the ATM, we have not pulled down on the ATM as a fall. So what we have entered into is about, I believe we disclose $58 million of the ATM we have entered into agreements on none of which we have closed upon. So from a cash flow standpoint, right, the entire ATM is outstanding, which 240-ish million is left to take into the market. As it relates to...
So I think you specifically as it relates to the ATM, we have not pulled down on the ATM as opposed to what we had had entered into is about.
I believe we disclosed $58 million of the ATM, we have entered into agreements on none of which we have closed upon so from a cash flow standpoint, right. The entire ATM is outstanding with $248 million is left to take into the market.
Julien Dumoulin Smith: Okay, fair enough. I'm just trying to see the near-term from the long-term here. And then if you can, I mean speaking about, you know, kind of reconciling 23 against the longer-term, how about 23 and the levers that you've pulled here to keep it at the lower end, you know, despite the litany of more weather-related pressures here, as you alluded to earlier, is there a read in the 24 that we should be aware of?
As it relates to.
Speaker 10: transcript
Speaker 10: Or could you say your second part of your question and just make sure I don't answer it as it relates to the capital? I just wanted to be sure are you are you leaving it open to whether or not you would you would pull that down by the end of the year or Could that be further feathered into 24 and beyond?
Or could you say your second part of your question and just to make sure I don't answer it as it relates to the capital I. Just wanted to be sure are you are you, leaving it open to whether or not you would you would pull that down by the end of the year or can that be further feathered into 'twenty four and beyond.
Julien Dumoulin Smith: I know you provided some commentary, in the remarks. But is there any kind of direct read through whether it's O&M or otherwise in terms of pull forward, that to 24 we should just be ready for? Yeah, no, I think it's Joe outlawed. We have really focused cost management efforts on how we manage the business, stay very confident to customer prices and drive efficiencies across our organization. But we remain confident in the long-term growth rate of five to seven percent.
Speaker 7: transcript
Speaker 18: I would say that the ATM that we have and the equity needs are complete for this year and the ATM would be open for next year. We don't have any at least current needs and obviously would always be opportunistic with our equity but we do not have any current needs for the ATM.
I would I would say that the ATM that we have in the b.
Our equity needs are complete for this year and the ATM would be open for for Nick for next year, we don't have any at least current needs and we obviously would always be opportunistic.
With our equity, but we do not have any any current needs for the ATM.
Thank you.
Thank you.
Speaker 1: transcript
Speaker 1: Our next question comes from the line of Greg Orell of UBS.
Our next question comes from the line of.
Julien Dumoulin Smith: And as we've always said, 2023 was an investment year. Got it, but no hesitation on 24 in turn. That's from what I can tell. No, not at all. Okay, wonderful. Thank you so much, right? You guys take care. Thank you, YouTube. Thank you.
Greg Oro of UBS.
Good morning, guys. Thank you hey, good morning.
Speaker 11: transcript
Speaker 11: Yeah, thank you morning. Hey, good morning. So, uh, 2 parts 1st, just.
So.
Two parts.
First.
Just.
How do you.
Speaker 11: transcript
Speaker 11: Regarding the $0.27 to $0.32 driver on the current year, the variable power costs, what
Regarding the 27 to 32 <unk> driver on the current year.
Julien Dumoulin Smith: Our next question comes from the line of Nicholas Campanella of Barclays. Hey, thanks for taking a question. Good morning. Right. I guess just on the revenue increase to 391 million, you know, I know that there's a lot of moving pieces with power costs and you called out the 183 for power costs. But is the net of those two numbers, that's what's falling to the bottom line? Or is that too simplistic? You know, I think that's right.
Variable power costs.
What.
Speaker 11: transcript
Speaker 11: How do you think about putting that range in place? What kind of gets you there?
How do you how do you think about.
Putting that range.
Race.
It kind of gets you there.
And then <unk>.
Secondly.
Speaker 16: transcript
Speaker 19: How are you thinking about the level of ownership in?
How are you thinking about the level of ownership.
In.
Speaker 16: transcript
Speaker 19: you know, renewables in your, your RFP and just maybe not a, maybe not a number, but, you know, sort of
Renewables and your pure RFP in gist.
Maybe not a <unk>.
Maybe not a number but.
Julien Dumoulin Smith: I would do that, that math on the net of the power cost. And specifically, we're talking about 2024 here, but I think the, you know, the performance of what we'll fall to the bottom line is obviously our low recovery, our return on the assets here as we build to 24. I mean, the rate case overall and the net outcome that we have, we're pretty, you know, we're pretty satisfied that it was a really constructive dialogue. And the case itself fits within our, we'll call our calculus to Maria's comments of our long term growth plan.
<unk>.
Sort of appetite for ownership I guess.
Sure.
Okay.
Speaker 4: transcript
Speaker 17: Okay, so let me take your first question and then your second and if I don't do an adequate job, I'll cancel in. So with regards to power cross the 27th to 32 cents.
So let me take your first question and then your second and.
Dumped at adequate Chapa TL can fill in.
So with regards to power cost the 27 to <unk> 32.
Speaker 3: transcript
Speaker 17: You know, roughly about half of that, I would call sort of structural. And you can see that in the AUT numbers, you can see it in what we sort of have already in place for the quarter. The other part is really the work that we do every day. And the work that we can see, and that would not be unusual for those kind of activities to yield the kind of results.
Roughly about half of that.
Good call set of structural.
And you can see that.
Now in the Eiichi numbers.
We think we can see it and what we sort of have already.
In place for the quarter.
The other part is really the work that we do every day.
Joe Turbick: Great. And then can you just expand a little on why load and demand mix was an issue for third quarter, but what's just driving your confidence level for the, for the, for the fourth quarter? I'm sorry if I missed that. Yeah. So I think as you relate specifically to the third quarter, right, the, the mixed shift was, was away from the residential commercial heading, heading towards the larger. And it's really due to two things that occur more is they, the one that occurs more in the summer period and one overall, one is energy efficiency.
And the work that we can see it in it that would not be unusual for those kind of activities to yield those kind of results.
Speaker 4: transcript
Speaker 17: for what is them pretty challenging for a quarter and a lot of work that we have to do. We feel confident that we'll get there.
For what is a pretty challenging fourth quarter and a lot of work, but we have to do we feel confident that we'll get there.
Speaker 3: transcript
Speaker 17: With regards to the RFP, we will put in a short list of
With regards to the RFP.
Hey.
Joe Turbick: We have a little more penetration on energy efficiency at that commercial and that residential level, but also and more of the, the summer item, there was, there was rooftop solar penetration that, that was occurring at both that commercial and that residential level that was, was pushing down the overall load. I mean, that the customer growth, you know, continues to be as we had anticipated, I believe we had 0.7% customer growth, but it's just that, that pressure from the energy efficiency and the, the DER penetration that, they're driving it.
RFP will be issued shortly we will put in a <unk>.
A short list of.
Speaker 3: transcript
Speaker 17: of opportunities that the company would hope to be able to participate in. Those have a little bit of a different timing just to make sure that there is
Of opportunities.
The company would hope to be able to participate in.
Those have a little bit of a different timing just to make sure that there is.
Speaker 3: transcript
Speaker 17: full transparency, but we're looking for the final RFP to be out by the end of this year. The first half, probably the short list, will be submitted by that time.
Full transparency, but we're looking for the final RFP to be out by the end of this year.
The first half probably the shortlist will be submitted by that time, and we would hope to by the end of 2024. We would have finished some negotiations obviously overseen by an independent evaluated to make sure that we're driving.
Speaker 4: transcript
Speaker 17: We would hope to buy the end of 2024. We would have finished some negotiations, obviously overseen by an independent evaluator to make sure that we are driving.
Speaker 4: transcript
Speaker 17: the lowest cost, least risk projects for our community.
Joe Turbick: Okay, great. And then just one more, Joe, just on the, on the equity, I, I thought that you said that you would, you would pull the, the full ATM down by the end of the year. If I'm wrong, please, please correct me, but just as an aside, how do you kind of think about on this current CAPX plan with the equity announced to date, your ability to get to the 50% or is there more that needs to, that we need to be thinking about? Thank you.
The lowest cost least risk projects.
For our customers and we've been pretty fortunate so far with regards to the company's ownership projects and that has really been.
Speaker 4: transcript
Speaker 17: And we've been pretty fortunate so far with regards to the company's ownership projects. And that has really been being able to drive competitive costs, be able to manage.
Able to drive competitive costs.
Able to manage the risks and quite frankly have very good partners as we move forward. So we would hope to have the same circumstances.
Speaker 3: transcript
Speaker 17: and quite frankly have very good partners as we move forward. So we would hope to have the same circumstances.
Joe Turbick: So all right, thank you. Specifically as it relates to the ATM, we have not pulled down on the ATM of the fall. So what we have have entered into is about, you know, we have, I believe we disclose $58 million in of the ATM. We have entered into ruins on none of which we have closed upon. So from a cash flow standpoint, right, the entire ATM is outstanding with 240-ish million is left to take into the market.
Speaker 3: transcript
Speaker 4: as we enter into 2024 and beyond. Clearly, there's a lot of opportunities.
We enter into 2024 and beyond clearly theres a lot of opportunities.
I appreciate it.
Thank you.
Speaker 1: transcript
Speaker 1: Again, to ask a question, please press star 11 on your telephone. Once again, that star 11 on your telephone to ask a question.
Again to ask a question. Please press star one one on your telephone once again Thats Star one one on your telephone to ask a question.
Joe Turbick: As it relates to our, could you say your second party to your question and just make sure I don't answer it as it relates to the capital. I just wanted to be sure, are you are you leaving it open to whether or not you would you would pull that down by the end of the year or cannot be further feathered into 24 and beyond. I would I would say that the ATM that we have in the, you know, the equity needs are complete for this year and the ATM would be open for next year. We don't have any at least current needs. And we obviously would always be opportunistic with with our equity, but we do not have any any current needs for for the idea.
Our next question comes from the line of.
Speaker 1: transcript
Speaker 1: Our next question comes from the line of Andrew Levi of Height, Hege, Asset Manis.
Joe Turbick: Thank you.
Andrew Levi of Hite hedge asset management.
Speaker 12: transcript
Speaker 12: Hi guys, can you hear me? Hey, how are you? We can. Yep. Okay, that's good. All is a good thing. Um, just a few questions if you don't mind. Um, just on the, um, the audio.
Hi, good evening gentlemen.
Yes, we can okay.
Okay, that's always a good thing.
<unk>.
Just a few questions if you don't mind.
Just on the.
The August.
Things a little bit.
For the quarter.
If you have this.
Settlement.
PJM in place.
Greg Orrell: Our next question comes from the line of Greg Orrell of UBS. Yes. Thank you. Hey, good morning. So two parts. First, just how do you, you know, regarding the 27 to 32 cent driver on the current year, they have very power costs. What, you know, how do you, how do you think about putting that range in place? What, what kind of gets you there? And, and then secondly, are you thinking about the level of ownership in, you know, renewables in your, your RFP and, and just maybe not a, maybe not a number, but, you know, sort of appetite for ownership, I guess. Okay.
Maria Pope: So let me take your first question, and then your second, and if I don't do an adequate job, Joe can fill in. So with regards to power across the 27 to 32 cents, you know, roughly about half of that, I wouldn't call sort of structural. And you can see that, you know, in the AUT numbers, you can, you can, we can see it in what we sort of have already in place for the quarter.
Maria Pope: The other part is, is really the work that we do every day. And the work that we can see in this, that would not be unusual for those kind of activities to yield those kind of results. For what is a pretty challenging for a quarter and a lot of work that we have to do, we feel confident that we'll get there. With regards to the RFP way, our field, the issue shortly, we will put in a short list of opportunities that the company would hope to be able to participate in those have a little bit of a different timing.
Maria Pope: Just to make sure that there is full transparency, but we're looking for the final RFP to be out by the end of this year. The first half, probably the short list will be submitted by that time, and we would hope to buy the end of 2024. We would have finished some negotiations, obviously overseen by an independent evaluator to make sure that we are driving. The lowest cost, least-risk projects for our customers.
Maria Pope: And we've been pretty fortunate so far with regards to the company's ownership projects. And that has really been being able to drive competitive costs, be able to manage risks, and quite frankly have very good partners as we move forward. So we would hope to have the same circumstances as we enter into 2024 and beyond. Clearly there's a lot of opportunities. Thanks. Appreciate it. Thank you. Again, to ask a question, please press star 11 on your telephone. Once again, that's star 11 on your telephone to ask a question.
Andrew Levi: Our next question comes from the line of Andrew Levi of height hedge asset management. Hi, Andy. Hey, how are you?
Andrew Levi: We can't. Okay, that's good. All the good things. Just a few questions if you don't mind. Just on the audience, I heard things a little bit for the quarter, if you had this settlement on the PCAM in place.