On Friday, Portland Gen Electric (NYSE:POR) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
Portland Gen Electric reported Q1 GAAP net income of $45 million or $0.38 per diluted share, with non-GAAP net income of $68 million or $0.58 per share.
The company experienced a 10% year-over-year growth in industrial customer demand, despite mild winter weather affecting residential and small commercial usage.
Portland Gen Electric reiterated its full-year earnings guidance of $3.33 to $3.53 per diluted share and long-term earnings and dividend growth guidance of 5% to 7%.
The company is progressing on strategic priorities, including regulatory filings for the Washington acquisition and clean energy resource procurement, targeting a mid-2027 close for the Washington transaction.
Management discussed advancements in cost management initiatives to mitigate weather impacts and affirmed commitment to maintaining operational excellence.
Portland Gen Electric anticipates a regulatory approval process for the Washington acquisition to take about a year, with discussions on potential customer benefits ongoing.
The company is focusing on capital investments to support customer growth, clean energy, and long-term reliability, with plans to manage volatility in energy usage and power costs through engagement with regulators.
Full Transcript
OPERATOR
Good morning everyone and welcome to today’s conference call with Portland General Electric. Today is Friday, May 1, 2026. This call has been recorded and all lines have been placed on mute to prevent background noise. After the speaker’s remarks, there will be a question and answer period. If you would like to ask a question during this period, press star then the number is 11 on your telephone keypad. To withdraw your question, please press star 11. Again. If you do intend to ask the question, please avoid the use of speakerphones for opening remarks. I will turn the conference over to Portland Gen Electric Senior Manager of Investor Relations, Ern Swartz. You may begin.
Ern Swartz (Senior Manager of Investor Relations)
Thank you, Tawanda, good morning everyone and thank you for joining us today. Before we begin, I would like to remind you that we issued a press release this morning and have prepared a presentation to supplement our discussion, which we will be referencing throughout the call. The press release and slides are available on our website at investors.portlandgeneral.com referring to slide 2 some of our remarks this morning will constitute forward looking statements. We caution you that such statements involve inherent risks and uncertainties and actual results may differ materially from our expectations. For a description of some of the factors that could cause actual results to differ materially, please refer to our press release and our most recent periodic reports on Forms 10-K and 10-Q, which are available on our website. Turning to Slide 3 leading our discussion today are Maria Pope, President and CEO, and Joe Terpik, Senior Vice President of Finance and CFO. Following their prepared remarks, we will open the line for your questions. Now I will turn things over to Maria.
Maria Pope (President and CEO)
Good morning. Thank you, Erin. Thank you all for joining us today. The first quarter delivered another stretch of warm winter weather, 10% year over year, industrial customer demand growth and continued maturity of our cost management initiatives. Beginning with slide 4, I will speak to our financial results and key drivers. For the first quarter we reported GAAP net income of 45 million or 38 cents per diluted share and non GAAP net income of 68 million or 58 cents per share. Our non GAAP results exclude the previously disclosed deferral adjustments related to the January 2024 storm restoration and reliability contingency event and business transformation, optimization and acquisition expenses. Our results reflect extremely mild weather, particularly in February and March, and lower seasonal usage from residential and small commercial customers, which Joe will cover in more detail. We will be engaging with our regulator to explore frameworks to help mitigate weather and other volatility impacting both revenue and power costs. Greater predictability is good for both customers and shareholders and we recognize that this will be multi year work. Despite weather and usage impacts, our team delivered a quarter of strong operational execution including overcoming inflationary pressure and advancing our cost management program, adapting to power market conditions, positioning our portfolio and generations fleet to deliver optimal value and executing on our robust capital investment plan to support customer growth, clean energy and long term reliability. On recent calls you have heard us highlight the company wide work to optimize our cost structure. We are using our operational strength, which we’ve built over multiple years to mitigate the impact of recent weather challenges by accelerating our cost management work. Our teams are squarely undertaking the challenge and we are committed to delivering strong results. As such, we are reiterating our full year Earnings guidance of $3.33 to $3.53 per diluted share and our long term earnings and dividend growth guidance of 5 to 7%. Turning to Slide 5 for updates on our five key strategic priorities. First, our teams made progress on the Washington acquisition and other key regulatory filings. In late March and early April, we filed applications with the Washington Utilities and Transportation Commission and the Oregon Public Utility Commission for approval of the Washington transaction. We anticipate the regulatory approval process to take about a year and continue to target a mid-2027 close. PGE’s holding company proposal continues to advance. The docket’s procedural schedule has been modestly extended to prioritize timely resolution of the holding company. We have paused the transmission company. That said, formation of a transmission company remains part of our long term strategy. We appreciate the ongoing collaboration and expect to engage with parties in the near future. Having just received reply testimony late yesterday, many issues have been resolved with a few key items remaining. The process is on course with a target final order date probably in August. Second, building upon our 2025 O&M cost management work, we continued driving efficiencies and improving productivity. We are accelerating this work, even the very warm winter weather and first quarter results. Importantly, our large load tariff proposal UM 2377 is in the final stages of review with the OPUC and we expect an order in the next several weeks. A transparent, predictable tariff for new and existing data centers strengthens protections for existing customers while supporting economic development in our region. Our proposed rate structure under consideration, enabled by Oregon’s recent legislation includes a a 26% increase in data center prices which will help reduce the cost born by residential and small business customers. Third, as I noted, industrial demand growth is accelerating in our service area. We foresee robust energy usage from data centers and high tech customers with large customer capacity growing by about 10% compounded annually through 2030. This growth forecast is driven by existing customers and contracts already executed with new customers customers companies that own property and have civil work underway. Compared to Q1 last year, our data center customer load growth grew by 10%. Fourth, progress towards additional clean energy resource procurement we filed our 2025 RFP final shortlist with the OPUC in February as we aim to procure approximately 2,500 megawatts. The shortlist is composed of a diverse mix of projects and technologies to support our existing portfolio and growing customer demand. We look forward to working collaboratively with stakeholders to achieve commission acknowledgment in the coming months and fifth, our year round risk based wildfire mitigation work remains on track as we prepare for the summer months. In parallel, regulators and policymakers are engaged in this critical topic. The opuc, in coordination with the Oregon Department of Energy, has hired experts on wildfire liability policy options that balance customer needs for essential services, support for wildfire victims and financial help of utilities. We expect the study’s findings will help inform policymakers in advance of the 2027 legislative session. In December, we filed our 2026 through 2028 wildfire mitigation plan which represents a significant evolution moving from an annual update to a forward looking three year strategic framework. As we progress through 2026, our focus continues to be on executing on our core priorities solid operational performance, meeting growing energy demands, expanding into Washington State and advancing customer driven clean energy investments. With the first quarter behind us, opportunities are significant. We are focused on achieving solid financial results and delivering value for customers, communities and shareholders.
Joe Terpik (Senior Vice President of Finance and CFO)
With that, I’ll turn it over to Joe. Thank you Maria and good morning everyone. Turning to slide 6, our Q1 results reflect strong energy demand from our industrial customers and ongoing System Investments. Total Q1 2026 loads were flat as compared to Q1 2025 and changes in demand between our customer classes were largely offsetting. Industrial demand increased 10% on a nominal and weather adjusted basis. The industrial customer class is expected to continue growing at a strong pace, highlighting the strength of our large customer pipeline and the attractiveness of our service area to data centers and high tech customers. Commercial load decreased 2.9% or 2.3% weather- adjusted and residential load decreased 6.2% or 4.6% weather-adjusted. PGE has seen seasonal shifts in residential and small commercial average uses in recent years with rooftop solar adoption and energy efficiency growth. While not considered in our 2026 plan, deviations of this magnitude are not unprecedented and we are adapting to manage through this. Historically, demand has been winter peaking, but our region has been transitioning to a dual peaking profile with customers increasing their cooling demand as air conditioning becomes more widespread in our region. After considering the recent trends in customer usage, we now anticipate weather adjusted load growth upgrade 1.5% to 2.5% this year. In the last 12 months, our organization has evolved tremendously in the ability to adapt through cost management. We have a well defined plan in place for the balance of the year to solve for the load impacts experienced this quarter which I will discuss shortly. Now I will cover our quarter over quarter earnings drivers. We experienced a 7-cent increase in retail revenues, including a 9 cent increase from additional cost recovery largely from the inclusion of our seaside battery asset in customer rates beginning in November 2025. A 9-cent increase driven by higher industrial demand offset by 11 cents due to lower residential demand A decrease from power cost of $0.15 driven by $0.09 from power cost performance in 2025 that reverses for this comparison and $0.06 from current year power cost performance driven by less favorable wholesale and environmental credit market conditions. A 16-cent decrease from other capital and financing costs in support of our ongoing rate base investments made up of $0.10 of higher depreciation and amortization, $0.05 of dilution and $0.01 of additional interest cost a $0.09 decrease from other items, primarily the timing of tax credits and O and M costs $0.10 from deferral reductions related to the January 2024 storm and reliability contingency event reflecting the outcome of the final OPUC order received In March, a 10 cent decrease from business transformation optimization expenses and acquisition costs. This brings us to our GAAP EPS of $0.38 per diluted share. After adjusting for the 2024 regulatory disallowance and our business transformation expense, we reach our Q1 2026 non GAAP EPS of $0.58 per diluted share. On to Slide 7 for our 5 year capital forecast which includes 2026 and 2027 spend for the incoming 2023 RFP projects. I will note this view does not contemplate CAPEX from the ongoing 2025 RFP or the Washington Utility business. Given our ongoing investment in critical systems and assets, serving our customers and other policy priorities, we remain engaged with stakeholders as we consider our next regulatory steps. We will keep you informed as this progresses in line with our usual practice. Onto slide 8 for liquidity and Financing Summary Total liquidity at the end of the quarter was 954 million. Our investment grade credit ratings remain unchanged. We will continue to maintain strong cash flow metrics with an estimated 2026 CFO to debt metric above 19% in the first quarter, we executed a $550 million equity forward to address our 2026 base equity needs and fund the 2023 RFP project this quarter. We also entered into two unsecured credit agreements, a $350 million term loan facility maturing in March 2028 to fund capital expenditures including those related to our 2023 RFP and general corporate needs, and a 680 million delayed draw term loan intended to finance the Washington acquisition related cost. The loan is available until specific milestones tied to the acquisition are achieved and matures 364 days after funding. Lastly, in April, the Board of Directors declared a quarterly common stock dividend of 55.125 …
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