Portland General Electric Company Q4 FY2025 earnings call

• Announced definitive agreement to acquire Washington electric utility business from PacifiCorp for $1.9 billion, partnering with Manulife Investment Management as 49% minority partner. • 2025 GAAP net income $306 million or $2.77 per diluted share, non-GAAP net income $336 million or $3.05 per share, impacted by unprecedented warm weather. • 2026 earnings guidance $3.33 to $3.53 per share, reaffirming long-term earnings and dividend growth 5% to 7%. • 5 strategic priorities: advancing regulatory proceedings, O&M and capital cost management, customer growth acceleration, new energy projects, and data center wildfire risk mitigation. • Executed agreements for new energy projects including solar and battery facilities, and procured battery capacity. • 2025 load growth driven by data center and high-tech customers, industrial load up 14%.

No specific product segments detailed in terms of absolute financial performance and revenue contribution % as the focus is on the acquisition and overall company performance. However, key points include growth in service area with total weather-adjusted load growth of about 5%, industrial load increasing 14%, residential load decreasing 1.8% year-over-year but increasing 0.4% weather adjusted, and residential customer count increasing by 1.3%. The acquisition of PacifiCorp's Washington utility business will increase the overall portfolio by approximately 18%, with additions in generation, transmission, distribution, and customers.

• 2026 earnings guidance $3.33 to $3.53 per share. • Reaffirming long-term earnings and dividend growth guidance of 5% to 7%. • Expecting base equity need of $300 million in 2026, tapering to approximately $50 million in 2027. • Anticipating financing of 2023 RFP projects in line with 50-50 cap structure, net of tax credit monetization. • Upsizing ATM to $500 million for CapEx plan. • Expecting debt issuances up to $350 million in 2026 for capital expenditures.

• Regulatory approvals for the acquisition are required and may take approximately 12 months after filings, with potential delays. • Uncertainties around the holding company and transmission company proposals, with discussions ongoing and potential sticking points. • Weather conditions could impact earnings, as seen in 2025 with warm weather reducing earnings. • Risks associated with break fees if the transaction does not close as expected, including regulatory approval or rate base issues.

Q: Congrats on the deal. Can you touch on accretion drivers and sensitivities?

A: Maria mentioned permanent financing plans, cost management execution, and operational opportunities for first year accretion.

Q: What's the enhancement to EPS growth rate?

A: Maria said combination of factors give confidence to be above midpoint of 5% to 7% range.

Q: How do you think about earned ROEs?

A: Imputed allowed ROE of 9.5% from last general rate case, expect to work towards gap over time.

Q: Are there break fees?

A: Yes, symmetrical break fees for certain reasons like non-approval or rate base issues.

Q: What's the filing cadence for the acquisition?

A: Expect filings in next 30 to 60 days, regulatory process takes about 11-12 months.

Q: How does the Washington acquisition aid large load growth?

A: Eastern Washington focused on economic development, leverage existing relationships with high-tech and data center customers.

Q: How to think about $600 million raised at HoldCo?

A: Balanced mix of debt, equity, etc.

Q: Does the acquisition enhance holding company approval possibility?

A: Joseph said it provides validation and clarity, enhancing the view of why a holding company makes sense.

Q: What are approval requirements in Oregon and Washington?

A: Oregon is no harm standard with 11-month process, Washington is net benefit standard with 11-month process (4-month extension possible).

Q: How is wildfire risk in Washington territory?

A: Maria said PacifiCorp has wildfire plan, will pick up and bring expertise, collaborate with regulators.