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Portland General Electric Company (POR)
Q1 2010 Earnings Call
May 4, 2010 11:00 am ET
Bill Valach - Director, IR
Jim Piro - President and CEO
Maria Pope - SVP of Finance, CFO and Treasurer
Brian Russo - Ladenburg Thalmann
James Bellessa - D.A. Davidson & Company
Previous Statements by POR
» Portland General Electric Company Q4 2009 Earnings Call Transcript
» Portland General Electric Company Q2 2009 Earnings Call Transcript
» Portland General Electric Company Q1 2009 Earnings Call Transcript
For opening remarks, I would like to turn the conference call over to Portland General Electric's Director of Investor Relations, Mr. Bill Valach.
Before we begin our discussion this morning, I'd like to make our customary statements regarding Portland General Electric's written and oral disclosures and commentary that there will be statements in this call that are not based on historical facts and as such constitute forward-looking statements under current law. These statements are subject to factors that may cause actual results to differ materially from the forward-looking statements made today.
For a description of some of the factors that may occur that could cause such differences, the company requests that you read our most recent Form 10-K and Form 10-Qs. The Form 10-Q for 2010 was available this morning at portlandgeneral.com.
The company undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise, and this Safe Harbor statement should be incorporated as part of any transcript of this call. Portland General Electric's first quarter earnings were released before the market opened today and the release is available at portlandgeneral.com.
Leading our discussion today are Jim Piro, President and CEO; and Maria Pope, Senior Vice President of Finance, CFO and Treasurer. Jim will begin today's presentation by providing a general overview of the quarter's results and our strategic capital projects. Then Maria will provide more detail around the quarter's results and key regulatory proceedings. Following those prepared remarks, we will open the lines up for your questions.
Now it's a pleasure to turn the call over to Jim.
Welcome to Portland General Electric's first quarter 2010 earnings call. PGE's net income for first quarter 2010 was $27 million or $0.36 per diluted share compared to $31 million or $0.47 per diluted share for the first quarter of 2009. We are reaffirming our full year 2010 earnings guidance of $1.30 to $1.45 per diluted share.
As we discussed in our last call, we continue to face challenges due to weather-related events and the effects of the weak economy. During the first quarter, the Portland metropolitan area experienced the third warmest average temperature on record. This warmer weather led to a decline in residential energy deliveries. The continued effects of the economic downturn also led to a decline in commercial and industrial energy deliveries.
Hydro conditions continued to be below normal quarter-over-quarter, and the current hydro forecast indicates that we're about 75% of normal. However, better than expected thermal plant operations helped to partially offset this impact. Maria will go into more details later on the call.
In Oregon, the unemployment rate came in at 10.6% in March, down from the recession high of 11.6% in mid-2009. This compares to the national unemployment rate of 9.7% for the same period. The drop in Oregon's recent jobless rate results from a stabilization of Oregon's labor force and improving job market. Oregon continued to attract in-migration, ranking second after Washington, D.C.
Despite continued customer growth of approximately 1.5%, total retail energy deliveries decreased by 9% or 3.3% on a weather-adjusted basis quarter-over-quarter. For 2010, we project that weather-adjusted retail energy deliveries will remain essentially flat relative to 2009. We expect energy deliveries to paper product manufacturers to be lower than 2009. However, this decline will be offset by a moderate increase in deliveries to other existing industrial customers, including those in the high-tech sector.
Looking ahead, we are seeing some positive signs. The high-tech sector, our largest industrial sector, is expected to benefit from strong demand. Locally, SANYO and Genentech are expected to ramp up to full capacity by mid-2010.
Now an update on our strategic initiative. Overall satisfaction with both residential and general business customers remains high, and we continue to receive positive feedback that tells us we are meeting our customers' needs.
The National Renewable Energy Laboratory just released its annual rankings yesterday, and I am pleased to announce that PGE is first in the nation for the number of renewable power customers. And for the fifth year in a row, PGE sold more renewable power to residential customers in any of the utility in the United States. These rankings reflect our customers' commitment to green power and our commitment to delivering them renewable resource options.
Also key to customer satisfaction is power quality and reliability. During the first quarter, our system-operated well, our distribution metrics remained strong. And through our generation excellence program, we've made continuous improvement in our generation facilities by focusing on safety, plant reliability and process improvement.
Now an update on our key capital projects. Our effort to install smart meters throughout our operating area is currently ahead of schedule with approximately 670,000 new meters installed as of the end of April. We expect our smart meter project to be completed by yearend and within its capital budget.
Construction of Phase III of our Biglow Canyon Wind Farm is on schedule. We expect to bring the first turbines of Phase III online in the second quarter and to complete this entire project by the third quarter of this year.