Portland General Electric Company (POR)
Q1 2011 Earnings Call
May 5, 2011 11:00 AM ET
Bill Valach – Director, IR
Jim Piro – President and CEO
Maria Pope – SVP, Finance, CFO and Treasurer
Eric McCarthy – Praesidis Asset Management
Sarah Akers – Wells Fargo
Stefka Gerova – JP Morgan
Previous Statements by POR
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Yes, thank you, Kelsey, and good morning, everyone. We’re pleased that you are able to join us today. 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. 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 first quarter 2011 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 quarterly results and key regulatory proceedings. Following prepared remarks, we will open the lines up for your questions.
And now it’s my pleasure to turn the call over to Jim.
Thank you, Bill. Good morning and thank you for joining us. Welcome to Portland General Electric’s 2011 first quarter earnings call. I’m very proud of our strong operating performance during the first quarter. Through effective power supply management, we were able to economically displace a significant amount of our thermal generation with increased energy received from hydro resources and low cost purchase power.
Our transmission and distribution system performed well, and we continue to focus on cost efficiency and effectiveness, keeping our operating costs in line with our 2011 general rate case. All while remaining – maintaining high levels of customer satisfaction. PGE’s net income for first quarter of 2011 was $69 million or $0.92 per diluted share compared to $27 million or $0.36 per diluted share for first quarter 2010. We are increasing our full-year 2011 earnings guidance by $0.10 to a $1.90 to $2.05 per share from the prior guidance of $1.80 to $1.95 per share.
Increased guidance primarily reflects improved hydro conditions and lower purchase power costs. Now let’s move on to the economic outlook for our operating areas. We continued to experienced customer growth with the addition of 3,800 new customers since the first quarter of 2010. Oregon seasonally adjusted unemployment rate declined in March to 10% for the state and 9.6% for the Portland metro area. This compares to the U.S. average of 8.8% in March.
Oregon’s decline was due to an increase in job creation, particularly with business employers. Total retail energy deliveries on the weather adjusted basis increased approximately 3.1% compared to first quarter of 2010. While we experienced increases in delivery across all customer segments, the load increase was driven primarily by one large industrial customer in the paper sector and deliveries to high tech customers.
We project that weather adjusted retail energy deliveries for 2011 will be approximately 1% above 2010 levels, which is the net of the expected impacts of energy efficiency efforts. Now an update on our strategic initiatives starting with operational excellence. We continue to deliver excellent operating performance companywide. Our system operated extremely well. Our distribution reliability metrics remained strong. And although a considerable amount of thermal generation was economically displaced during much of the first quarter, generating plant availability remained high.
In overall customer satisfaction, we ranked in the top decile for residential and general business customers and in the top quartile for large industrial customers. Recently J.D. Power ranked PGE second in the region and fourth in the nation for overall satisfaction in their 2011 Electric Utility Business Customer Satisfaction Study. I’d also like to mention that Steve Hawke, Senior Vice President of Customer Service, Transmission and Distribution is retiring in July after 38 years with the company.
Steve’s dedication to customers and operational excellence helped the company achieve top industry rankings for system reliability and customer satisfaction. I’d like to thank Steve for all he has done. Bill Nicholson, who has worked closely with Steve for many years, will step into this role. Bill joined PGE in 1980 as a Generation Engineer. He was appointed to the executive team in 2007 to lead customers and economic development and has served as Vice President of Distribution since 2009.