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Portland General Electric Company (POR)
Q2 2011 Earnings Call
August 5, 2011 11:00 AM ET
Bill Valach – Director, IR
Jim Piro – President and CEO
Maria Pope – CFO and SVP
Neil Mehta – Goldman Sachs
Sarah Akers – Wells Fargo
Andrew Wiesel – Macquarie Capital
Steven Gambuzza – Longbow Capital
Previous Statements by POR
» Portland General Electric Company's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Portland General Electric CEO Discusses Q4 2010 Results - Earnings Call Transcript
» Portland General Electric CEO Discusses Q3 2010 Results – 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. Please go ahead, sir.
Thank you, Nancy and good morning, everyone. We’re very pleased that you’re 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. And there will be statements on 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 the second quarter of 2011 was available this morning at our website 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 second 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 then open the lines up for your questions.
And I would like 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 second quarter earnings call. We delivered strong operations during the second quarter.
With a continued increase in energy received from hydro resources, combined with low cost purchase power, we were able to effectively manage our power supply and economic we displayed a significant amount of our thermal generation.
I’m proud of the excellent work accomplished during the scheduled maintenance outages at two of our thermal plants.
Our T&D system performed well and we continue to maintain high levels of customer satisfactions. In addition to strong operations, I’m very pleased with the significant progress we have made on regulatory and legal matters. We have achieved a positive resolution concerning Senate Bill 408. We made major progress towards implementing our Boardman 2020 plan. And finally, I’m pleased with the progress that PGE, the Sierra Club and other environmental groups have made towards resolving a lawsuit related to Boardman filed in 2008.
The positive outcomes on these matters reflect a constructive process between PGE, customer groups, key stakeholders and other utilities and the results will create value for our customers and shareholders.
For the second quarter 2011, PGE’s net income was $22 million or $0.29 per diluted share compared to $24 million or $0.32 per diluted share for the second quarter 2010. We are reaffirming our full-year 2011 earnings guidance of $1.90 to $2.05 per diluted share.
Now I will provide you an update on the economic outlook in our operating area. We continue to experience customer growth with the addition of 3,000 new customers since the second quarter of 2010. Oregon’s seasonally adjusted unemployment rates continue to decline and for June, it was 9.4% for the state and 8.8% for the Portland metro area. This compares to the U.S. average of 9.2%. Oregon’s economic recovery continues as Oregon’s payroll grew 2.7% annualized in the last six months versus 1.2% for the U.S.
Total retail energy deliveries on a weather adjusted basis increased approximately 2% compared to the second quarter 2010.
While we experienced increases in deliveries across all customers segments, increase in load was driven primarily by the industrial sector. We project that weather adjusted retail energy deliveries for 2011 will be approximately 1.8% above 2010 levels, including the anticipated effects of energy efficiency measures.
However, when you exclude the load growth of two large industrial customers in the paper sector, weather adjusted retail energy deliveries for 2011 will be approximately 1% above 2010. It’s important to keep in mind that a few of our large customers are able to access the wholesale energy markets directly through PGE. So their production levels can vary widely based up on their market opportunities.
Now an update on our strategic initiatives starting with the operational excellence. We continue to deliver excellent operating performance company wise. On distribution reliability metrics remain strong and generation plant availability was high.