Portland General Electric Co 10-Q for FY2023 Q2

Portland General Electric Co (POR)

10-Q 2023-07-28 For: 2023-06-30

Added on April 04, 2026

About this 10-Q

Portland General Electric Co filed this 10-Q on July 28, 2023, covering the quarter ended June 30, 2023 (FY2023 Q2).

Headline figures

Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $648M; up 9.6% from $591M a year earlier
Net income: $39M; down 39.1% from net income of $64M a year earlier
Diluted EPS: $0.39; down 45.8% from $0.72 a year earlier

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Oregon			93-0256820
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


(Title of class)	(Trading Symbol)	(Name of exchange on which registered)
Common Stock, no par value	POR	New York Stock Exchange


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


Definitions		3

PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	4

	Condensed Consolidated Statements of Income and Comprehensive Income	4

	Condensed Consolidated Balance Sheets	5

	Condensed Consolidated Statements of Cash Flows	7

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65

Item 4.	Controls and Procedures	65

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	65

Item 1A.	Risk Factors	65





Item 6.	Exhibits	65

SIGNATURE		66


Abbreviation or Acronym						Definition
AFUDC						Allowance for funds used during construction
AUT						Annual Power Cost Update Tariff



Colstrip						Colstrip Units 3 and 4 coal-fired generating plant

EFSA						Equity Forward Sale Agreement
EPA						United States Environmental Protection Agency

FERC						Federal Energy Regulatory Commission
FMBs						First Mortgage Bonds
GAAP						Accounting principles generally accepted in the United States of America
GRC						General Rate Case
IRP						Integrated Resource Plan
Moody’s						Moody’s Investors Service
MW						Megawatts
MWa						Average megawatts
MWh						Megawatt hour
Nasdaq						National Association of Securities Dealers Automated Quotations
NVPC						Net Variable Power Costs
NYSE						New York Stock Exchange

OPUC						Public Utility Commission of Oregon
PCAM						Power Cost Adjustment Mechanism


RPS						Renewable Portfolio Standard
S&P						S&P Global Ratings
SEC						United States Securities and Exchange Commission


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues:
Revenues, net	$	646	$	588	$	1,391	$	1,213
Alternative revenue programs, net of amortization	2		3		5		4
Total revenues	648		591		1,396		1,217
Operating expenses:
Purchased power and fuel	220		168		524		370
Generation, transmission and distribution	101		85		194		175
Administrative and other	93		84		173		173
Depreciation and amortization	113		103		224		202
Taxes other than income taxes	40		39		83		79
Total operating expenses	567		479		1,198		999
Income from operations	81		112		198		218
Interest expense, net	41		38		85		76
Other income:
Allowance for equity funds used during construction	4		3		7		6
Miscellaneous income, net	5		—		17		—
Other income, net	9		3		24		6
Income before income tax expense	49		77		137		148
Income tax expense	10		13		24		24
Net income	39		64		113		124
Other comprehensive income	1		1		1		1
Net income and Comprehensive income	$	40	$	65	$	114	$	125

Weighted-average common shares outstanding (in thousands):
Basic	97,087		89,225		94,478		89,310
Diluted	97,630		89,371		94,950		89,449


Earnings per share—basic and diluted	$	0.39	$	0.72	$	1.19	$	1.39


See accompanying notes to condensed consolidated financial statements.


	June 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	13	$	165
Accounts receivable, net	310		398

Inventories	108		95

Regulatory assets—current	88		54
Other current assets	157		498
Total current assets	676		1,210
Electric utility plant, net	8,841		8,465
Regulatory assets—noncurrent	593		473
Nuclear decommissioning trust	35		39
Non-qualified benefit plan trust	36		38
Other noncurrent assets	189		234
Total assets	$	10,370	$	10,459

See accompanying notes to condensed consolidated financial statements.


	June 30, 2023		December 31, 2022
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	227	$	457
Liabilities from price risk management activities—current	98		118
Short-term debt	140		—
Current portion of long-term debt	—		260

Current portion of finance lease obligation	20		20
Accrued expenses and other current liabilities	276		641
Total current liabilities	761		1,496
Long-term debt, net of current portion	3,486		3,386
Regulatory liabilities—noncurrent	1,409		1,389
Deferred income taxes	452		439
Unfunded status of pension and postretirement plans	171		170
Liabilities from price risk management activities—noncurrent	159		75
Asset retirement obligations	263		257
Non-qualified benefit plan liabilities	79		83
Finance lease obligations, net of current portion	292		294
Other noncurrent liabilities	98		91
Total liabilities	7,170		7,680
Commitments and contingencies (see notes)
Shareholders’ Equity:
Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding as of June 30, 2023 and December 31, 2022	—		—
Common stock, no par value, 160,000,000 shares authorized; 98,863,827 and 89,283,353 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively	1,647		1,249
Accumulated other comprehensive loss	(3)		(4)
Retained earnings	1,556		1,534


Total shareholders’ equity	3,200		2,779
Total liabilities and shareholders’ equity	$	10,370	$	10,459

See accompanying notes to condensed consolidated financial statements.


	June 30, 2023		December 31, 2022
Prepaid expenses	$	56	$	69

Assets from price risk management activities	75		313
Margin deposits	26		116


Other current assets	$	157	$	498


	June 30, 2023		December 31, 2022
Electric utility plant in-service	$	12,868	$	12,421
Construction work-in-progress	568		467
Total cost	13,436		12,888
Less: accumulated depreciation and amortization	(4,595)		(4,423)
Electric utility plant, net	$	8,841	$	8,465


	June 30, 2023					December 31, 2022
	Current			Noncurrent		Current			Noncurrent
Regulatory assets:
Price risk management	$	23		$	136	$	—		$	1
Pension and other postretirement plans	—			95		—			95

Debt issuance costs	—			21		—			21
Trojan decommissioning activities	—			134		—			133
February 2021 ice storm and damage	12			60		10			64
Power cost adjustment mechanism	16			7		14			14
2020 Labor Day wildfire	5			25		4			27
COVID-19	12			7		—			22
Wildfire mitigation	—			32		—			28
Other	20			76		26			68
Total regulatory assets	$	88		$	593	$	54		$	473
Regulatory liabilities:
Asset retirement removal costs	$	—		$	1,154	$	—		$	1,136
Deferred income taxes	—			187		—			194

Asset retirement obligations	—			10		—			7

Price risk management	—			—		195			—
Boardman Refund	4			3		—			—
Other	21			55		39			52
Total regulatory liabilities	$	25	*	$	1,409	$	234	*	$	1,389


	June 30, 2023		December 31, 2022
Accrued employee compensation and benefits	$	58	$	66
Accrued taxes payable	25		29
Accrued interest payable	33		31
Accrued dividends payable	48		42
Regulatory liabilities—current	25		234
Margin deposits from wholesale counterparties	5		140
Other	82		99
Total accrued expenses and other current liabilities	$	276	$	641


Level 1			Quoted prices are available in active markets for identical assets or liabilities as of the measurement date;
Level 2			Pricing inputs include those that are directly or indirectly observable in the marketplace as of the measurement date; and
Level 3			Pricing inputs include significant inputs that are unobservable for the asset or liability.


	Fair Value				Valuation Technique	Significant Unobservable Input	Price per Unit
Commodity Contracts	Assets		Liabilities				Low		High		Weighted Average
	(in millions)
As of June 30, 2023
Electricity physical forwards	$	22	$	140	Discounted cash flow	Electricity forward price (per MWh)	$	31.90	$	208.00	$	93.59
Natural gas financial swaps	3		23		Discounted cash flow	Natural gas forward price (per Decatherm)	2.35		9.35		3.47
Electricity financial futures	1		1		Discounted cash flow	Electricity forward price (per MWh)	57.00		206.00		97.99
	$	26	$	164
As of December 31, 2022
Electricity physical forwards	$	52	$	93	Discounted cash flow	Electricity forward price (per MWh)	$	35.00	$	270.00	$	101.27
Natural gas financial swaps	6		8		Discounted cash flow	Natural gas forward price (per Decatherm)	2.71		24.71		4.42
Electricity financial futures	11		—		Discounted cash flow	Electricity forward price (per MWh)	54.17		143.70		104.21
	$	69	$	101


	June 30, 2023			December 31, 2022
Commodity contracts:
Electricity	5		MWhs	6		MWhs
Natural gas	219		Decatherms	211		Decatherms

Foreign currency	$	15	Canadian	$	10	Canadian


	2023		2024		2025		2026		2027		Thereafter		Total
Commodity contracts:
Electricity	$	20	$	12	$	17	$	(2)	$	(2)	$	80	$	125
Natural gas	(7)		19		9		13		—		—		34
Net unrealized loss/(gain)	$	13	$	31	$	26	$	11	$	(2)	$	80	$	159


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Federal statutory tax rate	21.0	%	21.0	%	21.0	%	21.0	%
Federal tax credits*	(11.2)		(9.5)		(10.0)		(10.0)

State and local taxes, net of federal tax benefit	8.3		9.0		8.8		9.0
Flow-through depreciation and cost basis differences	(0.6)		0.6		0.5		0.6
Amortization of excess deferred income tax	(3.8)		(4.1)		(3.7)		(4.3)
Other	7.1		(0.1)		0.9		(0.1)
Effective tax rate	20.8	%	16.9	%	17.5	%	16.2	%


	Common Stock			Accumulated Other Comprehensive Loss		Retained Earnings

	Shares	Amount						Total
Balances as of December 31, 2022	89,283,353	$	1,249	$	(4)	$	1,534	$	2,779
Issuances of shares pursuant to equity-based plans	159,603	—		—		—		—
Issuances of shares pursuant to equity forward sales agreement	7,178,016	300		—		—		300
Stock-based compensation		(1)		—		—		(1)


Dividends declared ($0.4525 per share)	—	—		—		(40)		(40)
Net income	—	—		—		74		74
Balances as of March 31, 2023	96,620,972	$	1,548	$	(4)	$	1,568	$	3,112
Issuances of shares pursuant to equity-based plans	30,245	1		—		—		1
Issuances of shares pursuant to equity forward sales agreement	2,212,610	92		—		—		92
Stock-based compensation	—	6		—		—		6
Other comprehensive income	—	—		1		—		1

Dividends declared ($0.4750 per share)	—	—		—		(51)		(51)
Net income	—	—		—		39		39
Balances as of June 30, 2023	98,863,827	$	1,647	$	(3)	$	1,556	$	3,200










Balances as of December 31, 2021	89,410,612	$	1,241	$	(10)	$	1,476	$	2,707
Issuances of shares pursuant to equity-based plans	163,291	—		—		—		—


Repurchase of common stock	(350,000)	(5)		—		(13)		(18)
Dividends declared ($0.4300 per share)	—	—		—		(40)		(40)
Net income	—	—		—		60		60
Balances as of March 31, 2022	89,223,903	$	1,236	$	(10)	$	1,483	$	2,709
Issuances of shares pursuant to equity-based plans	18,769	1		—		—		1
Stock-based compensation	—	4		—		—		4
Other comprehensive income	—	—		1		—		1

Dividends declared ($0.4525 per share)	—	—		—		(41)		(41)
Net income	—	—		—		64		64
Balances as of June 30, 2022	89,242,672	$	1,241	$	(9)	$	1,506	$	2,738


	Three Months Ended June 30,	% Increase (Decrease) in Energy Deliveries			Six Months Ended June 30,		% Increase (Decrease) in Energy Deliveries
	2023		2022			2023		2022














Energy deliveries (MWhs in thousands):
Retail:
Residential	1,730	1,724	—	%		4,057		3,940	3	%
Commercial	1,595	1,552	3	%		3,252		3,186	2	%
Industrial	1,140	998	14	%		2,211		1,972	12	%
Subtotal	4,465	4,274	4	%		9,520		9,098	5	%
Direct access:
Commercial	154	133	16	%		283		264	7	%
Industrial	430	441	(2)	%		866		854	1	%
Subtotal	584	574	2	%		1,149		1,118	3	%
Total retail	5,049	4,848	4	%		10,669		10,216	4	%
Wholesale	1,453	1,425	2	%		2,849		2,932	(3)	%
Total	6,502	6,273	4	%		13,518		13,148	3	%


	Heating Degree-days					Cooling Degree-days
	2023		2022		Avg.	2023		2022		Avg.




First Quarter	1,927		1,761		1,840	—		—		—
April	404		454		371	12		—		2
May	105		242		185	87		—		23
June	45		65		73	96		75		76
Second Quarter	554		761		629	195		75		101




Year-to-date	2,481		2,522		2,469	195		75		101
Increase/(decrease) from the 15-year average	—	%	2	%		93	%	(26)	%


	Plant availability (1)				Actual energy provided compared to projected levels (2)					Actual energy provided as a percentage of total retail load

	2023		2022			2023		2022			2023		2022
Generation:
Thermal:
Natural gas	80	%	84	%		93	%	78	%		45	%	33	%
Coal (3)	89		83			93		91			10		10
Wind (4)	98		74			97		80			11		9
Hydro	91		96			65		81			7		6


	Three Months Ended June 30,		% Increase (Decrease)					Six Months Ended June 30,			% Increase (Decrease)
	2023				2022				2023			2022
Total revenues	$	648	$	591		10	%		$	1,396			$	1,217	15	%
Operating expenses:
Purchased power and fuel	220		168			31			524				370		42
Generation, transmission and distribution	101		85			19			194				175		11
Administrative and other	93		84			11			173				173		—
Depreciation and amortization	113		103			10			224				202		11
Taxes other than income taxes	40		39			3			83				79		5
Total operating expenses	567		479			18			1,198				999		20
Income from operations	81		112			(28)			198				218		(9)
Interest expense, net*	41		38			8			85				76		12
Other income:
Allowance for equity funds used during construction	4		3			33			7				6		17
Miscellaneous income, net	5		—			—			17				—		—
Other income, net	9		3			200			24				6		300
Income before income tax expense	49		77			(36)			137				148		(7)
Income tax expense	10		13			(23)			24				24		—
Net income	39		64			(39)			113				124		(9)
Other comprehensive income	1		1			—			1				1		—
Net income and Comprehensive income	$	40	$	65		(38)	%		$	114			$	125	(9)	%


	Three Months Ended		Six Months Ended
June 30, 2022	$	503	$	1,067
Change in prices as a result of the AUT, approved by the OPUC (partially offset in Purchased power and fuel)	32		67
Retail energy deliveries driven by customer load growth	16		42
Average price of energy deliveries due primarily to customer price increases and the relative mix of deliveries among customer classes	2		6
Colstrip depreciation life adjustment	2		8
Wildfire mitigation revenue (offset in Generation, transmission and distribution)	2		8
Recovery of deferrals for 2020 Wildfire and 2021 ice storm	6		11
Boardman settlement refund	(7)		(7)
PCAM collection, offset in Purchased power and fuel expense	4		7
Combination of various supplemental tariffs and adjustments	7		9
June 30, 2023	$	567	$	1,218
Change in Total retail revenues	$	64	$	151


	Runoff as a Percent of Normal*
Location	2023 Forecast		2022 Actual
Columbia River at The Dalles, Oregon	83	%	107	%
Mid-Columbia River at Grand Coulee, Washington	78		110
Clackamas River at Estacada, Oregon	100		139
Deschutes River at Moody, Oregon	100		92


	Increase/ (Decrease)
Net income	$	(11)
Accounts receivable and Unbilled revenue	45
Margin deposits activity	(197)
Accounts payable	(178)
Regulatory deferral activity	28
Depreciation and amortization	22
Other miscellaneous changes	(17)
Net change in cash flow from operations	$	(308)


	As of June 30, 2023
	Capacity		Outstanding		Available
Revolving credit facility (1)	$	650	$	140	$	510
Letters of credit (2)	220		92		128
Total credit	$	870	$	232	$	638
Cash and cash equivalents					13
Total liquidity					$	651


	Moody’s	S&P
Issuer credit rating	A3	BBB+
Senior secured debt	A1	A
Commercial paper	P-2	A-2
Outlook	Stable	Stable


Exhibit Number			Description
3.1			Third Amended and Restated Articles of Incorporation of Portland General Electric Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed May 9, 2014).
3.2			Eleventh Amended and Restated Bylaws of Portland General Electric Company (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K filed February 15, 2019).




31.1			Certification of Chief Executive Officer.
31.2			Certification of Chief Financial Officer.
32			Certifications of Chief Executive Officer and Chief Financial Officer.

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104			Cover page information from Portland General Electric Company’s Quarterly Report on Form 10-Q filed July 28, 2023, formatted in iXBRL (Inline Extensible Business Reporting Language).


Date:	July 27, 2023	By:	/s/ Maria M. Pope
			Maria M. Pope
			President and Chief Executive Officer


Date:	July 27, 2023	By:	/s/ Joseph R. Trpik
			Joseph R. Trpik
			Senior Vice President, Finance and Chief Financial Officer