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Portland General Electric will not file rate case in 2020, CFO says

Because Portland General Electric Co. has been able to reduce operating costs and use those savings for other purposes, the company has no plans to file for a general rate increase in 2020, Senior Vice President of Finance, CFO and Treasurer James Lobdell said during a Feb. 14 earnings call.

"For a second consecutive year, we have seen opportunities to reduce costs," Lobdell said while reporting on PGE's fourth-quarter 2019 earnings. "And as a result, [we] have decided that we will not be filing a general rate case with the Oregon Public Utility Commission for a 2021 test year. We'll continue to reevaluate the need to file on an annual basis."

He said the company has "made great strides" in holding down the information technology department's costs and in keeping work crews operating efficiently with full schedules in the field. Also, the company is winding down operations at the Boardman plant in Morrow County, Ore., and will use the operation and maintenance costs that it saves there for other purposes. PGE will stop buying coal for the facility just before the plant is closed at the end of 2020, he said.

The PUC last approved a rate increase for PGE in late 2018, when the company was authorized an $8.59 million hike in annual revenues compared to $85.9 million it originally requested.

President and CEO Maria Pope said the company increased its earnings per share in 2019 due to strong industrial customer demand and higher earnings from ongoing investments in the utility system. The higher gross margin was partially offset by increased operating expenses for vegetation management and wildfire mitigation, she continued, but the company recorded net income of $214 million, or $2.39 per diluted share, compared with $212 million, or $2.37 per diluted share, in 2018. The company's 2020 full-year earnings guidance is $2.50 to $2.65 per diluted share, she said.

Lobdell said the company is looking forward to a 4% to 6% earnings-per-share growth through 2021 because of Oregon's healthy economy. "We are seeing strong growth in the high-tech and digital services in our service territory," he said.

Company officials downplayed whether strong growth would provide more capital investment opportunities. Pope said the company hopes to get the PUC's acknowledgment in March that its integrated resource plan, or IRP, is acceptable and then obtain approval to issue requests for proposals for more renewable energy resources. However, PGE will have to determine through a selection process with an independent evaluator whether least-cost resources will be power purchase agreements or new company-owned facilities, she said.

PGE is looking to add about 150 average megawatts of renewable energy and 600 MW of dispatchable capacity, Pope noted, adding, "All of the capacity we're looking for is non-emitting capacity at this point in time."

Lobdell pointed out that the state renewable portfolio standard calls for 27% of PGE's retail needs to be met with renewable energy by 2025 and that the requirement increases to 35% by 2030, 45% by 2035 and 50% by 2040.

Pope said some of the company's largest municipal and corporate customers want to buy 100% green energy, which is the reason the company announced its 15-year power purchase agreement with Avangrid Renewables LLC for its planned 162-MW solar project in Gilliam County, Ore.