AGM 2021

Apr 28, 2021

Good morning, and welcome to Portland General Electric Company's 2021 Annual Meeting of Shareholders. I would now like to introduce the first presenter, Jack Davis. Good morning. Welcome to Portland General Electric's 2021 Annual Meeting of Shareholders. I'm Jack Davis, Chairman of the Board of Directors. Thank you for joining us today and for your interest in the company. Joining me are Maria Pope, our President and CEO Lisa Kaner, our VP, General Counsel and Corporate Compliance Officer as well as members of the Board of Directors and officers team. In addition to myself, Jack Davis, our board members for election today include Rod Brown, Kirby Dias, Mark Gantz, Maria Huber, Kate Jackson, Michael Lewis, Michael Milliken, Neil Nelson, Lee Felton, Maria Pope and Jim Torgerson. I would like to thank John Valentine and Chuck Shivery, who will be concluding their board service. Their vision and expertise have helped guide the company for a combined 20 plus years. John Ballantyne served more than 15 years on the Board of Directors, one of the longest serving directors in Portent General Electric's history. He played an instrumental role in the company's return to independence in 2006 as a public company and his counsel and leadership has provided tremendous value to customers, employees and investors. Chuck Shirey's 7 year tenure on the Board of Directors fueled the company's progress toward delivering a clean energy future for Oregonians. His wise counsel and commitment to company values of integrity, transparency and service to customers are unmatched. I would also like to welcome Michael Lewis and Jim Torgerson, who joined our Board in January 2021. Michael is the former Interim President of Pacific Gas and Electric Company and brings more than 35 years of utility industry leadership and management of Progress Energy, Duke Energy and PG and E. Jim is the retired CEO of EvinGrid and brings executive and financial experience in renewable energy development and energy markets. He is the past CEO of the Midwest Independent Transmission System Operator and the former CFO of Puget Sound Energy. We're joined by our officer team, including Jim Augello, Larry Bechadel, Brad Jenkins, John Kochovar, John MacFarlane and Merciero, Dave Robertson and Brett Sims. We're also joined by representatives from Deloitte Touche LLP, our independent auditors. Before I turn it over to Maria and we call the formal meeting to order, I would like to remind you that any statements made during the remainder of this meeting that relate to future results and events are forward looking statements based on current expectations. We caution that such statements involve inherent risks and uncertainties and actual results may differ materially from our expectations. For a description of some factors that could cause actual results to differ materially, please refer to our earnings press release and our most recent periodic reports on Form 10Q and 10 ks. These reports are available on our website. And now, I'd like to turn the meeting over to Maria. Thank you, Jack. I would first like to address the unique aspects of 2020 and highlight key accomplishments as well as areas of focus going forward. 2020 was a year unlike any other in Portland General Electric's more than 130 year history. It brought crises that impacted Oregonians, businesses, the economy and our climate. The company rose to meet every challenge while providing customers with reliable, safe, affordable, clean energy. As we look back on 2020 and into 2021, we are proud of how we've responded to significant challenges that tested us like never before, while staying true to our core company values and strategic direction. Despite our challenges, we delivered solid results and accomplished more work for customers while lowering our operating costs by 6%. However, given the energy trading losses, our financial results were disappointing. We recorded GAAP net income of $155,000,000 or $1.72 per diluted share in 20.20 compared to GAAP net income of $214,000,000 or $2.39 per diluted share in 2019. Excluding the energy trading losses of $127,000,000 or $1.03 our GAAP net income was a solid 240 $7,000,000 or $2.75 per diluted share. As we look ahead, our long term growth prospects remain strong. We are fortunate to operate in an area with strong growth and we continue to reduce costs through our organization and invest in our system. We are on track to achieve 4% to 6% long term EPS growth and 5% to 7% long term dividend growth. I would like to turn your attention to our operating performance and accomplishments, but first the challenges. Throughout the coronavirus pandemic, Portland General Electric responded quickly to ensure that safe, reliable and affordable electricity continued uninterrupted and improved our planned outage performance. Our work evolved along with a public health crisis and we continue to leverage technology, accelerate flexible schedules and remote work capabilities, all while implementing stringent safety protocols to protect essential frontline employees. 2020 Q1 of 2021 brought historic storms to our service area. Our team acted quickly and prioritized safety in providing essential services to customers. In September 2020, as wildfires ravaged Oregon, we proactively issued a public safety power shutoff and high risk fire zones and partnered with first responders and state and local officials to de energize 8 additional risk areas. Similarly, as once in 40 year severe snow, wind and ice storms descended on our region, more than 1 third of our customers were without power and we faced significant and sustained damage to transmission lines and distribution equipment. Our restoration was the largest in our history as we deployed a record number of crews, bringing in resources from as far away Montana, Nevada, Southern California, British Columbia and Alberta. In total, we restored over 750,000 outages as many customers lost power multiple times. The August trading losses. We faced the August energy trading losses head on. Our Board and leadership team acted transparently and swiftly in addressing the problems. To ensure that customer prices would not be impacted, we did not seek regulatory recovery and have strengthened internal policies and risk management. As many of you saw on national news, Portland was at the forefront of protests and social unrest in response to systemic racism and inequity. Diversity, equity and inclusion have long been a core company value and we measure and publish progress as well as pay equity and other key metrics on our website. Inclusion in the Bloomberg Gender Equality Index and a perfect score on the Human Rights Campaign Foundation's Corporate Equality Index reflects our years of focus and work in this area. However, we know that there is still more work to do. As we reflect on 2020 and look to the year ahead, the responsibility we have as an essential service provider, a leader within Oregon's economy and a crucial partner to customers and communities we serve has never been more important. Throughout the events of 2020, we remain focused on our strategy to lead a clean energy future, develop a smart and integrated grid and improve reliability and efficiency, keeping prices affordable and power reliable for customers. We set new climate goals. By 2,030, we aim to meet customers' expectations and reduce greenhouse gas emissions associated with the power we deliver by 80% over 2010 levels. We also set an aspirational goal of 0 greenhouse gas emissions by 2,040. Actions and accomplishments during 2020 include closing the Boardman Coal Plant, capping off a decade of diligent planning. I would like to recognize our exceptional coworkers who ran the plant safely and reliably from the mid-1980s through its last days. Just a short distance away from Boardman, we partnered with NextEra Energy Resources to bring the new Wheatridge Renewable Energy Facility online, one of the nation's first to integrate solar, wind and battery storage in one location at scale. We announced partnerships with Douglas County Public Utility District and Avangrid that optimize the region's clean energy resources, while also helping the company meet near term capacity needs. 18, large businesses and municipalities are reducing their carbon footprints and reaching their climate goals, participating in our Green Future Impact Program, purchasing the bulk of their energy needs from regional renewable projects. We are electrifying Oregon's transportation sector by developing charging infrastructure for electric vehicles, helping customers electrify their businesses and leading the way by electrifying our own fleet. For the 11th year in a row, Portland General was the number one voluntary renewable program in the country. As we work to build out a resilient, distributed electric system, we are excited that this fall we will be completing our new integrated operations center. It will centralize key operations and functions with enhanced technology and resiliency against cyber and physical security threats and seismic risks. The success of our company and the value we deliver to shareholders is directly connected to the value we deliver to customers, employees and the communities we serve. We know that together, we each have a role to play to achieve our shared climate goals and create a clean energy economy that benefits all. I'll now turn the meeting over to Lisa Kaner, Portland General Electric's Vice President, General Counsel and Corporate Compliance Officer. Lisa? Thank you, Maria. I will now call the meeting to order and lead us through today's formal business. After that, we will have an opportunity for questions and answers. If you are a shareholder and would like to ask a question, please submit your question through the virtual meeting website at any time. Notice of this meeting and related proxy materials were mailed or made available on or around March 16, 2021 to all holders of record of the company's common stock as of the close of business on March 1, 2021, which is the record date for the meeting. In addition, a supplement to the proxy was filed on March 25, 2021. This meeting is called to order pursuant to timely and proper notice. Based on a report provided by Broadridge Financial Solutions, we have received proxies representing more than 50% of the company's shares of common stock entitled to vote at the meeting. Therefore, a quorum of shareholders is present and the meeting is lawfully convened to transact business. With that, the meeting will come to order. You should see a vote button on your computer screen. The polls are open and you can cast your ballot at any time until the polls close. Our Board of Directors have appointed our corporate Secretary, Nora Arconovitch, to serve as Inspector of Elections to tabulate the votes. Nora is here with us today and has taken the oath of Inspector of Elections. Business is the election of Directors. The Board of Directors have nominated the following people: Rod Brown, Jack Davis, Kirby Dias, Mark Gantz, Marie O. Huber, Kate Jackson, Michael Lewis, Michael Milligan, Neil Nelson, Lee Pelton, Maria Pope and Jim Torgerson. The Board recommends a vote for each of the nominees. The second item of business is an advisory vote to approve executive compensation as described in our proxy statement. The Board recommends a vote for this proposal. The 3rd and last item of business is the ratification of the appointment of Deloitte and Touche LLP as our independent registered public accounting firm for fiscal year 2021. The Board recommends a vote for this proposal. That concludes the matters to be voted on. The polls will close shortly. The polls are now closed. I will now share the preliminary voting tabulation. I'm pleased to report that all 12 of the Director nominees have been elected with more than 50% of the votes cast for Proposal 1. Proposal 2, the advisory vote on executive compensation has been approved with more than 50% of the votes cast. And finally, Proposal 3, ratification of the appointment of Deloitte and Touche LLP as the company's independent auditor has been approved with over 50% of the votes cast. An official tabulation of the vote will be included in the company's Form 10 Q for the first quarter of 2021, which we intend to file within 2 business days of this meeting. With that, the formal business of this meeting is complete and the meeting is adjourned. We will now begin the question and answer session of the meeting. Maria Pope will respond for the company. Thank you, Lisa. Are there any questions? It looks as if there are not any questions this morning. Thank you very much for joining us today. We appreciate your interest in Portland General Electric. Thank you. Thank you. Portland General Electric Company's 2021 Annual Meeting of Shareholders has now come to an end. Thank you for attending. You may now disconnect.